Sourcing strategies/supplier evaluation/trends in supply management
The purchasing process
100
What can cause supply chain disruptions? (2 reasons)
natural disasters, economic events, political events
100
What is the aim of a spend analysis?
Identifzing irregularities or possible areas for cost saving
200
Cite 2 advantages and 2 disadvantages of multiple sourcing.
Advantages: creates competition, spreads risk, required if purchased volume is too great for one supplier, desired if frims want to meet obligations to support minorities, can ensure suppliers do not become complacent. Disadvantages: reduces supplier loyalty, can increase risk in the event of a shortage, may result in different product attirbutes and varying quality, can result in increased price over time, suppliers can let performance slide if volume is not high enough for them
200
What is the reorder point system?
A method to initiate the purchase of routine items at a predetermined quantity.
300
What is cross sourcing?
A sourcing strategy in which the company uses a single supplier for a certain part of the business, and another supplier with the same capabilities for a similar part in another area of the business.
300
What is the 6th step of the purchasing process?
Receipt and Income
400
What are multicriteria decisions models?
Models that allow decision makers to evaluate various alternatives accross multiple decision criteria.
400
What is maverick spending?
Internal customers purchase directly from nonqualified suppliers and bypass established ones.
500
Cite 4 advantages and 4 disadvantages of single sourcing.
Advantages: cost per unit decreases as supplier spreads fixed costs over larger volume, transportation economics, reduces quality variability, builds stronger relationships with suppliers, required when supplier has a proprietary product, required when volume is too small to split between 2 suppliers. Disadvantages: suppliers can increase pirce in the SR, increased supply risk, buyers can become captive to a supplier's technology, do not know if they have the 'best' supplier available, dangerous strategy if the supplier has limited capacity
500
What is the name of the last four steps in the purchasing process?
Order cycle
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