Questions and Answers of Purchasing And Supply Management

11. What is the triple bottom line? How can supply influence sustainability performance in the organization?
10. What is the difference between performance benchmarking and process benchmarking?
9. Why would an organization want to “benchmark” its supply function? How would it do this?
7. What are the key metrics of supply performance?
1. How does value analysis differ from value engineering?
26. Is anyone buying it for less?
25. Will another dependable supplier provide it for less?
24. Do material, reasonable labor, overhead, and profit total its cost?
23. Are suppliers of the item being asked for suggestions to reduce cost?
22. Can cost of packaging be reduced?
21. Is the item properly classified for shipping purposes?
20. If being made internally, can the item be purchased for less?
19. Can the item be made cheaper internally?
18. Is commercial quality specified?
17. Are unnecessary fine finishes specified?
16. Is unnecessary machining performed on the item?
15. Are closer tolerances specified than are necessary?
14. Have new materials or designs been developed that would alter performance of the product?
13. Can the weight be reduced?
12. Is there a similar item in inventory that could be used?
11. Does the item have greater capacity than required?
10. If it is a standard item, does it completely fit the application or is it a misfit?
9. If the item is not standard, can a standard item be used?
8. Can the item be eliminated?
7. Are the original specs realistic under today’s conditions?
6. Is there anything better for the intended use?
5. Does it need all its features?
4. Have functional requirements changed over time?
3. Can basic and secondary functions be separated?
2. Is its cost proportionate to its usefulness?
1. Does its use contribute value?
10. How can environmental matters be incorporated into supplier selection?
9. How do environmental concerns affect the disposal of scrap, surplus, and obsolete materials?
8. Where can you achieve cost reductions in disposal and investment recovery activities?What are the major cost drivers?
7. What is the difference between surplus material, obsolete material, rejects, scrap, waste, and hazardous waste? How do investment recovery and disposal practices differ between these six
6. What are the channels used in disposing of items? What are the advantages of each?
5. What specific procedures should supply use to dispose of unneeded items?
4. How can the firm obtain maximum return from disposal of unneeded items?
3. What are the advantages and disadvantages for giving responsibility of accounts payable to supply?
2. Why is responsibility for investment recovery often given to supply?
1. Why is responsibility for logistics often given to supply?
14. Where does the borderline fall between gratuities and bribery?
13. What are the liability issues when contracting for software?
12. What legal issues would you want to consider before setting up an e-procurement system in a company?
11. What can supply managers do to minimize the company’s risk of a product liability lawsuit?
10. What actions can the supply manager take to protect intellectual property rights and avoid legal action?
9. What authority does a supply manager have to make decisions that are binding on the principal? What responsibility do purchasing agents have for the consequences of their decisions?
8. Is an oral contract legally enforceable? Under what conditions?
7. Under what conditions might purchasers be personally liable for contracts they enter into?
6. What are the legal rights of the buyer if goods delivered by a supplier do not measure up to the specifications?
5. Does a salesperson have basically the same legal authority as a buyer? If not, how is it different?
4. What is alternative dispute resolution? When and how should it be used?
3. Does a supplier have to accept a PO exactly as offered by the buyer to create a legally binding contract?
2. Under what conditions is it realistic for a buyer to cancel a contract for goods? For services? For a seller to cancel a contract for goods? For services?
1. What is counterfeiting and how does this issue affect supply managers?
3. Does the clause ensure the appointment of impartial arbitrators? If a person serving as arbitrator is an agent, advocate, relative, or representative of a party, or has a personal interest in the
2. Does the clause fully express the will of the parties or is it ambiguous? If it is uncertain in its terms, the time and expense involved in determining the scope of the clause and the powers of
1. Is the clause in the proper form under the appropriate arbitration laws? Unless properly drawn, it may not be legally valid, irrevocable, and enforceable.
Avoid legal disputes with suppliers?
Minimize our own personal liability for purchase actions?
Minimize the organization’s legal and ethical exposure?
Use alternative dispute resolution in large-dollar purchase agreements?How can we
Develop and support a set of principles of social responsibility?
Put all purchase agreements in writing?
10. What are Incoterms? What factors should be considered when selecting an Incoterm?
9. What advantages are there for buyers affected by the North American Free Trade Agreement (NAFTA)? What is a certificate of origin? Why does the buyer need to be concerned with this?
8. How can the buyer make effective use of foreign trade zones?
7. What are the forms of countertrade, and what problems do they cause for the buyer?How can the buyer help make countertrade work?
6. What are the pros and cons of buying direct versus using some form of intermediary?
5. How can the buyer best get a list of potential international sources? Evaluate potential suppliers?
4. How can the buying firm minimize the problem areas connected with global buying?Which do you feel are most serious?
3. What do firms see as the principal advantages to be gained when they buy globally?What are the principle disadvantages?
2. Why have North American firms outsourced and offshored the manufacture of goods and delivery of services?
1. What are the factors/forces that have caused the increase in global trade? What changes do you think will occur in the next 10 years?
10. What is the relationship between satisfaction and stability in buyer–supplier relations?
9. What are the differences between an operational alliance and a strategic alliance?
8. What are the goals of early supplier involvement (ESI)? How does ESI fit in with cross-functional teams?
7. What is a strategic alliance and why is it used?
6. Why create a partnership?
5. Why are buyer–supplier relationships important?
4. Why is purchasing focusing more attention on a supplier’s management as part of the evaluation process? How might this evaluation be conducted?
3. What are the similarities and differences between evaluating new and existing sources of supply?
2. When might it be appropriate to conduct a formal, rather than an informal, supplier evaluation?
1. What is a weighted point evaluation system? Why is it used?
Find out how satisfi ed our suppliers are with us as a customer?
Improve our relationships with suppliers?
Reduce the number of unacceptable suppliers?
Have more or fewer partnerships and alliances?How can we
Have annual top executive meetings with our key suppliers?
Change the way we evaluate supplier performance?
10. How might social or political issues impact a supplier selection decision?
9. Why is supply focusing more attention on a supplier’s management as part of the evaluation process? How might this evaluation be conducted?
8. What are the similarities and differences between evaluating new and existing sources of supply?
7. When might it be appropriate to conduct a formal, rather than an informal, supplier evaluation?
6. What are the advantages of purchasing from large, global sources?
5. Why might it be preferable to buy from a distributor or wholesaler rather than directly from the manufacturer?
4. What are standard supply risks? How might they be mitigated?
3. Why is the trend toward single sourcing? What are the disadvantages to this trend?
2. What challenges do you see in assessing a supplier’s environmental performance?
1. Why might a supply manager prefer to look for a new supplier rather than place additional business with an existing supplier? Why not?

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