Questions and Answers of Operations And Supply Chain Management

When reviewing its car lease contract the police department of a large city thinks about what purchasing procedure to follow. Discuss each purchasing procedure and decide what procedure would be most
A municipality within the EC wants to renew its contract for copiers. In order to prevent the contract from surpassing the threshold value it pursues decentralized purchasing: each department needs
Mention the basic EC Directives on public procurement. List the key elements of each of them
Why would public entities often favour local suppliers? What political objectives could be served by such behaviour? Discuss.
Since a high service level and a strong customer orientation are a prerequisite for an effective purchasing department in a service company, purchasing managers should be constantly working on
Purchasing departments in many service companies deal with many small orders related to standard materials (MRO materials). Much time and effort can be spent on small orders, which prevents buyers
One of the improvement measures suggested was to introduce tender boards or buying committees in order to manage decision making on strategic purchases. How would you construct a tender board, when
How would you assess the degree of customer friendliness of a purchasing department in a service company? What elements would you consider? How would you proceed in order to obtain the necessary
Place yourself in the position of the purchasing manager of the introductory case study. What would you do in order to improve the effectiveness of your department? How would you try to gain a better
A subject that still receives a lot of attention is the 'battle of the brands': manufacturers brands are constantly threatened by retailers' private labels. Who do you think will win the battle?
Discuss the pros and cons of the functional and integrated purchasing organization structures that can be found in retail organizations. What organizational structures are required in what kind of
What actions can retail organizations pursue in order to improve the efficiency of their operations? Differentiate between those activities aimed at improving the sales turnover ratio and those
Following the previous question, how should manufacturers respond to this development in terms of their marketing and sales policies?
An important trend in the food product sector is the development of private labels. The manufacturer's brand name is replaced more and more by the retailer's private label. What are the consequences
What do you think are the major differences between negotiations with European suppliers and negotiations with suppliers from the Far East?
Name some factors that can limit the supplier's negotiating power.
The preparations of negotiations should mention the location of the negotiations. One can basically choose between the buyer's office, the supplier's office and neutral territory. List the advantages
You are the buyer in a machine factory. Management is considering the purchase of a CNC milling machine, representing an investment of more than €350,000. You have selected one supplier from a
Name examples of products of which the price is set by means of cost-based pricing, market-based pricing and competitive bidding. What are the consequences of this distinction for the purchasing
Last year you purchased 100 units of product X from a supplier at £50 each. You estimate that you will purchase 300 units of this product from the same supplier this year. You are now preparing for
In this chapter vendor rating was named as one of the methods that can be used to measure supplier performance. Delivery reliability and quality performance of the supplier are two aspects of vendor
A supplier of components announces that he has to raise his prices by 10%, because he has lost a major customer. He states he is now forced to spread his overheads across a smaller production volume.
This chapter discusses a number of methods in the field of supplier assessment. In addition to objective and quantitative methods, such assessments can also be made in a more subjective manner. The
If you were asked to perform a purchasing audit, how would you proceed?
What are the major differences between purchasing performance measure¬ ment and vendor rating?
How would you measure cost savings realized by the purchasing department? How would you define purchasing savings?
What parameters would you use when benchmarking the performance of your purchasing department against that of other companies? Explain.
The general manager of a manufacturing firm uses the ratio purchasing departmental costs as a percentage of purchasing turnover to assess the performance of his purchasing staff. Would you consider
To what manager should purchasing report in the following companies:• a manufacturer of basic chemicals;• a wholesale company in construction materials;• an automotive manufacturer.Explain your
In the preceding text it was stated that information technology increases the need for greater integration of the purchasing and logistics functions. Do you agree with this statement? Explain your
A manufacturer of candy consists of four business units. These business units respectively produce chewing gum, chocolate, candy bars and sweets. Purchasing activities are all located within the
The policies concerning intercompany business and counter purchase are regarded as strategic decisions. What does this mean? What might the contribution of purchasing be, in dealing with these two
With regard to purchasing tasks, responsibilities and authority, three different levels can be distinguished. What are these three levels? Why do you consider this differentiation useful?
In this chapter a distinction was made between order-based production systems and forecast-based production systems. What is the difference between both types of systems? What is the relevance of
It is sometimes said that: 'Integrated materials management starts with sales!' Do you agree with this statement? Explain your answer.
What does 'functional thinking' mean? Can you give examples of functional thinking in:• the purchasing department;• the production department;• the sales department.
What is the difference between logistics management and materials management? Name some examples of activities for both types of management.
This chapter talked about a corrective and a preventive approach to quality issues in organizations. What is the difference between the two? How would you recognize these approaches when applied to
What do you feel supplier evaluation means? And what in your opinion is supplier rating? Can you indicate the most important similarities and differences?
Some large manufacturers have a supplier quality assurance section in their purchasing department. This section is responsible for the improvement of supplier quality. Other organizations have no
The purchasing manager can undertake preventive activities to maintain or increase the quality of the goods and services which are to be purchased. Supplier selection is the most important activity
Which types of quality costs can be distinguished? Provide at least two examples of every type. To what extent can the purchasing department contribute to a reduction of the quality costs?
In this chapter the author contends that quality control must be regarded as an integrated business function - indicate why. Which departments in particular are involved in the quality control?
Implementing electronic solutions in purchasing should, according to some leading consultants, lead to impressive savings. From what sources are these savings derived? Mention at least three
Find European examples for each of the types of electronic market place that have been identified by Kaplan and Sawhney (2000).
A large manufacturer of handtooling equipment considers whether to implement an E-Procurement system in one of its manufacturing locations. Describe what it will take to be able to do so effectively.
This chapter describes how electronic market places develop within different types of industries. Electronic market places can be initiated by different parties: sellers, buyers and/or intermediary
Conduct a global sourcing, 'best deal' assignment, using the Internet, aimed at buying consecutively: (1) 20 tons steelplate (0119 Mod. and 0144,1 inch thick and 100 inches wide); (2) rental of a
What do you think of the approach used by Lopez? When can it be useful? How do you feel about the critique on this approach?
What is the difference between single and sole sourcing and partnership? Give examples. Discuss how these terms interrelate.
This chapter states that the reduction of the number of suppliers should not be a goal in itself; it should be seen as a means for other goals. Which objectives are served with the reduction of the
This chapter focuses on the necessity of cross-functional teamwork during the stage of product development. What do you think are the benefits of such co-operation? Why does cross-functional teamwork
In the case as described at the beginning of Chapter 5, AT&T (a company with a purchasing share of 55%) states: 'Purchasing is by far the biggest activity at AT&T. Nothing else is more important.'
Some time ago the microprocessor market was characterized by considerable scarcity. The demand for products was enormous, and the supply was limited. Those manufacturers who were able to secure
The automobile industry is characterized by a limited number of large customers and a large number of smaller suppliers. Discuss which form the purchasing strategy adopted by these automobile
Global sourcing has become more popular among manufacturing companies. For what segments of the purchasing portfolio would you recommend a global sourcing strategy? Discuss the advantages and
Consider a manufacturer of food products (macaroni and spaghetti products, dry soups and sauces). Analyse the purchasing portfolio based on Kraljic's portfolio analysis. Indicate which products can
This chapter has talked about the 'globalization of purchasing markets'. What is meant by this? To what products or goods does this phenomenon apply?
Internet technology is open to everyone. Not only to buyers, but also to users and budget holders within organizations. How would the Internet change the job of a buyer? Discuss.
A distinction is made between macro-, meso- and microeconomic research. Name some sources of information to be consulted in each of these types of purchasing market research.
Conduct a purchasing market survey by using Internet technology, for the following commodities:• 100 tons of steelplate (0119 Mod. And 0144 free machining steelplates, 1 inch thick, 100 inch
Would you feel that purchasing market research is required for every purchased commodity? For what type of products would you feel it would be most appropriate? Link your ideas to the portfolio
What would you consider to be the most important internal and external sources of information for purchasing market research. Name at least eight sources for each category.
Management has requested you to develop a cost-down programme for your organization related to non-production buying. What would such a cost-down programme look like? What structure would you give to
Reduction of the company's technological and supply risk was presented as an important purchasing task. What exactly is meant by these terms? Explain. What positive actions could companies take to
A reporting structure has been presented as an essential part of the purchasing management process. If you were a purchasing manager, what would you report to your superiors on a monthly basis? Would
Why would communications both internally and to suppliers be so important for effective purchasing? Who would you see as the most important 'competitor' of a buyer? How would you prevent 'back-door
In this chapter four major tasks and responsibilities have been described which can be attributed to purchasing and supply management. What are these? It has been argued that these four tasks and
One of the unsolved problems in many companies is who should be responsible for the purchase of services. Indicate who in your opinion should take care of the purchase of the following services.
In the purchase of MRO goods there is the small-order problem: the smallest part of the turnover is made up by a very large amount of low- consumption articles.• Name some examples of MRO
The board of a trade company is considering expanding the stockroom. This entails adding to the existing stockroom and will cost approximately £2 million. Indicate:• How you would proceed in a
Describe the major differences between the execution of work based on fixed-price contracts and on cost-reimbursable contracts. Describe the circumstances in which each of the methods would be
In this chapter the function of the project buyer was discussed. In your opinion, what characteristics should a project buyer who purchases for large investment projects possess? Answer the same
Large companies want to carry out a preliminary qualification of suppliers before they place an order. What does prequalification mean? Name at least five criteria you would use in the
The case study at the beginning of the chapter describes the problems that arose when a railway company purchased new carriages. In your opinion, how could these problems have been avoided? List at
This chapter describes three different methods of expediting. In which circumstances do you think each of these methods is useful? Explain your answer.
General terms and conditions sometimes include a penalty clause for late delivery, delivery of products that do not comply with the specification, etc. What advantages and disadvantages do you see in
In this chapter fixed-price contracting and cost-reimbursable contracting were distinguished. What are the most important advantages and disadvantages of both types of contract? Describe situations
One production plant, where numerical milling machines have been in use for a number of years, is considering the purchase of an additional one. Describe how the purchasing process in this production
According to the interaction approach of Johansson, Hakansson and Wootz, the industrial seller can influence the course of the purchasing process by anticipating three kinds of uncertainty. First,
What are the differences between buying standard-grade raw materials and buying customized electrical components? Discuss the differences in market structure, required expertise, product
The management of a medium-sized metal working company is considering buying a CNC-milling machine. This is a completely new type of machine for the company in question. Describe:(a) the purchasing
As the strategic importance of a product increases, management's involvement in the purchase decision will also grow. Which criteria determine the strategic importance of a particular good that is to
In paragraph two of this chapter it is stated that industrial markets, unlike consumer markets, are often inelastic. Do you agree with this statement? Please explain why and provide some examples.
The chapter describes a number of new developments in purchasing and also addresses the aim for total quality control in companies. Describe the major consequences of total quality control on the
What are the major differences between the activities of the purchasing function and the activities conducted by the purchasing department? Do you think it is important to differentiate between these
What are the major differences between purchasing, supply, sourcing and supply management? Would you consider the purchasing function to be part of supply chain management or would you favour the
What would you consider to be purchasing's added value to a company? What would you consider to be purchasing's core and non-core activities?
Take the annual report of an industrial company. Calculate the purchasing value in relation to the turnover. Calculate the effect of a 2% saving on the purchasing value.Do the same for a 2% increase
Can a manufacturer have a service guarantee in addition to a product guarantee? LO.1
What is the term used for the bundle of goods and services that are provided in some environment by every service operation? LO.1
At i rst glance, asking customers to provide their own service in the self-service approach may not seem very consumer friendly. What are some of the characteristics of self-service operations that
Identify the high-contact and low-contact operations of the following services:a. A dental ofi ceb. An airlinec. An accounting ofi ced. An automobile agencye. Amazon.com LO9–4 LO.1
Why should a manager of a bank home ofi ce be evaluated differently from a manager of a bank branch? LO.1
Could a service i rm use a production-line approach or self-service design and still keep a high customer focus (personal attention)? Explain and support your answer with examples.LO9–3 LO.1
Where would you place a drive-in church, a campus food vending machine, and a bar’s automatic mixed drink machine on the service-system design matrix? LO.1
How have price and variety competition changed McDonald’s basic formula for success? LO.1
What strategy do the following organizations seem to use to manage customer-introduced variability?a. eBayb. Ritz-Carlton Hotelsc. New airline check-in procedures LO.1
It is robust. That is, it can cope effectively with variations in demand and resource availability. For example, if the computer goes down, effective backup systems are in place to permit service to
Are service operations with a high degree of customer contact more or less difi cult to control than those with a low degree of customer contact?LO9–2 LO.1

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