BUAD 331 EXAM 2 QUESTIONS AND ANSWERS
2026 UPDATED EXAM MATERIAL
◉ procurement/supply management. Answer: strategic approaches
and processes used to secure needed inputs into the organization to
create relevant value
◉ sourcing. Answer: identifying the requirements, locations, and
identity of specific companies and providers that may be used to
acquire various inputs required to create value
◉ purchasing. Answer: process used to actually make a buy from a
source
◉ commodity. Answer: inputs (things we buy)., including materials,
sub-assembled components, equipment, and services, which are
required to create value
◉ a typical manufacturer spends more than __________ of revenue on
purchased inputs. Answer: 55%
◉ four areas supply chain managers are experts in. Answer: 1.
resources
2. suppliers
,3. processes
4. technologies
◉ procurement strategy. Answer: - supports the desired competitive
business-level strategies
- complements other functional areas
◉ commodity strategy. Answer: how to purchase commodities to
support higher-level strategies
◉ primary focus of purchasing. Answer: support the firm's
operational requirements by ensuring the uninterrupted flow of
appropriate quality materials, services, and products
◉ direct materials. Answer: go directly into the product sold to the
downstream customer
◉ indirect materials. Answer: do not go directly into the final
product but are necessary to maintain operations
◉ services. Answer: challenging to manage but offer a great
opportunity for procurement in terms of savings
◉ MRO. Answer: maintenance, repair, and operations
, ◉ effective supply management is about obtaining. Answer: 1. right
material
2. at the right price
3. delivery at right place
4. at the right time
5. from right supplier
6. with right service
◉ strategic sourcing process. Answer: 1. market research
2. spend analysis
3. portfolio analysis
4. contract negotiation
5. supplier relationship management
◉ threat of new entrants. Answer: purchasing professionals must
understand the barriers to market entry
◉ bargaining power of suppliers. Answer: a supplier's amount of
power significantly impacts negotiations
2026 UPDATED EXAM MATERIAL
◉ procurement/supply management. Answer: strategic approaches
and processes used to secure needed inputs into the organization to
create relevant value
◉ sourcing. Answer: identifying the requirements, locations, and
identity of specific companies and providers that may be used to
acquire various inputs required to create value
◉ purchasing. Answer: process used to actually make a buy from a
source
◉ commodity. Answer: inputs (things we buy)., including materials,
sub-assembled components, equipment, and services, which are
required to create value
◉ a typical manufacturer spends more than __________ of revenue on
purchased inputs. Answer: 55%
◉ four areas supply chain managers are experts in. Answer: 1.
resources
2. suppliers
,3. processes
4. technologies
◉ procurement strategy. Answer: - supports the desired competitive
business-level strategies
- complements other functional areas
◉ commodity strategy. Answer: how to purchase commodities to
support higher-level strategies
◉ primary focus of purchasing. Answer: support the firm's
operational requirements by ensuring the uninterrupted flow of
appropriate quality materials, services, and products
◉ direct materials. Answer: go directly into the product sold to the
downstream customer
◉ indirect materials. Answer: do not go directly into the final
product but are necessary to maintain operations
◉ services. Answer: challenging to manage but offer a great
opportunity for procurement in terms of savings
◉ MRO. Answer: maintenance, repair, and operations
, ◉ effective supply management is about obtaining. Answer: 1. right
material
2. at the right price
3. delivery at right place
4. at the right time
5. from right supplier
6. with right service
◉ strategic sourcing process. Answer: 1. market research
2. spend analysis
3. portfolio analysis
4. contract negotiation
5. supplier relationship management
◉ threat of new entrants. Answer: purchasing professionals must
understand the barriers to market entry
◉ bargaining power of suppliers. Answer: a supplier's amount of
power significantly impacts negotiations
