QUESTIONS AND DETAILED VERIFIED SOLUTIONS|GRADED
Components of a supply chain network - ANSWER - Suppliers
- Manufacturers
- Distributors
What is outsourcing? - ANSWER - Transfers some of the internal activities of a firm to
outside vendors
- Uses specialization for efficiency so they can focus on core production
Many companies sourcing strategy for suppliers - ANSWER - Plays one supplier against
another so they compete
- Holds supplier responsible for technology, expertise, forecasting, cost, quality, and delivery
- Long term relationships are not the goal
- Common with commodities
Few companies sourcing strategy for suppliers - ANSWER - Creating long term
relationships with few suppliers
- Suppliers particiapting in JIT programs and contribute expertise
- Beleive cost of changing partners is huge
- Have trade secrets and other alliances
What is vertical integration? - ANSWER - Developing the ability to produce goods or
services previously purchased within the company OR just buying the supplier
-Two types: forward and backward
1
, - Benefits: Cost reduction, higher quality, inventory reduction
-Works best when company has large market share
Forward integration - ANSWER Moving closer to the finished goods of customers,
-Involves the purchase or control of DISTRIBUTORS moving to finished goods
Backward integration - ANSWER Purchasing of a SUPPLIER
-it can improve efficiency and save money (raw materials)
Four stages of supplier selection for a company - ANSWER 1. Supplier evaluation
2. Supplier development
3. Negotiations
4. Contracting
1. Supplier selection: Evaluation - ANSWER - Finding potential suppliers and determining
the likelihood of becoming good suppliers
-Strict evaluations of all types of things (ie; financial strength, management, quality, etc...)
- May require internal or external certification! (3 step process) once certified they are
treated with priority
2. Supplier selection: Development - ANSWER - Ensuring the supplier has the right
equipment to produce quality items and can deliver on time
- Includes training, engineering and production help
3. Supplier selection: Negotiations - ANSWER -When price, delivery terms, quality
standards and advertising are discussed
-Cost based (time and materials)
2
Components of a supply chain network - ANSWER - Suppliers
- Manufacturers
- Distributors
What is outsourcing? - ANSWER - Transfers some of the internal activities of a firm to
outside vendors
- Uses specialization for efficiency so they can focus on core production
Many companies sourcing strategy for suppliers - ANSWER - Plays one supplier against
another so they compete
- Holds supplier responsible for technology, expertise, forecasting, cost, quality, and delivery
- Long term relationships are not the goal
- Common with commodities
Few companies sourcing strategy for suppliers - ANSWER - Creating long term
relationships with few suppliers
- Suppliers particiapting in JIT programs and contribute expertise
- Beleive cost of changing partners is huge
- Have trade secrets and other alliances
What is vertical integration? - ANSWER - Developing the ability to produce goods or
services previously purchased within the company OR just buying the supplier
-Two types: forward and backward
1
, - Benefits: Cost reduction, higher quality, inventory reduction
-Works best when company has large market share
Forward integration - ANSWER Moving closer to the finished goods of customers,
-Involves the purchase or control of DISTRIBUTORS moving to finished goods
Backward integration - ANSWER Purchasing of a SUPPLIER
-it can improve efficiency and save money (raw materials)
Four stages of supplier selection for a company - ANSWER 1. Supplier evaluation
2. Supplier development
3. Negotiations
4. Contracting
1. Supplier selection: Evaluation - ANSWER - Finding potential suppliers and determining
the likelihood of becoming good suppliers
-Strict evaluations of all types of things (ie; financial strength, management, quality, etc...)
- May require internal or external certification! (3 step process) once certified they are
treated with priority
2. Supplier selection: Development - ANSWER - Ensuring the supplier has the right
equipment to produce quality items and can deliver on time
- Includes training, engineering and production help
3. Supplier selection: Negotiations - ANSWER -When price, delivery terms, quality
standards and advertising are discussed
-Cost based (time and materials)
2
