MAR 3203 - EXAM 4 QUESTIONS WITH CORRECT ANSWERS |LATEST UPDATE
100% SOLVED| GRADED A+
Make-or-buy decision The choice between producing a component or a service and
purchasing it from an outside source
Six Sourcing Strategies 1. Many suppliers
2. Few suppliers
3. Vertical integration
4. Joint ventures
5. Keiretsu networks
6. Virtual companies
Many Suppliers - Old Method
- Suppliers moving away from this
- Commodity goods
- Purchasing typically based on price
- Suppliers compete w one another
Few Suppliers - Rational Method
- Win/win opportunity
- Buyer forms longer term relationships
, - Create value through economies of scale
- Suppliers more willing to participate in JIT
- Cost of changing suppliers is huge
- Trade secrets may be at risk
Vertical Integration Developing the ability to produce goods or services previously
purchased or actually buying a supplier or a distributor
Integration - May be forward (to customer) or backward (to supplier)
- Can improve costs, quality, and inventory but requires capital, managerial skills, and demand
- Risky in industries w rapid technological change
Joint Ventures - Gain benefit of partnering while retaining independence w easier to
dissolve relationships
- Formal collaboration can:
> Enhance skills
> Secure supply
> Reduce costs
Keiretsu Japanese term that describes suppliers who become part of a company coalition
Keiretsu Networks - A middle ground between suppliers & vertical integration
100% SOLVED| GRADED A+
Make-or-buy decision The choice between producing a component or a service and
purchasing it from an outside source
Six Sourcing Strategies 1. Many suppliers
2. Few suppliers
3. Vertical integration
4. Joint ventures
5. Keiretsu networks
6. Virtual companies
Many Suppliers - Old Method
- Suppliers moving away from this
- Commodity goods
- Purchasing typically based on price
- Suppliers compete w one another
Few Suppliers - Rational Method
- Win/win opportunity
- Buyer forms longer term relationships
, - Create value through economies of scale
- Suppliers more willing to participate in JIT
- Cost of changing suppliers is huge
- Trade secrets may be at risk
Vertical Integration Developing the ability to produce goods or services previously
purchased or actually buying a supplier or a distributor
Integration - May be forward (to customer) or backward (to supplier)
- Can improve costs, quality, and inventory but requires capital, managerial skills, and demand
- Risky in industries w rapid technological change
Joint Ventures - Gain benefit of partnering while retaining independence w easier to
dissolve relationships
- Formal collaboration can:
> Enhance skills
> Secure supply
> Reduce costs
Keiretsu Japanese term that describes suppliers who become part of a company coalition
Keiretsu Networks - A middle ground between suppliers & vertical integration
