CSCP EXAM MODULE 3- SOURCING
PRODUCTS AND SERVICES
QUESTIONS & ACCURATE
COMPLETE SOLUTIONS
Sourcing Process - Correct Answer ✔✔ 1. Develop/validate supply plan
2. Research supply market
3. Create/refine categories and category
4. Do spend and portfolio analyses
5. Segment suppliers
6. conduct procurement processes
7. continuously improve
Procurement Process - Correct Answer ✔✔ 1. supplier selection
2. negotiation
3. order placement
4. supplier follow-up
5. supplier performance measurement and control
6. value analysis
7. evaluation of new materials and processes
Developing Sourcing Competency - Correct Answer ✔✔ 1. understand companies
goals
2. how purchasing achieves those goals
3. analytical and people skills (i.e. culture)
4. global expertise
5. customer centric
make-or-buy cost analysis - Correct Answer ✔✔ A comparison of all of the costs
associated with making an item versus the cost of buying the item.
make-or-buy decision - Correct Answer ✔✔ The act of deciding whether to produce an
item internally or buy it from an outside supplier. Factors to consider in the decision
include costs, capacity availability, proprietary and/or specialized knowledge, quality
considerations, skill requirements, volume, and timing.
integral component - Correct Answer ✔✔ unique to a product, and if it fails the whole
product fails
modular component - Correct Answer ✔✔ interchangeable with other variants on the
market, such as a computer component
,Determining Core Competencies - Correct Answer ✔✔ 1. determine if organization
already has it i.e. overnight shipping
2. determine if there is a need for it in the marketplace
3. determine relationship between the organizations capabilities to deliver the service
and the need of the service
4. if need is present in marketplace but organization does not have core competency,
determine if they should develop it or outsource
landed cost - Correct Answer ✔✔ the cost of the item plus logistics and transportation
Considerations for Foreign Suppliers - Correct Answer ✔✔ Will foreign suppliers be
able to provide the components in sufficient quantities to meet production needs?
Will the (likely) longer lead times and larger delivery sizes (higher average inventory) be
acceptable?
Are there infrastructure constraints that may stall shipments unexpectedly?
Will labor, economic, or political problems suddenly cut off supplies?
Will shipments be secure against pilferage, damage in transit or handling, tampering,
and terrorism?
Finally, what other costs are incurred by bringing the components to the manufacturing
site from a foreign rather than domestic producer, such as higher monitoring and control
costs?
outsourcing - Correct Answer ✔✔ the process of having suppliers provide goods and
services that were previously provided internally. Outsourcing involves substitution—the
replacement of internal capacity and production by that of the supplier.
insourcing - Correct Answer ✔✔ using the firm's internal resources to provide goods
and services
subcontracting - Correct Answer ✔✔ sending production work outside to another
manufacturer
Examples of Supply Chain Contracting - Correct Answer ✔✔ Supplier relationship
management (SRM)
Manufacturing
Logistics and logistics management
Customer relationship management (CRM)
Information systems
, Benefits of Contracting - Correct Answer ✔✔ 1. Economies of Scale: access to more
customers
2. Risk reduction
3. Increased capital available for investment
4. Clearer focus on core competency
5. Access to new tech
6. Faster development cycle times
Offshoring - Correct Answer ✔✔ outsourcing a business function to another company in
a different country than the original company's country
Reasons for Offshoring - Correct Answer ✔✔ To take advantage of lower wage and
production costs
Enter a new market
Use resources that might not be available in the domestic country
To overcome regulations
Offshoring Complexity/Risks - Correct Answer ✔✔ language differences, culture
differences, country-specific processes, and legal, tax, and regulatory differences
less mature organizational levels, less emphasis on total quality initiatives, or less
developed information visibility and technology
failure to perform or deliver on time, failure of technology systems or electrical grids for
unacceptable periods, or theft of intellectual property
Requirements of Sourcing and Timing - Correct Answer ✔✔ Cost and target price
quality
delivery
lead time
available capacity
design expertise
time to market
sustainability
total cost of ownership (TCO) - Correct Answer ✔✔ the sum of all the costs associated
with every activity of the supply stream
Use of TCO - Correct Answer ✔✔ compares the differences between incremental (or
marginal) costs of alternative supply chain solutions
Process change costs - Correct Answer ✔✔ the costs of evaluating choices and
implementing the changes to the supply chain
R&D
Product development
PRODUCTS AND SERVICES
QUESTIONS & ACCURATE
COMPLETE SOLUTIONS
Sourcing Process - Correct Answer ✔✔ 1. Develop/validate supply plan
2. Research supply market
3. Create/refine categories and category
4. Do spend and portfolio analyses
5. Segment suppliers
6. conduct procurement processes
7. continuously improve
Procurement Process - Correct Answer ✔✔ 1. supplier selection
2. negotiation
3. order placement
4. supplier follow-up
5. supplier performance measurement and control
6. value analysis
7. evaluation of new materials and processes
Developing Sourcing Competency - Correct Answer ✔✔ 1. understand companies
goals
2. how purchasing achieves those goals
3. analytical and people skills (i.e. culture)
4. global expertise
5. customer centric
make-or-buy cost analysis - Correct Answer ✔✔ A comparison of all of the costs
associated with making an item versus the cost of buying the item.
make-or-buy decision - Correct Answer ✔✔ The act of deciding whether to produce an
item internally or buy it from an outside supplier. Factors to consider in the decision
include costs, capacity availability, proprietary and/or specialized knowledge, quality
considerations, skill requirements, volume, and timing.
integral component - Correct Answer ✔✔ unique to a product, and if it fails the whole
product fails
modular component - Correct Answer ✔✔ interchangeable with other variants on the
market, such as a computer component
,Determining Core Competencies - Correct Answer ✔✔ 1. determine if organization
already has it i.e. overnight shipping
2. determine if there is a need for it in the marketplace
3. determine relationship between the organizations capabilities to deliver the service
and the need of the service
4. if need is present in marketplace but organization does not have core competency,
determine if they should develop it or outsource
landed cost - Correct Answer ✔✔ the cost of the item plus logistics and transportation
Considerations for Foreign Suppliers - Correct Answer ✔✔ Will foreign suppliers be
able to provide the components in sufficient quantities to meet production needs?
Will the (likely) longer lead times and larger delivery sizes (higher average inventory) be
acceptable?
Are there infrastructure constraints that may stall shipments unexpectedly?
Will labor, economic, or political problems suddenly cut off supplies?
Will shipments be secure against pilferage, damage in transit or handling, tampering,
and terrorism?
Finally, what other costs are incurred by bringing the components to the manufacturing
site from a foreign rather than domestic producer, such as higher monitoring and control
costs?
outsourcing - Correct Answer ✔✔ the process of having suppliers provide goods and
services that were previously provided internally. Outsourcing involves substitution—the
replacement of internal capacity and production by that of the supplier.
insourcing - Correct Answer ✔✔ using the firm's internal resources to provide goods
and services
subcontracting - Correct Answer ✔✔ sending production work outside to another
manufacturer
Examples of Supply Chain Contracting - Correct Answer ✔✔ Supplier relationship
management (SRM)
Manufacturing
Logistics and logistics management
Customer relationship management (CRM)
Information systems
, Benefits of Contracting - Correct Answer ✔✔ 1. Economies of Scale: access to more
customers
2. Risk reduction
3. Increased capital available for investment
4. Clearer focus on core competency
5. Access to new tech
6. Faster development cycle times
Offshoring - Correct Answer ✔✔ outsourcing a business function to another company in
a different country than the original company's country
Reasons for Offshoring - Correct Answer ✔✔ To take advantage of lower wage and
production costs
Enter a new market
Use resources that might not be available in the domestic country
To overcome regulations
Offshoring Complexity/Risks - Correct Answer ✔✔ language differences, culture
differences, country-specific processes, and legal, tax, and regulatory differences
less mature organizational levels, less emphasis on total quality initiatives, or less
developed information visibility and technology
failure to perform or deliver on time, failure of technology systems or electrical grids for
unacceptable periods, or theft of intellectual property
Requirements of Sourcing and Timing - Correct Answer ✔✔ Cost and target price
quality
delivery
lead time
available capacity
design expertise
time to market
sustainability
total cost of ownership (TCO) - Correct Answer ✔✔ the sum of all the costs associated
with every activity of the supply stream
Use of TCO - Correct Answer ✔✔ compares the differences between incremental (or
marginal) costs of alternative supply chain solutions
Process change costs - Correct Answer ✔✔ the costs of evaluating choices and
implementing the changes to the supply chain
R&D
Product development
