BUAD 331 EXAM 2 UTK QUESTIONS WITH VERIFIED
ACCURATE ANSWERS
Purchasing Professionals - Answers -Keep the company running smoothly by providing
an uninterrupted flow of supply to build products and deliver services.
Procurement/Supply Management - Answers -The strategic approaches and processes
used to secure needed inputs into the organization to create relevant value.
Sourcing - Answers -The process involved in identifying the requirements, locations,
and identity of specific companies and providers that may be used to acquire various
inputs required to create value.
Purchasing - Answers -The process used to actually make a buy from a source
Commodity - Answers -The inputs (or things we buy) required to create value
Ex. Materials, sub, assembled components, equipment services.
Successful supply chain managers are experts in four areas - Answers -Resources,
suppliers, processes, technologies
When purchasing and supply management works well within an organization... -
Answers -The company acquires the best resources from around the world, which allow
them to compete on cost, quality, and innovation
Procurement strategy - Answers -Allows the business to complete its overall goal,
whether it involves differentiated product, accosted advantage, or some blend of the
two.
-Supports the desired competitive business-level strategies
-Complements other functional areas
A dollar save by purchasers... - Answers -In material costs as a dollar added to net
income
Primary focus of purchasing - Answers -To support the firms operational requirements
by ensuring an uninterrupted flow of appropriate quality materials, services, and
products
Direct materials - Answers -Materials that go directly into the product sold downstream
Ex. Ball bearings, fasteners, engine components.
Indirect materials - Answers -Materials necessary to maintain operations
, Ex. Office supplies, maintenance/repair.
Services - Answers -Advertising, contract, labor, logistics
Purchasing as a function contributes to both the________ and _________ of a business
- Answers -Top and bottom line
How purchasing affects the top line - Answers --In innovation, using the capabilities of
its supply base in a way that brings in the best ideas
-Improve quality with suppliers
-Improve delivery
-Improve and develop target cost and product cost
Other way purchasing can contribute - Answers --developing systems and processes to
gather competitive market intelligence
-Strategic role in maintaining the organizations brand and commitment to social
responsibility.
Michael Porter five forces model - Answers -Focuses on predicting buyer and supplier
behavior, as well as understanding current market conditions
Threat of new entrants - Answers -Purchasing professionals must understand the
barriers to market entry
Bargaining power of suppliers - Answers -Power of suppliers to negotiate prices, and
allow access to innovation; fewer suppliers, more supplier, bargaining power
Bargaining power of buyers - Answers -Power of buyers to negotiate price, access,
innovation; more demand for a buyer, the more power of the buyer has
Threat of substitutes - Answers -Purchasers must understand the possible substitutes
for suppliers or services, and the risk involved in substitutes
Rivalry among existing competitors - Answers -High when competition is fierce in a
market and low when competitors are more complacent
Strategic sourcing process - Answers -Process needed to drive procurement decisions
and enable the management of commodities with a portfolio view
Step one: market research - Answers -Conduct a market analysis to gain a clear
understanding of supply and demand trends in markets. Conduct SWOT analysis.
Step two: spend analysis - Answers -Conduct spend analysis in each category.
Understand how much money is spent, which suppliers are receiving most business,
and whether pricing is accurate.
ACCURATE ANSWERS
Purchasing Professionals - Answers -Keep the company running smoothly by providing
an uninterrupted flow of supply to build products and deliver services.
Procurement/Supply Management - Answers -The strategic approaches and processes
used to secure needed inputs into the organization to create relevant value.
Sourcing - Answers -The process involved in identifying the requirements, locations,
and identity of specific companies and providers that may be used to acquire various
inputs required to create value.
Purchasing - Answers -The process used to actually make a buy from a source
Commodity - Answers -The inputs (or things we buy) required to create value
Ex. Materials, sub, assembled components, equipment services.
Successful supply chain managers are experts in four areas - Answers -Resources,
suppliers, processes, technologies
When purchasing and supply management works well within an organization... -
Answers -The company acquires the best resources from around the world, which allow
them to compete on cost, quality, and innovation
Procurement strategy - Answers -Allows the business to complete its overall goal,
whether it involves differentiated product, accosted advantage, or some blend of the
two.
-Supports the desired competitive business-level strategies
-Complements other functional areas
A dollar save by purchasers... - Answers -In material costs as a dollar added to net
income
Primary focus of purchasing - Answers -To support the firms operational requirements
by ensuring an uninterrupted flow of appropriate quality materials, services, and
products
Direct materials - Answers -Materials that go directly into the product sold downstream
Ex. Ball bearings, fasteners, engine components.
Indirect materials - Answers -Materials necessary to maintain operations
, Ex. Office supplies, maintenance/repair.
Services - Answers -Advertising, contract, labor, logistics
Purchasing as a function contributes to both the________ and _________ of a business
- Answers -Top and bottom line
How purchasing affects the top line - Answers --In innovation, using the capabilities of
its supply base in a way that brings in the best ideas
-Improve quality with suppliers
-Improve delivery
-Improve and develop target cost and product cost
Other way purchasing can contribute - Answers --developing systems and processes to
gather competitive market intelligence
-Strategic role in maintaining the organizations brand and commitment to social
responsibility.
Michael Porter five forces model - Answers -Focuses on predicting buyer and supplier
behavior, as well as understanding current market conditions
Threat of new entrants - Answers -Purchasing professionals must understand the
barriers to market entry
Bargaining power of suppliers - Answers -Power of suppliers to negotiate prices, and
allow access to innovation; fewer suppliers, more supplier, bargaining power
Bargaining power of buyers - Answers -Power of buyers to negotiate price, access,
innovation; more demand for a buyer, the more power of the buyer has
Threat of substitutes - Answers -Purchasers must understand the possible substitutes
for suppliers or services, and the risk involved in substitutes
Rivalry among existing competitors - Answers -High when competition is fierce in a
market and low when competitors are more complacent
Strategic sourcing process - Answers -Process needed to drive procurement decisions
and enable the management of commodities with a portfolio view
Step one: market research - Answers -Conduct a market analysis to gain a clear
understanding of supply and demand trends in markets. Conduct SWOT analysis.
Step two: spend analysis - Answers -Conduct spend analysis in each category.
Understand how much money is spent, which suppliers are receiving most business,
and whether pricing is accurate.
