SCMN 2150 Test 2 Questions and Answers with Verified Solutions

SCMN 2150 Test 2 Questions and Answers with Verified Solutions What is procurement? The purchase of merchandise or services at the optimum possible total cost in the correct amount and quality. How does procurement differ from strategic sourcing and supply management? Procurement is buying the merchandise or services while SS tries to improve the buying process and SM is setting up in order to attain what it needs. What is strategic sourcing? The process of analyzing an organization's spending and using the analysis to make effective decisions about the acquisition of products and services. Why would companies source externally? Price Capacity Capability Cost reduction Management focus What are the key make vs. buy considerations? Buy: Price, Capacity, Capability, Cost reduction, Management focus Make: Cost, Knowledge protection, Leverage suppliers,, Lack of external knowledge, Core competency What is production? Production is the process by which inputs are combined, transformed, and turned into outputs. What are the three key components of production? How much to make? Which transformation processes to use? What quantities of inputs are required? Its 3 components are inputs, transformation, and outputs. What's the focus of lean production and mass customization? Lean production: cutting waste, high quality, and low cost Mass production: high-speed production, poor quality, and low cost What production processes are available for companies to use? Job production: custom products Batch production: producing large groups of products Continuous production: produce products w/o interruption What issues and factors drive the production layout decision? Product characteristics Business strategy Constraints of physical structure Purpose of break-even analysis Allows a comparison of total costs for different processes Purpose of assembly line balancing Manufacturing process in which interchangeable parts are added to a product in a sequential manner to create a finished product What is logistics? Logistics focuses on the planning, implementation, and control of the flow and storage of goods, relevant information, and