Final Exam MGT301 NAU Questions and Answers(A+ Solution guide)

Outsourcing - Transferring a firm's activities that have traditionally been internal to external suppliers Vendor-managed inventory - a system in which a supplier maintains material for the buyer, often delivering directly to the buyer's using department. Postponement - Delaying any modifications or customization to a product as long as possible in the production process. The concept is to minimize internal variety while maximizing external variety. Blanket order - A long-term purchase commitment to a supplier that are to be delivered against short-term releases to ship. Blanket orders are unfilled orders with a vendor and are also called "open orders" or "incomplete orders". It is a contract to purchase certain items from a vendor. It is not an authorization to ship anything. Drop shipping - Shipping directly from the supplier to the end consumer rather than from the seller, saving both time and reshipping costs Reverse logisitics - The process of sending returned products back up the supply chain for value recovery or disposal. Reverse logistics involves resale, repair, reuse, remanufacture recycling, and disposal. The operations manager's goal should be to limit disposal and strive for reuse. The supply chain management's strategic importance - The objective is to build a chain of suppliers that focuses on maximizing value to the ultimate customer. Make-or-buy decision - a choice between producing a component or service within the firm or purchasing it from an outside source. sourcing strategy: many suppliers - The order goes to the lowest bidder. One supplier is put against another. In order to receive the order, the supplier must meet the buyer's needs in terms of technology, expertise, forecasting abilities, as well as cost, quality, and delivery competencies. Long term partnering is not the ing strategy: few suppliers - a strategy of few suppliers implies that rather than looking for short-term attributes, such as low cost, a buyer is better off forming a long-term relationship with a few dedicated suppliers. Disadv: the cost of changing partners is huge, so both supplier and buyer run the risk of becoming captives of the other. Also, trade secrets and supplier alliances. sourcing strategy: Vertical integration - developing the ability to produce goods or services previously purchased or actually buying a supplier or a distributor. sourcing strategy: joint ventures - Formal collaboration. Adv: secure supply or reduce costs. Disadv: could dilute the brand or lose competitive advantage