CHAPTER 1
Purchasing and Supply Management
Chapter Outline
Purchasing and Supply Management Supply Chain Management
Supply Management Terminology Measurement
Supply and Logistics Risk Management
The Size of the Organization’s Spend and Sustainability
Financial Significance Growth and Influence
Supply Contribution Effective Contribution to Organizational
The Operational versus Strategic Success
Contribution of Supply The Organization of This Text
The Direct and Indirect Contribution Conclusion
of Supply Questions for Review and Discussion
The Nature of the Organization References
Supply Qualifications and Associations Cases
Challenges Ahead 1–1 Denniston Spices
,1–2 Brennan Bank
1–3 Hansen Equipment
,
, Case 1-1: Denniston Spices
Teaching Note
IMMEDIATE ISSUE
Develop an inventory build plan that balances stock-out risks with inventory holding and inventory
spoilage costs.
BASIC ISSUES
Forecasting and planning
Risk management
Total cost of ownership analysis
ABC analysis
SUGGESTED STUDENT ASSIGNMENT
1. As Amy Lin, what is your analysis of the situation at Denniston Spices?
2. What recommendations would you make to Kevin Sherman regarding the inventory build of
products supplied from Whittingham Foods and why?
POSSIBLE DISCUSSION QUESTIONS
1. How relevant is the data from 2012 and 2013? Are you prepared to use it?
2. How would you weight the costs of stock-outs versus inventory spoilage?
Purchasing and Supply Management
Chapter Outline
Purchasing and Supply Management Supply Chain Management
Supply Management Terminology Measurement
Supply and Logistics Risk Management
The Size of the Organization’s Spend and Sustainability
Financial Significance Growth and Influence
Supply Contribution Effective Contribution to Organizational
The Operational versus Strategic Success
Contribution of Supply The Organization of This Text
The Direct and Indirect Contribution Conclusion
of Supply Questions for Review and Discussion
The Nature of the Organization References
Supply Qualifications and Associations Cases
Challenges Ahead 1–1 Denniston Spices
,1–2 Brennan Bank
1–3 Hansen Equipment
,
, Case 1-1: Denniston Spices
Teaching Note
IMMEDIATE ISSUE
Develop an inventory build plan that balances stock-out risks with inventory holding and inventory
spoilage costs.
BASIC ISSUES
Forecasting and planning
Risk management
Total cost of ownership analysis
ABC analysis
SUGGESTED STUDENT ASSIGNMENT
1. As Amy Lin, what is your analysis of the situation at Denniston Spices?
2. What recommendations would you make to Kevin Sherman regarding the inventory build of
products supplied from Whittingham Foods and why?
POSSIBLE DISCUSSION QUESTIONS
1. How relevant is the data from 2012 and 2013? Are you prepared to use it?
2. How would you weight the costs of stock-outs versus inventory spoilage?
