SCMN 3730 exam 2 auburn complete
solutions
What is a spend analysis - ANSWER-is an annual review of a firm's entire set of
purchases. This review provides answers to the following questions:
• What did the business spend its money on over the past year?
• What suppliers received majority of business?
• Which divisions spent their money on products and services that were correctly
budgeted for?
• Did the business receive the right amount of products and services, given what it
paid for them?
what insight does a spend analysis have - ANSWER-•Combine volumes of spending
from different businesses
•Standardize product requirements
•Reduce number of suppliers
•Exploit market conditions for better pricing
What are the steps in a spend analysis? - ANSWER-1. Sort data by category
2. Find total spend by category
3. Chart top 10 by descending $ spend
4. Find number of suppliers by category
5. Chart top 10 by descending number of suppliers
6. Find average spend/supplier/category
7. Apply Pareto analysis for opportunities
What is a pareto analysis? - ANSWER-is a technique used for business decision-
making
• Pareto analysis states that 80% of a project's benefit or results are achieved from
20% of the work—or conversely, 80% of problems can be traced to 20% of the
causes.
Helps answer the question: What should we focus on?
What are the steps in the supplier evaluation and selection process - ANSWER-1.
Recognize the need for supplier selection
2. Identify key sourcing requirements
, 3. Identify potential supply sources
4. Determine sourcing strategy
5. Limit suppliers in selection pool
6. Determine method of supplier evaluation and selection
7. Select supplier and reach agreement
What are some events that may trigger the need to perform a supplier selection? -
ANSWER-• Poor internal or external supplier performance
• End of contract period
• Strategic sourcing event
• Internal users submit requisitions
• New product development
• Expanding into new markets or products lines
• Buying new equipment
What are the three variables that determine the effort to identify potential supply
sources? - ANSWER-The degree to which a buyer must search for information, or
the effort put forth toward the search is a function of several variables
1. How well existing suppliers can satisfy cost, quality, or other performance
variables
2. Strategic importance of purchase requirement
3. Technical complexity of purchase requirement
What are some commonly accepted sources of information regarding potential
supply sources? - ANSWER-•Current suppliers
•Preferred suppliers
•Sales representatives
•Internet searches and social media
•Informational databases
•Organizational knowledge
•Trade journals
solutions
What is a spend analysis - ANSWER-is an annual review of a firm's entire set of
purchases. This review provides answers to the following questions:
• What did the business spend its money on over the past year?
• What suppliers received majority of business?
• Which divisions spent their money on products and services that were correctly
budgeted for?
• Did the business receive the right amount of products and services, given what it
paid for them?
what insight does a spend analysis have - ANSWER-•Combine volumes of spending
from different businesses
•Standardize product requirements
•Reduce number of suppliers
•Exploit market conditions for better pricing
What are the steps in a spend analysis? - ANSWER-1. Sort data by category
2. Find total spend by category
3. Chart top 10 by descending $ spend
4. Find number of suppliers by category
5. Chart top 10 by descending number of suppliers
6. Find average spend/supplier/category
7. Apply Pareto analysis for opportunities
What is a pareto analysis? - ANSWER-is a technique used for business decision-
making
• Pareto analysis states that 80% of a project's benefit or results are achieved from
20% of the work—or conversely, 80% of problems can be traced to 20% of the
causes.
Helps answer the question: What should we focus on?
What are the steps in the supplier evaluation and selection process - ANSWER-1.
Recognize the need for supplier selection
2. Identify key sourcing requirements
, 3. Identify potential supply sources
4. Determine sourcing strategy
5. Limit suppliers in selection pool
6. Determine method of supplier evaluation and selection
7. Select supplier and reach agreement
What are some events that may trigger the need to perform a supplier selection? -
ANSWER-• Poor internal or external supplier performance
• End of contract period
• Strategic sourcing event
• Internal users submit requisitions
• New product development
• Expanding into new markets or products lines
• Buying new equipment
What are the three variables that determine the effort to identify potential supply
sources? - ANSWER-The degree to which a buyer must search for information, or
the effort put forth toward the search is a function of several variables
1. How well existing suppliers can satisfy cost, quality, or other performance
variables
2. Strategic importance of purchase requirement
3. Technical complexity of purchase requirement
What are some commonly accepted sources of information regarding potential
supply sources? - ANSWER-•Current suppliers
•Preferred suppliers
•Sales representatives
•Internet searches and social media
•Informational databases
•Organizational knowledge
•Trade journals
