BUS 370 Test 2 || Graded A+.
Supply Management correct answers The broad set of activities carried out by organizations to
analyze sourcing opportunities, develop sourcing strategies, select suppliers, and carry out all the
activities required to procure goods and services.
Why Supply Management is Critical correct answers To compete, companies need tap into the
abilities of world-class suppliers providing both products and services. Global SM efforts are
supported by advances in information systems.
Supply Management Financial Impact correct answers Bottom line impact and shareholder value
Total Cost of Ownership (TCO) correct answers Purchase price, amount paid to the supplier for
the product or service, is not the only consideration. Other key impact areas include: Quality and
functionality, Delivery performance and service, ability to exploit new technologies and
innovation, flexibility, other costs such as: acquisition, usage, and end-of-life
Strategic Sourcing Process correct answers 1. Assess opportunities
2. Profile internally and externally
3. Develop the sourcing strategy
4. Screen suppliers and create selection criteria
5. Conduct supplier selection
6. Negotiate and implement agreements
Insourcing correct answers the use of resources within the firm to provide products or services
Outsourcing correct answers the use of supply chain partners to provide products or services
Advantages of Insourcing correct answers -High degree of control
, -Ability to oversee the entire program
-Economies of scale and/or scope
Disadvantages of Insourcing correct answers Required strategic flexibility
Required high investment
Loss of access to superior products and services offered by potential suppliers
Advantages of Outsourcing correct answers High strategic flexibility
Low investment risk
Improved cash flow
Access to state-of-the-art products and services
Disadvantages of outsourcing correct answers Possibility of choosing a bad supplier
Loss of control over the process and core technologies
Communication and coordination challenges
"Hollowing out" of the corporation
Factors Affecting the Decision to Insource or Outsource correct answers
portfolio analysis correct answers A structured approach used by decision makers to develop a
sourcing strategy for a product or service, based on the value potential and the relative
complexity or risk represented by a sourcing opportunity.
Critical Quadrant correct answers Critical to profitability and operations
Few qualified sources of supply
Large expenditures
Design and quality critical
Complex and/or rigid specification
Supply Management correct answers The broad set of activities carried out by organizations to
analyze sourcing opportunities, develop sourcing strategies, select suppliers, and carry out all the
activities required to procure goods and services.
Why Supply Management is Critical correct answers To compete, companies need tap into the
abilities of world-class suppliers providing both products and services. Global SM efforts are
supported by advances in information systems.
Supply Management Financial Impact correct answers Bottom line impact and shareholder value
Total Cost of Ownership (TCO) correct answers Purchase price, amount paid to the supplier for
the product or service, is not the only consideration. Other key impact areas include: Quality and
functionality, Delivery performance and service, ability to exploit new technologies and
innovation, flexibility, other costs such as: acquisition, usage, and end-of-life
Strategic Sourcing Process correct answers 1. Assess opportunities
2. Profile internally and externally
3. Develop the sourcing strategy
4. Screen suppliers and create selection criteria
5. Conduct supplier selection
6. Negotiate and implement agreements
Insourcing correct answers the use of resources within the firm to provide products or services
Outsourcing correct answers the use of supply chain partners to provide products or services
Advantages of Insourcing correct answers -High degree of control
, -Ability to oversee the entire program
-Economies of scale and/or scope
Disadvantages of Insourcing correct answers Required strategic flexibility
Required high investment
Loss of access to superior products and services offered by potential suppliers
Advantages of Outsourcing correct answers High strategic flexibility
Low investment risk
Improved cash flow
Access to state-of-the-art products and services
Disadvantages of outsourcing correct answers Possibility of choosing a bad supplier
Loss of control over the process and core technologies
Communication and coordination challenges
"Hollowing out" of the corporation
Factors Affecting the Decision to Insource or Outsource correct answers
portfolio analysis correct answers A structured approach used by decision makers to develop a
sourcing strategy for a product or service, based on the value potential and the relative
complexity or risk represented by a sourcing opportunity.
Critical Quadrant correct answers Critical to profitability and operations
Few qualified sources of supply
Large expenditures
Design and quality critical
Complex and/or rigid specification
