BUAD 331 Exam 2 UTK with Complete
Solutions
Purchasing Professionals - ANS-Keep the company running smoothly by providing an
uninterrupted flow of supply to build products and deliver services.
Procurement/Supply Management - ANS-The strategic approaches and processes used
to secure needed inputs into the organization to create relevant value.
Sourcing - ANS-The process involved in identifying the requirements, locations, and
identity of specific companies and providers that may be used to acquire various inputs
required to create value.
Purchasing - ANS-The process used to actually make a buy from a source
Commodity - ANS-The inputs (or things we buy) required to create value
Ex. Materials, sub, assembled components, equipment services.
Successful supply chain managers are experts in four areas - ANS-Resources,
suppliers, processes, technologies
When purchasing and supply management works well within an organization... - ANS-
The company acquires the best resources from around the world, which allow them to
compete on cost, quality, and innovation
Procurement strategy - ANS-Allows the business to complete its overall goal, whether it
involves differentiated product, accosted advantage, or some blend of the two.
-Supports the desired competitive business-level strategies
-Complements other functional areas
A dollar save by purchasers... - ANS-In material costs as a dollar added to net income
Primary focus of purchasing - ANS-To support the firms operational requirements by
ensuring an uninterrupted flow of appropriate quality materials, services, and products
Direct materials - ANS-Materials that go directly into the product sold downstream
Ex. Ball bearings, fasteners, engine components.
Indirect materials - ANS-Materials necessary to maintain operations
Ex. Office supplies, maintenance/repair.
, Services - ANS-Advertising, contract, labor, logistics
Purchasing as a function contributes to both the________ and _________ of a business
- ANS-Top and bottom line
How purchasing affects the top line - ANS--In innovation, using the capabilities of its
supply base in a way that brings in the best ideas
-Improve quality with suppliers
-Improve delivery
-Improve and develop target cost and product cost
Other way purchasing can contribute - ANS--developing systems and processes to
gather competitive market intelligence
-Strategic role in maintaining the organizations brand and commitment to social
responsibility.
Michael Porter five forces model - ANS-Focuses on predicting buyer and supplier
behavior, as well as understanding current market conditions
Threat of new entrants - ANS-Purchasing professionals must understand the barriers to
market entry
Bargaining power of suppliers - ANS-Power of suppliers to negotiate prices, and allow
access to innovation; fewer suppliers, more supplier, bargaining power
Bargaining power of buyers - ANS-Power of buyers to negotiate price, access,
innovation; more demand for a buyer, the more power of the buyer has
Threat of substitutes - ANS-Purchasers must understand the possible substitutes for
suppliers or services, and the risk involved in substitutes
Rivalry among existing competitors - ANS-High when competition is fierce in a market
and low when competitors are more complacent
Strategic sourcing process - ANS-Process needed to drive procurement decisions and
enable the management of commodities with a portfolio view
Step one: market research - ANS-Conduct a market analysis to gain a clear
understanding of supply and demand trends in markets. Conduct SWOT analysis.
Step two: spend analysis - ANS-Conduct spend analysis in each category. Understand
how much money is spent, which suppliers are receiving most business, and whether
pricing is accurate.
Solutions
Purchasing Professionals - ANS-Keep the company running smoothly by providing an
uninterrupted flow of supply to build products and deliver services.
Procurement/Supply Management - ANS-The strategic approaches and processes used
to secure needed inputs into the organization to create relevant value.
Sourcing - ANS-The process involved in identifying the requirements, locations, and
identity of specific companies and providers that may be used to acquire various inputs
required to create value.
Purchasing - ANS-The process used to actually make a buy from a source
Commodity - ANS-The inputs (or things we buy) required to create value
Ex. Materials, sub, assembled components, equipment services.
Successful supply chain managers are experts in four areas - ANS-Resources,
suppliers, processes, technologies
When purchasing and supply management works well within an organization... - ANS-
The company acquires the best resources from around the world, which allow them to
compete on cost, quality, and innovation
Procurement strategy - ANS-Allows the business to complete its overall goal, whether it
involves differentiated product, accosted advantage, or some blend of the two.
-Supports the desired competitive business-level strategies
-Complements other functional areas
A dollar save by purchasers... - ANS-In material costs as a dollar added to net income
Primary focus of purchasing - ANS-To support the firms operational requirements by
ensuring an uninterrupted flow of appropriate quality materials, services, and products
Direct materials - ANS-Materials that go directly into the product sold downstream
Ex. Ball bearings, fasteners, engine components.
Indirect materials - ANS-Materials necessary to maintain operations
Ex. Office supplies, maintenance/repair.
, Services - ANS-Advertising, contract, labor, logistics
Purchasing as a function contributes to both the________ and _________ of a business
- ANS-Top and bottom line
How purchasing affects the top line - ANS--In innovation, using the capabilities of its
supply base in a way that brings in the best ideas
-Improve quality with suppliers
-Improve delivery
-Improve and develop target cost and product cost
Other way purchasing can contribute - ANS--developing systems and processes to
gather competitive market intelligence
-Strategic role in maintaining the organizations brand and commitment to social
responsibility.
Michael Porter five forces model - ANS-Focuses on predicting buyer and supplier
behavior, as well as understanding current market conditions
Threat of new entrants - ANS-Purchasing professionals must understand the barriers to
market entry
Bargaining power of suppliers - ANS-Power of suppliers to negotiate prices, and allow
access to innovation; fewer suppliers, more supplier, bargaining power
Bargaining power of buyers - ANS-Power of buyers to negotiate price, access,
innovation; more demand for a buyer, the more power of the buyer has
Threat of substitutes - ANS-Purchasers must understand the possible substitutes for
suppliers or services, and the risk involved in substitutes
Rivalry among existing competitors - ANS-High when competition is fierce in a market
and low when competitors are more complacent
Strategic sourcing process - ANS-Process needed to drive procurement decisions and
enable the management of commodities with a portfolio view
Step one: market research - ANS-Conduct a market analysis to gain a clear
understanding of supply and demand trends in markets. Conduct SWOT analysis.
Step two: spend analysis - ANS-Conduct spend analysis in each category. Understand
how much money is spent, which suppliers are receiving most business, and whether
pricing is accurate.
