SCMT 2103 STEPHANIE THOMAS
EXAM 2 QUESTIONS AND ANSWERS
Purchasing - Correct Answers --Largely transactional activity
Facilitated by the placement & processing of a PO
Procurement - Correct Answers --Range of processes related to an organization's need
to procure (buy) goods & services
-Examples of activities - supplier selection, price negotiation, contract management
Strategic Sourcing - Correct Answers --Broader than procurement, align with
organizational and supply chain goals and objectives; cross-disciplinary collaboration
-Focus on value, not cost; deeper supplier relationships; process improvement
-Consolidate and leverage purchasing power
How to determine the importance of a specific buying situation? - Correct Answers -•Not
all purchases are equally important
-Know how to segment the vendor base
•Need a way to help buyers segment purchases
•Buying strategies vary based on value & risk or complexity and volume
-Risk - likelihood for an unexpected event in the SC to disrupt operations
-Profitability - impact of a supply item upon the bottom line
Bottleneck items - Correct Answers -•Low supplier control
•Innovation/product substitution/ replacement
•Production-based scarcity
Strategic Items - Correct Answers -•Development of long-term relationships
•Collaboration and innovation
•Natural scarcity
Non-Critical (Routine) Items - Correct Answers -•Product standardization
•Process efficiency (automated purchasing, e.g. catalogs, e-tendering)
•Abundant supply
, Leverage Items - Correct Answers -•Exploitation of full purchasing power
•Targeted pricing strategies/negotiations
Abundant supply
How to identify potential strategic sourcing partners - Correct Answers -•View from an
organizational perspective
•Develop individual strategies
•Evaluate supply options (funnel)
-Start broad and then narrow
•Market analysis -> RFI -> RFP/RFQ -> Site visits ->Final selection
-Determine selection criteria
•Cost, quality, reliability, risk, capability, financial, locations, lead time, sustainability,
innovation, exclusivity
Why is this topic important? - Correct Answers -•Negotiating is an essential skill for
personal growth & professional success
•It's a skill that begins with identifying & acting on one's wants & needs
•Many individuals lack the confidence, motivation or training to ask for what they want in
certain situations
•Others are reluctant to initiate requests in general
•Effective negotiation skills & techniques can positively impact & optimize yourself &
your company
Importance of Prep - Correct Answers -•Supplier negotiators are often better prepared
than buying negotiators
•Edison: "A genius is just a talented person who does his homework."
•75% of total negotiation process time should be spent in preparation
•Solicitation & evaluation of supplier proposals
•Develop negotiation strategy
Buy-in of senior management
Market research/survey - Correct Answers -directly collecting information from
consumers about purchases
Delphi method - Correct Answers -panels of experts individually questioned (not as a
group); effective for long range forecasting
Importance of pricing - Correct Answers -•Align with positioning for target customers
•Align with Marketing Mix (4P's)
•Target what customers are willing & able to pay
•Supports organizational goals
•Enables adequate income to cover costs and make a profit
Preparation Techniques - Correct Answers -1.Familiarize your team with the supplier's
company
EXAM 2 QUESTIONS AND ANSWERS
Purchasing - Correct Answers --Largely transactional activity
Facilitated by the placement & processing of a PO
Procurement - Correct Answers --Range of processes related to an organization's need
to procure (buy) goods & services
-Examples of activities - supplier selection, price negotiation, contract management
Strategic Sourcing - Correct Answers --Broader than procurement, align with
organizational and supply chain goals and objectives; cross-disciplinary collaboration
-Focus on value, not cost; deeper supplier relationships; process improvement
-Consolidate and leverage purchasing power
How to determine the importance of a specific buying situation? - Correct Answers -•Not
all purchases are equally important
-Know how to segment the vendor base
•Need a way to help buyers segment purchases
•Buying strategies vary based on value & risk or complexity and volume
-Risk - likelihood for an unexpected event in the SC to disrupt operations
-Profitability - impact of a supply item upon the bottom line
Bottleneck items - Correct Answers -•Low supplier control
•Innovation/product substitution/ replacement
•Production-based scarcity
Strategic Items - Correct Answers -•Development of long-term relationships
•Collaboration and innovation
•Natural scarcity
Non-Critical (Routine) Items - Correct Answers -•Product standardization
•Process efficiency (automated purchasing, e.g. catalogs, e-tendering)
•Abundant supply
, Leverage Items - Correct Answers -•Exploitation of full purchasing power
•Targeted pricing strategies/negotiations
Abundant supply
How to identify potential strategic sourcing partners - Correct Answers -•View from an
organizational perspective
•Develop individual strategies
•Evaluate supply options (funnel)
-Start broad and then narrow
•Market analysis -> RFI -> RFP/RFQ -> Site visits ->Final selection
-Determine selection criteria
•Cost, quality, reliability, risk, capability, financial, locations, lead time, sustainability,
innovation, exclusivity
Why is this topic important? - Correct Answers -•Negotiating is an essential skill for
personal growth & professional success
•It's a skill that begins with identifying & acting on one's wants & needs
•Many individuals lack the confidence, motivation or training to ask for what they want in
certain situations
•Others are reluctant to initiate requests in general
•Effective negotiation skills & techniques can positively impact & optimize yourself &
your company
Importance of Prep - Correct Answers -•Supplier negotiators are often better prepared
than buying negotiators
•Edison: "A genius is just a talented person who does his homework."
•75% of total negotiation process time should be spent in preparation
•Solicitation & evaluation of supplier proposals
•Develop negotiation strategy
Buy-in of senior management
Market research/survey - Correct Answers -directly collecting information from
consumers about purchases
Delphi method - Correct Answers -panels of experts individually questioned (not as a
group); effective for long range forecasting
Importance of pricing - Correct Answers -•Align with positioning for target customers
•Align with Marketing Mix (4P's)
•Target what customers are willing & able to pay
•Supports organizational goals
•Enables adequate income to cover costs and make a profit
Preparation Techniques - Correct Answers -1.Familiarize your team with the supplier's
company
