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Chapter 6 of the document discusses procurement, defining it as the acquisition of raw materials and supplies necessary for a company's operations. It outlines the supplier selection and evaluation process, emphasizing the importance of understanding both internal and external environments, and differentiates between various types of materials such as excess, obsolete, scrap, and waste. Additionally, the chapter addresses procurement objectives and the relevance of procurement to logistics.

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14 views

Section_4_answers - Copy

Chapter 6 of the document discusses procurement, defining it as the acquisition of raw materials and supplies necessary for a company's operations. It outlines the supplier selection and evaluation process, emphasizing the importance of understanding both internal and external environments, and differentiates between various types of materials such as excess, obsolete, scrap, and waste. Additionally, the chapter addresses procurement objectives and the relevance of procurement to logistics.

Uploaded by

Hana Mahmoud
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Materials and Logistics Management

Chapter 6: Procurement

State whether the following statements are true or false; correct the false statements:

1. Procurement refers to the raw materials, component parts, and supplies bought from outside
organizations to support a company’s operations. (True)

2. One of procurement’s most important responsibilities involves supplier selection and


evaluation. (True)

3. Global procurement is primarily driven by the input-output and market-access strategies.


(False: factor-input)

4. Problem recognition is the first step in global procurement. (False: planning)

5. Because global sourcing increases the distance that components and inputs must be moved,
managers must consider the tradeoff between transportation and holding costs. (True)

6. Obsolete materials have no economic value. (False: waste)

7. Investment recovery is often the responsibility of the finance manager. (False: procurement)

8. Diversity and philanthropy are two dimensions of socially responsible procurement. (True)

9. With respect to gift giving and gift receiving, bribes refer to money paid after an exchange.
(False: kickbacks)

Choose the right answer for the following statements:

1. Which of the following is not a potential procurement objective?


a. supporting organizational goals and objectives
b. managing the supply base
c. developing strong relationships with other functional groups
d. supporting operational requirements
e. all are potential procurement objectives

2. A focus on satisfying internal customers is associated with which procurement objective?


a. managing the supply base
b. supporting organizational goals and objectives
c. managing the purchasing process effectively and efficiently
d. supporting operational requirements

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3. With respect to the supplier selection and evaluation process, ____ looks at both the internal
and external environment within which the supply decision is to be made.
a. Identify the need for supply
b. Identify suppliers
c. Situation analysis
d. Evaluate suppliers

4. ____ is the third step of the supplier selection and evaluation process.
a. Identify need for supply
b. Select suppliers
c. Identify and evaluate possible suppliers
d. Situation analysis

5. What is the final step in the supplier selection and evaluation process?
a. evaluate decision
b. implement decision
c. select suppliers
d. provide feedback

6. What is the first step in a global sourcing development model?


a. specification
b. situation analysis
c. problem recognition
d. planning

7. ____ materials refer to stock that exceeds the reasonable requirements of an organization.
a. Waste
b. Obsolete
c. Scrap
d. Excess

8. ____ materials are not likely to ever be used by the organization that purchased it.
a. Waste
b. Scrap
c. Obsolete
d. Excess

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Essay Questions:

1. What is procurement? What is its relevance to logistics?

Procurement refers to the raw materials, component parts, and supplies bought from
outside organizations to support a company’s operations. It is closely related to logistics
since acquired goods and services must be entered into the supply chain in the exact
quantities and at the precise time they are needed.

2. Name and describe the steps in the supplier selection and evaluation process.

Identify the need for supply => can arise from the end of an existing supply agreement
or the development of a new product. Situation analysis looks at both the internal and
external environment within which the supply decision is to be made. Identify and
evaluate potential suppliers delineates sources of potential information, establishes
selection criteria, and assigns weights to selection criteria. Select supplier(s) is where an
organization chooses one or more companies to supply the relevant products. Evaluate
the decision involves comparison of expected supplier performance to actual supplier
performance.

3. Distinguish between a single sourcing and multiple sourcing approach.

A single sourcing approach consolidates purchase volume with a single supplier in the
hopes of enjoying lower costs per unit and increased cooperation and communication in
the supply relationship. Multiple sourcing proponents argue that using more than one
supplier can lead to increased amounts of competition, greater supply risk mitigation, and
improved market intelligence.

4. Distinguish between excess, obsolete, scrap, and waste materials

Excess (surplus) materials refer to stock that exceeds the reasonable requirements of an
organization, perhaps because of an overly optimistic demand forecast. Obsolete
materials, unlike excess materials, are not likely to ever be used by the organization that
purchased them. Scrap materials refer to materials that are no longer serviceable, have
been discarded, or are a by-product of the production process. Waste materials refer to
those that have been spoiled, broken, or otherwise rendered unfit for reuse or reclamation.
Unlike scrap materials, waste materials have no economic value.

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