1.Why does the contemporary view of procurement as a strategic activity differ from the more traditional view of “purchasing”?
2.How can strategic procurement contribute to the quality of products produced by a manufacturing organisation?
3.Explain the rationale underlying volume consolidation. What are the risks associated with using a single supplier for an item?
4.What is the underlying rationale that explains why firms should segment their purchase requirements? Explain the concept of procurement strategy portfolio.
1.In the text, Tyco’s procurement of logistics services was discussed. Why is Tyco’s approach considered innovative?
MGT 5062 LOGISTICS POLICY
Identify (circle) TRUE/FALSE choice that best completes the statement or answers the following:
1.Early Supplier Involvement (ESI) is an important part of the “Volume Consolidation” stage of procurement strategy evolution.
2.Good purchasing strategy is based on standardized set of procedures for dealing with every supplier in a firm’s supply base.
3.The most important objective in procurement strategy is to ensure that the lowest purchase price is obtained from suppliers.
4.A company has decided that it no longer needs to extensively count and inspect the products it buys from a particular supplier. This suggests that the buying company has is in the volume consolidation stage of developing procurement strategy.
5.It is very possible that the supplier which offers the lowest purchase price does not have the lowest total cost of ownership for the buying firm.