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SCMN 3730 EXAM 2 NEWEST ACTUAL EXAM
COMPLETE 70 QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED ANSWERS)
|ALREADY GRADED A+
What are the primary steps in the strategic sourcing process?
Answer: Research & Analysis, Initiative Planning, Supplier
Selection, Contract Negotiation
What is the objective of the sourcing process?
Answer: To achieve the "lowest landed cost" position for a
specified product quality, quantity, and terms & conditions
What is the difference between direct vs. indirect purchases?
Answer: Direct = Goes into final product (Wheels on a car) ~
raw materials, semi-finished products, finished products; Indirect = Does not go into final product (Case for a phone) ~ Admin, EHS, Factory/Equipment, IT, etc
When developing an AS-IS spend company profile, what is meant by the analysis terms of number of contracts, contract coverage and compliance?
Answer: AS-IS = how things are right now, how much you are
currently spending vs where you want to be in the future; # of contracts = contracts in place (existing obligations); Contract
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coverage = scope? size? (local/regional/global); Contract compliance = contracts being utilized well
When developing a corporate AS-IS spend profile, how is a total spend vs. business importance quadrant analysis used in evaluating sourcing categories management?
Answer: total spend - how much did we spend on the goods?
What are the characteristics / value added benefits to each total spend vs. business importance quadrant?Answer: Tactical: not critical to business (best price wins); try to
automate; Leverage: not critical but a lot of money involved
(contract with few suppliers to gain improved pricing structure);
continuous improvement; Bottleneck: not a lot of money but
very critical to business (work closely with company to improve
bottleneck or consider purchasing company if able); Strategic:
critical and a lot of money (develop long-term partnerships with suppliers)
How are SWOT and 5-Forces business tools used in developing a strategic sourcing strategy?
Answer: Have to ensure you have the capabilities and strengths
to strategically source; tells you what others are doing too;
SWOT: Strengths, Weaknesses, Opportunities, Threats; Porter's
5 Forces: 1. Supplier Bargaining, 2. Pressure of Substitutes, 3.
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Buyer Bargaining Power, 4. Threat of New Entrants, 5. Market Competition
What marketplace conditions exist to form a monopoly / oligopoly?
Answer: Monopoly = government allows, little to no
competition, one supplier; Oligopoly = few sellers (actions affect prices and competitors)
What is a competitive market structure? What constitutes a buyer's and a seller's market?
Answer: Competitive market structure = monopoly, oligopoly,
perfect competition; Buyer's market = Supply > Demand:
pricing will go down; Seller's market = Demand > Supply:
pricing will go up
What conclusions can be drawn from the "Top 10 CPO Goals" survey?
Answer: Implemented cost saving and ROI are most important
factors
What is a strategy; how is it applied to the sourcing process?
Answer: Strategy = a plan of action designed to achieve a goal;
an elaborate and systematic plan of action; >Align purchase
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objectives to marketplace needs, >Develop goals to meet business needs, >Maximize corporate leverage to generate savings, >Include business operations (clients) in decision- making
What are the four opportunities for procurement to impact the income statement's "bottom line"?Answer: Operating Costs: Negotiate contract with lower pricing, Implement cost reduction in supply chain, Reduce purchased volumes, Reduce P2P operation costs; increase efficiency
What are the two opportunities for procurement to positively impact the balance sheet?
Answer: Reduce inventory investment, Increase days payable;
Inventory investment; increase inv. turns, Days-payable outstanding; increase cash, Fixed asset mgt; tooling and equipment
What are the key value drivers for each quadrant strategy? For each quadrant, how does procurement drive savings (strategy) to the "bottom line"?Answer: Tactical: not critical to business (best price wins); try to
automate; Leverage: not critical but a lot of money involved
(contract with few suppliers to gain improved pricing structure);