University of South Africa MNP 2601 MNP Tutorials For All Assignments & Tests From 2015-2020

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University of South Africa MNP 2601 MNP Tutorials For All Asiignments 2015-2020 Assignment 1-Semester 1 (2015) Question 1 An example of reverse logistics at Air Chefs could be... . 1. reversing t... he loading trucks to the ramps for easy loading onto the aircraft 2. communicating with the cabin crew to inform them of the final flight menu 3. employing chefs from culinary schools 4. recycling items on used trays after flights Question 2 The typical downstream linkage in Air Chefs’ supply chain would be ... . 1. abattoirs for slaughtering free-range chickens 2. sources of recyclable cutlery on trays 3. passengers enjoying fine cuisine meals 4. halaal kitchens for specific meals Question 3 The special packaging for meals to ensure freshness and hygiene for passengers is part of ... . 1. inspecting inventory 2. outbound logistics 3. internal distribution 4. production units Question 4 Which one of the following scenarios would describe benchmarking as part of performance evaluation in Air Chefs’ purchasing and supply function? 1. Air Chefs has a certified halaal kitchen unit. 2. Modular heat pumps provide warm water efficiently. 3. Compared to Air France, Air Chefs is more efficient in uploading meals before flights. 4. All meat bought are inspected for hygiene purposes when received at the kitchen units. Question 5 Air Chefs’ kitchen staff have to place an order for soya beans, lentils and lean meat for processing purposes with the suppliers of these special ingredients. Which one of the following documents should Air Chefs’ purchasing officer complete for the beans, lentils and meat? 1. material invoice 2. receiving note3. material list 4. purchasing requisition Question 6 Select the purchasing and supply objective that can typically be formulated at the operational level of Air Chefs. 1. analyzing inventory 2. developing existing suppliers 3. studying alternative control systems 4. ensuring the availability of purchased requirements Question 7 To execute a purchasing transaction, the various steps of the purchasing cycle should be performed. Which combination of steps should normally take place PRIOR to placing the order with suppliers? a. awarding the order b. expediting and contract administration c. receipt and inspection d. invoice analysis and payment e. product (need) identification f. source identification and selection g. Bidding and negotiation Choose the correct combination: 1. e f a 2. b c d 3. e f g 4. f g d Question 8 The product classification matrix consists of strategic, leverage, non-critical and bottleneck items. Bottleneck items are items that are characterized by ... . 1. high-profit impact and high-supply risk 2. high-profit impact and low-supply risk 3. low-supply risk and low-profit impact 4. high-supply risk and low-profit impact Question 9 Logistics is considered part of the supply chain process and has more to do with the inbound and outbound flow and storage of information, material, goods and serviceswithin and between organisations. Select a process that forms part of outbound logistics. 1. receiving 2. internal distribution 3. cross-docking 4. internal inspection Question 10 The following is one of the functions of supply chain management that are specifically aimed at managing the processes of delivery across organizational and functional boundaries. 1. process integration 2. cycle time reduction 3. total cost ownership 4. value creation Question 11 The process of asking for written tenders in purchasing and supply is referred to as ... . 1. bidding 2. inspection 3. selection 4. expediting Question 12 One of the management tasks performed in purchasing with the aim of aligning the activities of the purchasing and supply functions with those of other business functions is known as ... . 1. planning 2. organizing 3. controlling 4. co-coordinating Question 13 Select the statement that represents an example of the objective of strategic purchasing. 1. to ensure the availability of purchased requirements at a competitive price 2. to put together a project team that is responsible for developing suppliers 3. to study the situation in the supplier market and develop technical support for developing suppliers 4. to enter into long-term contracts with reliable suppliers of materialsQuestion 14 A structure where the purchasing and supply function is performed by different departments, branches or plants is known as a(n) structure. 1. centralized 2. outsourced 3. benchmarked 4. decentralized Question 15 A(n) ... structure exists when an organisation vests the authority of the purchasing and supply function in one person or a dedicated team. 1. centralized 2. outsourced 3. benchmarked 4. decentralized Question 16 When discussing the product classification matrix, which one of the following statements is FALSE? 1. It is typically found that there are a large number of suppliers of leverage items in the market. 2. Bottleneck items generally have a high supply risk. 3. All products, materials and services can be classified according to two main characteristics of supply situations, namely supply risk and lead time. 4. Strategic items pose the greatest overall risk to the supply department. Question 17 Which combination of the following could be considered objectives of purchasing and supply management? a. Managing the supply base so that adequate suppliers are available for the current and future requirements of the organisation. b. Maintaining the optimum balance of inventory to ensure the desired level of customer service while minimizing inventory holding cost. c. Ensuring that goods are purchased at the lowest possible cost above all other criteria. d. Maintaining and developing the quality of purchased products and services by implementing quality assurance programmes. Choose the correct combination:1. a c 2. b c d 3. b c 4. a b d Question 18 Which one of the following statements is TRUE about purchasing and supply organizational structures? 1. Gaining economies of scale is an advantage of a decentralized purchasing and supply structure. 2. A centralized purchasing and supply structure has higher administrative costs than a decentralized structure. 3. The purchasing and supply department’s negotiating power is increased with a centralised structure. 4. Decentralized structures offer easier control over the purchasing and supply department. Question 19 When discussing level-2 supply proficiency, some of the most important measures that can be used for performance evaluation are pricing proficiency, supplier performance and materials flow. The ... is a ratio that is used for materials flow measurement. 1. rejection ratio 2. expenditure ratio 3. input ratio 4. promptness factor Question 20 Which combination of the following factors will positively contribute to increased sales? a. increased flexibility b. improved quality c. increased customer lead time d. More innovative products Choose the correct combination: 1. a b c d 2. b d c 3. a b d 4. b dAssignment 2-Semester 1 (2015) Question 1 Air Chefs offers a wide range of services. Assume that they conclude that the canteen services should rather be outsourced. Which one of the following situations best describes the possible disadvantage of the contractor becoming a captive supplier in the Air Chefs context? 1. The market can be saturated with too many canteen catering specialists, leading to fewer business opportunities for entrepreneurs. 2. The contractor is captured by daily operational activities, which might lead to a loss of strategic focus. 3. The contractor can become dependent on Air Chefs when business with Air Chefs accounts for more than half of the contractor’s total business. 4. Air Chefs can get over-involved in the contractor’s development, resulting in a situation where the contractor will always need Air Chefs’ assistance. Question 2 In the case study, it is mentioned that kosher meals can be sourced. If Air Chefs finds that the supplier of kosher meals are not performing to their satisfaction and then decides to rather source the activity internally due to a lack of capable suppliers of kosher meals, it is called the ... . 1. supplier evaluation 2. insourcing 3. captive suppliers 4. subcontracting Question 3 With their sustainability drive, Air Chefs has decided to buy ingredients from local suppliers. In general, buying from local suppliers usually has the following advantage: 1. Express orders based on crewmembers’ late requests can be accommodated. 2. Transportation costs are higher, since no delivery is usually possible by the local suppliers. 3. Lead times are longer due to local suppliers’ labour-intensive techniques. 4. Larger inventories are carried to provide in the unforeseen needs of passengers. Question 4 Air Chefs has implemented a fully documented HACCP system to monitor compliance with hygiene and quality control processes. Suppliers that have shown that their past performance consistently meet and exceed Air Chefs’ required levels for quality are known as ... suppliers. 1. Weighted average 2. Approved 3. preferred 4. Accredited Question 5 In Air Chefs’ case, a typical example of striving towards environmental sustainability would be the following:1. Traditional boilers are replaced with modular heat pumps to have warm water more efficiently and costeffectively. 2. Air Chefs’ directors have the economic accountability to ensure that resources are used in such a way that Air Chefs’ viability is continued. 3. Air Chefs accepts their social responsibility and provides nutritious food for the Feed-a-Child project to show their community involvement. 4. Air Chefs realises that happy workers are productive workers and provides fringe benefits to suit workers’ diverse compensation needs. Question 6 A possible greening opportunity that Air Chefs identified in their supply chain would be ... . 1. installing solar panels 2. Buying unripe fresh produce 3. Planting flowers at the kitchen units 4. Using air-conditioners in canteens Question 7 If Air Chefs’ suppliers of sustainable products do not keep to the agreed delivery dates, Air Chefs can be affected negatively. This type of risk would typically be called a(n) ... risk. 1. Operational 2. External downside 3. Incidental 4. Lead time Question 8 Select the step that does NOT form part of the process typically followed when the supplier invoice is analysed at Air Chefs. 1. Verifying calculations 2. Checking discounts 3. Comparing invoice prices with those on the order or quotation 4. Closing the order Question 9 If strategic sourcing is performed at Air Chefs, it would be a process of ... . 1. Selecting a purchasing team with knowledge about specific products and services to purchase at Air Chefs 2. Setting policy guidelines at Air Chefs to enable the purchasing and supply function to make decisions more easily 3. Purchasing goods at Air Chefs that were previously produced in-house from external suppliers 4. Buying packaging materials at Air Chefs that can be more easily recycled or reused Question 10 Which one of the following purchasing and supply responsibilities performed at Air Chefs would represent the responsibility of abiding by Air Chefs’ code of conduct when executing tasks? 1. Activities related to the community 2. Activities related to diversity 3. Activities related to ethics 4. Activities related to safetyQuestion 11 The description of requirements (such as materials, components and services) that the user function needs, is communicated to the purchasing function by means of the following documents: a. material lists b. purchasing requisitions c. kanbans d. travelling requisitions Choose the correct combination: 1. a b c d 2. b c 3. a b 4. a b c 5. a c d Question 12 Placing the order/concluding the contract is a step of the purchasing process. Apart from the purchasing function, which other function would typically also require a copy of the order form generated during this part of the process? 1. Human resource function 2. Marketing function 3. financial function 4. Research and development function Question 13 Which one of the following would typically be a disadvantage of the decision to outsource? 1. Reducing operating and control costs 2. Gaining access to resources that are not available inside the organisation 3. Increasing flexibility and sharing risk with a partner 4. Securing internal confidentiality Question 14 Outsourcing technically means ... . 1. Purchasing goods that were previously produced in-house from external suppliers 2. Setting policy guidelines which enable the purchasing and supply function to make decisions more easily 3. Selecting team members with knowledge about specific products and services to purchase 4. Conducting market research on suppliers Question 15 One can explain reciprocity as a practice that exists when … . 1. suppliers who are also the customers of the purchasing organisation enjoy the preferential treatment of buying from one another 2. The make or buy decision is finally made 3. Top management makes the decision of becoming involved in supplier development 4. Purchasing and supply management formulates a policy on captive suppliers Question 16Identify the INCORRECT description of spend categories in a strategic sourcing matrix. 1. For bottleneck items, the amount that is spent is high but the risks are low because substitution is easy and specifications and manufacturing are simple. 2. For routine items, supply risks are low due to easy substitution possibilities, many suppliers, high availability and standard specifications. 3. With critical items, large amounts are spent and the risks of availability are high due to difficulty in substitution, the strategic importance of the item or service, and the large amount spent on it. 4. For leverage items, supply risks are low due to substitution possibilities, available alternative sources of supply and standard product specifications. Question 17 When assessing supplier delivery compliance, environmental factors also influence the purchasing and supply selection decision. Which one of the following criteria is specifically used to assess if suppliers consider environmental ethics? 1. ISO 14001 accreditation 2. ISO 9000 accreditation 3. Financial status accreditation 4. Technological accreditation Question 18 There are a number of advantages when a South African organisation buys goods and services from other South African (local) suppliers. Which one of the followings is usually NOT an advantage of buying goods and services from other South African (local) suppliers? 1. Advanced technical expertise 2. Better communication 3. Better personal relationships 4. Small inventories Question 19 To assess the supplier’s financial abilities prior to supplier selection, the purchasing and supply organisation should search for information on the financial status of the supplier. Which one of the following organisations may the purchasing and supply organisation primarily consult in assessing the financial status of a potential supplier? 1. Embassies and consular general officers 2. Chambers of commerce 3. Credit bureaus 4. National associations Question 20 A straightforward relationship between the buyer and the seller where both parties exchange goods and services for payment is known as a(n) ... . 1. Transactional relationship 2. Collaborative relationship 3. Alliance relationship 4. Supplier relationship managementAssignment 1-Semester 2 (2015) Question 1 In Air Chefs’ supply chain ... would typically form part of the upstream linkages in the chain. 1. sustainable sources of chicken 2. streamlined kitchen units 3. hi-loader trucks at ramps 4. finished meals correctly plated on trays Question 2 Air Chefs is probably reducing lead time by ... . 1. having units less than 2 km from the ramps 2. constantly increasing the lines of services provided 3. identifying sustainable sources of organic fruit and vegetables 4. reducing waste in the kitchen units Question 3 If purchasing at Air Chefs is organised so that the units in Cape Town, Johannesburg and Durban manage their own purchasing and supply, it is typically known as ... . 1. a decentralised purchasing and supply structure 2. economies of scale 3. interdivisional competition 4. demand-driven sales planning Question 4 If Air Chefs’ purchasing and supply function uses the promptness factor as a metric for the performance evaluation of their suppliers of plastic trays, it would mean that they ... . 1. determine the relationship between the number of orders for plastic trays received on a planned date and the total number of orders for plastic trays received 2. determine the relationship between the number of suppliers certified for quality plastic trays and the total number of suppliers of plastic trays in the supply base 3. evaluate the lead time of the different suppliers of plastic trays for a specified time to choose the most efficient supplier 4. compare the supplier of plastic trays to the supplier of plastic cutlery to determine the recyclability of the plastic used in production Question 5 When Air Chefs decides to actually purchase soya beans, lentils and lean meat from the suppliers of dietary ingredients, this is known as ... . 1. contract awarding 2. inspecting 3. selecting 4. expeditingQuestion 6 An example of reverse logistics at Air Chefs could be ... . 1. reversing the loading trucks to the ramps for easy loading onto the aircraft 2. communicating with the cabin crew to inform them of the final flight menu 3. employing chefs from culinary schools 4. recycling items on used trays after flights Question 7 To execute a purchasing transaction, the various steps of the purchasing cycle should be performed. Which combination of steps should normally take place PRIOR to placing the order with suppliers? a. awarding the order b. expediting and contract administration c. receipt and inspection d. invoice analyses and payment e. product (need) identification f. source identification and selection g. bidding and negotiation Choose the correct combination: 1. e f a 2. b c d 3. e f g 4. f g d Question 8 The product classification matrix consists of strategic, leverage, non-critical and bottleneck items. Bottleneck items are items that have ... . 1. high-profit impact and high-supply risk 2. high-profit impact and low-supply risk 3. low-supply risk and low-profit impact 4. high-supply risk and low-profit impact Question 9 Logistics is considered part of the supply chain process and it has more to do with the inbound and outbound flow and storage of information, material, goods and services within and between organisations. Select a process that is an example of outbound logistics. 1. receiving 2. internal distribution 3. cross-docking 4. internal inspection Question 10 The following is one of the functions of supply chain management that are specifically aimed at managing the processes of delivery across organisational and functional boundaries.1. process integration 2. cycle time reduction 3. total cost ownership 4. value creation Question 11 If the purchasing team has successfully selected suitable suppliers to supply the organisation with goods and services, the next step will usually be to ... . 1. request formal tenders 2. analyse invoices of suppliers 3. place orders with suppliers 4. inspect goods received Question 12 Which one of the following documents is required to complete a specification of raw materials needed? 1. material invoice 2. receiving note 3. material list 4. travelling requisition Question 13 Information cards that form part of the just-in-time (JIT) system are known as ... . 1. kanbans 2. purchase requisitions 3. material lists 4. travelling requisitions Question 14 The process of asking for written tenders in the purchasing and supply chain is referred to as ... . 1. bidding 2. inspection 3. selection 4. expediting Question 15 Which one of the following actions should a purchasing officer conduct when orders placed with suppliers are not received on the set delivery date? 1. bidding 2. inspection 3. selection 4. follow-upQuestion 16 One of the tasks performed in purchasing with the aim of aligning the activities of purchasing and supply functions with those of other organisational functions is known as ... . 1. planning 2. organising 3. controlling 4. co-ordinating Question 17 Select the statement that is an example of the objective of strategic purchasing. 1. to ensure the availability of purchased requirements at a competitive price 2. to put together a project team that is responsible for developing suppliers 3. to study the situation in the supplier market and develop technical support to developing suppliers 4. to enter into long-term contracts with reliable suppliers of materials Question 18 One of the disadvantages of a centralised purchasing and supply organisational structure is that ... . 1. there is slow response time to regional plants 2. there is duplication of staff 3. control over the function is much more difficult 4. there is a focus on local units Question 19 One of the advantages of a decentralised purchasing and supply organisational structure is that there is an ... . 1. increase in good service delivery to regional plants 2. increase in negotiation power 3. elimination of duplicate efforts 4. improvement in control Question 20 When discussing the product classification matrix, which of the following statements is FALSE? 1. It is typically found that there are a large number of suppliers of leverage items in the market. 2. Bottleneck items generally have a high supply risk. 3. All products, materials and services can be classified according to two main characteristics of supply situations, namely supply risk and lead time. 4. Strategic items pose the greatest overall risk to the supply department.Assignment 2-Semester 2 (2015) Question 1 If Air Chefs decides to outsource their lounge services to suitable caterers, what would best describe a situation of double outsourcing? 1. The contractor that Air Chefs chose gets so busy with new responsibilities that the contractor decides to rather outsource to another catering organisation. 2. Air Chefs decides to outsource to three different caterers at the three different airports in order to be more efficient. 3. Contracting the lounge services to another company would double the available resources for the canteen services. 4. Air Chefs decides to try to outsource to two contractors; if the one contracted caterer fails, there will still be another caterer to perform the lounge services. Question 2 If Air Chefs concludes that external parties are more competent in delivering laundry services, and they know that providing laundry services does not contribute to their competitive advantage, the best decision for Air Chefs would be to ... . 1 provide staff with laundry training in laundry services to improve efficiencies 2 continue with the services since the array of services makes them versatile 3 outsource the laundry services to other contractors 4 reengineer with the objective of providing all services equally well Question 3 When a customer bases his decision about airline companies on their sensitivity towards environmental issues, he/she will probably consider SAA because of the following: 1. Air Chefs, as a subsidiary of SAA, provides a wide range of services to satisfy all possible needs. 2. The food served on SAA flights adheres to all ethnic and religious requirements. 3. The ingredients that Air Chefs uses in food preparation come from sustainable sources. 4. SAA and Air Chefs follow the requirements of the Broad-Based Black Economic Empowerment Act. Question 4 If Air Chefs buys into sustainable purchasing and supply, their philosophy would be the following: 1. “We are sustainable in the sense that we are maintaining our profit levels and satisfy the needs of our passengers from different backgrounds.” 2. “We prioritise on Air Chefs’ bottom-line profits; if the community and environment benefit in the process, it is a bonus.” 3. “We want to sustain the highest possible return on investors’ money; therefore, we have to satisfy them first and then trust that the environment is not damaged.” 4. “We meet our needs at Air Chefs by generating benefits for ourselves, society and the community without damaging the environment.” Question 5 If Air Chefs performs a life cycle analysis as part of their sustainability drive, they probably ... . 1. use the changes in passengers’ demand patterns to adapt meal offerings2. evaluate the environmental friendliness of plastic trays and eating equipment to determine their recyclability 3. analyse economic conditions to determine the number of passengers who are booking flight tickets in order to calculate the number of meals to prepare 4. determine the lifespan of fresh produce to make sure that sufficient replacement will arrive when the need arises to use the fresh produce in food processing Question 6 Air Chefs has a state-of-the-art communication network. Assume that the wrong number of meals is delivered to the aircraft. What type of risk best describes Air Chefs’ risk if miscommunication takes place between the cabin crew and Air Chefs during last-minute requests due to upgrades to the network? 1. capacity risk 2. external downside risk 3. people risk 4. process risk Question 7 Which one of the following would usually obtain the original order as a confirmation of concluding the purchasing contract at Air Chefs? 1. receiving 2. inspection 3. purchasing 4. supplier Question 8 Outsourcing of kosher meals at Air Chefs would technically mean to ... . 1. purchase goods that were previously produced in-house from kosher meals suppliers 2. set policy guidelines that enable Air Chefs’ purchasing and supply function to make decisions more easily 3. select a purchasing team at Air Chefs that has knowledge about specific products and services to purchase 4. conduct market research on the suppliers of Air Chefs Question 9 A supplier selection phase, where possible suppliers are identified at Air Chefs, is known as the ... phase. 1. Pre-assessment 2. assessment 3. post-assessment 4. supplier visit Question 10 Air Chefs can participate in greening the supply chain of food ingredients. This will give Air Chefs opportunities to … . 1. provide a basis for working together, which would require staff to treat each other with respect 2. set boundaries for what constitutes ethical behaviour 3. provide a safe environment4. buy packaging materials that can be more easily recycled or reused Question 11 Which one of the following statements is FALSE about the distribution of the actual order form when placing orders as part of the purchasing process? 1. The finance department receives the original order form used for invoice verification and payment of the supplier. 2. The receiving function receives a copy of the order form to make them aware of the incoming goods. 3. The inspection function receives a copy of the order form to enable them to plan their inspection. 4. A copy of the order form stays in the order book as a record of the transaction. Question 12 The internal order form that is used in the just- in-time (JIT) system/philosophy is known as a(n) ... form. 1. purchasing order 2. internal order 3. six sigma 4. kanban Question 13 Which combination of the following would cause an organisation to consider outsourcing the manufacturing of a component? a. making the organisation leaner b. double outsourcing c. pressure to adapt to technology developments d. lack of skills in the organisation Choose the correct combination: 1. a b d 2. a b c d 3. a c d 4. b c d Question 14 As part of the strategic sourcing process, commodities are labelled according to their complexity and the amount that the organisation spent on them. A relatively cheap, standard commodity such as machine oil, which can easily be substituted from alternative suppliers, would typically be classified as a ... item. 1. bottleneck 2. routine 3. critical 4. leverageQuestion 15 To simplify the ongoing management of suppliers, organisations classify suppliers into three categories based on past performance and the length of the relationship. The category that signifies the highest level of cooperation and trust is ... suppliers. 1. preferred 2. certified 3. approved 4. potential Question 16 Toyota has decided to install a computer with wireless internet in each of their new Fortuner 2015 models. Which one of the following statements is incorrect about the circumstances in which Toyota will choose to buy the computers according to specification from an external supplier instead of making it themselves? 1. when there are inadequate facilities at Toyota’s manufacturing plant in Japan 2. when Toyota’s demand for the computers is small or temporary 3. when it is cheaper for Toyota to buy the computers than to make it themselves 4. when it costs Toyota less to manufacture the computers than to purchase it from an external supplier Question 17 Which three criteria are known as the trinity (the main key performance indicators) of supplier evaluation? 1. cost, price, quality 2. cost, quality, delivery 3. cost, flexibility, delivery 4. cost, delivery, quantity Question 18 Buyer–supplier relationships ideally develop from ... relationships. 1. transactional to collaborative to alliance 2. partnerships to transactional to alliance 3. alliance to strategic to partnership 4. negotiation to transactional to partnership Question 19 When it comes to handling consignment and rejections, which function of the organisation should take that responsibility? 1. purchasing 2. receiving 3. inspection 4. financeQuestion 20 It is crucial in purchasing and supply to find potential suppliers who are able to supply the organisation with the correct quality and quantity at the right time and place and to ensure efficiency in the purchasing and supply function. Who is responsible for finding suitable suppliers of this calibre? 1. purchasing 2. receiving 3. inspection 4. finance Assignment 1-Semester 1 (2016) Question 1 In terms of the supply chain, the concept “upstream linkages” is often used. Which one of the following processes refers to upstream linkages? [1] distribution to the end consumer [2] wholesalers selling to retailers [3] supply sourcing [4] customer service Question 2 If an organisation adopts the philosophy of lean manufacturing, they would typically use the following statement in conversations: [1] By keeping large inventories of raw materials, even if these items are not used in manufacturing, we will be prepared to respond to customers’ orders when they come in. [2] If we have more work stations at the plant, we can employ more people to be part of the manufacturing process. [3] By simplifying our work environment, we can reduce waste and keep our employees, equipment and workspace responsive to current needs. [4] We have invested large sums of capital in these advanced machines; therefore, we need to get maximum return on our investment before meeting changing demands. Question 3 A typical example of a qualitative performance indicator for evaluating purchasing and supply activities in the organisation is the … the purchasing and supply function. [1] negotiation ability of [2] promptness factor achieved by [3] rejection ratio of consignments by [4] outstanding orders of Question 4 Quality certification as a quantitative metric that is used in purchasing and supply performance evaluation is determined by using the following ratio: [1] number of quality certificates received during the past year: expected performance [2] number of suppliers which are also accredited suppliers for other organisations: quality delivered [3] number of suppliers certified for quality: total number of suppliers in the supply base [4] actual quality cost: number of orders placed Question 5Since the purchasing and supply function is a support function, lateral purchasing and supply coordination is essential. This means that purchasing and supply … [1] has a harmonious relationship with other organisational functions. [2] uses horizontal thinking to solve purchasing and supply challenges. [3] distributes an annual report to all the relevant internal and external stakeholders. [4] promotes a hybrid purchasing and supply organisational structure. Question 6 The following principle should be kept in mind when evaluating purchasing and supply performance: [1] It would be best to use the generic evaluation system that is available to evaluate purchasing and supply performance. [2] Quantitative measures give the best and most accurate indication of purchasing and supply performance. [3] As long as the benefits equal the costs, the evaluation system for evaluating purchasing and supply performance is effective. [4] A sound database with information on a wide spectrum of purchasing and supply activities is necessary to evaluate performance. Question 7 Expediting an order in the purchasing and supply context implies that the purchasing official firstly … [1] obtains advanced technology to speed up the process. [2] phones the supplier to discuss future relationships. [3] monitors the supplier’s progress with the order. [4] suggests lean manufacturing as an efficient alternative. Question 8 Since the nature of the requirements significantly influences the procedure for selecting a supplier, the usual procedure for selecting suppliers of standard items in relatively small quantities would be to choose the supplier … [1] after following a comprehensive procedure for supplier selection. [2] as recommended on the requisition by the user function. [3] which seems to be the best one from three or four suggested suppliers. [4] which submitted a complete quotation. Question 9 When making the decision to insource or outsource, which one of the following options is most suitable when a buying organisation is more competent in performing an activity than a potential supplier? [1] Outsource to any external supplier that has the capability to perform the activity. [2] Outsource a core activity even though it gives a competitive advantage. [3] Invest in disadvantaged suppliers to create their capability to perform the activity in-house at their premises. [4] Keep the activity in-house and invest to maintain and increase competitive advantage. Question 10 Sometimes non-cost factors should be considered in the outsourcing decision. The non-cost factor of … would compel the organisation to perform an activity internally when style plays an unusually important role and patents do not provide sufficient protection against emulation.[1] quality control [2] workforce stability [3] design secrecy [4] new product development Question 11 Assume that the purchasing manager at Amazon.com is requested to submit a report on suppliers in accordance with the policy guidelines of the organisation. In his report, he lists the different types of suppliers and their dealings with Amazon.com. Which one of the following best describes a situation where the purchasing function of Amazon.com buys more than half of a supplier’s production of video games? [1] unreliable suppliers [2] suppliers’ specialised knowledge [3] captive suppliers [4] reciprocal suppliers Questions 12-16 are based on the following example of the weighted average method: Question 12 When using the weighted average method to determine the selected suppliers’ performance, the following best describes the criteria (shown in the table) according to which the suppliers are evaluated: [1] After-sales service is not important when evaluating the suppliers’ performance. [2] Suppliers A, B, C and D should all score the highest in terms of on-time delivery as the most important criterion. [3] The decision on which criteria to use is one of the subjective (qualitative) parts of this method. [4] Once criteria are selected, they will remain the criteria that management will use to evaluate current and future suppliers’ performance. Question 13 When using the weighted average method to identify the most suitable supplier, the calculations in the above table shows that Supplier … is the best supplier in this situation. (To answer the question, the table should be completed by doing the necessary calculations.) [1] A [2] B [3] C[4] D Question 14 When only focussing on the suppliers’ scores for price, the Supplier C's score of 35 can be interpreted as follows: [1] Supplier C offers the highest-priced product compared to the other suppliers. [2] Supplier C offers the lowest-priced product compared to the other suppliers. [3] Supplier C will be eliminated from the list due to its low score for the price criterion. [4] Supplier C seems confident that having the lowest price will compensate for the perception of poor quality. Question 15 If quality was the ONLY criterium used when deciding on the best supplier, which supplier would be the most obvious one to select? [1] Supplier A [2] Supplier B [3] Supplier C [4] Supplier D Question 16 (Before you answer this question, change the weight for quality product to 25 and ignore after-sales service as a criterion.) If the criteria of on-time delivery, price and quality product were the only three criteria used in evaluating the potential suppliers, which supplier would be the best supplier (use the scales in the table)? [1] Supplier A [2] Supplier B [3] Supplier C [4] Supplier D Question 17 The uncertainty about the timeous delivery of materials from suppliers can be problematic for the buying organisation. Which one of the following options describes the most likely way of deciding on inventory to be held by suppliers? [1] Suppliers should not be asked to hold sufficient safety inventory for the buying organisation based on ethical reasons. [2] Even if the supplier is located near the premises of the buying organisation, it would still be best to hold inventory at the buying organisation’s premises. [3] Inventory held by a supplier can have cost implications for the supplier, which will be transferred to the buying organisation. [4] Only contingency inventory should be held by the supplier in their warehouses until needed by the buying organisation due to the insurance risks borne by the supplier. Question 18 … costs arise from the warranty claims and product recalls of the Kindle Fire Tablet sold by Amazon.com. [1] Internal failure [2] Appraisal [3] External failure [4] PreventionQuestion 19 Amazon.com, an online retailer, uses a central computer in their warehouses, which records the location of goods and maps out routes for pickers of the ordered items. If the central computer should have insufficient capacity to handle all the required transactions, it would imply the following type of operational risk: [1] hardware risk [2] systems risk [3] policy risk [4] process risk Question 20 According to the King III report, which level of the organisation is primarily responsible for the development and implementation of good ethics? [1] financial officials [2] shareholders [3] internal stakeholders [4] board of directors Assignment 2-Semester 1 (2016) Read the case study in Annexure D and familiarise yourself with the content of study units 6 to 12 to answer the questions that follow. All the questions are based on the case study (these questions will test your insight). Question 1 Distinguishing between ethical and unethical conduct is difficult. Which ONE of the following lines of thinking would be ethical when allocating a budget to a province to train millers for a six-month period in commercial milling? [1] My brother-in-law has a training facility in Kimberley which we could easily use for our training. By doing this, both my family and the DTI would benefit. [2] It would make financial sense to use a written quotation from one of the training companies to help a competing training company to quote the lowest price for the training. [3] Since bribes are common practice in other African countries, we can do the same when awarding contracts to trainers in the Northern Cape Province. [4] Loyalty has a price; therefore, even if my career is at stake, I have to blow the whistle on my superior who awarded the training contract to his best friend Question 2 Storing 14.5 million tons of maize in silos at different cooperatives can hold some risks, of which … risk refers to the supply risk when maize prices fluctuate. [1] core business [2] external downside [3] incidental business [4] foreign exchange Question 3 The risk of receiving sub-standard quality maize in the silos could proactively be managed by the following management technique:[1] ABC inventory management [2] supplier certification [3] target costing [4] buffer inventory Question 4 If the bags of maize meal for rural customers are badly torn while being transported on back to towns, the quality costs borne by the maize millers is known as … costs. [1] external failure [2] variable [3] internal appraisal [4] opportunity Question 5 The quality of service that internal suppliers provide to internal customers is equally important. In terms of the government’s support programmes to help the small-scale millers as discussed in the case study, the … would most probably be the internal supplier/s of maize grain to small millers. [1] government purchasers of maize grain [2] sellers of milling equipment [3] rural maize users [4] Department of Trade and Industry Question 6 One of the cost elements that small-scale maize millers should consider is direct material costs, which in this case would refer to the … [1] cost of the cleaning materials for the milling machines. [2] electricity cost for operating the milling machines. [3] cost of adjusting the coarseness of the milled maize. [4] cost of the maize grain used in the milling process Question 7 Millers should see electricity as a semi-variable cost, which in this case would imply that electricity … [1] usage varies according to South Africa’s load-shedding schedule. [2] is only a variable-cost component which changes according to production volumes. [3] could have both a variable-cost and a fixed-cost component for the milling facility. [4] can be replaced by manual labour if electricity provision is uncertain. Question 8 If drought forces the government purchasers who purchase maize on behalf of the millers to adopt a strategy of hedging maize prices, the reason for this decision would most probably be to … [1] protect themselves against losses due to unforeseen changes in the available maize grain supply. [2] negotiate lower maize prices to the benefit of all the small-scale millers. [3] fix a high price for the processed maize sold to manufacturers of premium-priced maize products.[4] standardise the price of processed maize to the benefit of the consumers of maize products as staple food. Question 9 The decision-makers in the Department of Trade and Industry (DTI) most probably assumed that the miller’s learning curve would change over time to decrease the labour cost component of milled maize. In this case, an improved learning curve would imply that … [1] the more small-scale millers attend training sessions before being selected for the programme, the more skilled they will be during the milling process. [2] the more skilled the small-scale millers become in actually handling the milling equipment, the more bags of milled maize will be produced. [3] maize millers’ labour skills can be improved indefinitely through the repeated handling of milling equipment. [4] skilled workers who are unwilling to work or often go on strike should be replaced by advanced milling equipment. Question 10 The case study makes clear that the prices of maize in South Africa has always been determined by the forces of supply and demand; therefore, based on the approaches to determining prices discussed in the prescribed book, maize prices are determined … [1] through negotiations. [2] according to tender prices. [3] according to the prevailing market prices. [4] according to market input prices. Question 11 The … would typically be categorised as inventory carrying cost for millers. [1] cost of maize ordered for milling purposes [2] transportation costs of empty maize bags [3] cost of small forklifts used for the finished maize bags [4] processing cost associated with specialised milling Question 12 If some of the millers protect themselves against irregular maize supply due to drought and hold more inventory of maize, this would be known as … inventories. [1] unavoidable [2] economic [3] strategic maintenance [4] buffer Question 13 A typical example of multi-purpose capital equipment purchased by millers would be … [1] forklifts for moving bags of maize meal in storage. [2] milling machines for grinding maize grain. [3] stitching machines for closing maize bags. [4] specialised maize milling plants to produce maize meal. Question 14 When purchasing capital equipment, the millers should consider the total cost of ownership (TCO) of capital equipment. TCO can best be described as … [1] the breakdown cost of the milling machine.[2] the purchasing price of the milling machine minus the depreciation costs. [3] all costs incurred during the lifespan of the milling machine. [4] the purchasing price, warranty and insurance cost of the milling machine. Question 15 Which one of the following statements best describes the role of the purchasing and supply function in buying capital equipment? [1] Since buying capital equipment is far too complex, purchasers are not included in the sourcing team for capital equipment. [2] The purchasing and supply function plays a dominant role in the purchasing of capital equipment. [3] The purchasing and supply officials can administer the order, but cannot play a role in the selection of suppliers of capital equipment. [4] The role of purchasing and supply function is to provide a support service, give advice and promote supplier relations Question 16 Which one of the following questions will millers ask when they are considering a quantitative factor of purchasing capital equipment? [1] Will I be able to afford the maintenance costs or should I consider asking an expert to do it? [2] If the machine takes up space, will I need more capital? [3] Will the machine be robust enough for grinding maize? [4] If my workers feel that the machine is unsafe, will they be willing to operate it? Question 17 … are an example of a service purchased by maize millers. [1] Quality approved maize corns [2] Specialised milling machines [3] Temporary millers employed during strikes [4] Conveyor belts for moving maize bags Question 18 When contracting a repair expert to fix a milling machine, there is no lead time in repair service delivery. This refers to the following characteristic of services: [1] heterogeneity [2] simultaneity [3] perishability [4] intangibility Question 19 If the Department of Trade and Industry contracted a maize specialist to grade maize corns before distributing them to millers, the step of quality measurement and supplier evaluation when purchasing this specialised service will have to be performed... [1] while the specialist does the grading. [2] when drafting the statement of work of the specialist. [3] while asking quotations from grading specialists. [4] when signing a service level agreement with the specialist. Question 20When the DTI buys transportation services for delivering maize to the 24 small-scale millers, they should ensure that the potential transportation companies are able to deliver the maize at the geographically dispersed milling plants. In this case … is a key variable in transport decision making. [1] reliability [2] capability [3] accessibility [4] speed Assignment 1-Semester 2 (2016) Question 1 The concepts of logistics management and supply chain management are sometimes confused. Which statement is correct about the difference between these concepts? [1] Supply chain management involves activities related to the effective flow of material and information within the boundaries of a specific organisation. [2] The focus of logistics management is on managing relationships between different organisations across the entire supply chain. [3] Logistics is that part of the supply chain that manages the forward and reverse flow of goods and information from the point of origin to the point of consumption. [4] Supply chain management focuses on optimising wealth for a single organisation by adding value. Question 2 Which one of the following can typically be categorised as an inbound logistics activity? [1] inspecting inventory [2] cross-docking [3] warehousing [4] customer service Question 3 Which one of the following can be categorised as both an inbound and an outbound logistics activity? [1] customer service [2] cross-docking [3] transportation [4] salvage and scrap Question 4 During the control task, the activity of evaluating the performance of the purchasing and supply function should be based on both the following critical dimensions: [1] tactical and strategic objectives [2] centralisation and decentralisation [3] quantitative and qualitative bases [4] cost reduction and reduced lead time Question 5When determining responsibilities in the purchasing and supply process, the … function has the prime responsibility to contact the supplier base about faulty consignments. [1] receiving [2] inspection [3] financial [4] purchasing Question 6 When buying specialised equipment, the purchasing procedures might require that requisitions exceeding a predetermined amount be accompanied by two or three written quotations. In such cases, the … has the prerogative of selecting the supplier. [1] user [2] purchasing official [3] specialised equipment specialist [4] financial function Question 7 Since the nature of the requirements significantly influences the procedure for selecting a supplier, the usual procedure for selecting suppliers of standard items in relatively small quantities would be to choose the supplier … . [1] after following a comprehensive procedure for supplier selection [2] as recommended on the requisition by the user function [3] which seems to be the best one from three or four suggested suppliers [4] which submitted a complete quotation Question 8 The need for Amazon.com, an e-retailer, to order specific titles to keep book items in stock originates with the … [1] production department. [2] book publisher. [3] inventory stores. [4] office supplies. Question 9 Sometimes non-cost factors should be considered in the outsourcing decision. The non-cost factor of … would compel the organisation to perform an activity internally when style plays an unusually important role and patents do not provide sufficient protection against emulation. [1] quality control [2] workforce stability [3] design secrecy [4] new product development Question 10 … is when an organisation decides to partially transfer the activities of a function to a supplier while keeping the rest of the activities in-house. [1] Outsourcing[2] Insourcing [3] Co-sourcing [4] Back-sourcing Question 11 Reciprocity is a practice where … . [1] suppliers, who are also customers of the organisation, enjoy preferential treatment [2] the supplier is directly or indirectly owned by the purchasing organisation [3] the buyer buys from a supplier that employs or is owned by a family member of the buyer [4] a purchasing organisation buys more than half of the supplier’s production Questions 12 to 16 are based on the following example of the weighted average method: Question 12 When using the weighted average method to determine the selected suppliers’ performance, the following best describes the criteria (shown in the table) according to which the suppliers are evaluated: [1] After-sales service is not important when evaluating the suppliers’ performance. [2] Suppliers A, B, C and D should all score the highest in terms of on-time delivery as the most important criterion. [3] The decision on which criteria to use is one of the subjective (qualitative) parts of this method. [4] Once criteria are selected, they will remain the criteria that management will use to evaluate current and future suppliers’ performance. Question 13 When using the weighted average method to identify the most suitable supplier, the calculations in the above table shows that Supplier … is the best supplier in this situation. (To answer the question, the table should be completed by doing the necessary calculations.) [1] A [2] B [3] C [4] D Question 14When only focussing on the suppliers’ scores for price, the Supplier C's score of 35 can be interpreted as follows: [1] Supplier C offers the highest-priced product compared to the other suppliers. [2] Supplier C offers the lowest-priced product compared to the other suppliers. [3] Supplier C will be eliminated from the list due to its low score for the price criterion. [4] Supplier C seems confident that having the lowest price will compensate for the perception of poor quality. Question 15 If quality was the ONLY criterium used when deciding on the best supplier, which supplier would be the most obvious one to select? [1] Supplier A [2] Supplier B [3] Supplier C [4] Supplier D Question 16 (Before you answer this question, change the weight for quality product to 25 and ignore after-sales service as a criterion.) If the criteria of on-time delivery, price and quality product were the only three criteria used in evaluating the potential suppliers, which supplier would be the best supplier (use the scales in the table)? [1] Supplier A [2] Supplier B [3] Supplier C [4] Supplier D Question 17 The uncertainty about the timeous delivery of materials from suppliers can be problematic for the buying organisation. Which one of the following options describes the most likely way of deciding on inventory to be held by suppliers? [1] Suppliers should not be asked to hold sufficient safety inventory for the buying organisation based on ethical reasons. [2] Even if the supplier is located near the premises of the buying organisation, it would still be best to hold inventory at the buying organisation’s premises. [3] Inventory held by a supplier can have cost implications for the supplier, which will be transferred to the buying organisation. [4] Only contingency inventory should be held by the supplier in their warehouses until needed by the buying organisation due to the insurance risks borne by the supplier. Question 18 Which one of the following best describes risk transfer as a way of a computer equipment leasing company to manage risks? [1] The financial consequences of losing computers are transferred to the insurance company. [2] In the lease agreement, the risk of obsolescent computers is transferred to the owner of the computers. [3] The risk of stolen computers is transferred to the board of directors. [4] The risk of redundant computers can be transferred to the computer equipment manufacturer. Question 19… costs arise from the warranty claims and product recalls of the Kindle Fire Tablet sold by Amazon.com. [1] Internal failure [2] Appraisal [3] External failure [4] Prevention Question 20 Amazon.com, an online retailer, uses a central computer in their warehouses, which records the location of goods and maps out routes for pickers of the ordered items. If the central computer should have insufficient capacity to handle all the required transactions, it would imply the following type of operational risk: [1] hardware risk [2] systems risk [3] policy risk [4] process risk Assignment 2-Semester 2 (2016) Read the case study in Annexure D and answer the questions that follow (these questions will test your insight). Question 1 The following would be an example of ethical behaviour when the DTI decides to use the Isigayo mill to centralise the milling logistics processes of several millers. [1] “Since Isigayo mill belongs to my parents, we can use it as a central place for processing maize. By doing this, my family will see my loyalty and they can expand their business with the money obtained from the DTI. This is a win-win situation for all of us”, says Stanley (a DTI official). [2] “It would be better for my career to keep quiet about the contract that has been awarded to Isigayo mill, since Stanley could block my promotion in future if the information becomes known”, says Ronald (Stanley’s subordinate). [3] “Using Isigayo mill, which is owned by Stanley’s parents, could only benefit the DTI in this project since the kickback that we receive from the mill can strengthen our section’s financial position to help previously disadvantaged millers to join our project”, says Robert (the financial administrator of the project). [4] “We have to select the best mill to optimise logistics costs and although Isigayo mill is not the only suitable mill, I cannot provide other potential mills with Isigayo’s quotation”, says Sandra (the project initiator). Question 2 As a general rule of thumb, small-scale maize millers should realise that the poor quality of incoming maize grain from farmers could cause approximately …% of the problems and related costs associated with the maize meal products reaching the final consumer. [1] 20 [2] 40 [3] 75 [4] 95 Question 3 The practice where a miller decides to only package maize meal in 25 kg bags and therefore only buys one size bag to reduce purchasing costs is known as …[1] diversification. [2] transformation. [3] integration. [4] standardisation. Question 4 Describing the quality of maize will provide information to both the maize purchaser (in this case the cooperative or maize miller) and the maize seller (in this case the farmer or the cooperative) about the inherent characteristics of the maize being bought. The description of the quality of maize grain is typically based on … [1] brand names. [2] market grades. [3] commercial standards. [4] colour specifications. Question 5 The quality of service that internal suppliers provide to internal customers is equally important. In terms of the government’s support programmes to help the small-scale millers as discussed in the case study, the … would most probably be the internal supplier/s of maize grain to small millers. [1] government purchasers of maize grain [2] sellers of milling equipment [3] rural maize users [4] Department of Trade and Industry Question 6 One of the cost elements that small-scale maize millers should consider is direct material costs, which in this case would refer to the … [1] cost of the cleaning materials for the milling machines. [2] electricity cost for operating the milling machines. [3] cost of adjusting the coarseness of the milled maize. [4] cost of the maize grain used in the milling process. Question 7 Millers should see electricity as a semi-variable cost, which in this case would imply that electricity … [1] usage varies according to South Africa’s load-shedding schedule. [2] is only a variable-cost component which changes according to production volumes. [3] could have both a variable-cost and a fixed-cost component for the milling facility. [4] can be replaced by manual labour if electricity provision is uncertain. Question 8 If drought forces the government purchasers who purchase maize on behalf of the millers to adopt a strategy of hedging maize prices, the reason for this decision would most probably be to … [1] protect themselves against losses due to unforeseen changes in the available maize grain supply. [2] negotiate lower maize prices to the benefit of all the small-scale millers. [3] fix a high price for the processed maize sold to manufacturers of premium-priced maize products. [4] standardise the price of processed maize to the benefit of the consumers of maize products as staple food. Question 9The decision-makers in the Department of Trade and Industry most probably assumed that the miller’s learning curve would change over time to decrease the labour cost component of milled maize. In this case, an improved learning curve would imply that … [1] the more small-scale millers attend training sessions before being selected for the programme, the more skilled they will be during the milling process. [2] the more skilled the small-scale millers become in actually handling the milling equipment, the more bags of milled maize will be produced. [3] maize millers’ labour skills can be improved indefinitely through the repeated handling of milling equipment. [4] skilled workers who are unwilling to work or often go on strike should be replaced by advanced milling equipment. Question 10 The case study makes clear that the prices of maize in South Africa has always been determined by the forces of supply and demand; therefore, based on the approaches to determining prices discussed in the prescribed book, maize prices are determined … [1] through negotiations. [2] according to tender prices. [3] according to the prevailing market prices. [4] according to market input prices. Question 11 In the case study, dependent demand items at millers would typically be … [1] maize used in the milling process. [2] finished bags of maize meal that are ready for delivery. [3] packaged maize breakfast cereal on supermarket shelves. [4] processed maize meal products at a premium price. Question 12 Optimum maize inventory for millers would imply a situation where … [1] maize transportation costs from rural areas are the lowest. [2] overall maize inventory costs are the lowest. [3] inventory holding costs equals inventory ordering costs. [4] the stock-out costs of maize inventory are related to transportation costs. Question 13 The … would typically be categorised as inventory carrying cost for millers. [1] cost of maize ordered for milling purposes [2] transportation costs of empty maize bags [3] cost of small forklifts used for the finished maize bags [4] processing cost associated with specialised milling equipment Question 14 If some of the millers protect themselves against irregular maize supply due to drought and hold more inventory of maize, this would be known as … inventories. [1] unavoidable [2] economic [3] strategic maintenance[4] buffer Question 15 When purchasing capital equipment, the millers should consider the total cost of ownership (TCO) of capital equipment. TCO can best be described as … [1] the breakdown cost of the milling machine. [2] the purchasing price of the milling machine minus the depreciation costs. [3] all costs incurred during the lifespan of the milling machine. [4] the purchasing price, warranty and insurance cost of the milling machine. Question 16 … is usually associated with purchasing capital equipment. [1] Much longer lead time than for consumer goods [2] Shorter lead time than for consumer goods [3] Derived demand lead time [4] Lead time based on the length of the negotiation process Question 17 Which one of the following statements best describes the role of the purchasing and supply function in buying capital equipment? [1] Since buying capital equipment is far too complex, purchasers are not included in the sourcing team for capital equipment. [2] The purchasing and supply function plays a dominant role in the purchasing of capital equipment. [3] The purchasing and supply officials can administer the order, but cannot play a role in the selection of suppliers of capital equipment. [4] The role of purchasing and supply function is to provide a support service, give advice and promote supplier relations. Question 18 … are an example of a service purchased by maize millers. [1] Quality approved maize corns [2] Specialised milling machines [3] Temporary millers employed during strikes [4] Conveyor belts for moving maize bags Question 19 When contracting a repair expert to fix a milling machine, there is no lead time in repair service delivery. This refers to the following characteristic of services: [1] heterogeneity [2] simultaneity [3] perishability [4] intangibility Question 20When the DTI buys transportation services for delivering maize to the 24 small-scale millers, they should ensure that the potential transportation companies are able to deliver the maize at the geographically dispersed milling plants. In this case … is a key variable in transport decision making. [1] reliability [2] capability [3] accessibility [4] speed Assignment 1-Semester 1 (2018) This assignment consists of 20 multiple-choice questions assessing your knowledge on basic theory (Chapters 1-5). Question 1 If a company adopts the philosophy of lean manufacturing, they would typically say the following: [1] “By keeping large inventories of raw materials, even if not used in manufacturing, we will be prepared to respond to customers’ orders when they come in.” [2] “If we have more work stations at the plant, we can employ more people in the manufacturing process.” [3] “By simplifying our work environment, we can reduce waste and keep our employees, equipment and workspace responsive to current needs.” [4] “We have invested large sums of capital in these advanced machines; therefore, we need to get maximum return on our investment before meeting changing demands.” Question 2 During the control task, the activity of evaluating the performance of the purchasing and supply function should be based on both the following critical dimensions: [1] tactical and strategic objectives [2] centralisation and decentralisation [3] quantitative and qualitative bases [4] cost reduction and income increase Question 3 Assume that the purchasing manager at Amazon.com (an online retailer) is requested to submit a report on suppliers in accordance with the policy guidelines of the organisation. In his report, he lists the different types of suppliers and their dealings with Amazon.com. Which one of the following best describes a situation where the purchasing function of Amazon.com buys more than half of a supplier’s production of video games? [1] unreliable suppliers [2] suppliers’ specialised knowledge [3] captive suppliers [4] reciprocal suppliersQuestion 4 The following principle should be kept in mind when evaluating purchasing and supply performance: [1] It would be best to use the generic evaluation system that is available to evaluate purchasing and supply performance. [2] Quantitative measures give the best and most accurate indication of purchasing and supply performance. [3] As long as the benefits equal the costs, the evaluation system for evaluating purchasing and supply performance is effective. [4] A sound database with information on a wide spectrum of purchasing and supply activities is necessary to evaluate performance. Question 5 When determining responsibilities in the purchasing and supply process, the … function has the primary responsibility to contact the supplier base about faulty consignments. [1] receiving [2] inspection [3] financial [4] purchasing Question 6 Expediting an order in the purchasing and supply context implies that the purchasing official firstly … [1] obtains advanced technology to speed up the process. [2] phones the supplier to save time to discuss future relationships. [3] monitors the supplier’s progress with the order. [4] suggests lean manufacturing as a stream-lined process. Question 7 When buying specialised equipment, the purchasing procedures might require that requisitions exceeding a predetermined amount be accompanied by two or three written quotations. In such cases, the … has the prerogative of selecting the supplier. [1] user [2] purchasing official [3] specialised equipment specialist [4] financial function Question 8 The usual procedure for selecting suppliers of standard items in relatively small quantities would be to choose the supplier … [1] after following a comprehensive procedure for supplier selection. [2] as recommended on the requisition by the user function. [3] which seems to be the best one from three or four suggested suppliers. [4] which submitted a complete quotation. Question 9When making the decision to insource or outsource, which one of the following options is most suitable when a buying organisation is more competent in performing an activity than a potential supplier? [1] Outsource to any external supplier that has the capability to perform the activity. [2] Outsource a core activity even though it gives a competitive advantage. [3] Invest in disadvantaged suppliers to create their capability to perform the activity in-house at their premises. [4] Keep the activity in-house and invest to maintain and increase competitive advantage. Question 10 Non-cost factors should also be considered in the outsourcing decision. A non-cost factor, such as … would compel the organisation to perform an activity internally when style plays an unusually important role and patents do not provide sufficient protection against emulation. [1] quality control [2] workforce stability [3] design secrecy [4] market share Question 11 … is when an organisation decides to partially transfer the activities of a function to a supplier outside while keeping the rest of the activities in-house. [1] Outsourcing [2] Insourcing [3] Co-sourcing [4] Back-sourcing Question 12 Reciprocity is a practice where … [1] suppliers, who are also customers of the organisation, enjoy preferential treatment. [2] the supplier is directly or indirectly owned by the purchasing organisation. [3] the buyer buys from a supplier that employs or is owned by a family member of the buyer. [4] a purchasing organisation buys more than half of the supplier’s production. Question 13 A typical example of a qualitative performance indicator for evaluating purchasing and supply activities in the organisation is the … the purchasing and supply function. [1] negotiation ability of [2] promptness factor achieved by [3] rejection ratio of consignments by [4] outstanding orders of Questions 14-20 are based on the following example of the weighted average method (note that you have to do the necessary calculations and complete the table in order to answer the questions):Question 14 When using the weighted average method to determine the selected suppliers’ performance, the following best describes the criteria (shown in the table) according to which the suppliers are evaluated: [1] After-sales service is not important when evaluating the suppliers’ performance. [2] Suppliers A, B, C and D should all score the highest in terms of on-time delivery as the most important criterion. [3] The decision on which criteria to use is one of the subjective (qualitative) parts of this method. [4] Once criteria are selected, they will remain the criteria that management will use to evaluate current and future suppliers’ performance. Question 15 When using the weighted average method to identify the most suitable supplier, the calculations in the above table shows that Supplier … is the best supplier in this situation. (To answer the question, the table should be completed by doing the necessary calculations.) [1] A [2] B [3] C [4] D Question 16 When only focussing on the suppliers’ scores for price, the Supplier C's score of 35 can be interpreted as follows: [1] Supplier C offers the highest-priced product compared to the other suppliers. [2] Supplier C offers the lowest-priced product compared to the other suppliers. [3] Supplier C will be eliminated from the list due to its low score for the price criterion. [4] Supplier C seems confident that having the lowest price will compensate for the perception of poor quality. Question 17 If quality was the ONLY criterium used when deciding on the best supplier, which supplier would be the most obvious one to select? [1] Supplier A[2] Supplier B [3] Supplier C [4] Supplier D Question 18 The most important criteria when choosing a supplier in this case is: [1] Quality [2] Price [3] On-time delivery [4] After-sales service Question 19 Supplier C had a rating (scale) of only 1 for price, which means that Supplier C … [1] charges a marginally lower price than Supplier D. [2] scores the best of all suppliers on price. [3] and Supplier B are the main suppliers to consider. [4] is the most expensive supplier. Question 20 (Before you answer this question, change the weight for quality product to 25 and ignore after-sales service as a criterion.) If the criteria of on-time delivery, price and quality product were the only three criteria used in evaluating the potential suppliers, which supplier would be the best supplier (use the scales in the table)? [1] Supplier A [2] Supplier B [3] Supplier C [4] Supplier D Assignment 2-Semester 1 (2018) Question 1 The fact that Amatole district municipality initially awarded the contract to the Siyenza Group instead of a local organisation in the Eastern Cape means that they neglected to consider … as a supplier selection criteria. [1] quality accreditation [2] on-time delivery [3] excellent service [4] geographic location Question 2 The fact that the Treasury is reviewing the legislative framework for supply chain management by the government will lessen the … risk in government procurement. [1] core business [2] external downside[3] operational [4] speculative Question 3 An example of internal service quality in the case study would be the following: [1] Amatole’s purchasing team has an obligation towards the different municipality departments to contract the most cost-effective supplier of quality toilets. [2] The Siyenza Group was awarded the contract based on political connections and not by following regular tender processes. [3] The Northern Cape supplier was able to provide about 6600 toilets in many villages in their region. [4] The Amatole district municipality cancelled its contract with the Siyenza Group due to tax certificates not issued by South African Revenue Services (SARS). Question 4 Since cost-efficiency was not considered when the contract was initially awarded to the Siyenza Group, an unfair price for the toilets was determined, which means that … [1] the lowest price that could ensure the continuous supply of quality toilets by the Siyenza Group was not negotiated. [2] the price of toilets asked by the Siyenza Group was determined by active competing suppliers in a competitive market. [3] the price of toilets is in reasonable proportion to the total manufacturing costs of the Siyenza Group. [4] the price determined for toilets was reasonable to both Amatole municipality and the Siyenza Group. Question 5 In the classification of inventory, Amatole district municipality will view toilets as … [1] processing inventories. [2] maintenance inventories. [3] independent demand items. [4] reorder product items. Question 6 In the case study the Amatole District Municipality in the Eastern Cape awarded a contract to Siyenza group for R631- million which was higher than the Northern Cape one. Which supply chain management practice could have prevented this situation? [1] Linked database [2] Efficient logistics [3] Total cost of ownership [4] Lean manufacturing Question 7 If the Amatole district municipality rationally selected a supplier of toilets by using the weighted-point supplier evaluation, the following evaluation criterium would have been assigned the highest weight, based on the information provided in the case study: [1] quality [2] delivery[3] service [4] cost Question 8 Purchasers at Amatole district municipality should have known that they operate in a … market where toilets are similar and easily substituted. [1] seller’s [2] buyer’s [3] monopolistic [4] oligopolistic Question 9 If the Siyenza Group were contracted for the substantially bigger contract in the Eastern Cape, their main reason for holding inventory would be to … [1] hedge against price increases of raw materials. [2] save on ordering costs. [3] benefit from forward buying. [4] continue production. Question 10 If the Siyenza Groups were contracted and then failed to adhere to the contractual agreement due to insufficient inventory, the biggest costs they would face are associated with … [1] ordering plastic. [2] keeping inventory of finished toilets. [3] carrying plastic components. [4] maintaining Amatole district municipality’s goodwill. Question 11 If a retailer in Soweto buys merchandise from a wholesaler to resell in his general store to final consumers, the retailer is the wholesaler’s … in a supply chain. [1] first-tier customer [2] first-tier supplier [3] second-tier customer [4] second-tier supplier Question 12 If a general store retailer in Soweto buys merchandise from a wholesaler to resell to final consumers, the general store retailer’s customers are the wholesaler’s … in a supply chain. [1] first-tier customers [2] first-tier suppliers [3] second-tier customers [4] second-tier suppliers Question 13 The value chain comprises of primary and support activities that can lead to a competitive advantage for an organisation when they are configured properly. Which one of the following would be an example of a primary activity in the value chain?[1] Human resource management [2] Technological development [3] Purchasing [4] Outbound logistics Question 14 Third-party logistics services (3PLs) are for-hire outside agents to which all or much of an organisation’s logistics activities can be outsourced. Which one of the following would be considered a logistics activity that a 3PL could provide? [1] Labelling [2] Manufacturing [3] Technological development [4] Purchasing Question 15 The linkages referring to the two-way movement and coordination between the different flows in the supply chain implies that ... [1] the two flows of goods and information move in the direction towards the end customer. [2] information, money and goods can also flow in a reverse direction in the supply chain. [3] both inbound and outbound activities on the two sides of the supply chain should be coordinated. [4] goods can flow from first-tier customers to second-tier customers. Assignment 1-Semester 2 (2018) Question 1 Which one of the followings relates to supply base optimisation as a critical activity in supply policies and strategies formulation? [1] two supplying organisations engage in buying from each other [2] a decision is made on the number of suppliers to maintain [3] a spend analysis is conducted during market research [4] the supplier identification process in followed Question 2 An organisation may decide to purchase not more than 40% of its production from an individual supplier. This kind of decision is focused on eliminating … [1] captive suppliers. [2] performance appraisal. [3] reciprocity agreement. [4] supplier development. Question 3 Select one statement that reflects the example of critical items in the strategic sourcing matrix. [1] Expensive vehicle parts used by car dealers to assemble motorcars with no substitution. [2] Inexpensive cartridges used when printing documents in an organisation. [3] Fuel supply which is obtained in the Middle East with no substitute products. [4] Computer hardware used by lecturers in universities with standard specifications.Question 4 Allrounder Automobiles services and repairs vehicles. They have decided to start manufacturing minor components, such as side mirrors and bumpers. If they are using the Just-In-Time system, which one of the following documents would provide Allrounder Automobiles’ suppliers with a clear description of and specifications for their specific need for reflective glass and plastic mould? [1] Kanbans [2] Purchasing requisitions [3] Materials lists [4] Invoices Question 5 A large clothing manufacturer purchases stationery for office use, which do not form part of clothing inventory items. According to the strategic sourcing matrix, stationery would typically be a … item for a clothing manufacturer. [1] leverage item [2] critical item [3] bottleneck item [4] routine item Question 6 Which one of the following statements describes lean manufacturing the best? [1] The most effective (and therefore least expensive) operation of all manufacturing processes. [2] The effective and efficient flow of information upstream and downstream in the supply chain. [3] Linking demand-driven customer sales to customer-driven demand. [4] Ensuring the lowest logistics cost in the supply chain, while conforming to or exceeding customer requirements. Question 7 Supply management can reduce lead times to the customer by reducing … [1] logistics costs from the point of origin to point of sales. [2] inventory levels. [3] cycle time from design to finished phase. [4] the number deliveries. Question 8 Which organisational function is mainly responsible for keeping a copy of the order form for the purpose of following-up and expediting an order, as well as to use as a control measure in the case of part deliveries of the order? [1] finance [2] receiving [3] inspection [4] purchasingQuestion 9 Which one of the following activities is typically performed when following up with the supplier after placing an order? [1] Assisting the supplier in obtaining an import permit [2] Bidding and negotiation [3] Checking for orders not received on the delivery date [4] Determining the origin of the need Question 10 Assume a large catering business decides that the bakery division should rather be outsourced. Which one of the following situations best describes the possible disadvantage of the contractor (i.e. the bakery) becoming a captive supplier of the catering business? [1] The market can be saturated with too many bakeries, leading to fewer business opportunities for entrepreneurs. [2] The bakery becomes over-involved in their own daily operational activities, which might lead to a loss of strategic focus. [3] The bakery can become dependent on the catering business if transactions with the catering business accounts for more than half of the bakery’s total business. [4] The bakery decides on decentralised purchasing in order to support local producers of flour. Question 11 If a catering company finds that a supplier of kosher meals are not performing to their satisfaction and then decides to rather source the activity internally due to a lack of capable suppliers of kosher meals, it is called ... [1] supplier evaluation. [2] insourcing. [3] captive suppliers. [4] subcontracting. Question 12 In general, buying from local suppliers usually has the following advantage: [1] Express orders can be accommodated. [2] Transportation costs are higher, since no delivery is usually possible by the local suppliers. [3] Lead times are longer due to local suppliers’ labour-intensive techniques. [4] Larger inventories are carried to provide in the unforeseen customer needs. Question 13 Suppliers that have shown that their past performance consistently meet and exceed the required levels for quality are known as ... suppliers. [1] weighted average [2] approved [3] preferred [4] accredited Question 14 An example of striving towards environmental sustainability would be when an organisation …[1] replaces traditional boilers with modular heat pumps to have warm water more efficiently and costeffectively. [2] accepts economic accountability to ensure that resources are used in such a way that an organisations viability is continued. [3] accepts their social responsibility and provides nutritious food for the Feed-a-Child project. [4] realises that happy workers are productive workers and provides fringe benefits to suit workers’ diverse compensation needs. Question 15 A possible greening opportunity in a supply chain would be ... [1] installing solar panels. [2] buying unripe fresh produce. [3] planting flowers at the kitchen units. [4] using air-conditioners in canteens. Question 16 If suppliers of sustainable products do not keep to the agreed delivery dates, the organisation can be affected negatively. This type of risk would typically be called a(n) ... risk. [1] operational [2] external downside [3] incidental [4] lead time Question 17 A straightforward relationship between the buyer and the seller where both parties exchange goods and services for payment is known as ... [1] a transactional relationship. [2] a collaborative relationship. [3] an alliance relationship. [4] supplier relationship management. Question 18 The process of strategic sourcing entails ... [1] selecting a purchasing team with knowledge about specific products and services to make purchases. [2] setting policy guidelines to enable the purchasing and supply function to make decisions more easily. [3] purchasing goods that were previously produced in-house from external suppliers. [4] buying packaging materials that can be more easily recycled or reused. Question 19 Which one of the following purchasing and supply responsibilities would represent the responsibility of abiding by an organisation’s code of conduct when executing tasks? [1] activities related to the community [2] activities related to diversity [3] activities related to ethics [4] activities related to safety Question 20The following principle should be kept in mind when evaluating purchasing and supply performance: [1] It would be best to use the generic evaluation system that is available to evaluate purchasing and supply performance. [2] Quantitative measures give the best and most accurate indication of purchasing and supply performance. [3] As long as the benefits equal the costs, the evaluation system for evaluating purchasing and supply performance is effective. [4] A sound database with information on a wide spectrum of purchasing and supply activities is necessary to evaluate performance. Assignment 2-Semester 2 (2018) Question 1 Why are Uber drivers able to sell more rides to passengers by focusing on improved customer lead time? [1] They can offer a ride to passengers at relatively short notice. [2] They use different vehicles based on different passenger needs. [3] They are carefully screened by the Uber company before being included in Uber’s transportation network. [4] They can also participate in the UberEATS and UberRUSH networks during off-peak periods. Question 2 In which way is quality built into Uber’s supply chain? [1] making the Uber service available in African countries with traffic challenges [2] exploiting the opportunity of a growing middle class in need of fast transportation [3] remunerating Uber drivers on a weekly basis via direct deposit [4] evaluating Uber drivers after every ride using the smartphone application Question 3 Uber has made the shift from a supply-driven supply chain to a demand-driven supply chain, which shows in their ability to … [1] develop a smartphone application to connect supply and demand. [2] identify suitable drivers for transporting people and goods. [3] provide the type of transportation service option requested by the customer. [4] offer all types of multiple services, ranging from transporting people to delivering meals and parcels. Question 4 Should farmers’ associations consider the Uber business model to move locally produced food directly from local farms to end consumers or retail stores, the shared supply chain processes could be optimised by … [1] charging the lowest price and no delivery fees. [2] using recyclable packaging material to promote sustainability. [3] purchasing empty space on other distributors’ trucks. [4] classifying fresh produce as leverage items in the strategic sourcing matrix.Question 5 Should local farmers use the Uber concept to deliver fresh produce directly to retailers by synchronising their orders with those routes that logistics providers already use, local fresh produce retailers could, in turn, improve their rate of return by … [1] lowering the purchasing costs of fresh produce and realising a higher profit margin. [2] lowering the selling price of fresh produce and buying a bigger variety of fresh produce [3] increasing transportation costs and saving on electricity expenses related to refrigeration. [4] increasing the carrying costs of fresh produce and offering a wider variety of fresh produce items. Scenario: The owner of a bridal boutique situated on the outskirts of Johannesburg realises that they should adapt their business model to include deliveries. During a staff meeting, colleagues suggest that the shop should consider using the UberRUSH service for deliveries to brides and bridal parties. The boutique's owner compares UberRUSH with other local courier companies to find the best provider (supplier) of transportation services. Question 6 Which supplier assessment criterion is priority to the boutique's owner if they require different transportation options from the service provider to do different types of deliveries of bridal products? [1] quality [2] price [3] geographic location [4] flexibility Question 7 Which supplier assessment criterion is priority if the boutique's owner focuses on demand-pull, which requires that they fulfil small orders of bridal products more frequently? [1] delivery [2] quality [3] financial status [4] price Question 8 Which supplier assessment criterion would be the most important if the bridal boutique owner prefers identifying an Uber vehicle closest to the boutique at the time when a delivery service is required? [1] ethics [2] cost structure [3] geographic location [4] quality accreditation Question 9 What type of relationship would the bridal boutique have with the Uber driver that they use if they decide on Uber as a courier service provider? [1] alliance[2] collaborative [3] transactional [4] application Question 10 Should the bridal company decide on the Uber company as their preferred courier service provider and should Uber prove to be the same good partner as they are to other small businesses worldwide, the relationship between the bridal boutique and the Uber company could be described as: [1] arm’s length [2] price-focused [3] techno-savvy [4] cooperative Question 11 Logistics management is often confused with supply chain management, since practitioners seem not to know that logistics management … [1] is the more strategic version of supply chain management. [2] involves the sourcing and management of suppliers as critical role-players in the supply chain. [3] refers to managing the movement and storage of goods as part of supply chain management. [4] is a broader concept, which includes supplier management, purchasing management and supply chain management. Question 12 What is the main difference between a supply chain and a value chain? [1] A supply chain is focused on the supply activity, whereas the value chain is focused on valueadding activities. [2] A supply chain has different upstream and downstream linkages, whereas the value chain has only downstream linkages. [3] A supply chain consists of the value-adding activities of a network of organisations, whereas a value chain consists of the value-adding activities of a specific organisation [4] A supply chain focuses its activities on satisfying the final consumer’s need, whereas a value chain coordinates the supply chain activities of different supply chain role-players. Question 13 In a typical supply chain, an upstream linkage will be on the … side of the supply chain. [1] supplier [2] end consumer [3] focal firm [4] outbound Question 14 The linkages referring to the two-way movement and coordination between the different flows in the supply chain implies that ... [1] the two flows of goods and information move in the direction towards the end customer. [2] information, money and goods can also flow in a reverse direction in the supply chain. [3] both inbound and outbound activities on the two sides of the supply chain should be coordinated. [4] goods can flow from first-tier customers to second-tier customers.Question 15 Third-party logistics services (3PLs) are for-hire outside agents to which all or much of an organisation’s logistics activities can be outsourced. Which one of the following would be considered a logistics activity that a 3PL could provide? [1] Labelling [2] Manufacturing [3] Technological development [4] Purchasing Assignment 1-Semester 1 (2019) Question 1 Which one of the following factors directly contributes to lower total cost? [1] innovation [2] improved customer lead time [3] lower inventory cost [4] improved quality Question 2 Which one of the following describes the asset turnover rate? [1] A measure of how efficiently assets have been employed [2] Total income from sales minus costs [3] A measure of the profit percentage out of each rand’s turnover [4] Profit margin multiplied by turnover rate of assets Question 3 What is the return on investment (ROI) if an organisation shows a nett income of R4 million, profit margin of 12%, total assets worth R2 million, sales at R8 million and an asset turnover rate of 2? [1] 24% [2] 50% [3] 30% [4] 19% Question 4 If an organisation experiences an unexpected slump in sales when a new competing supplier enters the market, which one of the following may directly contribute to increased sales? [1] lower inventory carrying cost [2] increased flexibility [3] reduced quality cost [4] partnering with long-term suppliers Question 5A General Manager is looking to measure the extent to which the purchasing and supply function has achieved the overall objectives for which the function was introduced into the organisation. Which one of the following sets of measures is used to determine this? [1] The outcomes of a training and integration questionnaire [2] Cost savings, workload and administrative performance [3] Communicating and publicising programme results [4] Pricing proficiency, supplier performance and materials flow Question 6 At an operational level, … entails forecasting marketing investigations, and analysing and interpreting master production schedules. [1] supply planning [2] purchasing and supply programme planning [3] materials requirements planning [4] extraordinary projects Question 7 A situation where an organisation decides to engage one of its existing suppliers for the purchase of a different product can best be described as a … situation. [1] new task [2] routine rebuy [3] modified rebuy [4] straight rebuy Question 8 Which party or function receives the original copy of the order form when an order is placed at a supplier? [1] supplier [2] receiving [3] purchasing and supply [4] financial Question 9 When BMW implemented a just-in-time (JIT) inventory system at their plant in Rosslyn, North West of Pretoria, they used … signals to notify suppliers of restocking requirements. [1] kanban [2] reorder point [3] materials requirements planning (MRP) [4] economic order quantity (EOQ) Question 10 Wheel Forge, a tyre manufacturer, had to reject a delivery from one of its rubber suppliers. Which party or function at Wheel Forge is responsible for all negotiations with suppliers over faulty rubber consignments and rejections?[1] Just-in-Time management team [2] purchasing and supply [3] supervisors on tyre manufacturing line [4] finance Questions 11 to 20 are based on the case study “Woolworths’ sustainable Distribution Centre” on pp. 205-206 of your prescribed book, excerpts from websites provided in the questions below and the list of definitions (Addendum D) provided in this Tutorial Letter 101. Read the case attentively before answering the questions. Question 11 The logistics function performed by the Woolworths distribution centre in Gauteng is called … [1] sourcing. [2] warehousing. [3] sales planning. [4] waste elimination. Question 12 The Woolworths distribution centre contributes directly to the reduced order cycle time of a Woolworths retail store by … [1] allowing delivery trucks to gather ordered stock items in one journey to the centre. [2] considering sustainability as the cornerstone of the facility design. [3] planning for extensions to the building for extra capacity in future. [4] sourcing sought after speciality products from international suppliers. Question 13 Identifying suitable suppliers to deliver quality products at the Gauteng distribution centre forms part of … [1] distribution. [2] product classification. [3] sourcing. [4] downstream supply chain activities. Question 14 Imperial Logistics is known as a … when Woolworths outsources deliveries to them from the Midrand distribution centre to Woolworths branches in malls. [1] first tier customer [2] third-party logistics provider [3] focal firm [4] second-tier supplier Question 15 An example of an upstream linkage in Woolworths’ supply chain would be … [1] Tetra Pak who provides packaging for transporting fruit juice without refrigeration. [2] Imperial Logistics delivering orders at Woolworths in Mall of Africa. [3] Woolworths’ employees receiving orders at local branches. [4] Woolworths’ financial services doing credit checks on credit card applicants. Question 16Suppose Woolworths is considering introducing automated materials handling equipment (MHE) in their Midrand Distribution Centre to increase efficiency and facility throughput. A cross functional team has developed a business case to provide guidance on how much can be spent on this investment; however, they require more technical insight into the different MHE suppliers and their automation capabilities, machine control systems and ability to integrate to best-of-breed warehouse management systems. Which bidding tool would be most suitable in obtaining this information from potentially suitable suppliers? [1] Request for bid (RFB) [2] Request for proposal (RFP) [3] Request for information (RFI) [4] Request for quotation (RFQ) Read the following short scenario on Woolworths’ handling of the liseriosis outbreak and answer questions 17 and 18. In March 2018, it was announced that the source of the latest outbreak of listeriosis was traced back to an Enterprise Foods facility in Polokwane Limpopo Province. Woolworths acknowledged that Enterprise Food supplies meats for the products it was recalling, necessitating that some of the house brand products be pulled from the shelves or taken back for a refund. Around the country, supermarkets pulled processed meat products off their shelves and called on consumers to return processed meat products to store for a refund. Woolworths followed suit, asking customers to return close to 35 different product items to store for full refund. (Excerpt taken from https://www.fin24.com/Companies/Retail/woolies-and-shoprite-pull-enterprise-products-20180305 accessed 19 July 2018.) Question 17 Suppose Woolworths is considering outsourcing the complete reverse logistics process for listeriosis impacted goods to one of their trusted 3PL’s (Third Party Logistics provider). Considering that minimising risk and liability are key aspects when preparing for the urgent recall event, what would the most likely driver be for choosing to outsource this effort, and why? [1] Cost-based outsourcing, because the core focus is on ensuring the effective management of the recall, with a secondary focus on cost efficiency. [2] Competency-based outsourcing, because the core focus is on ensuring the effective management of the recall, with a secondary focus on cost efficiency. [3] Competency-based outsourcing, because a competent service provider will be able to perform the recall at a lower total cost. [4] Cost-based outsourcing, because the core focus is on ensuring cost efficiency, with a secondary focus on the effective management of the recall. Question 18 Suppose the team in charge of managing the recall for Woolworths has decided that outsourcing the reverse logistics process for potentially contaminated product is the best option. The managing director however feels that some members of the recall team need to be operationally involved in the reverse logistics activities to ensure continual oversight and adherence to Woolworths’ requirements. What would most likely be the managing director’s main concern, considering the below factors are generally ascribed as outsourcing disadvantages? [1] Loss of control or skills [2] Lack of cost control [3] Ineffective management [4] Creating a captive supplierQuestion 19 Having a sustainable transport strategy resulted in Woolworths collaborating with their logistics partner, Imperial Logistics. This decision to outsource must have been the result of lengthy discussions, which entailed knowledge and technical expertise, as well as in-depth cost analysis. A team was appointed to perform the tasks of negotiating contracts with Imperial Logistics, executing the project and transferring the transportation services to the contractor. Which phase in the outsourcing process is decsribed? [1] Phase 1: Strategic phase [2] Phase 2: Transition phase [3] Phase 3: Operational phase [4] Phase 4: Relationship phase Question 20 Woolworths is a member of the Better Cotton Initiative (BCI), a global enterprise which aims to create long-term change by helping farmers grow cotton in a way that reduces stress on the local environment and improves the livelihoods of farming communities. Woolworths is committed to sourcing 100% of their cotton as 'more sustainable cotton' by 2020. 'More sustainable' means Better Cotton and Organic Cotton. (Excerpt taken from https://www.woolworths.co.za/recipe/_/A-cmp205999 on 19 July 2018). Which one of the following statements about Woolworths using more than one cotton supplier is true? [1] Cotton suppliers with insufficient capacity should be engaged to reduce unit price to account for potential organic cotton supply shortage. [2] Long term relationships should never be established with more than one supplier of organic cotton as required by Woolworths. [3] It is advisable that Woolworths purchase routine items, such as clothes hangers for cotton garments, from more than one organisation. [4] Buying from multiple cotton suppliers is driven by Woolworths goal of investing in local communities. Assignment 2-Semester 1 (2019) Questions 1 and 2 refer to the below weighted-point supplier evaluation table. You will need to complete the missing fields in order to answer the questions.Question 1 Compared to the other suppliers, Supplier C scored the highest in which two main evaluation criteria? [1] innovation and quality [2] quality and service [3] cost and service [4] innovation and cost Question 2 The head of purchasing and supply has decided that quality does not carry enough weight within the organisations’ supplier evaluation matrix, and has instructed you to increase the weight for quality to 40, split equally between defect rate and quality management. Assuming that the weight for all other criteria had to be adapted as shown in the table below, and that the rating for all suppliers remain unchanged, what will the impact of this weighting change be on the outcome of this weighted-point evaluation?[1] The total scores increase for all suppliers, however there is no change in the outcome with regards to which supplier has the highest total score. [2] Supplier C now has the highest overall rating, followed by supplier B and then supplier A. [3] Supplier B still has the highest overall rating, but supplier C has now overtaken supplier A as the second highest scoring supplier. [4] Supplier B and supplier C now have the same total score, followed by supplier A with the lowest score. Question 3 Event risks can be defined as the exposure of an organisation to potential losses resulting from external factors or shortcomings (failures) in the execution of its operations. Which one of the following examples can be classified as an event risk? [1] The National Union of Metalworkers (NUMSA) goes on strike due to their unhappiness with annual wage increases, subsequently driving up the price of steel and drastically diminishing market supply. [2] The integration between the organisation’s Enterprise Resource Planning (ERP) system and Warehouse Management system (WMS) falls over unbeknownst to anyone, resulting in the warehouse receiving goods without any electronic notification being sent to the purchasing and supply department. [3] The Reserve Bank announces a sharp increase in the prime lending rate, impacting all of the organisation’s long-term loans linked to the prime rate. [4] The organisation has a long term purchasing agreement with a raw material supplier based in Russia, and an unforeseen upwards spike in the ZAR-RUB (Russian Rubel) exchange rate means that the organisation is now paying considerably more ZAR for the same amount of material. Question 4 Andrew, a mechanical engineer, works for a specialised manufacturer of machine parts. He has designed a new component that can be manufactured from either Aluminium Bronze, Nickel Brass or Copper Nickel, with no performance implications regardless of what material is chosen. Andrew knows however that there is only a single supplier within the region that can supply Copper Nickel in the required volumes. If Andrew puts together the sourcing specifications for the component, and stipulates that only Copper Nickel will be suitable as material input (knowing that there will be no performance difference if either of the other two types are used), in what way will he be acting unethically?[1] Withholding important information from a supplier [2] Misuse of confidential supplier information [3] Setting specifications to suit one specific supplier [4] Misuse of the buying organisation’s purchasing power Question 5 Which one of the following options is a reason why managers are more concerned about the ethical conduct of purchasing and supply than in any other organisational function? [1] Purchasers have no say in terms of which supplier will receive an order. [2] Purchasers have power over large sums of money. [3] Purchasers’ objectivity and rational thinking will always conquer unethical conduct. [4] Purchasers are less exposed to temptations than other organisational members. Question 6 During the recording phase in the quality control process, 5% of the incoming goods for a single consignment are inspected. It is found that of the 5% of goods inspected, over 30% of the goods are damaged, which is higher than the tolerable thresholds. The receiving manager decides to inspect another 10% of the consignment before dispatching to the warehouse. This process is known as … [1] total inspection. [2] probability sampling. [3] sequential sampling. [4] no inspection. Question 7 Which one of the following tools can be used in the low impact quadrant of the purchasing matrix to support strategic cost management? [1] Landed price [2] Open books [3] Target cost analysis [4] Life cycle costing Question 8 As the lead purchaser at Grind Fort, you have managed to negotiate lower prices with suppliers and this has resulted in a R14 300 reduction in Grind Fort’s cost of goods sold (COGS). Using the Profit Leverage Effect, calculate Grind Fort’s net profit before taxes after the R14 300 reduction in their cost of goods sold as shown in Scenario 2 below? 1] R46 000 [2] R44 200 [3] R45 820[4] R41 220 Question 9 Pot Belly Meats buys polony from Grind Fort. Grind Fort has increased the unit price of a pack of polony from R34.50 per unit (in March 2018) to R36.70 per unit (in April 2018). Polony Producer Price Index (PPI) in March 2018 was 135 and 135.5 in April 2018. Using the PPI to conduct a price analysis, calculate the percentage price increase from Grind Fort and the percentage inflation for the polony, respectively? [1] 6.30% price increase; 0.20% inflation [2] 5.99% price increase; 0.30% inflation [3] 6.20% price increase; 0.33% inflation [4] 6.37% price increase; 0.37% inflation Question 10 If the demand for sausages is 6 cases, the lead time for delivery is 14 days and the safety stock is 24 cases, calculate the reorder point (ROP) of Pot Belly Meats’ sausages. [1] 119 [2] 190 [3] 108 [4] 101 Assignment 1-Semester 2 (2019) This assignment consists of 20 multiple-choice questions assessing your knowledge on theoretical principles (Chapters 1 to 4), your knowledge on terminology in Addendum D in this tutorial letter and your ability to apply principles. Question 1 Which one of the following is a strategic purchasing and supply objective? [1] To study alternative inventory control systems or the flow of materials [2] To develop existing or new suppliers [3] To maintain sound relations with suppliers through ethical conduct [4] To enter into long-term contracts with reliable suppliers Question 2 A new start-up organisation needs help on key strategic decisions, such as deciding about centralised versus decentralised structures for purchasing and supply. Assume the organisation will source from many suppliers, but will exclusively market their products to consumers in the Western Cape, with primary focus on the urban hub of Cape Town. Which one of the following options would rationalise the decision on the purchasing and supply structure in a start-up organisation? [1] A decentralised structure is preferred to ensure that economies of scale are achieved, while centralisation will result in a loss of economies of scale. [2] Decentralisation generally reduces negotiating power, while centralisation allows greater negotiating power.[3] Centralisation will result in slow response times to regional plants, while decentralisation ensures faster response times. [4] Centralisation often results in a duplication of staff and facilities, while decentralisation will ensure a leaner organisational structure. Question 3 Which one of the following options is a characteristic of a successful purchasing and supply team? [1] Create permanent cross-functional teams [2] Create temporary cross-functional teams [3] Align team functions permanently according to specialisation [4] Team works independently from senior executive support Question 4 Which one of the following is an example of tactical purchasing and supply objectives? [1] To keep investment in inventory as low as possible [2] To maintain sound relations with suppliers by means of ethical conduct [3] To study alternative inventory control systems [4] To study the situation in the supplier market Question 5 The complexity of annual performance evaluations the purchasing and supply function can be attributed to the difficulty to … [1] obtain a detail picture of every purchasing and supply functionary’s activities. [2] break free from the isolated functioning of the purchasing and supply function. [3] express the performance of various purchasing and supply activities in quantitative terms. [4] exert control over the supplier market and supplier performance. Question 6 You find a tender document on your desk one morning. This confirms that your purchasing and supply department has progressed to the … step in the process for kitting out the new testing lab you requested. [1] product specification [2] bidding and negotiation [3] order placement [4] invoice analysis Question 7 A modified rebuy is a purchasing situation where an organisation … [1] purchases a completely new product from an unknown supplier due to new opportunities being exploited. [2] contacts the supplier to modify the number of items per batch sent. [3] decides to purchase a new product from a known supplier, or an existing product from a new supplier. [4] purchases a known product from a known supplier to show loyalty. Question 8The following are bar code forms consisting of labels with information about from whom the item is purchased and are mainly used for the repeat purchases of standard inventory requirements. [1] Kanbans [2] Stock checks [3] Reorder point systems [4] Travelling requisitions Question 9 A captive supplier is a supplier that … [1] sells more than half its total production to one organisation. [2] sells to an organisation that it also buys from. [3] sells less than half its total production to one organisation. [4] produces more than 50% of a buying organisation’s supply. Question 10 Which one of the following circumstances will favour outsourcing services? [1] When the organisation’s quality requirements are too stringent to be met. [2] When capacity is available for use. [3] When product demand is relatively small and only temporary. [4] When no or only a few reliable suppliers exist. Questions 11 to 20 are based on the case study “Woolworths’ sustainable Distribution Centre” on pp. 205-206 of your prescribed book, excerpts from websites provided in the questions below and the list of definitions provided (see Addendum D) in Tutorial Letter 101. Read the case attentively before answering the questions. Questions 11 to 20 are based on the case study “Woolworths’ sustainable Distribution Centre” on pp. 205-206 of your prescribed book, excerpts from websites provided in the questions below and the list of definitions provided (see Addendum D) in Tutorial Letter 101. Read the case attentively before answering the questions. Question 11 Woolworths has decided to contract Imperial Logistics for their excellence in maintaining the cold chain from the warehouse when delivering orders at local outlets. The logistics function performed Imperial Logistics is called … [1] refrigeration. [2] warehousing. [3] transportation. [4] order processing. Question 12 The case study also focused on Woolworths’ efforts to reduce the lead time to Woolworths retail outlets. How can Imperial Logistics carriers directly reduce Woolworths retailers’ lead time? [1] by doing a delivery to Woolworths retailers on relatively short notice [2] by obtaining their own vehicle fleet to serve Woolworths and other organisations [3] by carefully screening their Imperial Logistics drivers before being appointed [4] by using idle space on Imperial Logistics trucks to transport goods to outlying Woolworths neighbourhood stores Question 13Delivering online orders directly to the final Woolworths consumer is part of the following supply chain process. [1] distribution [2] product classification [3] sourcing [4] upstream supply chain activities. Question 14 Woolworths represents the … in their supply chain when deciding to contract Imperial Logistics to do deliveries from their distribution centre to branches in malls. [1] first tier customer [2] third-party logistics provider [3] focal firm [4] second-tier supplier Question 15 An example of a downstream linkage in Woolworths’ supply chain would be … [1] Tetra Pak providing packaging for transporting fruit juice without refrigeration. [2] Imperial Logistics obtaining refrigeration trucks from vehicle manufacturers. [3] Woolworths FoodStops opening at local Engen garages. [4] Woolworths partnering with Discovery Vitality to promote healthy living. Question 16 Suppose Woolworths is considering introducing automated materials handling equipment (MHE) in their Midrand Distribution Centre to increase efficiency and facility throughput. A cross functional team has developed a business case to provide guidance on how much can be spent on this investment, however they require more technical insight into the different MHE suppliers and their automation capabilities, machine control systems and ability to integrate to best-of-breed warehouse management systems. Which bidding tool would be most suitable in obtaining this information from potentially suitable suppliers? [1] Request for bid (RFB) [2] Request for proposal (RFP) [3] Request for information (RFI) [4] Request for quotation (RFQ) Read the following short scenario and answer questions 17 to 19 In March 2018 was announced that the source of the latest outbreak of listeriosis was traced back to an Enterprise Foods facility in Polokwane Limpopo Province. Woolworths acknowledged that Enterprise Food supplies meats for the products it was recalling, necessitating that some of the house brand products be pulled from the shelves or taken back for a refund. Around the country, supermarkets pulled processed meat products off their shelves and called on consumers to return processed meat products to store for a refund. Woolworths followed suit, asking customers to return close to 35 different product items to store for full refund. (Excerpt taken from https://www.fin24.com/Companies/Retail/woolies-and-shoprite-pull-enterpriseproducts-20180305 accessed 19 July 2018.) Question 17 Suppose Woolworths was initially not sure whether to keep the reverse logistics process in-house or to outsource the complete reverse logistics process for listeriosis impacted goods to one of their trusted3PL’s (Third Party Logistics provider). Considering that minimising risk and liability are key aspects when preparing for the urgent recall event, what would the most likely decision to make? [1] Cost-based outsourcing, because the core focus is on ensuring the effective management of the recall, with a secondary focus on cost efficiency. [2] Competency-based outsourcing, because the core focus is on ensuring the effective management of the recall, with a secondary focus on cost efficiency. [3] Competency-based outsourcing, because a competent service provider will be able to perform the recall at a lower total cost. [4] Performing the recall activity in-house to maintain any current advantage by further developing the competency in order to minimise the risk of competitors benefiting from it as well. Question 18 Suppose the team in charge of managing the recall for Woolworths has decided that insourcing the reverse logistics process for potentially contaminated product is the best option. What would most likely be the managing director’s main motivation behind the decision to insource? [1] Less costly to outsource [2] Inadequate capacity in reverse logistics [3] Stringent quality requirements [4] Temporary occurrence of listeriosis Question 19 Suppose Woolworths decided to outsource the reverse logistics process to be performed when recalling the contaminated products. In which phase of the outsourcing process would Woolworths be if they debate the rationale for outsourcing to a suitable supplier by considering their focus on their core competencies and on either cost-efficiency or service delivery? [1] Phase 1: Strategic phase [2] Phase 2: Transition phase [3] Phase 3: Operational phase [4] Phase 4: Relationship phase Question 20 Woolworths set about transforming the cocoa used in our chocolate by sourcing UTZ certified cocoa. UTZ Certified is a program and a label for sustainable farming. The UTZ Certified label is featured on more than 10,000 different product packages in over 116 countries. As of 2014, UTZ Certified is the largest program for sustainable farming of coffee and cocoa in the world. UTZ provides assurance that the cocoa has been grown and harvested responsibly. The programme ensures that farmers learn to improve the quality and yield of their cocoa while reducing their impact on the environment and enabling them to take better care of their families. (Excerpt taken from https://www.woolworths.co.za/recipe/_/A-cmp205999 and https://en.wikipedia. org/ wiki/ UTZ _ Certified on 20 July 2018). What is the rationale for Woolworths using more than one cocoa supplier? [1] Cocoa suppliers with insufficient capacity should be engaged to reduce unit price to account for potential cocoa supply shortage. [2] Long term relationships should never be established with more than one cocoa supplier adhering to Woolworths’ stringent quality requirements. [3] It is advisable that Woolworths purchase routine items, for example chocolate wrapping packaging, from more than one organisation. [4] Buying from multiple cocoa suppliers is driven by Woolworths goal of investing in sustainable farming.Assignment 2-Semester 2 (2019) Questions 1 and 2 are based on the weighted average method. Question 1 Using the weighted average method, calculate the overall quality score for Grind Fort as a supplier of pork meat to Pot Belly Meats? [1] 96 [2] 128 [3] 256 [4] 64 Question 2 Complete the table in question 1. Based on the weighted average method, Grind Fort … [1] outperformed Snout Trading overall despite their higher cost structure. [2] is the better supplier for Pot Belly Meats purely due to their low cost approach. [3] should be selected based on their higher score in the taste of their pork meat. [4] is the best overall supplier of pork meat for Pot Belly. Question 3 Which one of the following examples can be classified as a core business risk? [1] The National Union of Metalworkers (NUMSA) goes on strike due to their unhappiness with annual wage increases, subsequently driving up the price of steel and drastically diminishing market supply. [2] The integration between the organisation’s Enterprise Resource Planning (ERP) system and Warehouse Management system (WMS) falls over unbeknownst to anyone, resulting in the warehouse receiving goods without any electronic notification being sent to the purchasing and supply department. [3] The Reserve Bank announces a sharp increase in the prime lending rate, impacting all of the organisation’s long-term loans linked to the prime rate. [4] The organisation has a long term purchasing agreement with a raw material supplier based in Russia, and an unforeseen upwards spike in the ZAR-RUB (Russian Rubel) exchange rate means that the organisation is now paying considerably more ZAR for the same amount of material.Question 4 Andrew, a mechanical engineer, works for a specialised manufacturer of machine parts. He has designed a new component that can be manufactured from either Aluminium Bronze, Nickel Brass or Copper Nickel, with no performance implications regardless of what material is chosen. Andrew knows however that there is only a single supplier within the region that can supply Copper Nickel in the required volumes. If Andrew puts together the sourcing specifications for the component, and stipulates that only Copper Nickel will be suitable as material input (knowing that there will be no performance difference if either of the other two types are used), in what way will he be acting unethically? [1] Withholding important information from a supplier [2] Misuse of confidential supplier information [3] Setting specifications to suit one specific supplier [4] Misuse of the buying organisation’s purchasing power Question 5 Which one of the following options is a reason why managers are more concerned about the ethical conduct of purchasing and supply than in any other organisational function? [1] Purchasers have no say in terms of which supplier will receive an order. [2] Purchasers have power over large sums of money. [3] Purchasers’ objectivity and rational thinking will always conquer unethical conduct. [4] Purchasers are less exposed to temptations than other organisational members. Question 6 You are part of a supply chain transformation team looking to implement six sigma practices within your organisation. The team is looking to establish a DMAIC improvement cycle to improve purchasing performance. One of the team members has built up a database of performance data and wants the team to immediately start with data analysis to determine reasons for deviation. What task typically follows after data analysis? [1] Implementation of industry best practice processes [2] Introduction of standardised procedures [3] Development of measurement instruments to determine baseline [4] Define improvement goals Question 7 Which one of the following tools can be used in the critical projects quadrant of the purchasing matrix to support strategic cost management? [1] Landed price [2] Open books [3] Target cost analysis [4] Life cycle costing Questions 8 and 9 are based on the profit leverage effect. Use the following table when answering.\Question 8 Using the above table, calculate Grind Fort’s cost of goods sold after the R14 300 reduction in their cost of goods sold as shown in Scenario 2? [1] R61 100 [2] R34 000 [3] R58 000 [4] R46 000 Question 9 Calculate Grind Fort’s gross margin after the R14 300 reduction in their cost of goods sold as shown in Scenario 2? [1] R66 000 [2] R72 300 [3] R68 900 [4] R41 100 Question 10 If the demand for sausages is 6 cases, the lead time for delivery is 14 days and the safety stock is 24 cases, calculate the reorder point (ROP) of Pot Belly Meat’s sausages. [1] 24 cases [2] 14 days [3] 108 cases [4] 64 days Assignment 1-Semester 1 (2020)Questions 1 to 5 are based on the case study “Continuous supply re-engineering at the Ford Motor Company” on page 251 of your prescribed book. (Note that although the case study comes from chapter 10, the chapter content need not be studied.) QUESTION 1 Ford Motor Company can compete internationally, since the landscape of doing business at a global scale changed significantly when … [1] the localisation of trade within countries and trade-areas was established. [2] longer product life cycles were adopted. [3] customers became less demanding of organisations. [4] massive advances in information technology happened. QUESTION 2 When Ford developed an initiative called “Order to Delivery”, they knew that a decrease in … might lead to an increase in their sales figures. [1] customer lead time [2] return on investment [3] flexibility [4] innovation QUESTION 3 As part of re-engineering at Ford, they had to restructure their network of suppliers. Based on the case study, which supplier assessment criteria is the most important one when selecting suppliers at Ford? [1] Financial status [2] Computer systems [3] Quality [4] Environmental awareness QUESTION 4 If Ford rejects a delivery from one of its rubber suppliers, which function at Ford is responsible for all negotiations with suppliers over faulty rubber consignments and rejections? [1] The Just-in-Time management team [2] The purchasing and supply function [3] Supervisors on the tyre manufacturing line [4] The finance function QUESTION 5 In the months before re-engineering at Ford, the head of purchasing and supply management was probably asked to quantify the financial benefit of this division for the Ford Motor Company. Since purchasing and supply affects the elements of Ford’s return on investment (ROI), which of the following figures for the previous five financial years were most probably requested from Ford’s finance department to do the calculation? [1] sales value, total cost, value of fixed assets, value of current assets [2] sales volume, total cost, value of fixed assets, value of current assets [3] total returns, value of fixed assets, value of current assets [4] sales value, purchasing cost, supply cost, total assetsQuestions 6 -11 relate to the following scenario: Your organisation manufactures rugged tablets and other smart devices that are frequently used on production lines and other manufacturing environments. The purchasing department has identified an opportunity to reduce total unit costs by changing the touch-screen technology used in your devices from Projected Capacitive technology to Surface Acoustic Wave technology. Further investigations into improved packaging materials also seem promising. QUESTION 6 Your supplier of Projected Capacitive touch screens uses your organisation’s devices in their manufacturing plant and that business might be lost if you switch to a different supplier. In what practice are you and the supplier engaging? [1] Captive supplier situation [2] Supply base optimisation [3] Supply base rationalisation [4] Reciprocity QUESTION 7 You have identified a manufacturer of custom-made recycled plastic moulds to protect the smart devices when in use. The price offered by the recycled plastics manufacturer is so attractive that you sign a deal to buy 70% of their moulds. In what situation is the plastic manufacturer finding itself? [1] Being a captive supplier [2] Part of supply base optimisation [3] Part of supply base rationalisation [4] In a reciprocal relationship QUESTION 8 Your team is about to sign a long-term contract with a new supplier of specialised packaging material to be used when exporting the smart devices. During the supplier selection process a weighted average point review was done for the three leading potential suppliers (results for scenario A are shown below). After completing the missing values in Scenario A (on the next page), which supplier is the best supplier for packaging material?[1] Supplier A for having the highest total score [2] Supplier B for having the highest quality score [3] Supplier C for having the highest innovation score. [4] Supplier C for having the lowest cost score. QUESTION 9 The CEO of your organisation recently announced that a greater strategic focus should be placed on innovation when dealing with suppliers, customers and other stakeholders. Your manager, considering the CEO’s recent statements, asks you to check whether there would be a significantly different outcome in Scenario A if the weighted review placed greater emphasis on innovation (which will be scenario B on the next page). During your calculation of Scenario B, you reduce the weight for cost to 25 and that of quality to 35, and increase the weight for innovation to 40. When comparing Scenario A and Scenario B, you see the following in Scenario B, if all ratings remain the same. (Complete the following table of Scenario B below before answering the question.)[1] no change in the outcome, since Supplier A would still score the highest of the three suppliers [2] a marginal change in the result, since Supplier B would move from second position to third position [3] a significant change in outcome, since Supplier C scores the highest and Supplier A and B respectively scored more than 50 points lower than Supplier C [4] a significant change in outcome, since Supplier C would score the highest, followed by Supplier A and then Supplier B QUESTION 10 Cost remain an important consideration when making supplier decisions. Assume that cost was the only consideration, what would the outcome in Scenarios A and B be? [1] Supplier A would offer the lowest price in both Scenario A and Scenario B. [2] Supplier B would move from the second cost position in Scenario A to the third cost position in Scenario B. [3] Supplier C would offer the lowest price in both Scenario A and Scenario B. [4] Supplier C would move from a second overall position on all criteria in Scenario A to an overall first position in Scenario B. QUESTION 11 The increased focus on innovation brought the following changes from Scenario A to Scenario B: [1] Despite all suppliers ranking the same on all criteria, the overall best supplier changed. [2] Supplier C not only scored the highest in terms of innovation, but also moved to the supplier with the best price. [3] Supplier A remained its highest scores in both cost and innovation. [4] Supplier B remained in second place on all three criteria. QUESTION 12 Avis Rent a Car is a large buyer of new cars in the South African market. Considering the number of units Avis buys from various vehicle manufacturers, such as Volkswagen and Toyota, what is the most likely form of buyer-supplier relationship between Avis and these suppliers?[1] Transactional relationship [2] Arms-length relationship [3] Collaborative relationship [4] Alliance relationship QUESTION 13 Expediting an order in the purchasing and supply context implies that the purchasing and supply official firstly … [1] obtains advanced technology to speed up the process. [2] phones the supplier to discuss future relationships. [3] monitors the supplier’s progress with the order. [4] suggests lean manufacturing as a stream-lined process. QUESTION 14 When buying specialised equipment, the purchasing procedures might require that requisitions exceeding a predetermined amount be accompanied by two or three written quotations. In such cases, the … has the prerogative of selecting the supplier. [1] user department [2] purchasing official [3] specialised equipment specialist [4] financial function QUESTION 15 The usual procedure for selecting suppliers of standard items in relatively small quantities would be to choose the supplier … [1] after following a comprehensive procedure for supplier selection. [2] as recommended on the requisition by the user function. [3] which seems to be the best one from three or four suggested suppliers. [4] which submitted a complete quotation on time. QUESTION 16 When making the decision to insource or outsource, which one of the following options is most suitable when a buying organisation is more competent in performing an activity than a potential supplier? [1] Outsource to any external supplier that has the capability to perform the activity. [2] Outsource a core activity even though it gives a competitive advantage. [3] Invest in disadvantaged suppliers to create their capability to perform the activity in-house at their premises. [4] Keep the activity in-house and invest to maintain and increase competitive advantage. QUESTION 17 If a computer organisation decides to outsource all their call centres to India, … takes place. [1] vertical integration [2] off-shoring [3] partial outsourcing [4] co-outsourcingQUESTION 18 The following happens when an organisation decides to partially transfer the activities of a function to a supplier outside while keeping the rest of the activities in-house: [1] Outsourcing [2] Insourcing [3] Co-sourcing [4] Back-sourcing QUESTION 19 If a retailer in the Diepsloot Township buys merchandise from a wholesaler to resell in his general store to final consumers, the final consumer would the wholesaler’s … in a supply chain. [1] first-tier customer [2] first-tier supplier [3] second-tier customer [4] second-tier supplier QUESTION 20 The linkages referring to the two-way movement and coordination between the different flows in the supply chain implies that ... [1] goods and information move in the same direction towards the end customer. [2] money, goods and information can flow in a reverse direction in the supply chain. [3] both inbound and outbound activities on the two sides of the supply chain should be coordinated. [4] information flow from first-tier customers to second-tier customers. Assignment 2-Semester 1 (2020) Questions 1 and 2 are based on the following scenario: Unofficial reports and rumours have made you (as a purchasing and supply official) increasingly doubtful that your main supplier adheres to sound ethical and socially responsible behaviour. Since your organisation takes these issues very seriously, you have decided to put together a task team to audit the supplier in question. QUESTION 1 Which one of the following audit findings contributes positively towards rating the supplier as ‘ethical’? [1] Suppliers’ workers are dedicated and are therefore made to work longer hours to earn much needed extra income. [2] The supplier has a code of ethics to guide their employees’ actions in all situations, even in some grey areas of ethical conduct. [3] The supplier does not report all its CO² emissions to environmental authorities, since current legislation still has many loopholes. [4] Suppliers’ assembly workers are encouraged to cover up defects that they come across, since not all defects are serious. QUESTION 2 Which one of the following audit findings would prove the supplier to be inadequate in terms of social responsibility?[1] Children are sometimes paid to do odd jobs at the factory to pay for their studies in later years. [2] The supplier pays for maintenance of sports fields near each of its factories to show community involvement. [3] The supplier has policies in place to actively promote diversity in its workforce to manage conflict and improve communication. [4] An annual pledge is made not to test any of the supplier’s products on animals following recent publicity on cruelty against animals. Questions 3 and 4 are based on the following scenario: Pralesh Singh, a senior sourcing coordinator at Eazi-Chips, a microchip manufacturing company based in Cape Town, was recently found guilty of unethical behaviour after a 3-month investigation. This came after reports that LeoCor Engineers was seen doing renovations to Pralesh’s home. LeoCor Engineers is the same company that Eazi-Chips had recently awarded a multi-million-rand tender that Pralesh was spear heading. QUESTION 3 Pralesh would act ethically when he … [1] buys a new computer for his son and not declaring the relatively small purchase to the management of Eazi-Chips. [2] never uses his authority or position for his own financial gain when dealing with LeoCor Engineers. [3] shares confidential information he receives as a manager with his outside trusted network, excluding LeoCor. [4] requests quotations from unqualifying suppliers to drive a qualifying supplier’s price (such as LeoCor’s) down. QUESTION 4 According to the King III & IV reports, senior managers should take responsibility for the ethical conduct of their organisations. Which one of the following options is not a requirement stipulated by the King III & IV reports? [1] The board of directors at Eazi-Chips should ensure that the company is and is seen to be a responsible corporate citizen. [2] Leadership at Eazi-Chips should be effective and based on an ethical foundation. [3] The board of Eazi-Chips should ensure that management cultivates a culture of ethical conduct through an ethical risk profile and a code of conduct. [4] Eazi-Chips’ should assess, monitor and report on its ethics performance, although disclosure is not required. QUESTION 5 Pork Belly Meats is very stringent when it comes to quality control. After the listeriosis outbreak, they have fine-tuned their processes and adopted new supplier quality management standards. As the purchasing and supply manager at Pork Belly Meats, you are involved in supplier quality. Identify the relevant task that you will have to perform during the selection and assessment of suppliers: [1] Count the number of well-trained security guards [2] Install quality cameras in the hand washing bays at the factory entrance [3] Check the functioning and quality of the weighbridge at the main gate [4] Take a survey of suppliers’ employee skills and qualifications QUESTION 6A large property developer, such as Atterbury, funds its developments by borrowing from large banks. Atterbury finds that they have limited options since only a handful of banks operate in South Africa. However, Atterbury can negotiate for a better rate by playing the banks off against each other. What market situation is described? [1] Perfect competition [2] Pure competition [3] Monopoly [4] Oligopoly QUESTION 7 Which one of the following statements regarding the standardisation of products is correct? [1] Standardisation is often employed by newly established businesses, because less inventory is generally required for standardised products. [2] Standardisation can only be implemented once the organisations’ employees have reached a high level of technical capability. [3] Standardisation should be employed when the organisation is not experiencing any price competition in order to take advantage higher profits by lowering production costs, while raising product prices. [4] Standardisation is mostly employed when market demand for a product is certain, because standardised manufacturing tends to be costlier than non-standard manufacturing. QUESTION 8 You are part of a supply chain transformation team looking to implement six sigma practices within your organisation. The team is looking to establish a so-called DMAIC improvement cycle to improve purchasing performance. One of the team members has built up a database of performance data and wants the team to immediately start with data analysis to determine reasons for deviation. What task should however precede data analysis? [1] Implementation of industry best practice processes [2] Introduction of standardised procedures [3] Development of measurement instruments to determine baseline [4] Define improvement goals QUESTION 9 Mercedes-Benz vehicles are known for their superior performing engines, state of the art interiors and the incorporation of innovative technologies, which is known as high … [1] prevention cost. [2] design quality. [3] conformance quality. [4] appraisal costs. QUESTION 10 Toyota is generally known to be a manufacturer of highly reliable vehicles which are products of the standard Toyota Production System. A core focus is on streamlining production processes to achieve highly consistent operations and eliminate errors and wastage, which can best be described as high ... [1] design quality. [2] conformance quality. [3] appraisal costs.[4] external failure costs. Assignment 1-Semester 2 (2020) This assignment consists of 20 multiple-choice questions assessing your knowledge on theoretical principles (Chapters 1 to 5), your knowledge on terminology in Addendum D in this tutorial letter and your ability to apply principles. Questions 1 to 5 are based on the case study “Continuous supply re-engineering at the Ford Motor Company” on page 251 of your prescribed book. (Note that although the case study comes from chapter 10, the chapter content need not be studied.) QUESTION 1 The following quote shows how reengineering at the Ford Motor Company improved ‘closing the order’ as a step in the purchasing and supply process: [1] “… re-engineer its external network by eliminating the correlations with smaller suppliers.” [2] “… these suppliers were given access to Ford’s computerised manufacturing schedule.” [3] “If the shipment from the supplier did not match the order, such an order was refused and returned.” [4] “… the computerised system would issue and send a cheque to the supplier.” QUESTION 2 The following quote shows how reengineering at the Ford Motor Company improved ‘origin and description of the need’ as a step in the purchasing and supply process. [1] “… these suppliers were given access to Ford’s computerised manufacturing schedule.” [2] “The idea was to work very closely with a limited number of suppliers…” [3] “…re-engineer its external network by eliminating the correlations with smaller suppliers.” [4] “On receipt, the shipment (if in all respects identical to the order) was to be recorded as received on the database …” QUESTION 3 Ford took steps to reduce their accounts department from 500 employees to 125 employees after following a control process. What action was most likely performed in the first step of the control process of ‘identifying objectives and determining the scope of the purchasing and supply function’? [1] Establishing qualitative measures, such as the human relations in the accounts department. [2] Observing that Mazda had increased efficiency with fewer staff members in the accounts department. [3] Benchmarking against Mazda to identify discrepancies in the respective accounts departments. [4] Compiling a report to highlight areas where performance in the accounts department was unsatisfactory. QUESTION 4 Ford followed a strategy of supply base optimisation when they decided to “work very closely with a limited number of suppliers”. Under which of the following circumstances would Ford benefit from the concentration of purchases from a limited number of suppliers? [1] When buying from small local businesses to show Ford’s community involvement [2] When one supplier provides the product and another the support service to Ford [3] When one supplier cannot supply in Ford’s future needs [4] When electronic data is interchanged between Ford and its suppliers QUESTION 5In the months before re-engineering at Ford, the head of purchasing and supply management was probably asked to quantify the financial benefit of this division for the Ford Motor Company. Since purchasing and supply affects the elements of Ford’s return on investment (ROI), which of the following figures for the previous five financial years were most probably requested from Ford’s finance department to do the calculation? [1] sales value, total cost, value of fixed assets, value of current assets [2] sales volume, total cost, value of fixed assets, value of current assets [3] total returns, value of fixed assets, value of current assets [4] sales value, purchasing cost, supply cost, total assets Questions 6 to 12 are based on the following example of the weighted average method (note that you must do the necessary calculations and complete the table below in order to answer the questions): QUESTION 6 When using the weighted average method to determine the selected suppliers’ performance, the following best describes the criteria (shown in the table) according to which the suppliers are evaluated: [1] After-sales service is not important when evaluating the suppliers’ performance. [2] Suppliers A, B, C and D should all score the highest in terms of on-time delivery as the most important criterion. [3] The decision on which criteria to use is one of the subjective (qualitative) parts of this method. [4] Once criteria are selected, they will remain the criteria that management will use to evaluate current and future suppliers’ performance. QUESTION 7 When using the weighted average method to identify the most suitable supplier, the calculations in the above table shows that Supplier … is the best supplier in this situation. (To answer the question, the table should be completed by doing the necessary calculations.) [1] A [2] B [3] C [4] DQUESTION 8 When only focussing on the suppliers’ scores for price, Supplier C's score of 35 can be interpreted as follows: [1] Supplier C offers the highest-priced product compared to the other suppliers. [2] Supplier C offers the lowest-priced product compared to the other suppliers. [3] Supplier C will be eliminated from the list due to its low score for the price criterion. [4] Supplier C seems confident that having the lowest price will compensate for the perception of poor quality. QUESTION 9 If quality was the ONLY criterium used when deciding on the best supplier, which supplier would be the most obvious one to select? [1] Supplier A [2] Supplier B [3] Supplier C [4] Supplier D QUESTION 10 The most important criteria when choosing a supplier in this case is: [1] Quality [2] Price [3] On-time delivery [4] After-sales service QUESTION 11 Supplier C had a rating of only 1 for price, which means that Supplier C … [1] charges a marginally lower price than Supplier D. [2] scores the best of all suppliers on price. [3] and Supplier B are the main suppliers to consider. [4] is the most expensive supplier. QUESTION 12 Before you answer this question, change the weight for quality product to 25 and ignore after-sales service as a criterion. If the criteria of on-time delivery, price and quality product were the only three criteria used in evaluating the potential suppliers, and the ratings remain the same, which supplier would be the best supplier? [1] Supplier A [2] Supplier B [3] Supplier C [4] Supplier D QUESTION 13Uplifting communities is a key priority for South Arica. If PEP Stores decides to increase the proportion of clothing items bought from local suppliers to more than 80% of total inventory and creates programmes to establish new local suppliers, these actions represent an example of the following level of purchasing and supply planning and objectives? [1] Operational objectives and planning [2] Tactical objectives and planning [3] Mission statement and strategic planning [4] Integrated objectives QUESTION 14 Assume that the purchasing and supply manager at Takelot (an online retailer) is requested to submit a report on suppliers in accordance with the policy guidelines of the organisation. In his report, he lists the different types of suppliers and their dealings with Takealot. Which one of the following best describes a situation where the purchasing and supply function of Takealot buys more than half of a supplier’s production of video games? [1] unreliable suppliers [2] suppliers’ specialised knowledge [3] captive suppliers [4] reciprocal suppliers QUESTION 15 Which one of the following factors directly contributes to lower total cost? [1] innovation [2] improved customer lead time [3] lower inventory cost [4] improved quality QUESTION 16 Expediting an order in the purchasing and supply context implies that the purchasing and supply official firstly … [1] obtains advanced technology to speed up the process. [2] phones the supplier to discuss future relationships. [3] monitors the supplier’s progress with the order. [4] suggests lean manufacturing as a stream-lined process. QUESTION 17 A General Manager is looking to measure the extent to which the purchasing and supply function has achieved the overall objectives for which the function was introduced into the organisation. Which one of the following sets of measures is used to determine this? [1] The outcomes of a training and integration questionnaire [2] Cost savings, workload and administrative performance [3] Communicating and publicising programme results [4] Pricing proficiency, supplier performance and materials flow QUESTION 18If an organisation experiences an unexpected slump in sales when a new competing supplier enters the market, which one of the following may directly contribute to increased sales? [1] lower inventory carrying cost [2] increased flexibility [3] reduced quality cost [4] partnering with long-term suppliers QUESTION 19 When BMW implemented a just-in-time (JIT) inventory system at their plant in Rosslyn, North West of Pretoria, they used … signals to notify suppliers of restocking requirements. [1] kanban [2] reorder point [3] materials requirements planning (MRP) [4] economic order quantity (EOQ) QUESTION 20 Wheel Forge, a tyre manufacturer, had to reject a delivery from one of its rubber suppliers. Which function at Wheel Forge is responsible for all negotiations with suppliers over faulty rubber consignments and rejections? [1] The Just-in-Time management team [2] The purchasing and supply function [3] Supervisors on tyre manufacturing line [4] The finance function Assignment 2-Semester 2 (2020) Multiple choice questions 1, 2 and 3 are based on the following scenario: Jill is a purchasing manager at ABC Enterprises and her son Adam has just been appointed in the IT department of another organisation that does not compete with ABC Enterprises in any way. Adam’s employer is looking to partner with a new software vendor, and to help Adam impress his bosses, Jill shares some key insights with him into the functional and technical capabilities of some vendors that have previously presented to ABC Enterprises in reply to open RFI’s (Request for information). QUESTION 1 Considering Jill’s position as a purchasing professional, how can her ethical behaviour in this scenario be described? [1] Jill acted unethically by initially requesting information from a supplier with the intention of not using such information for purchasing decision-making. [2] Jill did not act unethically, since Adam’s employer does not compete with ABC Enterprises. [3] Jill acted unethically, since information on vendors obtained from written quotations, tenders and sales presentations should be treated confidentially. [4] Jill did not act unethically, since the software vendors should be grateful that she is sharing their information which could lead to an unexpected sales. QUESTION 2 Which one of the following reflects Jill’s misconception regarding ethical behaviour? [1] “It is my calling in life to help my son to make a good impression.” [2] “As a purchasing professional, I have a responsibility to act ethically.”[3] “I should use information from vendors for its intended purpose.” [4] “I know that gifts from suppliers should not be accepted.” QUESTION 3 According to the King Reports, who bears the main responsibility for creating and maintaining an environment where the unethical behaviour seen in the scenario is reduced and eventually eliminated? [1] The board of directors has sole responsibility for the development and implementation of ethical strategies and policies. [2] Ethical conduct start and stop with top management. [3] Employees and supervisors need to drive a bottom-up approach to establish an ethical culture. [4] Government should craft a framework for ethical conduct and continually monitor, reprimand and punish unethical behaviour. QUESTION 4 Your organisation is looking to import a new type of product parts, used for assembly in its final products, from the United States. Management is concerned about the volatility in the USD–ZAR exchange, which makes it difficult to accurately do unit production costing and product pricing. Management is considering two options. Option A is to import a generic, standardised version of the part from Supplier A. Option B is to import a customisable version of the part from Supplier B. Neither suppliers are willing to agree to a fixed-ZAR based contract, and each order will be in USD with the exchange rate fixed at time of order placement. Considering the concerns around volatile exchange rates outlined above, which one of the below statements are most correct? [1] Customised items are more readily available in the market and would allow the organisation to eventually diversify its sources of supply and negotiate more favourable exchange rate terms. [2] Standardisation will allow larger quantities to be ordered at a time, which affords the organisation the flexibility to wait out highly volatile periods and only conclude orders when the currency exchange is favourable. [3] Standardised items are generally lower-priced, which will enable the organisation to reduce its risk exposure to fluctuating exchange rates. [4] Customised items typically require lower inspection costs, since errors and quality discrepancies are less; these cost savings can be used to hedge against exchange rate fluctuations. QUESTION 5 ZZ’s Fashion, a small online clothing retailer operating only in Gauteng, is considering buying a new forklift to boost productivity in their distribution facility. The owner indicated that, if the payback period for the forklift is less than 4 years, ZZ’s credit provider will supply credit for the purchase. If the payback period is calculated as: Payback = machine cost / Y then Y represents … [1] net cash flow after operating costs, depreciation and interest charges have been deducted. [2] net cash flow before depreciation deductions. [3] net cash flow after operating costs, excluding interest charges on the capital loan. [4] annual interest repayment, excluding other operating expenses. QUESTION 6 A large property developer, such as Atterbury, funds its developments by borrowing from large banks. They find that they have limited options since only a handful of banks operate in South Africa. However, Atterbury also finds that they can negotiate for a better rate by playing the banks off against each other. What market situation is described? [1] Perfect competition[2] Pure competition [3] Monopoly [4] Oligopoly QUESTION 7 Logistics management is often confused with supply chain management, since practitioners do not seem to know that logistics management … [1] is the more strategic version of supply chain management. [2] involves the sourcing and management of suppliers as critical role-players in the supply chain. [3] refers to managing the movement and storage of goods as part of supply chain management. [4] is a broader concept, which includes supplier management, purchasing management and supply chain management. QUESTION 8 What is the main difference between a supply chain and a value chain? [1] A supply chain is focused on the supply activity, whereas the value chain is focused on valueadding activities. [2] A supply chain has different upstream and downstream linkages, whereas the value chain has only downstream linkages. [3] A supply chain consists of the value-adding activities of a network of organisations, whereas a value chain consists of the value-adding activities of a specific organisation [4] A supply chain focuses its activities on satisfying the final consumer’s need, whereas a value chain coordinates the supply chain activities of different supply chain role-players. QUESTION 9 In a typical supply chain, an upstream linkage will be on the … side of the supply chain. [1] supplier [2] end consumer [3] focal firm [4] outbound QUESTION 10 Which one of the following tools can be used in the critical projects quadrant of the purchasing matrix to support strategic cost management? [1] Landed price [2] Open books [3] Target cost analysis [4] Life cycle costing [Show More]

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