Purchasing and Supply Chain Management
6th Edition
ISBN: 9781285869681
Author: Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher: Cengage Learning
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Question
Chapter 19, Problem 7DQ
Summary Introduction
To determine: The meaning of the below statement and examples of performance measures that result in negative long-term outcome on purchasing performance.
Statement: Some firms still rely on measures that harm rather than support purchasing’s long term performance objectives.
Performance and evaluation system is a formal and systematic methodology to observe and assess the purchasing performance.
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Discuss the major difference between cost-reduction and cost-avoidance measures. Why have some described the reported savings in cost-avoidance measures as “soft,” “funny money,” and “easy to manipulate”? When can purchasing take credit for a legitimate cost reduction or cost avoidance?
The earnings of the organization can be considerably impacted by buyers and supply chain management. Anorganization may spend up to 50% of its sales revenue on the acquisition of goods and services, including rawmaterials.You are employed as a purchasing director at Food Lovers in Durban, South Africa.
The selection of a supplier establishes the crucial issues that will determine whether the organization's procurement process is successful or unsuccessful.Critically examine how Food Lovers will detect which supplier is able to supply its requirements satisfactorily, bothstrategically and operationally in the short and long term
What can be the performance indices for a purchasing department of an organization? How can a purchasing manager monitor them? What are the advantages of defining such performance indices? Include examples for each part of this question
Chapter 19 Solutions
Purchasing and Supply Chain Management
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Similar questions
- You have been made the purchasing manager of a local bakery that specialises in artisanal bread, pastries, and cakes. This bakery is steadily growing in the Durban CBD and is seeing increased growth month on month as a result of lowered Covid-19 regulations. Answer the following questions with application to your new role. There are several objectives to performance evaluation. In your opinion, is performance evaluation vital to the success of the purchasing and supply function? Justify your stance by discussing at least 2 key points in relation to the context of the bakery.arrow_forwardPlease briefly explain why the correct option is right and why the other options are incorrect. 1) Which of the following is the PRIMARY reason for institutionalizing continuous improvement in the supply chain? a)To help suppliers enhance capability in their processes, allowing both the buyer and supplier to reap the benefits b)To determine where the supplier is making errors without raising costs in the supply chain c)To enable suppliers to voice concerns about how the organization is managing contracts with the supplier d)To make the buying organization more receptive to supplier concerns, including any negative feedbackarrow_forwardCompanies must chase the objective of matiching supply with demand in order to boost their overall performance. This objective is fully achieved when; A. Costs are minimised while lead time are maxiimised in the supply chain B. Costs are maximised while lead times ar minimised in supply chain C.Costs and lead times are maximesed in the supply chain D. Costs and lead times are minimised in the supply chainarrow_forward
- When a buying team visit a potential supplier, what evidence might they find that managers are not forward - looking or that the company might not perform well?arrow_forwardDiscuss what companies could do to influence the different stages of the purchasing process. View keyboard shortcutsarrow_forwardUsing the existing published research materials and data explain how implementing a comprehensive purchasing policy help organizations to be more competitive in the current business environment. Your discussion should also review the characteristics of a good policy, the benefits as well as downsides associated with a comprehensive policy and procedure manual.arrow_forward
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