SCMN 3730 EXAM 2 NEWEST 2024-2025 ACTUAL
EXAM COMPLETE 70 QUESTIONS AND
CORRECT DETAILED ANSWERS (VERIFIED
ANSWERS) |ALREADY GRADED A+
What are the two opportunities for procurement to positively
impact the balance sheet? - CORRECT ANSWER--Reduce
inventory investment
-Increase days payable
-Inventory investment; increase inv. turns
-Days-payable outstanding; increase cash
-Fixed asset mgt; tooling and equipment
What are the key value drivers for each quadrant strategy? For
each quadrant, how does procurement drive savings (strategy) to
the "bottom line"? - CORRECT ANSWER--Tactical: not critical
to business (best price wins); try to automate
-Leverage: not critical but a lot of money involved (contract
with few suppliers to gain improved pricing structure);
continuous improvement
-Bottleneck: not a lot of money but very critical to business
(work closely with company to improve bottleneck or consider
purchasing company if able)
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-Strategic: critical and a lot of money (develop long-term
partnerships with suppliers)
Compare and contrast a tactical vs. strategic methodology to
implementing procurement cost savings - CORRECT
ANSWER--Tactical = single company focused on supply chain
cost reduction efforts (reduce total landed cost)
-Strategic = integrative approach focused on improving costs
throughout supply chain (reduce total cost of ownership; get
everyone to reduce your costs)
What is the concept of Total Cost of Ownership (TCO) and how
does it apply to procurement processes? - CORRECT
ANSWER--TCO = acquisition, ownership, and post ownership
costs (net present value of all): long-term integrative approach
>Routine analysis performed by purchasing to define decision
making processes
>Analyze all acquisition related costs
TCO - CORRECT ANSWER-Total Cost of Ownership
-Routine analysis performed by purchasing to define the
sourcing decision-making process
-The sourcing team should typically research and prepare
analysis for management's consumption
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-Research process must be adapted to each enterprise
-Purchasing must analyze all acquisition related costs when
making supply management decisions
-TCO is the net present value (NPV)
-Equation: TCO = Acquisition + Ownership + Post-Ownership
Costs
What costs are included in each of the TCO segments? -
CORRECT ANSWER--*Acquisition (TLC)*: purchase price,
planning costs, quality costs, business taxes, financing costs,
inbound transport
-*Ownership*: downtime costs, supply risk cost, cycle time
costs, conversion costs, non-value added costs, supply chain
costs
-*Post-Ownership*: environmental costs, warranty costs,
product liability costs, customer dissatisfaction costs
Compare and contrast TCO to Total Landed Cost (TLC)
concept. - CORRECT ANSWER-Acquisition costs are TLC
costs, TCO includes ownership and post-ownership
What are the categories of cost savings and how are each
defined? - CORRECT ANSWER--*Realized cost savings*: can
find on income statement (implemented and used)
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