Supply Chain Management - Exam 2(5-8) Questions and Correct Answers the Latest Update
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Course
Supply Chain Management
Institution
Supply Chain Management
Procurement
-The process of selecting and vetting suppliers, negotiating contracts, establishing
payment terms, and the actual purchasing of goods and services.
-Procurement is concerned with acquiring all of the goods, services and work that is vital
to an organization.
-Procurement is...
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Supply Chain Management - Exam 2(5-8)
Questions and Correct Answers the Latest
Update
Procurement
✓ -The process of selecting and vetting suppliers, negotiating contracts, establishing
payment terms, and the actual purchasing of goods and services.
✓ -Procurement is concerned with acquiring all of the goods, services and work that is vital
to an organization.
✓ -Procurement is the overarching or umbrella term within which the action of purchasing
can be found.
Purchasing
✓ -The action of obtaining merchandise, capital equipment; raw materials, services, or
maintenance, repair, and operating (MRO) supplies in exchange for money, or its
equivalent.
✓ -Purchasing is the process of how goods and services are ordered.
✓ -Purchasing can usually be described as the transactional function of procurement for
goods or services.
e-Procurement
✓ The business-to-business purchase and sale of supplies and services over the Internet.
Merchants
✓ Wholesalers and retailers who purchase for resale
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Industrial Buyers
✓ Individuals within an organizations who purchase raw materials for conversion into
products, and/or purchase services, capital equipment, and MRO supplies.
Contracting
✓ A term often used for the acquisition of services
Supply Management
✓ a newer term that encompasses all acquisition activities beyond the simple purchase
transaction.
Request for Proposal (RFP)
✓ A detailed low-level capabilities evaluation document that is used to precisely determine a
supplier's capability and interest in the production of a customized product or service.
Request for Quote (RFQ)
✓ A document generally used to solicit bids from interested and qualified suppliers for
goods or services that the organization needs to obtain.
Bid
✓ A tender, proposal, or quotation submitted in response to a solicitation from a contracting
authority
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✓ Offers submitted by multiple individuals or firms competing for a contract, privilege, or
right to supply specified services or merchandise.
Purchase Requisition
✓ Document that defines the need for goods and/or services. An internal document. Does
not constitute a contractual relationship with any external party.
Purchase Order(PO)
✓ The Buyer's offer to the supplier to acquire goods or services. Becomes a legally binding
contract only when accepted by the supplier.
The primary goals of purchasing are:
✓ 1. Ensure uninterrupted flows of materials and services at the lowest total cost
✓ 2. Improve quality of the finished goods produced
✓ 3. Optimize customer satisfaction.
Purchasing contributes to these objectives by:
✓ -Actively seeking better materials and reliable suppliers
✓ -Work with the expertise of strategic suppliers to improve quality and materials
✓ -Involving suppliers and purchasing personnel in new product design and development
efforts.
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✓ 1. Identify the need. Receive a Purchase Requisition
✓ 2.Identify and evaluate potential suppliers
✓ 3.Supplier selection (including bids and negotiations)
✓ 4.Approve and issue the Purchase Order
✓ 5.Receive and check the order upon delivery
✓ 6.Measure the supplier's performance
✓ 7.Close out the order
e-Procurement Process
✓ The "electronic" requisitioning, receiving, and reconciliation of the received goods
✓ -Automation of the non-strategic and transactional activities that would otherwise
consume the majority of a buyer's time
✓ -Provides increased enterprise level visibility of all purchases.
✓ -At a bare minimum, it consists of an electronic Purchase Requisition and/or Purchase
Order, an Invoice (which might be one with the receipt), and a Payment.
✓ -For high-dollar purchases, the process will generally also include authorization of the
Purchase Order and reconciliation of the invoice.
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