Lum David SCM 406W 3/18/08 Chapter 17 1. Transportation purchasing was revolutionized when legislation was passed in the 70's to 80's that deregulated transportation. For Air transportation, the Air Cargo Deregulation Act in 1977 and Air Passenger Act in 1978 deregulated this mode of shipping. The Motor Carrier Act in 1980 released road transportation from regulation and the Staggers Act in 1980 deregulated the railroads. Other legislation includes the Transportation Industry Regulation Reform Act in 1994 and Ocean Shipping Reform Act in 1998 which freed up water shipping. 3. Topics that should be discussed while negotiating with providers include who has responsibility of the freight and at what point, also the amount of control that is allowed by the transportation provider. Most importantly is the total cost or cost per shipment, and how often shipments are picked up and delivered. Information sharing should be discussed to, so both parties don't have miscommunication. It should be established what performance level can be expected from the supplier and how both parties can work together improve to it. 13. Standardization is important when it comes to purchasing because it helps to reduce redundancy of purchases and therefore reducing costs overall. It also plays a part in communication within each division of the company, which can help each division decide which supplier is the cheapest or most reliable. By standardizing, it helps control the quantity of what each division can order and limit them to into those that corporate would want them to purchase from. It makes it easier to keep track of where money is going and determine a budget. 14. Power Spenders include people such as CEOs or presidents of a company, who would use money to finance their trips to meetings or buying corporate planes and such. They would also utilize money to help service their customers or suppliers for things such a meals. Being able to train these people can help make the budget more predictable and the knowledge of the allocation of money is traceable. This fits in with the indirect spending strategy because it helps reduce costs and like other sections, the spending is known and controlled.