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Unformatted text preview: SELF-STUDY - UNIT #4 & #5 (2005 Fall) Unit 4 : Supply Chain Management 1. Define supply-chain management.- Supply-chain management is the integration of activities that procure materials and services, transform them into intermediate goods and final products, and deliver them to customers. 2. What are the three things supply chains in a global environment must be? 1. Flexible enough to react to sudden changes in parts availability, distribution or shipping channels, import duties, and currency rates. 2. Able to use the latest computer and transmission technologies to schedule and manage the shipment of parts in and finished products out. 3. Staffed with local spets to handle duties, trade, freight, customs, and political issues. 3. Table #2 and table #3 on pg. 118 show supply chain/purchasing cost as a percent of sales. How can savings in these areas increase profitability?- Because such a huge portion of revenues is devoted to the supply chain, and effective strategy is vital. The supply chain provides a major opportunity to reduce costs and increase contribution margins. 4. What do "make-or-buy" decisions relate to?- Choosing products and services that can be advantageously obtained externally as opposed to produced internally is known as the make-or-buy decision. 5. Identify the 11 reasons for making, and the 10 reasons for buying. Making Buying 1 Maintain core competence Frees management to deal with its primary business 2 Lower production cost Lower acquisition cost 3 Unsuitable suppliers Preserve supplier commitment 4 Assure adequate supply (quantity or delivery) Obtain technical or management ability 5 Utilize surplus labor or facilities and make a marginal contribution Inadequate capacity 6 Obtain desired quality Reduce inventory costs 7 Remove supplier collusion Ensure alternative sources 8 Obtain unique item that would entail a prohibitive commitment for a supplier Inadequate managerial or technical resource 9 Protect personnel from a layoff Reciprocity 1 Protect proprietary design or quality Item protected by a patent or trade secret 1 1 Increase or maintain size of a company (management preference) 6. Identify and explain the five supply-chain procurement strategies. 1. Many Suppliers This strategy plays one supplier against another and places the burden of meeting the buyers demands on the supplier. Suppliers aggressively compete with one another. (Short-term) 2. Few Suppliers This strategy implies that a buyer is better off forming a long-term relationship with a few dedicated suppliers....
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- Fall '05