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Example_questions_-_solution_a - SOLUTIONS TO EXAMPLE...

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1 SOLUTIONS TO EXAMPLE QUESTIONS Multiple Choice Questions 1. E 2. C 3. E 4. B 5. A 6. A 7. D 8. E Short Answer Questions 9. How globalization is impacting purchasing. Some possible answers include: - Availability of many more suppliers worldwide many more opportunities for potential sources, greater competition, greater choice - Offshoring and its associated consequences: increase in lead-times and risk, issue of intellectual property protection in countries where these laws are not enforced, lack of control over supplier (especially in terms of ensuring their ethical practices, e.g. child labor, which might be tolerated in the foreign country) 10. What does the following chart show, and how was the experience made by Honda of America possible? The black line in the chart shows the development of the producer price index (PPI) and the relative performance of a major manufacturing company (green line) and Honda of America (orange line). While the PPI was increasing, prices that the suppliers charged the green supplier were increasing as well, albeit to a lesser degree. This means that the supplier was doing well, since its prices did not increase as much as the prices across the board as
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2 indicated by the PPI. Honda (the orange line) however even showed greater performance, in
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Example_questions_-_solution_a - SOLUTIONS TO EXAMPLE...

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