I. Purchasing is a strategic activity, only if the purchasing activities and strategy is in line with the overall strategy of the company.
II. The scope of the purchasing function consists of all commercial activities that are executed by the entire purchasing department.
Both statements are correct.
Both statements are incorrect.
Statement I is correct and Statement II is incorrect.
Statement I is incorrect and Statement II is correct.
Which of the processes below is not part of the Monczka’s ‘purchasing excellence’ model?
Develop commodity/article group strategies.
Develop and manage supplier relationships.
Develop partnership strategies.
Integrate suppliers into the order fulfillment process.
Which of the processes below is not part of the Monczka’s ‘purchasing excellence’ model?
Develop commodity/article group strategies.
Competitive benchmarking.
Strategic cost management.
Insourcing /outsourcing.
The purchasing portfolio analysis of Kraljic distinguishes between different types of products. Which statement about product type is not correct?
When purchasing routine products, the emphasis is often put on reducing administrative activities.
When dealing with bottleneck products, it is important to create severe competition between suppliers.
Strategic products are often characterized by high switching costs.
For leverage products it is important to use purchasing power.
The purchasing portfolio analysis of Kraljic characterizes products in two dimensions. These dimensions are:
Profitability and number of suppliers.
Impact of the product on the bottom line and the number of suppliers.
Supply risk and impact of the product on the bottom line.
Strategic influence and supply risk.
Consider the statements below:
I. For leverage products, large savings can be created with an aggressive sourcing strategy; for retail chains this effect is larger than for service organizations as, for retail chains, purchased goods represent a larger part of the turnover than for service organizations.
II. The term leverage products, in Kraljic purchasing portfolio, is chosen as it resembles the situation where suppliers have power (leverage) over buyers.
Both statements are correct.
Both statements are incorrect.
Statement I is correct and Statement II is incorrect.
Statement I is incorrect and Statement II is correct.