Questions && Answers

Chapter 1

1. Three major attractions of careers in supply management are 1) periodic analysis of an organization’s spending (what is purchased and from whom), 2) Analysis of the supply market (who offers what and what changes are taking place in the relevant component of the supply world), and 3) Development of a sourcing strategy which supports the corporate strategy while minimizing risks and costs.

7. Seven ways in which supply management has an impact on a firms sales are as follows: 1) Faster to Market or Time-Based Competition - The first firm to introduce a successful new product or service will hold a 40 to 60 percent of the market after their competition enters the picture. Time-based competition also includes a firm’s ability to meet unexpected surges in demand for its products. 2) Improved Quality - A firm whose products or lines of products have a reputation for quality gains market share over its competitors and frequently is able to command premium prices. 3) Pricing Flexibility - A strategic approach to supply management will reduce the total cost of ownership associated with purchasing and owning or leasing materials, equipment, and services an average of 25 percent. When the cost of producing an item or service is reduced, marketing receives the gift of pricing elasticity. 4) Innovation - A percentage of all successful new products are the result of technology gained from the supply base. 5) Enhanced Customer Satisfaction - Strategic supply chain management helps achieve shorter fulfillment lead times, consistent on-time delivery, high fill rates, complete orders, quicker responses to customers’ requirements, and the ability to meet unique or special requests. 6) The supplier of choice - By providing the best value, a firm becomes the supplier of choice to another channel member or to the end customer. 7) Customer Fulfillment Flexibility - Strategic supply chain management provides the supply support which allows a firm to be responsive to...