Procurement Final

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  1. What are 5 options that exist to resolve a dispute?
    • Negotiation
    • Mediation
    • Litigation
    • Arbitration
    • Courts
  2. When resolving a dispute, what are 6 considerations to keep in mind?
    • 1. Time
    • 2. Money
    • 3. Complexity/Formality of method
    • 4. Stress
    • 5. Visibility
    • 6. Damage to relationship
  3. What is Mediation?
    • Introducing a third-party into the discussion.
    • Their role is to listen, sympathize, empathize.
    • They CANT decide anything (thats Arbitration)
  4. Whats Litigation?
    • When they take it to the court
    • Both sides have "already lost"
    • Costs are maximized
  5. Whats Arbitration?
    • They hear testimony and study evidence from both sides, then make a decision based on the facts
    • (Purchase orders often have arbitration clauses)
  6. What are Evergreen Contracts?
    • Orders or contracts with open-ended termination.
    • Can be difficult to monitor or amend.
  7. What are some trends of Global Sourcing?
    • Hypercompetative business environment,
    • Complex distributed supply chain networks,
    • Faster pace of innovation,
    • Shorter product life/Faster time to market,
    • Higher expectation of customer service levels
  8. What are the 3 stages of Global Supply Management?
    • 1. International Purchasing
    • 2. Global Sourcing
    • 3. Global Supply Management
  9. Explain the Purchasing stage of Global Supply Management
    Organizations focusing on leveraging volumes.
  10. Explain the Global Sourcing stage of Global Supply Management
    Organizations focused on global opportunities.
  11. Explain the Global Supply Management stage of Global Supply Management -___-
    Organizations optimize supply networks.
  12. What are the 6 categories of cost?
    • Variable Manufacturing costs
    • Fixed Manufacturing costs
    • Mixed Manufacturing costs
    • Total Production costs
    • Direct costs
    • Indirect costs
  13. What is Price Analysis (or Cost analysis)
    • A review and an evaluation of actual or anticipated costs
    • Purpose is to arrive at a price that is fair and reasonable to both the buying and selling firms
    • (Most useful when purchasing Nonstandard items)
  14. Explain Direct Costs?
    • Direct costs are normally the major portion of product or service costs
    • They are usually easily traceable
    • They generally serve as the basis for allocation of supplier overhead costs
    • (Ex. Direct Labor & Direct Materials)
  15. Explain the process for preparing for Negotiations
    • 90% of time involved should be invested in preparation
    • (Negotiator must: Posses technical understanding, analyze bargaining position, conducted a price analysis, know the seller, know culture, be thoroughly prepared)
  16. What is Target costing?
    • Focuses on the price the customer will be willing to pay for a product or service
    • (After removing a reasonable profit from the price, the target cost is identified)
  17. What is MMOG?
    • Materials Management Operations Guideline
    • Used to conduct a comprehensive evaluation of their supply chain performance and capability
    • (Developed in 2001 by OEM's through AIAG)
  18. What does GSP mean?
    Generalized System Preferences
  19. What does MFN mean?
    Most Favored Nation
  20. What are the 3 types of competition?
    • Pure Competition
    • Imperfect competition
    • Monopoly
  21. What does SRM mean?
    Supplier Relationship Management
  22. What is significant about Collaborative & Alliance negotiating techniques?
    • Separate the people (negotiators) from the problem (quality, price)
    • Focus on interests, not positions
    • Invent options for mutual gain
    • Insist on using objective criteria
  23. What are the 2 major purposes of contracts?
    • 1.They clarify EXPECTATIONS
    • Suppliers understand our expectations
    • They can meet our expectations
    • They know what to expect from the Buyer

    • 2.They properly align the ECONOMICS
    • Each contract is a bargain
    • Remedies are available if expectations not met
  24. What does UCC stand for?
    • Uniform Commercial Code
    • Identifies 2 warranties: Implied & Express
Card Set:
Procurement Final
2013-12-12 04:48:36
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