O1. Outline FIVE differences between purchasing goods and purchasing services. - correct answer 1. Goods are tangible, services are intangible:
2.
... [Show More] Services cannot be separated from their supplier:
3. Heterogeneity: goods are usually uniform in nature while services are unique at each delivery
4. Services 'perish' immediately on delivery whereas goods can be stored until required
5. Products are easier to specify, being tangible
O2. Explain THREE circumstances in which a competitive tendering exercise might not be the best approach to making a purchase. - correct answer 1. Urgency
2. Commercial confidentiality or national security (e.g. military organisations):
3. Value of the purchase:
4. Production costs cannot be measured accurately:
5. Price is not the only criterion for supplier selection and contract award
6. Intellectual Property Rights and monopoly
O2. Describe TWO e-sourcing tools and their use in procurement and supply. - correct answer 1. E-Catalogues
2. E-Tendering
3. E. Auction
4. Reverse Auctions
5. Online suppleir evaluation data
O3. Explain the role of a shared services unit (SSU). - correct answer SSUs reflect a desire to centralise and share services
The shared service provider becomes a dedicated provider of services such as; finance, HR, IT and procurement which continue to be provided internally
An SSU manages costs and quality SLAs to demonstrate value for money.
An SSU's benefits may be summarised as:
• cost effective internal service;
• liaison with its customers;
• anticipating future demand;
• employing resources and providing higher levels of service more cost effectively than if they were provided by a department or an external provider.
O3. A manufacturer of electrically powered tools for the engineering industry consists of four separate business units, each of which undertakes its own purchasing activities.
Discuss THREE benefits of centralising all purchasing activities with those of retaining the present decentralised structure. (1 of 2) - correct answer Centralisation' and 'decentralisation' refer to the degree to which responsibility and authority is delegated. Arguments for centralisation can only be evaluated in the context of specific organisational environment and might include:
1. Policies & procedures
2. Consolidation of requirements
3. Location
4. Supply market structure
5. Expertise required:
6. Customer demands
O3. A manufacturer of electrically powered tools for the engineering industry consists of four separate business units, each of which undertakes its own purchasing activities.
Discuss THREE benefits of centralising all purchasing activities with those of retaining the present decentralised structure. (2 of 2) - correct answer The benefits of retaining the present de-centralised structure include:
1. Local responsibility
2. Knowledge of the local environment, culture and customer needs [Show Less]