Answers Of Questions Case Study Example

Management

Answer of Question 1
Purchase order is different from blanket purchase order in that they have different delivery date as well as the receiving department. This information remains open on the blanket order as it is different on different orders. One of the main advantage of blanket purchase order is that it remains in effect during the specified time, i.e. six months to a year on the agreement. Most buyers are also able to cancel the order at any time with the help of an “escape clause”.

Answer of Question 2

Three important supply chain management goals are (1) cost-reduction, (2) technology/new-product development, and (3) supply base and assurance. Cost-reduction objective involves the low-cost production, and reduction in the levels of inventory. Technology/new-product objective includes the reduction of the time of product development, and outsourcing of non-core-competency activities. Supply base and assurance objectives include the reduction of the number of suppliers used, and assurance of uninterrupted supply from the remaining suppliers.

Answer of Question 3-A

Purchasers can increase their purchase quantity to ensure that their receipt yields the optimal amount of good quality material (Monczka 618).
Answer of Question 3-B
Purchasers can eliminate delivery uncertainty with the help of stable release schedules with realistic supplier lead times (Monczka 618).
Answer of Question 3-C
With lengthening of the order-cycle times uncertainty can arise. So, purchasers can carry a higher level of inventory to compensate for higher uncertainty (Monczka 619).

Answer of Question 3-D

Purchasers have to increase safety stock levels to compensate for demand uncertainty or inaccurate forecasts. Moreover, companies have to check the accuracy of their forecasting systems (Monczka 619).

Answer of Question 4

Some of the sources of uncertainty in the supply chain are the lack of knowledge by the decision maker, lack of information about the supply chain, lack of information about processing capacities, inability to correctly predict the affect of possible control actions on supply chain behavior, and absence of control actions.

Answer of Question 5

Personal computers have high profit impact and have low supply risk. Custom designed telecommunications have high profit impact and high supply risk. Paper cups have low profit impact, low level of supply risk, and low visibility. Energy-saving light bulbs have low impact on profit, and can show supply risk.

Answer of Question 6

Gray box approach is a more involved approach in which the engineers of the suppliers work in cooperation with the buying company’s engineers to jointly design the project. On the other hand, black box approach can be considered as the highest level of supplier involvement in which suppliers are provided with working specifications and are asked to complete them. If the suppliers become a full-time member of the team, then both of these conditions would be appropriate (Monczka 142).

Answer of Question 7

1. In the traditional model, buyer gets all cost savings and supplier hides cost savings, whereas in the collaborative model there are win-win shared rewards.
2. In the traditional model, there are almost no joint improvement efforts, whereas in the collaborative model joint improvement is driven by mutual interdependence.
3. In the traditional model, there is almost no exchange of information in buyer-seller relationship, whereas in collaborative approach, there is open and complete sharing of information.
4. In the traditional model of buyer-seller relationship, buyer unilaterally resolves disputes. On the other hand, in the collaborative model, there is the existence of conflict-resolution mechanisms (Monczka 125).

Works Cited

Monczka, R., et al. Purchasing and Supply Chain Management. Cengage Learning, 2011. Print.