Supply Chain Management - Test 1 Memo
Supply Chain Management - Test 1 Memo
FEEDBACK TUTORIAL LETTER
1st SEMESTER 2018
TEST 1 MEMO
SUPPLY CHAIN MANAGEMENT
SCM711S
1
Centre for Open and Lifelong Learning (COLL)
Total Marks: 50
Duration: 2 Hours
Marker/Tutor: Ms Ester Kalipi
Instructions:
1
SECTION A (MULTIPLE CHOICE & TRUE/FALSE QUESTIONS) (15 Marks)
Question 1.1 – 1.5 consist of multiple choice questions, while question 1.6 consist of
True/False questions.
Question 1
Write the number and the corresponding letter of the correct answer, e.g. 1.1. a. Each
questions allocated 2 marks. (2x5 = 10 Marks)
1.1. ____ refers to the raw materials, component parts, and supplies bought from outside
organizations to support a company’s operations.
a) Inbound logistics
b) Procurement
c) Materials management
d) Supply management
e) None of the above
1.2. Procurement’s historical focus in many organizations was to ____.
a) incur minimal supply disruptions
b) use a limited number of suppliers
c) minimize loss and damage
d) achieve the lowest possible cost
1.3. Procurement and ____ are viewed as synonymous terms.
a) materials management
b) supply management
c) purchasing
d) inbound logistics
1.4. Which of the following is not a potential procurement objective?
a) supporting organizational goals and objectives
b) managing the supply base
c) developing strong relationships with other functional groups
d) supporting operational requirements
e) all are potential procurement objectives
1.5. ____ Materials refer to stock that exceeds the reasonable requirements of an
organization.
a) Waste
b) Obsolete
c) Scrap
d) Excess
2
b) Obsolete materials have no economic value. (False)
c) The major factors influencing locational decisions are markets and resource
availability. (True)
d) Inventories are stocks of goods and materials that are maintained for many purposes.
(True)
e) Inventory carries its greatest costs after value has been added through manufacturing
and processing. (True)
Sub-total: 15 Marks
SECTION B (STRUCTURED QUESTIONS) (35 Marks)
Question 2
2.1. What is purchasing? What is its relevance to logistics? 5 Marks
Purchasing refers to the raw materials, component parts, and supplies bought from outside
organizations to support a company’s operations.
Purchasing is the acquisition of material of the right quality, in the right quantity, from the
right source, delivered to the right place at the right time.
It is closely related to logistics since acquired goods and services must be entered into the
supply chain in the exact quantities and at the precise time they are needed.
2.2. Discuss 5 potential purchasing objectives. 5 Marks
The text provides five potential procurement objectives that could be discussed. They are
supporting organizational goals and objectives; managing the purchasing process effectively
and efficiently; managing the supply base; developing strong relationships with other
functional groups; supporting operational requirements.
2.3. Discuss five stages of the purchasing process/cycle. 10 Marks
3
Supplier investigation and assessment
Supplier choice
b) Awarding the contract
c) Expediting
d) Receipt and payment