A scientific equipment company wants to encourage its key suppliers to participate in the firm's quality certification program. The process is detailed and time-consuming. Which of the following is likely to be the GREATEST benefit to the buying organization?
The greatest benefit of involving suppliers in a quality certification program is often the reduction in total costs. Certified suppliers typically produce higher-quality goods, reducing defects and rework. This improvement leads to lower operational costs and enhances the overall supply chain efficiency. Reference include supply chain management studies that highlight the cost benefits of supplier quality certifications.
PQR, Inc. produces office supplies for big box retailers. This is a highly competitive market and the requirement for maintaining a continuous inventory of product for retailers is a high priority for PQR. Recently, the firm experienced shipping delays from overseas suppliers. Which of the costs associated with shortages would be MOST critical for PQR?
In a highly competitive market like office supplies, the most critical cost associated with shortag-es is typically lost sales. If PQR, Inc. experiences shipping delays and cannot maintain continuous inventory, customers are likely to turn to competitors to meet their needs. This can result in im-mediate lost sales and potentially long-term loss of customer loyalty. The cost of lost sales often outweighs other costs like idle workers or production downtime because it directly affects revenue and market share. Reference:
* Chopra, S., & Meindl, P. (2015). Supply Chain Management: Strategy, Planning, and Op-eration. Pearson.
* Christopher, M. (2016). Logistics & Supply Chain Management. Pearson UK.
A supply manager receives four bids for a special piece of equipment. The equipment is large and does not fit into a normal sea container. The bids are as follows:
Supplier 1 Supplier 2 Supplier 3 Supplier 4
Bid $2,110,000 $2,105,000 $2,110,000 $2,115,000
Incoterms 2020 Rule GIF DPU FCA FAS
The costs of transportation, included within each bid price, are as follows:
Responsibility for Payment to Carrier Transfer of Risk to Buyer Cost of Transportation
Supplier, before goods are loaded onto vessel: purchaser thereafter Alongside vessel nominated by purchaser $50,000
Supplier to named port of destination: purchaser thereafter Once goods have been loaded onto the vessel $55,000
Supplier to named place of destination once unloaded: purchaser thereafter Once goods have been unloaded at named place of destination 540,000
Purchaser Where goods are loaded onto the collecting vehicle $30,000
The supply manager has taken account the firm's risk profile and wishes to use FCA for its Incoterms 2020 rules. Adjusting the pricing in the tenders to reflect this, which supplier should be awarded the contract (based on the lowest price)?
Using FCA Incoterms means the buyer assumes responsibility at the point where goods are loaded onto the transport. Adjusting for transportation costs, Supplier 3, with a lower base bid price and assuming buyer's responsibility earlier, results in the lowest adjusted total cost. This selection balances cost and risk, aligning with the buyer's preferred Incoterm.
A firm that manufactures residential doors and windows runs short of rubber molding used in production. The next delivery from the contracted supplier is due in two working days. To maintain production, the firm's supply manager purchases 100 feet of material from a local supplier. This type of purchase is known as
Spot buying refers to purchasing goods on the open market for immediate requirements, often at a premium, to meet urgent needs. This approach addresses shortages quickly, ensuring continuity in production.
GHI, Inc. is a U.S.-based company with an expanding product line. GHI widens its sourcing of components to global suppliers, including suppliers in countries which are not included in trading blocs or bilateral agreements with the United States. Compliance with which of the following will MOST likely reduce GHI's administrative burden of cargo inspections on materials imported from these sources?
GHI, Inc. would benefit most from compliance with the Customs-Trade Partnership Against Terrorism (C-TPAT) (Option D). This initiative helps reduce the administrative burden of cargo inspections by establishing security guidelines and facilitating faster customs processing for participating companies. By aligning with C-TPAT, GHI can ensure smoother import procedures, even when dealing with countries outside of specific trading blocs. Reference: U.S. Customs and Border Protection information on C-TPAT.
