Understanding Procurement Methods

Procurement methods have considerable impact on _________.

• inventory level

• financial stability

• employee satisfaction

• market share

Inventories are maintained for meeting production requirements, supporting the operations, extending customer service and hedge against future __________.

• production delays

• supply shortages

• demand fluctuations

• inventory costs

Effective implementation of VMI depends on smoothly addressing the concerns of __________.

• suppliers

• employees

• stakeholders

• customers

The modern approach to control inventories is not focused on __________.

• excessive stockpiling

• reducing lead times

• just-in-time delivery

• minimizing holding costs

The inventory carrying cost includes which of the following?

• Transportation fees

• Storage costs, insurance, depreciation, opportunity costs

• Marketing expenses

• Employee salaries

Which procurement method is characterized by a long-term relationship with suppliers?

• Strategic sourcing

• Just-in-time procurement

• Competitive bidding

• Single sourcing

What is the primary goal of Just-In-Time (JIT) inventory management?

• To enhance production speed without regard to costs.

• To increase inventory levels for better availability.

• To focus on long-term storage solutions.

• To minimize inventory costs and reduce waste.

Which of the following is a benefit of Vendor Managed Inventory (VMI)?

• Improved stock availability

• Longer lead times

• Increased shipping costs

• Reduced supplier accountability

What does the term 'lead time' refer to in procurement?

• The duration of the delivery process only.

• The total time from placing an order to receiving the goods or services.

• The time taken to negotiate contract terms.

• The time required for payment processing.

Which inventory management technique aims to minimize stock levels?

• Safety Stock Management

• Just-In-Time (JIT)

• Economic Order Quantity (EOQ)

• First-In, First-Out (FIFO)