A firm purchases a product requiring high quality, but it is not a critical or high-value item. What is the targeted supplier qualification level for this product?
For a product that requires high quality but is not critical or high-value, the targeted supplier qualification level should be 'Certified.' Certified suppliers have demonstrated their ability to consistently meet quality standards and performance criteria, making them reliable sources for high-quality products. While 'Approved' and 'Preferred' suppliers may meet basic requirements, 'Certified' suppliers have typically undergone more rigorous evaluation processes, ensuring a higher level of quality assurance.
Leenders, M. R., Johnson, P. F., Flynn, A., & Fearon, H. E. (2006). Purchasing and Supply Management. McGraw-Hill.
Trent, R. J. (2005). End-to-End Lean Management: A Guide to Complete Supply Chain Improvement. J. Ross Publishing.
Which of the following statements best describes a fundamental requirement for developing and maintaining good business relationships in an effective supplier partnership?
A fundamental requirement for developing and maintaining good business relationships in an effective supplier partnership is a means of periodic feedback for issue resolution. This means that both parties should communicate regularly and transparently, share information and insights, and address any problems or concerns in a timely and constructive manner12. Feedback is essential for building trust, alignment, and collaboration between suppliers and customers, as well as for improving performance, quality, and innovation34. The other options are not as comprehensive or relevant as the correct answer. While the supplier must commit to meeting the customer's performance metrics, and the buyer must commit to improving processes, these are not sufficient for developing and maintaining good business relationships. They are more specific aspects of supplier performance management and continuous improvement, which are important but not the only factors for effective supplier partnerships1. Similarly, while both parties should focus on cost reduction to improve competitiveness, this is not the primary or sole objective of a supplier partnership. Cost reduction is one of the potential benefits of a supplier partnership, but it is not the main driver or requirement for forming and sustaining such a relationship2. A supplier partnership should also aim for creating value, enhancing customer satisfaction, and achieving strategic goals34.
The purpose of the Global Reporting Initiative (GRI) is to summarize which of the following guidelines?
The purpose of the Global Reporting Initiative (GRI) is to summarizesustainability reporting guidelines regardless of country.GRI is an international independent standards organization that provides a common framework and language for organizations to communicate and demonstrate their impacts on economic, environmental, and social issues12.GRI's sustainability reporting guidelines are applicable and relevant for any organization, regardless of its size, sector, or location
Which of the following outcomes is most likely to result when lot size increases?
When lot size increases, the number of units ordered in each batch grows, leading to several outcomes:
Inventory Levels: As lot size increases, more inventory is held at any given time. This results in higher average inventory levels.
Carrying Costs: Inventory carrying costs include storage, insurance, handling, and obsolescence. With more inventory on hand due to larger lot sizes, these costs increase proportionally.
Setup Costs: While larger lot sizes can reduce the frequency of setups, thereby reducing setup costs, the increase in carrying costs due to holding more inventory typically outweighs the setup cost savings.
Operating Expenses and Total Profit: Operating expenses might not necessarily increase with lot size, and total profit is not directly influenced by lot size alone but by a combination of factors like sales, costs, and efficiency.
Therefore, increasing lot size primarily leads to an increase in inventory carrying costs.
Silver, Edward A., David F. Pyke, and Rein Peterson. 'Inventory Management and Production Planning and Scheduling.' Wiley.
Chopra, Sunil, and Peter Meindl. 'Supply Chain Management: Strategy, Planning, and Operation.' Pearson.
.
Total annual profit typically is highest at what stage of the product life cycle?
The product life cycle consists of four stages: Introduction, Growth, Maturity, and Decline. Total annual profit typically is highest at the maturity stage due to several factors:
Market Penetration: By the maturity stage, the product has achieved significant market penetration and established a stable customer base.
Economies of Scale: Production and operational efficiencies are maximized, reducing costs and increasing profit margins.
Stable Demand: Demand tends to stabilize during maturity, leading to consistent revenue streams.
Reduced Marketing Costs: Marketing expenses may decrease compared to the growth stage, as the product is already well-known.
In contrast, the introduction and growth stages involve higher costs for development and marketing, while the decline stage sees reduced sales and profitability.
Kotler, Philip, and Kevin Lane Keller. 'Marketing Management.' Pearson.
Anderson, Carl R., and Julian W. Vincze. 'Strategic Management: An Integrated Approach.' Cengage Learning.
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