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A company finds that one of its warehouses is out of capacity to store products. Expanding the physical size of the warehouse is not an option. The most appropriate solution would be to increase the:
The purpose of price differentiation is to:
In a make-or-buy decision, if the product is modular and the company is dependent on knowledge and capacity, outsourcing most likely will be:
A company's annual cost of goods sold is $350 million, and inventory carrying cost is 18%. The company averages four inventory turns. The cost savings resulting from increasing inventory turns from four to six would be:
For an item with high profit impact and low supply risk, what would be a likely procurement strategy to support the overall supply strategy?
Supply chains delivering products or services are most able to respond quickly to changing market requirements when:
Throughout most of the supply chain, safety stock will be de-emphasized as a result of improved:
The primary risk associated with outsourcing innovative components to suppliers is:
The practice of supply chain members acting in close collaboration while retaining independent ownership is known as:
A company considers moving a portion of its production to a distant country to support a major customer. Which of the following actions is most effective in mitigating the risk of financial loss in the event of a global economic downturn?

Question 232 - CSCP discussion

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A company develops annual forecasts for key products and enters into annual contracts with key suppliers based on the forecasts. Which of the following benefits would the company most likely receive from this approach?

A.
Shorter delivery lead times
Answers
A.
Shorter delivery lead times
B.
Lower prices
Answers
B.
Lower prices
C.
Improved service
Answers
C.
Improved service
D.
Higher-quality products
Answers
D.
Higher-quality products
Suggested answer: B

Explanation:

Entering into annual contracts with key suppliers based on forecasts typically allows a company to negotiate better pricing due to the guaranteed volume over a set period. Suppliers are more likely to offer discounts and favorable terms when they have a predictable and steady demand. This approach can also lead to cost savings from bulk purchasing and long-term relationships, contributing to lower procurement costs. While shorter delivery lead times, improved service, and higher-quality products are potential benefits, the most direct and likely benefit from this approach is lower prices.

Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2020). Purchasing and Supply Chain Management. Cengage Learning.

Burt, D. N., Petcavage, S., & Pinkerton, R. (2010). Supply Management. McGraw-Hill Education.

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asked 16/09/2024
Padmanabhan Kudiarasu
48 questions
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