A firm sells an average of 2,000 units of snacks from its existing stock while it waits for orders to be delivered. Demand during lead time varies in accordance with a normal distribution. The firm's supply manager prepares a presentation to explain the concept of customer service and safety stock levels using the following figure:
What does the shaded area D (in red) represent?
At the beginning of each year, a large firm's indirect procurement organization holds a brainstorming session.
These sessions produce many great ideas and foster support among the procurement team. However, after a few years, support for the brainstorming sessions begins to diminish, and the projects discussed are pushed aside in order to deal with more pressing issues. In this situation, which of the following would be the BEST course of action to take?
A company purchases raw materials from a domestic supplier that offers competitive overland transportation rates. The firm requires the goods be delivered to its manufacturing plant. Which of the following Incoterms
2020 rules should be used if the firm wants risk to transfer at the manufacturing plant?
In an effort to cut expenses, GHI, Inc. moves responsibility for logistics to the supply management department. Some officers in the firm are skeptical that this move will be beneficial, since most shipping providers use published rates, and there will be little room for cost improvement. Which of the following will be the BEST way for GHTs supply manager to demonstrate that supply management skills can obtain better value in shipping?
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 1Supplier 2Supplier 3Supplier 4
Bid$2,110,000$2,105,000$2,110,000$2,115,000
Incoterms 2020 RuleGIFDPUFCAFAS
The costs of transportation, included within each bid price, are as follows:
Responsibility for Payment to CarrierTransfer of Risk to BuyerCost of Transportation Supplier, before goods are loaded onto vessel: purchaser thereafterAlongside vessel nominated by purchaser$50,000 Supplier to named port of destination: purchaser thereafterOnce goods have been loaded onto the vessel$55,000 Supplier to named place of destination once unloaded: purchaser thereafterOnce goods have been unloaded at named place of destination540,000 PurchaserWhere 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)?
