Transmission system for a significant portion of total costs for a car and there are only a few suppliers in market. Which is a proper procurement strategy for a car manufacturer?
Facilitating cost reduction through competition between resistance suppliers
Forming a strategic alliance with resistance suppliers
Online order placement to resistance suppliers without pre-approval process .
Carrying a high inventory level of resistances.
- Forming a strategic alliance with resistance suppliers
The highest percentage of supplier find it hard to produce a product that requires enormous amount of initial cost and as a result, only those who have economies of scale or enough capital are able to produce the transmission systems. In line with this, strategic alliances are common methods employed in markets when two or more partners or entities come together to share various parts of production process. By doing this, the suppliers can spread the cost and risk of producing transmission system which can effectively increase output, increase innovation, and increase production quantity.
Which one is NOT a benefit for firms to outsource their production to the suppliers?
It helps firms to produce at lower costs.
Firms do not need to invest so much in capacity.
The firms can lead innovation on the outsourced activities.
It helps firms focus on their core competency.
- Firms do not need to invest so much in capacity.
Suppliers are higher in the supply chain and by outsourcing, they also carry a part of market risk including demand changes. Innovation is expensive because it requires knowledge and new ideas which are hard to find. This is the reason why most companies decide to outsource innovation to increase product attractiveness, cut costs of production and access best talents. Outsourcing also decreases labor costs for the business, and allowing it to better focus on core aspects of the business. Not investing in capacity is not a benefit of outsourcing to the company.
It is common practice to specify the procedure and results necessary to meet quality standards as part of the specification.
Group of answer choices
There are various methods of item description including by brand, by specification, by engineering drawing, and by miscellaneous among others. On description by specification, it is recommended that one should specify the test procedure and results that are necessary to meet quality standards. This is part of the instructions for handling, labeling, transportation as well as disposal when adhering to environmental regulations.
The need for supply chain agility comes from the?
- Fast food
Supply chain agility is the rate at which supply chain responds to changes in the environment, customer preferences, competitive forces among others. The need for supply chain agility comes from the consumer because consumers are less predictable than in the past. This offers the supply chain variability of cycle time to execute demand volatility and also demand intelligence to accurately predict demand changes. Whenever there is a slight change in the supply chain agility, there is also an impact on satisfying needs.