Question

1. The decision to make or buy a good or service is:

Multiple Choice

• a one-time decision never to be reconsidered.

• a decision of strategic importance that deserves careful evaluation.

• primarily an operational decision.

• the same as deciding to insource or outsource.

• typically made by the chief supply officer and his or her executive team.

2. Make or buy and insourcing or outsourcing decisions are:

Multiple Choice

• routine decisions with low levels of uncertainty.

• routine decisions with high levels of certainty.

• key strategic decisions.

• key operational decisions.

• key tactical decisions.

3. True or False. The procurement of indirect or noncore spend is more likely to be outsourced than procurement of direct or core spend.

4. Deciding what represents a core competency in an organization is:

Multiple Choice

• often a fairly complex decision and a function of many factors.

• always the same for companies in the same industry.

• a fairly easy decision once organizational goals and objectives are known.

• a decision best left to the organization’s Board of Directors.

• a decision best left to the chief executive officer (CEO).

Answer 1

1. Option B.

It is a strategic decision. A good or service brings revenue to the firm. It requires a careful evaluation that if we outsource the production then what would be cost , quality and whether customers will continue to buy

2. As described above , these are key strategic decisions.

3. True.

Our core spend areas require more control and form a large percentage of expense. These functions are most likely to be retained by company.

4. Option a .

A core competency is a inherent function that differentiates from competition and adds value to the customers and company. It is not easy to narrow down and identify. Further, core competencies arise out of many functions that work in synergy.