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PSM611S - PURCHASING AND SUPPLY MANAGEMENT - 1ST OPP - JUNE 2024 |
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n Am I BI A u n IVER s ITY
OF SCIEnCE TECHnOLOGY
FACULTYOFCOMMERCEH, UMANSCIENCESAND EDUCATION
DEPARTMENTOF GOVERNANCEAND MANAGEMENTSCIENCES
QUALIFICATION:BACHELOROF MANAGEMENT
QUALIFICATIONCODE: 07BBMA
LEVEL:7
COURSECODE: PSM611S
COURSENAME: PURCHASINGAND SUPPLYMANAGEMENT
SESSION:JUNE 2024
DURATION: 3 HOURS
PAPER:1
MARKS: 100
EXAMINER(S)
FIRSTOPPORTUNITYEXAMINATION QUESTIONPAPER
Ms. O.N Kangandjo
MODERATOR: Mr. M B Simasiku
THIS QUESTION PAPERCONSISTSOF 7 PAGES(Including this front page)
INSTRUCTIONS
1.
Answer all questions.
2.
Read all the questions carefully before answering.
3.
Marks for each question are indicated at the end of each question.
4.
Please ensure that your writing is legible, neat and presentable. Start each Section on a
new page.
PERMISSIBLEMATERIALS
1. Examination question paper
2. Examination answer sheet
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isECTION
Question 1
[20 Marks]
Select the correct answer by indicating the correct letter next to the corresponding question number
in the answer book provided. For example, 1.1 d.
1.1 Which of the following cannot be associated with the basic SCM philosophy?
a. Networks
b. Transparency
c. Cost focus
d. Relationships
1.2 In perfectly competitive free markets purchasing prices are determined by ___ _
a. Suppliers
b. Purchasing firm
c. Market forces
d. Competitors
1.3 The following are inventory-holding costs, except:
a. Capital costs
b. Storage costs
c. Inventory ordering costs
d. Inventory risk costs
1.4 Which of the following objectives is performed at the operational
supply?
a. Analysing inventory
b. Studying alternative control systems
c. Developing existing suppliers
d. Ensuring availability of purchasing requirements
level in purchasing and
1.5 These items in the ABC analysis need careful consideration since they are responsible for the
major part of the inventory investment:
a. A items
b. B items
C. C items
d. D items
1.6
a.
b.
c.
d.
Large inventories will _______
Decrease
Increase
Equal
Not affect
the cost of stock shortage.
1.7
a.
b.
c.
d.
Select the correct statement below.
MRP is a computerised information system.
MRP and ECRare virtually identical concepts.
MRP use kanbans as inputs.
MRP has nothing to do with inventory mangement
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1.8 Which of the following combinations of concepts best reflect the nature of supply
management?
i.
Strategic focus, systems approach, short-term view
ii.
Short-term view, organisational goals, progressive approach
iii.
Strategic role, strategic focus
iv.
Total cost of ownership, customer satisfaction
a. i. and ii
b. i, ii and iii
C. iii and iv
d. i and iv
1.9
a.
b.
c.
d.
When using 'ABC' approach to stock categorisation.
describes class 'C' items?
High value, high risk
High value, low risk
Low value, high risk
Low value, low risk
Which of the following
1.10
a.
b.
c.
d.
Problems with disadvantaged small business purchasing programmes include
economic empowerment
small business promotion
job creation
communication
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Question 1 (True or False)
Indicate whether the following statements are True or False.
Which of the following statements are true or false?
2.1 Logistics management only involves the safety storage of
materials.
2.2 Supply management has a major impact on the net income of
the firm because it increases input costs and reduces sales
revenue.
2.3 The purchasing and supply function of a firm operates
independently from the other enterprise functions.
2.4 Just In Time philosophy requires high levels of inventory in
order to secure an uninterrupted flow of materials.
2.5 Strategic plans formulated at top management of purchasing
and supply management are implemented and executed at top
level management.
2.6 A delivery note is one of the documents used by user
departments to communicate their needs to the purchasing
function.
2.7 The size of suppliers does not matter when developing supply
policies and strategies.
2.8 The supplier selection decision is based on a uniform set of
weighted criteria that can be applied to every purchase.
2.9 In a transactional relationship buyer and seller do not get
closely involved with each other, but simply exchange goods or
services for payment.
2.10 Uncertainty arises from a person's imperfect state of
knowledge concerning future events.
[10 Marks]
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!SECTIONij
Question 3
[55 Marks]
3.1 Tekla aims to develop a standard sourcing process for her company. One element of
this will be to use a selection criterion that will enable her to identify appropriate
external suppliers. Explain any three selection criteria that Tekla might use to identify
appropriate external suppliers
{6)
3.2 Explain the areas in which purchasing and supply chain management make a
contribution to environmental sustainability and thus contributing to environmental
performance.
(6)
3.3 Purchasers have power over large sums of money and they probably have the greatest
say in terms of which supplier will receive an order. Thus they could be exposed to
unethical temptations. Identify three areas of unethical conduct amongst purchasers
which should always be avoided.
{6)
3.4 Effectively, strategic sourcing formalises the way information is gathered in supply chain
management. By means of a diagram, illustrate the Strategic sourcing process. (6)
3.5 Mazo Pty Ltd is a Namibian auto retailer company with operations in all major towns
of the country. All the company's purchasing activities are managed from the
company's head office in Windhoek.
{a) What type of a purchasing structure are we observing here?
{2)
{b) Explain two advantages of such a structure.
{4)
3.6 Any competent buyer needs to be aware and be able to manage risk. Identify the
strategies a buyer would employ to deal with or eliminate purchasing and supply risk.
{5)
3.7 Kraljic's product portfolio matrix is an important strategic tool that enables
organizations to prioritise procurement activities, manage supply chain risks, and
improve supplier relationships. You are required to draw Kraljic's Product Purchasing
classification matrix.
(10)
3.8 The use of tactics in negotiations at the right time can lead to a better result for
negotiators or rescue them from a difficult situation. At the same time, tactics
accelerate the decision-making process because they compel people to make decisions.
Explain any four tactics that may be useful in constructive negotiations.
{4)
3.9 A buyer has to be knowledgeable about the market structure or conditions present in
the most important supply markets to be able to analyse purchasing prices. Distinguish
between the different market forms or conditions and how they can affect buying
prices.
(6)
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Question 4
[15 Marks]
Readthe newspaper article below and answer the questions thereafter.
LUTOMBIUNHAPPYABOUT DELAYEDROADWORKS
Project behind by more than two months
The project involves the upgrading of a 16.3-kilometre stretch of road, and began in October
last year.
Tuyeimo Haidula
2 DAY AGO - 2024-04-09 12:21:00
Roads Authority (RA) CEO Conrad Lutombi is not impressed with slow progress on a road
upgrade in the Oshikoto Region. This after the RA and the Road Fund Administration (RFA)
last week made a trip to inspect ongoing construction on the Engoyi-Omuntele road.
The project involves the upgrading of a 16.3-kilometre stretch, and began in October last year.
The construction was due to be completed by September, but according to Lutombi, the
project is behind by two-and-a-half months.
So far, only N$5 million of the allocated N$43 million for the project has been spent. "An
amount of N$20 million should have been spent on the project thus far. This is unacceptable
as it is a setback for the community which requires service delivery," he said, adding that only
six kilometres of the 16-kilometre road has been worked on.
"I am not happy, and I made it very clear during the meeting with the contractor and the
consultant, as well as the one official who is on this project. We need to pull up our socks,"
he said.
The RAwill do another follow-up to check on the project's progress in May, Lutombi said, and
will in the meantime issue the contractor a 21-day notice to accelerate the development
without compromising on quality.
"And those officials, we hold them accountable to make sure that they are on the project. We
can't stay in the office. Our work is here. If people are sitting in the office and there is a delay
and we are coming from Windhoek to come and find this, we cannot tolerate that, and we
are serious about that. If people don't want to work, they must go and find a job somewhere
else," Lutombi fumed.
RoadsContractor Company (RCC)acting CEODasius Nelumbu guaranteed that the project will
be completed by September as promised. He added that they will redouble efforts to ensure
the project is completed on time, even if it means they need to bring in a second or a third
team to meet the deadline.
Source: https://www.namibiansun.com/infrastructure/lutombi-unhappy-about-delayed-roadworks2024-04-09-111383
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4.1 The purchasing cycle plays a crucial role in enhancing efficiency, and aligning
procurement activities with organizational goals. Outline the seven steps of the
purchasing cycle.
(7)
4.2 According to the article the RA (Roads Authority) and the Road Fund Administration
(RFA)Chief Executive Officers made a trip last week to inspect ongoing construction on
the Engoyi-Omuntele road. Which specific step of the purchasing cycle was being
carried out and why was it necessary to carry out that step?
(6)
4.3 What were the findings of the purchasing cycle step that was carried out by the CEOs
of RA and RFA7
(2)
END OF THEQUESTIONPAPER.
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