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PSM611S - Purchasing and Supply Chain Management - 1st Opp - June 2022 |
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n Am I BI A u n IVER s I TY
OF SCIEnCE Ano TECHnOLOGY
FACULTYOFCOMMERCEH, UMANSCIENCEAS ND EDUCATION
DEPARTMENTOF MANAGEMENT
QUALIFICATION: BACHELOR OF MANAGEMENT
QUALIFICATION CODE: 07BBMA
LEVEL: 7
COURSE CODE: PSM611S
COURSE NAME: PURCHASINGMANAGEMENT
SESSION: JUNE 2022
DURATION: 3 HOURS
PAPER:1
MARKS: 100
EXAMINER(S}
MODERATOR:
FIRST OPPORTUNITY EXAMINATION QUESTION PAPER
Ms O.N Kangandjo
Mr M Nelenge
Mr M B Simasiku
THIS QUESTION PAPER MEMO CONSISTS OF 4 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 and start each Section on a
new page.
PERMISSIBLEMATERIALS
1. Examination question paper
2. Examination answer sheet
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!SECTION~
Question 1
[83 Marks]
1.1 A manufacturer of vehicle parts consists of four separate business units, each of which
undertakes its own purchasing activities.
(a) Which type of a purchasing and supply organisational structure is employed by this
manufacturer?
(2)
(b) Discuss four advantages of the purchasing and supply organisational structure
identified in (a) above.
(4)
1.2 Suppose you are the purchasing manager in your company and you must take the
leading role in negotiations with a supplier about a long-term contract. Explain negotiation
tactics that you would brief your team members about in preparation for these negotiations.
(20)
1.3 You are the owner of a small business, a general dealer, in a rural area where the
nearest town is 50 km away and your shop is the only one in a wide geographic area.
(a) Explain why you think it is necessary to hold inventory for a wide range of items.
(8)
(b) Outline the various costs you will incur in carrying inventory.
(10)
1.4 Explain five areas in which purchasing and supply chain management can make a contribution
towards environmental sustainability.
(10)
1.5 In order to execute a purchasing transaction, various activities should be performed in a logical
sequence. Matroos aims to develop a standard purchasing process for her company. Identify
the seven steps of the purchasing cycle that Matroos should consider in developing such a
model.
(7)
1.6 You are the Purchasing and Supply Manager of a newly established company. Part of your
responsibilities entails the development of a purchasing policy or guideline that will enable the
purchasing and supply function to make decisions more easily and to provide direction. You are
required to outline any five issues that might be considered or addressed in such a policy. {10)
1.7 Tommy would like to convince the management of his company to implement an e-
procurement system. Indicate two benefits of such a system?
(2)
1.8 If you as the corporate purchasing and supply manager decided to start a small business
purchasing programme, what problems do you foresee for your company and for the small
supplier?
{10)
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Question 2
[17 Marks]
Read the case below and answer the questions that follow.
Russia-Ukraine war to make potato chips expensive
Business- News I 2022-03-16
by LazarusAmukeshe
COOKINGoil prices are up the roof, and the Russia-Ukraine war is expected to make matters worse,
especially for fried potato chips lovers - a Namibian youth delicacy. Students, construction workers
and young professionals are the frequent consumers of potato chips, which now - all thanks to the
Russian-Ukraine war - are set to become expensive and probably not fill enough bellies from next
week.
Workers at a popular fast food hotspot in central Windhoek yesterday told The Namibian that a price
hike is inevitable, and consumers should be ready for a 15% plus increase. Despite Russia/Ukraine
being thousands of miles away, the war has sent edible food prices soaring. Potato chips use a lot of
cooking oil.
Ukraine and Russia are key players in the supply of vegetable oil. The workers interviewed by The
Namibian said the price of the cooking oil has drastically risen this year compared to 'last year. They
indicated that 20 litres of cooking oil last year cost about N$475 compared to approximately N$700
this year.
In neighbouring South Africa, the situation is no different. "The impact of the increase in cooking oil
[price] within the food industry is expected to realise in the processing industry on frozen potato
produce, such as French fries and wedges, as well as crisps," said Potatoes South Africa, a non-
governmental organisation that protects the potato industry in that country. The hospitality and quick
service restaurants industries will not be left untouched, it said.
"We do foresee consumers feeling the pinch as the suppliers of chips will have to adjust their current
pricing based on an increase in one of their main inputs, which is cooking oil," said Potatoes South
Africa.
The Russian invasion into Ukraine sent the prices of several essential commodities soaring, including
oils such as sunflower oil. Although South Africa produces vegetable oil, it does not make enough to
meet local demand, and imports (about 20% above local production) are heavily dependent on the
Black Sea region.
The other major input cost for fried chips is either electricity or gas used for cooking - both of which
are rising sharply.
Source: https://www .nam ibia n.com .na/11085 7/read/Russia-Ukraine-war-to-make-potato-chips-expensive
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2.1 Kraljic's product classification matrix is a powerful tool designed with the purpose of helping
purchasers to maximize supply security and reduce costs by making the most of their
purchasing power. You are required to draw this product matrix.
(6)
2.2 On which quadrant of Kraljic's product classification matrix would fast food restaurants and
take-aways place cooking oil?
(2)
2.3 Based on your answer above, you are required to advise fast food restaurants and take-aways
about the possible strategies to pursue. Motivate your answer.
(4)
2.4 Are the fried potato chips lovers in Namibia affected by the war in Ukraine? If yes, how are
they affected? If no, why are they not affected?
(4)
2.5 On the supply chain of cooking oil, what are fried potato chips lovers called?
(1)
END OF THEQUESTIONPAPER
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Dr.Asa KAsa