PROCUREMENT MANAGEMENT
MIDTERM 2
Questions for repetition
1. What is inventory?
2. How do we classify inventory?
3. What are inventories with dependent demand, and what are those with independent
4. demand? Give some examples.
5. Give an example of parent item and a couple of its components.
6. What is „lot“?
7. Explain the difference between dependent and independent demand items?
8. Is it better to have stock turnover rate at high or at low level? Explain why?
9. What does stock turn rate show us?
10. What are 3 aims of inventory management?
11. Explain the structure of inventory acquisition costs!
12. What are holding costs?
13. How stockout costs can be divided?
14. How DRP model differs from MRP model of inventory planning.
15. What is DRP display?
16. What is Bill of materials?
17. What is a „time bucket“ in MRP?
18. Define the term „lead time“! How does the lead time influence stock management?
19. Why do we perform ABC analysis?
20. What would you recommend to purchasing department regarding materials ofthe A
category (ABC analysis)?
21. What would you recommend to purchasing department regarding materials ofthe C
category (ABC analysis)?
22. How do we calculate economic order quantity?
23. What EOQ shows us?
24. What is a safety stock level?
25. Explain the term „win-win situation“ in supplier-buyer negotiations.
26. Is the statement „stocks are waste of the company“ correct? Explain your answer in the
detail.
27. Explain what is the total cost of ownership!!! Why is it better criterium for supplier
evaluation than item price?
28. What is competitive/cooperative/cocreative value!
29. What does supplier management inludes?
30. Name supplier management techniques! Describe shortly one of them!
31. Name and explain at least 4 criteria for supplier evaluation (10Cs)!!!
32. What is category of preferred suppliers / certified suppliers in optimized supplier base?
33. How can we develop relationships with suppliers and why are they important?
34. Describe at least 2 ways of CSR application in procurement!
35. How e-commerce influences procurement?
For abbreviations (you have to know the meaning and explanation):
MRO; MRP; MRP2; DRP; LRP; ERP; JIT; EOQ; LDC; TCO; BOM; VMI; ECR; CSR; VMI