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L5M6 Category Management - paper *7.
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1.
Dick is category manager for ABC Ltd and he has developed a range of KPIs that make up his scorecard. He then gathers data under the quality, cost, supplier and sustainability themes from which he develops KPIs. He also identifies possible data source for each KPI. Workforce measures, use of local suppliers and environmental improvements are typical KPIs for which theme?
2.
To develop a category management process, a category manager needs to gather data that can help identify market trends. Tom was conducting a market analysis and realised that in his particular market, the stock prices are rising and the forecast for volumes show them to increase. What type of a market has Tom just discovered?
3.
Category managers must fully understand the relationships they have with suppliers to produce benefits for the buying organisation. The type of relationship they choose to build must be one that benefits the buyer. What type of a relationship considered to be more appropriate and based on high relationship building and high focus on pricing?
4.
Cost drivers are factors that cause the amount of cost to change and hence influence the total cost of a commodity. This makes cost models very important. Which of the following are basic principles for creating accurate cost models? Select ALL that apply
1. Capture cost drivers and not just costs
2. Cost drivers should be commodity specific
3. Consider total cost of ownership
4. Start with a basic model
5. Use data already internally held, or obtained from other
sources to improve cost model
5.
The total cost of ownership (TCO) ensures that full implications across the life cycle of the purchase are considered, and assessing it requires a focus on four main elements. What element of the TCO includes cost of change, decommissioning, and waste disposal?
6.
Stakeholder mapping identifies stakeholders into internal and external stakeholders. Which TWO of the following are internal stakeholders?
7.
What engagement plan would be most suitable for key players in the category management process?
8.
There is need to ensure that where cross-functional teams are used, the teams operate more effectively by specifying the different roles each must play in the team work. Which team role is part of the team which that gives views during the process?
9.
The 5th and final stage in the impact assessment process that evaluates the ongoing impact of the relevant legislation or standard that has been identified during sourcing and contract management is called the ____________ stage
10.
Industries are dynamic and they tend to have a life cycle. At what stage of the industry life cycle would you expect a decline in profitability to start, slowed but continued industry growth, increase in supplier competition and some suppliers stopping and leaving the market?
11.
A pricing model where the seller wants to stimulate increase in demand over the amount estimated by setting the price at a level where full costs will not be recovered is called _____________
12.
Elasticity of demand measures the responsiveness in demand for a product or service when nothing else changes apart from the price. John uses the formula: Elasticity of demand = %change in demand/% change in price to calculate elasticity of demand. At one time after computing elasticity of demand his result was exactly 1. Was he using the correct formula, and what is the interpretation of elasticity of demand being exactly 1?
13.
There are three components of an organisation’s financial statements that can be used for supplier’s financial analysis by a buyer. Identify the THREE financial statements that can be used by the buyer when conducting due diligence on the supplier’s financial stability?
1.Cash book
2.Cash flow statement
3.Balance sheet
4.Income statement
14.
Given the following data for Company A: Gross profit = BWP300 000 Sales Revenue = BWP500 000 Net Profit = BWP100 000 Total current assets = BWP100 000 (Inclusive of BWP30 000 inventory) Total current liabilities = BWP50 000 Total debt = BWP200 000 Total equity = BWP800 000 Compute the gearing ratio for Company A, and interpret the result.
15.
The corporate social responsibility pyramid indicates for critical responsibilities that supplier organisations must demonstrate. Which responsibility level demonstrates an organisation as a good corporate citizen through donating to disadvantaged communities, charities, and non-profit groups?
16.
A supplier orgnaisation pays all its employees above the legal minimum wage, gives one month extra maternity leave than minimum levels, donates food and provides shelter tends to the homeless, and pays one day leave for employees engaging in community service. Which element of Elkington’s triple bottom line is demonstrated by the supplier?
17.
When applying Porter’s Five Forces tool, which of the following will increase or reduce the likelihood of buyer switching from industry product to substitute product?
1. Cost of switching from industry product to substitute product.
2. Price of the substitute product compared to industry product.
3. Quality of substitute product compared to the industry product.
4. Substitute product functions, attributes, and performance compared to the industry product
18.
Which of the following is the earliest stage in establishing a category management approach?
19.
A new manager has been appointed with responsibility for Dix Ltd's highest spend category. They have a target to achieve savings and are keen to understand how best to do this without jeopardising product and service quality. Which of the following should they carry out first?
20.
Workshops, safety facilities and design engineers are indirect costs associated with which industry?
21.
A large central government department is adopting a category management approach. Resources have been allocated and a project team has been formed to commence the initial work. Different stakeholders have been identified and their respective roles and importance within the project have been assessed. Stakeholder A will be making all of the decisions and is ultimately in charge but will not be completing any of the tasks themselves. Stakeholder B will need to be kept updated on how the project is progressing but has no direct input into decision making. These two stakeholders are best described as which of the following?
1. Trustworthy
2. Accountable
3. Informed
4. Consulted
22.
The ABS Group executive board is concerned about the organisation's lack of adoption of innovative products. In the future, the board is keen that it considers substitute products and products from new market entrants wherever possible. Considering which of the following would directly help ABS Group in this respect?
23.
When applying Porter’s Five Forces tool, which of the following will have the greatest impact on the likelihood of new entrants to the industry?
1. Stakeholders’ physical locations
2. Level of regulation and government control
3. Product packaging and design
4. Initial set-up costs
24.
Customers who are perceived as 'exploitable' by suppliers will receive poor quality service. Is this true?
25.
A category manager has identified a number of 'bottleneck' suppliers on which the organisation has a high level of critical dependency. They plan to identify alternative sources of supply as a contingency. Is this the right course of action?
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