nAm I B lA UnIVERSITY OF SCIEnCE AnD TECHnOLOGY

FACULTY OF MANAGEMENT SCIENCES DEPARTMENT OF MANAGEIV_IENT

QUALIFICATION: BACHELOR OF MANAGEMENT

QUALIFICATION CODE: 07BBMA LEVEL~ 7

COURSE CODE: BPM611S COURSE NAME: PURCHASING MANAGEMENT

SESSION: JUNE 2017 PAPER:1 ;

DURATION: 3 HOURS MARKS: 100

FIRST OPPORTUNITY EXAMINATION QUESTION PAPER

EXAMINER(S) Ms O.N Kangandjo Mr M Nelenge I

MODERATOR: Ms J !Garus-Oas

THIS QUESTION PAPER MEMO CONSISTS OF 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. 5. Section A Question 1 should be answered on the answer sheet provided on page 6 ofthis

question paper. Detach the answer sheet and submit it with your answer book before you leave the exam hall.

NOTE: Do not forget to fill in your details on question 1 Section A answer sheet.

6. Please ensure that your writing is legible, neat and presentable and start each Section on a new page.

PERMISSIBLE MATERIALS

1. Examination question paper 2. Examination answer sheet

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Question 1 [2x10=20]

Multiple choice questions from 1 - 10. Cross in the appropriate box on the Answer Sheet provided for this question. The answer sheet is attached on pages nine and ten of this question paper. Please submit your answer sheet with your answer book.

1.1 Fill in the missing word in the quotation below by selecting the appropriate word from the list provided. "Supply chain management continues to become increasingly .. ... . ..... . ....... . ..... . . oriented." a. cost b. logistics c. market d. supplier

1.2 Which of the following combinations of concepts best reflect the nature of supply management?

i. Strategic focus, systems approach, short-term view 11. Short-term view, organisational goals, progressive approach 111. 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

1.3 Select the correct statement below. a. MRP is a computerised information system. b. MRP and ECR are virtually identical concepts. c. MRP use kanbans as inputs. d. MRP has nothing to do with inventory mangement

1.4 When a firm vests the .. ....................... . ........... for the purchasing and supply function in one person or team it is centralising the supply organisational structure. a. Budget b. Vision c. Mission d. Authority

1.5 When using 'ABC' approach to stock categorisation. Which ofthe following describes class 'C' items? a. High value, high risk b. High value, low risk c. Low value, high risk d. Low value, low risk

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1.6 In perfectly competitive free markets purchasing prices are determined by ___ _ a. Suppliers b. Purchasing firm c. Market forces d. Competitors

1. 7 Identify in the following list, the one element that cannot be considered to be a feature of e-commerce a. E-commerce transactions are not always conducted on the Internet. b. E-commerce includes communications. c. E-commerce is an important change agent. d. E-commerce enhances transactional processes in supply

1.8 Which statement is incorrect? Reasons for holding inventory: a. Continuity in production and marketing b. Cost savings and hedging against price uncertainties. c. Protection against supply certainties d. Reduction of purchasing costs

1.9 The following are inventory-holding costs, except: a. Capital costs b. Storage costs c. Inventory ordering costs d. Inventory risk costs

1.10 Problems with disadvantaged small business purchasing programmes include a. economic empowerment b. small business promotion c. communications d. job creation

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Question 2 (True or False) [10 Marks] Indicate your answers in the answer book provided.

Which of the following statements are true or false? 2.1 Logistics management involves the safety storage of materials

only. 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 anses from a person's imperfect state of knowledge concerning future events.

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Question 3 [56]

3.1 Risk is defined as the deviation or variability of actual results from desired or expected results. Differentiate between speculative and event risks. (4)

3.2 Herunga aims to develop a standard purchasing process for her company. Elaborate on the seven steps of the purchasing cycle that Herunga should consider in developing such a model. (7)

3.3 Kraljic's product classification matrix is a powerful tool which is 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. ( 14)

3.4 Inventory management is important as a firm has to maintain adequate inventory for smooth production and selling activities. On the other hand, a firm has to minimise the investment in inventory in order to enhance firm's profitability hence the importance of identifying poor inventory management. Discuss any five symptoms of poor inventory management. (5)

3.5 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. Analyse six of some of the tactics that may be useful in constructive negotiations. (12)

3.6 Describe the main categories of e-procurement and briefly indicate the role of each in supply management. (6)

3.7 Many purchasers do not welcome small business purchasing programmes and have certain justified objections against affirmation purchasing. Discuss four of these objections. (8)

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Question 4 [14]

Read the case below and answer the questions thereafter.

Health Care for Truckers

Truck drivers in Africa have a new navigation tool to help them find healthcare centres along the subcontinent's major transport con·idors. In a partnership between Shell, Maplecroft and North Star Alliance, four maps have been published showing the exact locations of more than 160 roadside wellness centres in west, east and southern Africa.

Some of the services provided by the wellness centres include sexual health education and counselling, HIV I Aids testing, blood pressure testing, TB screening, treatments of minor infections and wounds, and the distribution of free condoms. The maps are produced by Maplecroft and funded by Shell. Shell recognises that the wellbeing of the drivers has a direct impact on the business.

Shell distributes the maps to its road transpmi managers in various sub-Saharan African countries. North Star Alliance3 also distributes the maps to drivers who visits their roadside wellness centres, and to other roadside clinic networks in sub-Saharan Africa.

Source: Absctacted from Export and Import South Africa (2010:33) as cited by Badenhorst-Weiss (2013)

4.1 What impact can the health oftruck drivers have on the performance of purchasing and supply and the supply chain as a whole? (5)

4.2 To which categories of corporate social responsibilities does the effort of taking care of the health of truck drivers contribute? Motivate your answer. (9)

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SURNAME & INITIAL: _________ _

STUDENT NUMBER: _________ _

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Question 1 (ANSWER SHEET- Cross in the appropriate box) (2xl0=20)

NB: THIS ANSWER SHEET SHOULD BE SUBMITTED WITH YOUR ANSWER BOOK.

NO A B c D

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TOTAL 20 MARKS

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