~— UNISA MNP3701 MAY/JUNE 2018 STRATEGIC SOURCING ‘STUDENT NUMBER TOENTITY NUMBER FOR USE BY EXAMINATION INVIGILATOR, Subject Number of paper Date of examination Examination centre WARNING. 1 A-canaidate who wirout autnonsation takes into the examination venue any took document oF object which could assist fun the ‘examination, and does not hand aver such materal tothe invgiatr before he oftzal commencement of the exarhnabon wil be gui of Ininegng be Unversity examnaton reguabors and wil be habe to purshmert as determined by Counc 2 Rough wark may be dave only cn the examination question paper and must be labelled as such 3. Nonotes maybe made on any pat of he body such asthe hands or on any garment 4 Ths pagetpaper is me property of the Unversity and under no exeumstances may the candate elem Wt oF take Wout of te examnaton NB PLEASE COMPLETE THE ATTENDANCE REGISTER ON THE BACK PAGE, TEAR OFF AN HAND TO THE INVIGILATORUNIVERSITY EXAMINATIONS UNIVERSITEITSEKSAMENS ie sist UNISA lees. MNP3701 May/dune 2018 Strategic Sourcing Duraton 2 Hours 70 Marks EXAMINERS FIRST MRS EG TROLLIP SECOND PROF JA BADENHORST EXTERNAL MRW NIEMANN Closed book examination This examination question paper remains the property of the University of South Africa and may not be removed from the examination venue This examination question paper consists of 19 pages including 1 page for additional wnting to answer questions and 1 page for rough work (pp 18 - 19) INSTRUCTIONS: 1. This is a fill-n examination paper - write your answers in this examination book and hand it to the invigilator as soon as you are finished with the paper. 2. Complete the attendance register on the back page; tear it off and hand it to the invigitator. Answer sections A and B (70 marks in total). Section A is compulsory and counts 45 marks. 5. In section B, you need to choose ONE of the two questions, either Question 2 OR Question 3 for 26 marks. Only the FIRST question that you have completed in section B will be marked. Read the questions carefully. a) ~e@ [TURN OVER]MNP3701 May/June 2018 Read the following case study before answering the examination questions that follow. Air Chefs South Africa and sustainability Background of Air Chefs ‘Air Chefs, a subsidiary company in the South Afncan Airways (SAA) Group, 1s the most significant in-fight catering company in South Afnca with units at all major airports such as in Johannesburg, Cape Town and Durban All units are located less than two kilometres from the loading ramp, allowing for faster delivery and response times to last-minute crew requests A fieet of high loader trucks and support vehicles, as well as a state-of-the-art communication network, complement this. They provide a full range of services to various intemational and domestic airlines, such as specific meal production and design, providing alcoholic and non- alcoholic beverages and recycling and cleaning equipment Sustainability drive at Air Chefs SAA should source the food ethically, based on the SAA Group’s sustainability drive. Air Chefs 's aligned with SAA's sustainability strategy and plans to become the most environmentally sustainable airline caterer in Africa and eventually the world As a result, Air Chefs have implemented some measures and mitatives The first initiative involved energy reduction by replacing traditional, old and inefficient boilers with a moduler heat pump solution, providing hot water more efficiently and cost-effectively while contnbuting to reduce emissions. They are investigating the process of installing solar panels to generate a litle bit more clean energy to reduce their carbon footprint Air Chefs also started looking into what they buy and where they buy While the what is relatvely easy, the challenge lies in where to buy hundreds of tons of different types of meat, fruits and vegetables, flour and other consumables They want to ensure that all items purchased are of a sustainable nature and that they come from local suppliers. One of the comerstones in becoming the greenest airline caterer 1s sustainable procurement policies Another measure taken by Air Chefs 1s a comprehensive measurement of their carbon footprint to comply with the avation industry's emerging environmental standard Realising Air Chefs’ objective of having an effective, efficient and sustainable supply chain might change the way passengers feel when they have to settle for the chicken option when the beefs done Sources: ‘SAWUBONA (SAA'‘s in-flight magazine), May 2014 www wikipedialHACCP (accessed 3 July 2014) collaboration (accessed 3 July 2014) www web up ac zalindustry www airchefs co za (accessed 3 July 2014) www sayellowpages com (accessed 3 July 2014) [TURN OVER]MNP3701 May/une 2018 SECTION A TOTAL: 45 MARKS Please note: Section A is COMPULSORY. You need to substantiate your answers by providing quotes or details from the case study. [QUESTION 1: COMPULSORY QUESTION [45] 4 Vanous buying organisations recognise the importance of managing sustainabilty| throughout the supply chain Sustainability includes strategic environmental and sociall esponsibility in a supply base According to the case study, Air Chefs wants the| assurance that all itemis purchased are of a sustainable nature and that they come from| local suppliers Provide Air Chefs with an outiine of issues that needs to be taken into) account in an environmental and social responsibility programme, which could lead to} an effective, efficient and sustainable supply chain (22) 12. Supplier market conditions, such as the number of competitors within an industry, have| a major influence on purchasing prices. Identify and briefly explain the one (1) most| probable market conditions in which Air Chefs finds itself Substantiate your answer by| refering to the case study or your knowledge of the industry @ l1.3 Name and discuss two (2) purchasing objectives used by Air Chefs Support your answer with a quotation from the case study 6) 14 Identify and bnefly discuss any seven (7) of the supply chain management activites, which could be performed by a company such as Air Chefs with one relevant example| per activity Present your answer as follows Purchasing Air Chefs needs to purchase! beverages, such as water, cold drinks and wine from various suppliers. [You may use| any relevant example — no need for case-based examples} (14) 11 Vanous buying organisations recognise the importance of managing sustainability throughout the supply chain Sustainability includes strategic environmental and social responsibilty in a supply base According to the case study, Air Chefs wants the assurance that all tems purchased are of a sustainable nature and that they come from local suppliers Provide Air Chefs with an outline of issues that needs to be taken into account in an environmental and social responsibility programme, which could lead to an effective, efficient and sustainable supply chain (22) [TURN OVER}‘MNP3701 May/June 2018 [TURN OVER]MNP3701 May/June 2018 {TURN OVER]MNP3701 May/June 2018 12. Supplier market conditions, such as the number of competitors within an industry, have @ major influence on purchasing prices Identify and briefly explain the one (1) most probable market conditions in which Air Chefs finds itself Substantiate your answer by referring to the case study or your knowledge of the industry @) [TURN OVER]MNP3701 Mayhiune 2018 43. Name and discuss two (2) of the purchasing objectives used by Air Chefs. Support your answer with a quotation from the case study (6) {TURN OVER]MNP3701 Mayfiune 2018 Identify and bnefly discuss any (7) of the supply chain management activities which could be performed by a company such as Air Chefs wth one relevant example per activity. Present your answer as follows. Purchasing: Air Chefs needs to purchased beverages such as water, cold drinks and wine from various suppliers [You may use any relevant example ~ no need for case-based examples]. (14) [TURN OVER]MNP3701 May/June 2018 (TURN OVER]MNP3701 May/June 2018 END OF QUESTION 1 END OF SECTION A [TURN OVER]MNP3701 May/June 2018 SECTION B TOTAL: 25 MARKS ‘Answer any ONE of the following two questions in the space provided below. Please note: Answer only one question — question 2 or question 3, Only ONE question that you have completed will be marked. You will not benefit in any way if you complete both the essay-type questions. [QUESTION 2 ry 21 Discuss the importance of purchasing 6) 22 Suggest seven (7) ways to improve the purchasing process ” 23. Bnefly explain when organisations usually make use of cross-functional teams (3) 2.4 Answer the following questions on target pricing ®) (a) Brefty, explain target pricing (2} (©) Bneffy explain how the price of an item is established in a target pricing contract {3} (©) What is the most probable action to take if total costs exceed target costs? {1} (d) Who is responsible for making sure that a product is below or at target cost? {2} 25 Under which two (2) circumstances would an organisation use the learning curve? (2) 21 Discuss the importance of purchasing 6) (TURN OVER}(MNP3701 ‘May/June 2018 22 Suggest seven (7) ways to improve the purchasing process ” [TURN OVER}2 MNP3701 May/June 2018 23. Briefly explain when organisations usually make use of cross-functional teams (3) 2.4 Answer the following questions on target pncing. ®) (2) Briefly, explain target pncing {2} (b) Bnefly explain how the price of an item is established in a target pricing contract? {3} (TURN OVER]MNP3701 May/June 2018 (©) What is the most probable action to take if total costs exceed target costs? {1} (¢) Who 1s responsible for making sure that a product 1s below or at target cost? {2} 25. Under which two circumstances would an organisation use the learning curve? (2) END OF QUESTION 2 [TURN OVER]MNP3701 May/June 2018 ‘QUESTION 3 25) 31 Defend the use of a long-term contract with cntical suppliers @) 32 Prowde an in-depth discussion of the most vital issues of non-traditional contracting (10) 33. Bnefiy discuss two (2) reasons why an organisation might want to use single a source (2) 34 Give eight (8) examples of members involved in a value analysis team @) 35. Bnefly explain the concept of quality of source (2) 31. Defend the use of long-term contracts with cntical suppliers 0°) 32. Provide an in-depth discussion on non-traditional contracting (10) [TURN OVER}(MNP3701 May/June 2018, 3.3. Bnefly discuss two (2) reasons why an organisation might want to use single sourcing. (2) {TURN OVER]7 MNP3701 MaylJune 2018 34 Give eight (8) examples of members involved mn a value analysis team 8) 35. Brefly explain the concept of quality of source @ END OF QUESTION 3 END OF QUESTION PAPER ° UUnise 2018 [TURN OVER]MNP3701 May/June 2018 ADDITIONAL SPACE (Note Use the lines below if the space provided for the answer fo a question are not enough PLEASE wnte the question number clearly ) [TURN OVER]9 MNP3701 MayiJune 2018 “ROUGH WORK (Note This page will not be marked - you can use the space for rough work )— UNISA| ity Copy) iversil (uni 5 2 8 2 5 3 2 5 3 (aera (MN Examination pero Student number [ I [ j ‘Sumame Fest Names. 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