nm UNISA MNP3701 MAY/JUNE 2017 STRATEGIC SOURCING FOR USE BY EXAMINATION INVIGILATOR Subject ‘Number of peper Date of examination Examination centre warning 1A cancto wn rinout umonsaton tates io the axamation venue ary Book document or obeet which cox abit ham the ‘xarraten. ahd does not hand ovr auch matonal oto mgsator tore bw ofa! commencement othe exarnnaton wil De ay ot \rinngng the Unvarety © exammston gustan andi bo habia fo punshment as dotrmned by Counc! Rough work may be dove only onthe examination queston paper and must be labetad as sich "No notes may be made on any pa othe body such as tw hands, or on any garment 44 Ts pageipapors the property ofthe Urworsty and under no cueumstanens may the candidat eta do ake out ofthe examination NB PLEASE COMPLETE THE ATTENDANCE REGISTER ON THE BACK PAGE. TEAR OFF AND HAND TO THE INVIGILATORUNIVERSITY EXAMINATIONS UNIVERSITEITSEKSAMENS. UNISA lesz MNP3704 ——arss0e Mayune 2017 STRATEGIC SOURCING Duaton 2 Hou 70 Mans examen FIRST MRS EG TROLLIP secouo SRS ES OShonsr EXTERNAL PROF MJ NAUDE Glosed book examination ‘This examination question paper remains the property of the University of South Africa and may not be removed from the examination venue INSTRUCTIONS: 1. This is a fill in examination — write your answers in this éxamination book and hand in to the invigilator when done. 2. This xamination’paper consists of 24 pages. 3. Answer Sections A, Band C (70 marks in total). 4, Section Ais compulsory and counts 20 marks. 5. Section B 1s compulsory and counts 35 marks. 6. In Section. C-you need,to chodge ONE of the two questions, either Question 2 OR Question 3 for 15:marks: . 7. Only'the first quéstion that’you have, completed in section C will be marked. 8: Read the questions carefully. (TURN OVER]2 MNP3701 May/June 2017 SECTION A ALL the questions in Section A are compulsory. Answer all the questions on your mark-reading sheet. Total: 20 Marks: As a backup, please also indicate your chosen answer by colouring the corresponding number next to correct option in the book. For example: [3]. Read through all the questions carefully and choose the BEST answer. QUESTION 1 Which one of the following statements is correct regarding the internal integration of organisational functions? [1] The flow of communications between marketing, operations, matenal control and supply management should only be at the end of the product's life cycle [2] A common conflict of interest between supply management and accounts payable 1s the delivery schedule of suppliers {3} Supply management ts responsible for putting pressure on administration to share a forecasts so that supply management can sie the manuiscuneg schedules QUESTION 2 A descnption by will be the best option for standardised food items and when the requirements are well understood [1]_performance charactenstic {3} brand [4] blue prints [TURN OVER]3 MNP3701 MayiJune 2017 QUESTION 3 A supplier evaluation system seeks to quantify the total cost of doing business with a supplier, as the lowest purchase price 1s not always the lowest total cost for an item ©] U1] costbased [2] sx sigma [3] cost-mark-up [4] categoncal QUESTION 4 ‘An organisation might make a decision to use fewer suppliers, but this decision can lead to possible risks Indicate which one of the following could be a possible risk of using fewer suppliers [1}_ Lack of trust {3} Lack of information shanng [4] Lack of communication QUESTION 5 When products are an organisation will most probably make use of collaborative cost management practices [1] readily available from multiple sources [2] standardised [4] always available form few suppliers QUESTION 6 In the framework for strategic cost management are high-value products or services that require price analysis using market forces to do the work and identify what is a competitive price - {1} commodities a {2] genencs [3] cntical products [4} unique products [TURN OVER]4 MNP3701 MayiJune 2017 QUESTION 7 indicates whether a seller can iower its cost as a result of the repetitive production of an tem a [1] Break-even analysis [3] Value analysis {4] Process capabihty QUESTION 8 If internal customers try to negotiate contracts themselves, without the input of purchasing its known as [1] strategic sourcing [2]_spend savages [4] outsourcing QUESTION 9 A refers to a specttic family of products or services that is used in delivering value to the end customer (1) product item [2] product name [4] product sequence QUESTION 10 Blanket purchase orders are typically used more often for purchases [1] unique [2] lower value {3] compiex [TURN OVER]5 MNP3701 May/June 2017 QUESTION 11 A isa senes of tasks that requires the completion of specific objectives within a certain lume frame, has defined start and stop dates, consumes resources, particularly time, personnel, and budget, and operates with limited resources [1] matenal packing [2] work study [3] service level agreement QUESTION 12 Michael Porter developed a model which descnbes an organisation’s as. being composed of pnmary and secondary activities that must be configured properiy to provide a competitive advantage (1]_ supply chain [3] marketing channel [4] core competency QUESTION 13 When the marketing department wants to commission an advertising campaign, the should specify the activities or tasks that are to be completed, when it is needed, and what type of service provider is needed [1] traveling purchase requisition [3] demand forecasts [4] invoice {TURN OVER}6 MNP3701 MayiJune 2017 QUESTION 14 Users of materials in the organisation (intemal customers of purchasing) use a for projects where there 1s a single known time for each activity with no vanance [1] make-buy analysis a (2) caer a“ [4] program evaluation and review technique QUESTION 15 In, a purchaser may have to use internal engineenng estimates about what it costs to Produce an item, rely on historical experience and judgement to estimate costs, or review Public financial documents to identity key cost data about the seller Qo [2] a total cost of ownership (TCO) analysis [3] penetration pricing [4] competition pricing QUESTION 16 A benefit of electronically generating and transmitting purchasing related documents 1s the © 11 etmmination of paperwork [2] guaranteed of long-term contracts. {3] increased currency hedging [4] elimination of problems in logistics QUESTION 17 The overall objective of the supplier-evaluation process should be to {1] create additional competition and better customer service [2] obtain close knowledge of the supplier [4] develop the leadership skills of the supplier [TURN OVER]7 MNP3701 MayfJune 2017 QUESTION 18 The most common reason(s} why an organisation will buy from tocal suppliers is/are as follow(s) [1] The use of a JIT system and dramatic price savings {3} Improved quality and cost benefits [4] Access to current technology QUESTION 19 What might be a reason behind an organisation deciding to involve suppliers earlier in their product design process? [1] To play multiple suppliers off against each other {3} Ensuring that all costs savings will go their way [4] To put dispute resolution on the supplier QUESTION 20 When negotiating with a supplier, the volatiity of pricing conditions for major elements of the product, such as raw maternal, purchased components, and labour, refers to the following [1] process or technology uncertainty {2} component market uncertainty [3} degree of trust between buyer and seller [4] total rand value of the purchase [TURN OVER]8 MNP3701 May/June 2017 Read the following case study before you answer the examination questions that follow. CASE STUDY: Coca-Cola's challenges in Uganda Introduction Coca-Cola 1s one of the most well-known brands in the world and 1s still ranking as the world's largest and leading non-alcoholic beverage producer In addition to their well- known sparkling brands that include Coca-Cola, Coca-Cola Light, Fanta, Sprite, Schweppes and Krest, the company also produces Minute Maid frutt yuices, Bon Aqua water, Burn energy drinks and Schweppes Malt TCCC has never lost sight of its goal to be the best beverage company in the world TCCC has remained true to its commitment to provide quality, products that are refreshing and satisfying to its customers TCCC ensures its customers that each product tastes the same across the globe, by keeping the beverage recipes a secret with tight controlled manufacturing facilites Currently, over 70% of The Coca-Cola Company's (TCC) business income is generated from outside the United States of America (USA), which includes countnes all over the world and in Africa, ‘such as Ghana, Mozambique, Angola, Namibia, Tanzania, Kenya, Ethiopia and South Africa TCCC 1s committed not only to continue investing and benefitting from the growing opportunities in emerging markets, but also to assist in building sustainable communities in these markets in an ethical manner and without harming the environment The company is particularly pleased with the opportunities for growth and community development in Afncan countnes, especially in Uganda TCCC and corporate social responsibility practices TCCC's commitment towards the community focuses on developing the youth, providing access to safe, clean drinking water and improved sanitation facilities, improving the educational system, and providing healthcare assistance for communities throughout Uganda For example, TCCC developed strong partnerships with farmers (including female farmers) in Uganda to source raw materials from them TCCC searched diligently to source local fruit, such as mangos and passion fru for their new project, Project Nurture To promote TCCC’s commitment to environmental sustainabilty, all packaging matenal 1s designed to be recyclable, such as the polyethylene terephthalate (PET) bottles TCCC’s challenges in Uganda Brand loyalty seems to be a thing of the past in Uganda and people are quick to try new things Despite their success worldwide, the market share for soft dnnks for TCCC in Uganda reduced from 85% in early 2000 to about 55% in 2016 The beverage industry has been flooded with competitors mtroducing new soft drink products Pepsi, an old nval of [TURN OVER]9 MNP3701 MayiJune 2017 TCCC Is gaining market share in Uganda One of the reasons why consumers started to relate and identify to the Pepsi brand 1s through local entrepreneurs (Pepst franchises) Both brands (Pepsi and Coca-Cola) compete directly for the same customers, using the same channels and sell similar products The majonty of Uganda's population (80%) lives in rural areas Narrow roads make it difficult (or even impossible) for big delivery trucks to reach tiny local shops This has affected TCCC's distribution and availability in rural areas In addition, distributors in rural areas get more profit per case for distnbuting Pepsi than TCCC in the rural areas This poses a problem to TCCC because industry experts are of the opinion that soft drink expansion opportunities for the future hes in the rural areas In addition to the mentioned competition from Pepsi, TCCC Uganda faces also tough direct competition from other imported drinks, which are mostly sold in urban areas Complex supply chain TCCC’s global supply chain 1s a vastly complex network of plants, bottlers, warehouses, logistics and customers, along with multiple product lines following multiple supply chains with differing objectives In the end, the challenge Is to achieve consistent reporting from the various role players in the different supply chains and to have real-time information on which to base tactical and strategic decision making Conclusion Despite of the competitive challenges TCCC’s main brand - Coke 1s still positioned as a fun drink, reflected in marketing campaigns and as seen in their sponsorships, such as in the football World Cup Coke as a brand 1s doing well, but as more competitive products are introduced, the brand 1s losing market share to these substitutes and needs to do more to remain competitive and sustainable Case study adapted from http //allaafnca com/stones/201607250745 html http /Jwww summitbusiness net/27 /1207-1s-pepsi-taking-over-ugand-s-beverage-market, http www sdcexec com/article/10325447/things-go-better-with-cokes-supply-chain www salor org/site/wp-content/uploads/2013/02/BUS208-2 5 6-Globalisation-and-the- ‘Coca-Cola-Company-FINAL pat (The above websites were accessed on 6 October 2016] [TURN OVER]10 MNP3701 May/June 2017 SECTION B TOTAL: 35 MARKS Please note: Section B is COMPULSORY. You need to motivate your answers by providing quotes or details from the case study. QUESTION 1: COMPULSORY QUESTION (35) 11 TCCC might use some of the ISO standards to assess supplier quality and environmental systems From the case study it can be deduced that there are two 1SO Standards that are important to TCCG Identify and brefly explain these two ISO standards Motivate your answer from the case study (6) 12 Draw a basic supply chain indicating the mayor players in a TCCC supply chain in Uganda (7) 13 Identity and brefly explain the market structure in which TCCC Uganda operates ‘Motivate your answer from the case study @” 14° Identity and bnefly discuss three external partners with whom TCCC Uganda strongly Interacts Motivate your answer from the case study ) 15 From the case study it can be deduced that sustainability and diversity objectives are important to TCCC Identity and briefly discuss these objectives with relevant examples or direct quotes from the case study 6) 14 TCCC might use of some of the (SGUSNGAMSMo assess supplier quality and environmental systems From the case study it can be deduced that there are two ISO standards that are important to TCCC Identify and briefly explam these two ISO standards Motivate your answer from the case study (6) (TURN OVER}" MNP3701 MayiJune 2017 12. Draw a basic supply chain indicating the major role players in a TCC supply chain in Uganda @ (TURN OVER}12 MNP3701 MaylJune 2017 13° Identity and briefly explain the((MaPRERSHUGIUF) In which TCCC Uganda operates Motivate your answer from the case study a [TURN OVER]13 MNP3701 May/June 2017 14° Identify and bnefly discuss three external partners with whom TCCC Uganda strongly interacts Motivate your answer from the case study (9) [TURN OVER]15 MNP3701 May/June 2017 15 From the case study it can be deduced that sustainability and diversity objectives are important to TCCC Identify and bnefly discuss these objectives with relevant examples or direct quotes from the case study ©) END OF QUESTION 1 [TURN OVER]16 MNP3701 May/June 2017 SECTION C TOTAL. 15 MARKS, [Answer any one of the following questions in the space provided below IMPORTANT NOTE Only the first question that you have completed will be marked You will not benefit in any way if you complete both questions 2 and 3. QUESTION 2 115] 21 TCCC Uganda neglected to perform step 2 of the strategic sourcing process, namely market research Discuss market research by retemng to the following (9) (a) Goals of market research (2) (b) Inputs of market research (3) (¢) Outputs of market research (4) (Note: Your answer should include both theory and relevant examples from the case study to motivate your answer) 22 Identity and briefly discuss three advantages that a buying organisation may acquire when rt enters into a long-term contract with their critical suppliers ©) 21. TCCC Uganda neglected to perform step 2 of the strategic sourcing, namely market research Discuss market research by referring to the following (9) (Note Your answer should include both theory and relevant examples from the case study to motivate your answer (a) Goals of market research (2) Ee CeCe EC EH ESE EEC (TURN OVER}7 MNP3701 MayiJune 2017 {b) Inputs of market research (3) 2 (c) Outputs of market research (4) {TURN OVER]” MNP3701 May/tune 2017 22 Identify and bnefly discuss any three advantages that a buying organisation may o acquire when it enters into a tong-term contract with their critical suppliers © END OF QUESTION 2 [TURN OVER]20 MNP3701 May/June 2017 QUESTION 3 115) 31 Identity and brefly discuss three supply chan management strategies that TCCC follows Motivate your answer from the case study by using direct quotes (9) 32 What type of supplier relationship would be the most appropriate for TCCC to have in their supply chain? Motivate your answer from the case study 2 33. Define cross-functional teams (2) 3.4 What role should purchasing and supply management play in the process of strategic sourcing at an organisation? (2) 31 Identity and bnefly discuss the supply chain management strategies TCC follows Motivate your answer from the case study by using direct quotes (9) [TURN OVER]a MNP3701 May/June 2017 32 What type of supplier relationship would be the most appropnate for TCCC to have in their supply chain? Motivate your answer from the case study 2) [TURN OVER]22. MNP3701 Mayhiune 2017 33 Define cross-functional teams (2) 3.4 What role should purchasing and supply management play in the process of strategic sourcing at an organisation? (2) END OF QUESTION 3 END OF QUESTION PAPER ° Unies 2017, [TURN OVER}23 MNP3701 Mayliune 2017 ADDITIONAL SPACE (Note Use the lines below if the space provided for the answer to a question are not enough PLEASE write the question number clearly ) (TURN OVER]university oF sours arnica U NISA en EXAMINATION MARK READING SHEET UNIVERSITEIT VAN SUID-AFRIKA EKSAMEN-MERKLEESBLAD * PART (GENERAL/ALGEMEEN) DEEL 1 : . . aeaaamcomesectsat”. ee aaa : t 6 : JOP RT) EET aT, | For use by examination invigilator Z eee Po ees a ee eo: 3] Vir gebruik deur eksamenopstener i geewewes) leew a ee prec atcea ea eeeaettt at ; - : F-PART 2 (aNSWERS/ANTWOORDE) DEEL 2 ee See eect arte eee ee aRELS Dg ewes | 2 eeeee eg Pp gees) skeet Set eee TR ee eee eee PRSSeSr Pe aeees! pega ee | epee | EGRRSURSI |g mame Pe eee Le ey WRES). |S GEGUEED | 2 SMR oey” a eee ij gaspmasl eg agegeh |g aaa ca ireraeeeee Pgaes) |e aaa os Peete eee ee eee eee fee oe igeeuea a ioe ee ee eee eee Pees |e eas 2 ana eye peer ae eee seers Sogaesl |e eaees) Spaseeyh |g age 7g nears) |g aaa “lgagees |e aperst |g pages fa pepe! vp a apeee |e mesg eg eee fg eee Lope nga je eae pe eee) Te Bee PefSosup@as) ] 8 SUR] A SESE [a Soe s ‘an mages & mpm] + sets scars we mammal” | Eee ge eee eee oe eee gee eee Jpg bepeeh |g oaece fe eee | aeMARK READING SHEET INSTRUCTIONS Your mark reading sheet is marked by computer and should therefore be filled in thoroughly and correctly USE ONLY AN HB PENCIL TO COMPLETE YOUR MARK READING SHEET PLEASE DO NOT FOLD OR DAMAGE YOUR MARK READING SHEET Consult the illustration of'a mark reading sheet on the reverse ofthis page and follow the instructions step by step when working on your sheet Instruction numbers @ to @ refer to spaces on your mark reading sheet winich you should fill n as, follows © Wee your paper code n these eight squares, for mstance PTS|¥[1]o[o[-[x ‘The paper nember pertains only to first-level courses consisting of two papers, WRITE forthe frst paper and Fill n your inuals and sumame ® forthe second If anty one paper, then leave blank Film the date of the examination Filan the name ofthe examination centre e000 WRITE the digits of your student number HORIZONTALLY (trom left to right) Begin by filing inthe first digit of your student number inthe frst square onthe left, then fill nthe other digits, each one an 2 separate square © Ineach vere cok mark the digi tha WW \WRITE your unique paper number HORIZONTALLY NB. Your ungue paper nunber appears tthe top of your examination paper and consists only of digs (eg 403326) © ineach vert column mak the dg tht correspond to the dg umber in your unique paper ruber as allows [ orresponds to the digitin your student number as follows ° @ Question numbers | to 140 indicate corresponding question numbers in your exammation paper The five spaces with digits 1 to 5 next to each question number indicate an alternative answer to each ‘question ‘The spaces of which the number correspond to the answer you have chosen for each question and should be marked as follows [-] —Foromicial use by the migiator Do not film any information here= UNISA! (university copy) attendance register Batch No 28092015MC0 Fillin/MCQ_ — UNISA Tear (student copy) attendance register Batch No 2a0ozo15Hca WA student number [_[ Sumame Fest Names Subject Cin ogoper LT] Numer etoser Conte Date This 1810 ceruty that | have reac the nutes goveming the examinations as set out on the inside ‘cover of tis examination answer book and in the examination instructions That the nformaton supplied by me mths answer book is coreet and valid |underteke to adhere tothe procedures rules and regulations ofthe University of South tna as published i the oficial brochures. Signature of cancidate 0 nunver [T_T] CTI Saraiure of vot [_ OS gators personel number NOTE. Nota yl cum nt compte hy he aie | Exeriaton pend | I ‘Student number ‘Sumame Fist Names. Subject cove tape L_] Hb of ope Centre Date ‘This 1610 cerfy Matt have read the rules governng the examwtions a¢ sot out on the side cover ofthis examination ansner Book and in the exammglion insructons ‘That the information suppliad by me m this answer book § coreet ane valid undertake to adhere to the procedures rules and reguitons ofthe Unwversty of South Ainca as published inthe oferal brochures, Signature of candida 1D Number Senstue of negtatr TT TT) UNISA invgiaiors personnel number NOTE Not a vate document nat completed by the inwgictr