CASC MODULE 4

BAFLOR GRACE C. BSCA2

Self-Check Activity:

1. How might a supply manager assess the risk of a specific purchase category or
supplier?

A supply manager would look at the risk involved in purchasing the item and its pricing to determine
what risk is involved. The supply manager will then analyze the probability of the occurrence of these
risks and make a decision on whether or not they should purchase an item that has high risks or
whether they should monitor a supplier's performance. The risk can be assessed by looking at past
company orders, customer feedback, and supply availability. If you are concerned about future
demand for a particular product and the potential for increases in the cost of the materials used to
make it, you might want to consider switching suppliers for that category.

2. What considerations must be made before establishing a joint purchasing agreement

with a supplier?

Before establishing a joint purchasing agreement with a supplier, you should consider these things:
First, to avoid disagreements between the parties, it is important to have enough information about
what the supplier has to offer and how their products compare with similar products from other
suppliers. Second, it is also important to ensure that all parties understand their roles and
responsibilities under the agreement. Third, it is important to ensure that both parties are comfortable
with the terms and conditions of the deal. And last, having both parties agree on what will happen if
either party breaches or defaults on any of their obligations.

3. Why is the trend toward single sourcing? What are the disadvantages to this trend?

The trend toward single sourcing has made sense in many cases and will continue to do so. Single
sourcing can reduce cost and offer product exclusivity, which may differentiate the company from
competitors. Single sourcing is a best practice when it comes to cost savings as well as flexibility and
efficiency on the manufacturing side. However, there are disadvantages to single-sourcing that should
be considered before making this change. The disadvantages of single-sourcing include supplier
control in bargaining, limited opportunities for the lowest price, and limited product diversity.
Additionally, if the single source goes out of business, it can leave the company in a bind, especially if
there are delays in lining up new suppliers.

4. Why might it be preferable to buy from a distributor or wholesaler rather than

directly from the manufacturer?

Buying from a distributor or wholesaler rather than directly from the manufacturer is usually
preferable because it allows the distributor to provide the right product at a good price. The
manufacturer may not have the product or may be unwilling or unable to offer a high-quality product
at a reasonable price, while the distributor can choose which products they stock and will often be able
to order more quantity at a better price. If a wholesaler had an interest in selling your products, this
might also encourage them to provide caring customer service and follow up on orders quickly. Buying
from a distributor or wholesaler is often better for consumers. Distributors provide more information
about safety, and efficacy. Wholesalers can offer additional discounts, services, and customer support.

5. Why is investment recovery often a responsibility of the supply department?

Investment recovery is often a responsibility of the supply department for several reasons. First, it's
difficult to recover investments from prospective customers, who are usually extremely knowledgeable
about what value they can get from a product or service. Second, most companies generate revenue
by selling products or services rather than making them themselves and therefore cannot recover
those costs unless they can charge more than an average customer would pay for those same goods
or services. If a company wants to recover these costs, it must pass those additional costs on to its
customers through increased prices or reduced benefits by offering different types of services in order
to meet this goal.

6. How can the firm obtain maximum return from disposal of unneeded items?

The firm should establish a system to maximize the return from the disposal of unneeded items. The
key to maximizing the return is to select the items that are the most profitable and then organize your
system so that those items can be sold at maximum profit. The best way to make sure that you get
the maximum return from an item that you no longer need is to sell it at a price that reflects your
willingness to do so.

7. What specific procedures should supply use to dispose of unneeded items?

Supply managers should consider various aspects of disposal when disposing unneeded items. Proper
handling procedures and protocols are needed, as well as the safe removal and disposal of waste
materials. These procedures may include careful excavation, transportation and storage of hazardous
materials and other regulated items. Also, supply should use the specific procedures to dispose of
unneeded items. This will help to protect the environment and prevent waste.

8. What is corporate social responsibility and how does this issue affect managers?

Corporate social responsibility (CSR) is an emerging field of business administration that aims to
balance the interests of shareholders and other stakeholders. The goal of CSR is to improve the
quality of life for people as well as reduce negative impact on the environment. This issue affects
managers in their day-to-day operations by creating an environment where employees feel motivated,
engaged, and comfortable sharing their thoughts and ideas while working toward a common goal. This
can lead to more innovation, higher productivity, better customer service and a more effective use of
resources within your company.

9. Under what conditions is it realistic for a buyer to cancel a contract? For a seller to
cancel a contract?

Cancellation usually occur during a period of falling prices. At such times, if the price has declined
since the placing of the order, some buyers may try to take advantage of all sorts of loopholes in the
purchase order or sales agreement to reject merchandise. To avoid completion of the transaction, they
take advantage of technicalities that under other circumstances would be of no concern to them
whatsoever. One can have sympathy for the buyer with a contract of a price higher than the market
price. Under the law of contracts, a buyer may cancel a contract in the case of delay when there is no
fault on either side. A seller could also choose to cancel if he/she is not satisfied with the results and
circumstances of the contract.

10. Does a supplier have to accept a PO exactly as offered by the buyer to create a
legally binding contract?

A supplier does not have to accept a PO exactly as offered by the buyer to create a legally binding
contract. The supplier may adjust the price, however, if it can be demonstrated that there was no
offer made and no corresponding acceptance from the buyer. In short, there is nothing wrong with
modifying a purchase order or firm price offer to meet your needs or negotiate price with your buyers.