Question 1:

Lerato is the head of his family and is responsible for acquiring the daily, weekly and monthly groceries for his household. Lerato has a very distinctive list of groceries that he must acquire based on his family’s requirements. Lerato buys these groceries from his local grocery store, just around the corner from his home. These items include fish, lamb and honey.

Scenario 2:
Mnisi is the Executive Head of DEG International, a well-known wholesaler and distributor in the Southern regions of the African continent. Mnisi has seen a drastic increase in operational spending over the past six months. The aforementioned is due to the absence of a formal policy that regulates company expenditure and purchasing needs. Mnisi decided to appoint John Bosch who will be taking over the responsibilities of this function, to ensure company expenditure is kept within budgeting measures. Thus, there will be one formal centralised function responsible for the acquisition of business-related requirements in organisational spending. These main items procured include stationary, packaging materials and machinery/equipment.
*Hypothetical scenario

Required:
Differentiate between the underlying functioning of purchasing and procurement. As an example, distinguish between who is a purchaser and who is responsible for the procurement function, by applying it to the scenario above. (6+8 = 14 marks)

Using your own words, distinguish between direct and indirect procurement. Ensure to include one (1) example of each form of procurement listed from the scenario provided in Q1.1. (4 marks)
Read the extract below and answer the question that follows:

Procurement and supply chain is linked. It is important that suppliers are well- managed by the procurement function because businesses procure goods and services from suppliers.
Thaver, G.; Wiese, S.; Kufandarerwa, R.; Sharp, K, L.; Ponnan, R. 2019. The Essentials of Procurement and Supply Chain Management. [Review]. Edge Learning Media. 01 November 2022.

The procurement and supply function staff need to ensure that they identify suitable suppliers and maintain a working relationship with these suppliers.

Outline four (4) criteria that the procurement and supply function uses when managing their suppliers. (4 marks)

Question 2: (18 Marks)
A supply chain consists of three main components including:
1. Supply
2. Manufacturing
3. Distribution

Required:
Briefly summarise how each component relates to each other. Ensure to provide one
(1) practical example for each component listed. (3×2 = 6 marks)

Read the extract below and answer the questions that follow:

When a business has an effective supply chain management system, it has a competitive advantage in the industry in which it operates. Proper supply chain management allows a business to decrease the inherent risks associated with buying goods and services that are used during production. There are several benefits of supply chains. These may include but are not limited to improved efficiency and cost management.
Thaver, G.; Wiese, S.; Kufandarerwa, R.; Sharp, K, L.; Ponnan, R. 2019. The Essentials of Procurement and Supply Chain Management. [Review]. Edge Learning Media. 01 November 2022.

List four (4) additional benefits of supply chains, not listed above. (4 marks)
Discuss the two benefits of supply chains, namely (1) improved efficiency and (2) cost management. (2×4 = 8 marks)

Question 3: (16 Marks)
Study the diagram provided below, for each box labelled 3.1.1 – 3.1.3. (12 marks)

Identify and explain the functionality of the box labelled (3.1.1) in the above diagram. (4 marks)

Identify and explain the functionality of the box labelled (3.1.2) in the above diagram. (5 marks)

Identify and explain the functionality of the box labelled (3.1.3) in the above diagram. Provide an example that explains the functionality of this objective. (3 marks)

• Match the correct term in Column A with the most correct description in Column

(4 marks)

Question 4: (14 Marks)
Explain what warehouse management is. Also, ensure to include two (2) activities which comprise warehouse management. (4 marks)

When selecting a warehouse, a few considerations need to be taken into account. List three (3) of these considerations. (3 marks)

Discuss the importance of customer service as a business logistics activity. Also, ensure to identify the two (2) elements that comprise customer service. (7 marks)

Question 5: (15 Marks)
Read the extract below and answer the questions that follow:
Wildflower Ltd
Wildflower Ltd is a South African company listed on the Johannesburg Stock Exchange (JSE). They have a portfolio of over 2000 products and are considered a successful company within the South African wholesale and retail market.

After much consideration, the board of Wildflower Ltd has decided that the priority long-term goal is to delist from the JSE, due to the restrictions and costs associated with being a listed company, and to instead list with AltX (an alternative exchange within the JSE with fewer restrictions and costs). The short-term goal decision is made to narrow down its offerings to just below 600 products, as of 2025.

Wildflower Ltd has a reputation for its exceptional product offerings and availability when it comes to meeting South African consumer trends. Wildflower Ltd is always ahead of the curve in terms of the latest colours, designs and aesthetics. In terms of all this, the company recently headhunted a top American designer, HB van Der Merwe, to join their research and design department. The acquisition of van Der Merwe will place Wildflower Ltd at the very top of the South African retail market. He is the competitive edge the company has been looking for.

Finally, Theabang Mhlopo was recently appointed as the new CEO of Wildflower Ltd. He will be responsible for the smooth and successful delisting of the company

Differentiate between strategic management and a strategic plan. (4 marks)

Strategy can be broken down into six (6) component questions:
• Where is the business trying to get in the long term? (2 marks)
• Which markets should the business compete in? (1 mark)
• How can the business perform better than its competitors? (3 marks)
• Which resources are required in order to compete? (1 mark)
• Which external environmental factors affect the business’s ability to compete?
(2 marks)
• What are the values and expectations of those who have power in and around the business? (2 marks)

Required:
Provide examples from the scenario to answer each of the six (6) component questions listed above. Be guided by the marking allocation listed above. (11 marks)

Question 6: (15 Marks)
Read the extract below and answer the question that follows:

The supplier relationship management (SRM) models used differ from business to business.

The three main activities involved in SRM include the following:
• Sourcing.
• Contract management.
• Supplier management.
Thaver, G.; Wiese, S.; Kufandarerwa, R.; Sharp, K, L.; Ponnan, R. 2019. The Essentials of Procurement and Supply Chain Management. [Review]. Edge Learning Media. 01 November 2022.

Supplier management involves making sure that the value is received for the money that a business spends on procuring goods or services.

Effective supplier management is comprised of many activities, list five (5) of these activities. (5 marks)

Distinguish between the purpose of procurement policies and procurement procedure manuals. (3 marks)

Based on your answer provided in Q.6.2. list four (4) benefits of using procurement procedure manuals. (4 marks)

Read the extract below and answer the question that follows:

Negotiation is a technique that is used in procurement to obtain favourable prices and payment terms. It is a process whereby two parties with common and, at times, conflicting interests strive to reach a mutual agreement on specific contractual terms by making constructive proposals, face-to-face or via electronic means, to give rise to mutual satisfaction.
Thaver, G.; Wiese, S.; Kufandarerwa, R.; Sharp, K, L.; Ponnan, R. 2019. The Essentials of Procurement and Supply Chain Management. [Review]. Edge Learning Media. 01 November 2022.

List, in chronological order, the process within which negotiations take place.

Get completed answers on procurement and supply chain

Answer 1: Procurement and purchasing are important concepts applicable to business decisions and day to day working. However there is a significant difference between the concept of procurement and purchasing. The main focus of procurement is on the strategic process of product or services sourcing such as negotiation, planning or researching. On the other hand, the focus in the purchasing process is mainly on how products and services are acquired and ordered such as making arrangements for payment on raising a purchase order.

Get completed answers on procurement and supply chain as provided by Student Life Saviour South Africa experts.