Question

Match each cost to its Total Cost of Ownership cost category - Transaction - Pre-Transaction Cost

- Post-Transaction Cost
Payment for the purchased materials Cost Cost for closing out the purchase order Cost to understand suppliers needs and operations Cost associated with a late delivery Cost associated with the loss of customer goodwill
Cost for replacing defective finished goods Cost associated with investigating the need for a purchased material Cost for a site visit to qualify a new supplier Cost of warranty repairs Cost to transport purchased materials
Match the following sourcing goals to the appropriate sourcing strategy If you wanted to obtain the most information, you would choose? If you want to reduce the risk of a supply disruption, you would choose? If you want to develop strong supplier relationships, you would choose? If you want to create transportation economies, you would choose? If your purchase volume is very small, you would choose?

Answer 1

The Total Cost of Ownership consists of various costs such as pre-transaction, transaction, and post-transaction costs. Matching these to certain expenses and deciding on the right sourcing strategies based on company goals are vital business decisions.

Step-by-step explanation:

Total Cost of Ownership Cost Categories:

The Total Cost of Ownership (TCO) includes various costs before, during, and after a purchase. Here's how some of these costs would be categorized:

• Pre-Transaction Cost: Cost to understand suppliers needs and operations, Cost associated with investigating the need for a purchased material, Cost for a site visit to qualify a new supplier.
• Transaction Cost: Payment for the purchased materials, Cost to transport purchased materials, Cost for closing out the purchase order.
• Post-Transaction Cost: Cost associated with a late delivery, Cost associated with the loss of customer goodwill, Cost for replacing defective finished goods, Cost of warranty repairs.

Sourcing Strategies for Specific Goals:

If one was to match sourcing goals with appropriate sourcing strategies, one might consider the following:

• If you wanted to obtain the most information, you could choose strategic sourcing.
• If you want to reduce the risk of a supply disruption, you might choose multi-sourcing or contingency planning.
• If you want to develop strong supplier relationships, consider partnership development or supplier relationship management (SRM).
• If you want to create transportation economies, logistics optimization would be suitable.
• If your purchase volume is very small, ad-hoc purchasing or using a spot-buying strategy might be appropriate.