Multiple: You have the possibility to justify each answer and explain why you provided that answer.

November 6, 2024November 6, 2024

You have the possibility to justify each answer and explain why you provided
that answer.


Unjustified answers will receive a 50% penalty if correct, or 0% if
incorrect. Remember that justifying your answer is more important than the
answer itself! A wrong answer, but appropriately elaborated and justified
will get more points than a correct answer without any justification.

Question 1:)

Which of the following statements about the procurement organization is
TRUE? 
There may be multiple answers.
(Consider the different dimensions regarding procurement organizational
design that we discussed (level of centralization, span of control,
specialization of resources)

a.) In organizations with a complex and dispersed organizational structure
and where procurement is very complex, a decentralized model for the
procurement organization is more appropriate.

b.)You are more likely to find the “commodity manager” role in a procurement
organization that uses input as approach to specialize procurement
resources.

c.) A purchasing department with a high span of control is more exposed to
the risks of the company spending being out of control, e.g., due to
maverick buying (remember the definition of maverick buying: Maverick buying
is purchasing that happens outside a company’s established policies and
processes).

d.) An electronic company would like to consolidate the demand for a circuit
component that is used by production in three different business units. To
achieve this objective, this company should use an output approach for
specializing the resources in the procurement organization, i.e.,
procurement employees should specialize in buying categories that are
specific for the production of the business units.

e.) A chemical company would like to specialize some buyers in the
procurement of different types of artificial colors. To achieve this
objective, the company should use the input as grouping criteria for the
buyers in the procurement organization.

Question 2.)  Please briefly justify your previous answer.


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