Term
| How does the ISM glossary define a specification? |
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Definition
| As a description of the technical requirements for a material, product or service. |
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Term
| What is acceptance criteria? |
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Definition
| It defines the specifications the product or service must meet upon delivery in order to be accepted of paid for by the customer. |
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Term
| What are 3 dimensions that come together to determine price from a sellers point of view? |
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Definition
1. Market structure effects
2. Cost-based pricing models
3. Value-based pricing |
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Term
| Which type of competition is characterized by few sellers, many buyers and price is controlled by either an industry leader or a certel? |
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Definition
| Oligopolistic competition |
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Term
| How do procuring organizations gather information about potential suppliers, products or services? |
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Definition
| Through requests for information (RFI) |
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Term
| Solicitation for general bids should include what information? |
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Definition
1. Complete specification of the item or a SOW of the service to be quoted.
2. Quantity
3. When and where the items are to be shipped, installed or where and when service will be performed
4. Due date for the quote.
5. Due date for the product or service. |
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Term
| What are Porter's Five forces? |
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Definition
1. The extent and intensity of direct competition
2. The threat of entrants
3. The threat of substitute products and services
4. The power of buyers
5. The power of suppliers |
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Term
| What is the first item in a negotiation plan? |
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Definition
| To conduct an in-depth analysis of the supplier's proposal. |
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Term
| When is a team approach to negotiations appropriate? |
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Definition
| When the product or service is complex and one person does not have sufficient knowledge of all issues. |
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Term
| Why is the caucus an important aspect of team negotiations? |
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Definition
| It's an unplanned or planned break in negotiations that gives the negotiation team an opportunity to discuss its strategy and tactics before continuing. It should be used immediately when disagreement, confusion or misunderstanding occurs within the negotiation team. |
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Term
| What is the difference between performance and design specifications? |
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Definition
Performance specifications define what the product or service must do. The supplier assumes the risk for proper performance of the end product.
Design specifications provide a complete and detailed description of what the product or service must look like. The supply management professional assumes the risk for proper performance of the end product. |
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Term
| In order to be enforceable, what must a contract have? |
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Definition
| An offer and and acceptance |
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Term
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Definition
| A bid that has been submitted in a sealed envelope to prevent its contents from being revealed or known before the deadline. |
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Term
| What are the two steps of two-step bidding? |
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Definition
1. Bids are requested only for technical proposals without prices.
2. Bids are only sent to those suppliers that submitted acceptable techincal proposals that asks those suppliers to submit an updated bid with pricing. |
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Term
| What are lotting strategies? |
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Definition
| Include online bidding and reverse auctions and are structured to increase cost-reduction opportunities. |
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Term
| When are bidder's conferences used? |
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Definition
| When bid proposals are complex due to specifications such as the number of suppliers, the amount of business to be awarded or the critical nature of the resulting contract. |
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Term
| What is the general assumption of who wins in a competitive bid? |
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Definition
| The assumption is that the business will be awarded to the supplier providing the least total cost or the greatest value to the organization. |
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Term
| In a contract what is the difference between custom and standard terms and conditions? |
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Definition
| Standard terms are applied to every contract like cancellations, confidentiality,and payment terms. Custom terms are unique to a specific contract like training, maintenance, and accepting testing. |
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Term
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Definition
| They bring a third party into the transaction and guarantees that is the order is awarded to a specific bidder, that bidder will accpt the contract and the contract's obligations. |
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Term
| What are the general negotiation objectives? |
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Definition
1. Fair and reasonable pricing
2. Timely performances
3. Meeting the minimum needs of the organization
4. Control over how the contract is perfomred
5. Maxmim supplier cooperation
6. Sound relations with suppliers |
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Term
| What is a price analysis? |
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Definition
| The examination of a supplier's price proposal or bid by comparison with reasonable benchmarks without examination and evaluation of cost and profit making up the price. |
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Term
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Definition
| An evaluation of actual or anticipated cost data. |
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