Supply Chain & Procurement Flashcards

A fastener buyer discovers that a key supplier's sole raw material source is in a geopolitically unstable region. The best immediate risk mitigation action is to:

Answer: Qualify an alternative supplier or encourage the primary supplier to diversify their material sourcing

Qualifying an alternative supplier or pushing the primary supplier to dual-source raw material addresses the root supply risk without disrupting current supply.

In a fastener distribution center, cycle counting is preferred over annual physical inventory because:

Answer: It provides continuous accuracy verification with minimal operational disruption, catching discrepancies earlier

Cycle counting counts a rotating subset of inventory continuously throughout the year, allowing errors to be found and corrected without shutting down operations for a full physical count.

Which pricing model allows a fastener buyer to benefit from reduced per-unit costs as cumulative purchase volume increases over a contract period?

Answer: Tiered volume pricing (volume discount schedule)

Tiered volume pricing provides progressively lower per-unit prices as cumulative purchases cross pre-defined volume thresholds during the contract term.

A procurement manager asks the engineering team to evaluate a lower-cost fastener from an alternate supplier as a 'form, fit, function' (FFF) equivalent. This process is called:

Answer: Approved vendor list (AVL) addition through qualification

Adding an alternate supplier through formal qualification — verifying FFF equivalence — is the approved vendor list addition process, ensuring the new source meets all technical and quality requirements.

What is the 'bullwhip effect' in the context of a fastener supply chain?

Answer: Amplification of demand variability as orders move upstream from end-user through distributor to manufacturer

The bullwhip effect describes how small fluctuations in end-consumer demand become progressively larger distortions in ordering patterns moving up the supply chain toward raw material suppliers.

A fastener company implements an e-procurement catalog system for MRO fasteners. The primary benefit compared to manual PO processing is:

Answer: Reduced maverick buying, faster order processing, and better spend visibility through standardized ordering

E-procurement catalogs enforce pre-approved items and pricing, reducing off-contract 'maverick' spending while automating order processing and providing full spend analytics.

Under AS9100 requirements relevant to aerospace fastener procurement, which supplier management activity is specifically mandated?

Answer: Documented supplier selection criteria, performance monitoring, and communication of applicable requirements to suppliers

AS9100 requires organizations to define supplier selection criteria, monitor supplier performance, and flow down all applicable quality and regulatory requirements to the supply chain.