INDIAN INDIAN INSTITUTE OF MATERIALS MANAGEMENT
Post Graduate Diploma in Materials Management
Graduate Diploma in Materials Management
PAPER No. 5
Purchasing Management
Date 11.06.2016 Max. Marks :100
Time 10.00 a.m. to 1.00 pm Duration 3 Hrs.
Instructions
1. From Part A answer all questions compulsory). Each sub questions carries 1 mark. Total 32 Marks
2. From Part B Answer any 3 questions out of 6 questions. Each question carries 16 marks. Total 48 Marks
3. Part C is a case study (compulsory) with questions. Read the case study carefully and answer the questions
4 questions of 5 marks each) Total: 20 Marks
4. Please read the instructions given in the answer sheet
PART A Total 32 marks
(compulsory- each question carry one mark)
Q.1 Please state whether the following statements are "True" or "False". Please do not rewrite
the statements while answering in the answer book. Mark each)
Purchasing means the process of buying
The right price brings the best ultimate value
c)The skill of negotiation cannot be applied universally
Benchmarking provides a snapshot of the performance of the business
The origin for purchase cycle is indent
Public buying refers to the purchases by Government and semi Government bodies.
g). P.O. is equated with contract .
Out sourcing is always beneficial for the organizations
Q.2. Give full-form of the following mark each)
FSN ii) MRP II iii) GPS iv) PSU VMI vi)VQR vii) AQL viii) VE
Q. 3. Match the following entries in column A with entries in column B mark each)
Column "A" Column "B"
A ERP 1 Quality of product
B Dispatch by air 2 GPS
C Arbitration 3 Comparing with the best
D Benchmarking 4 Optimum utilization of resources
E Zero defects 5 ISO-9000
F Value Engineering 6 Purchase order term
G Vehicle tracking 7 Systematic method to improve the value of goods
H Quality Standards 8 AWB
June 2016
Q.4 Fill in the blanks mark each)
Negotiation is a_______communication process.
be the assignment of specific tasks to subordinates
is for supply of stores at specified rates.
a documented investigation
is most suitable for controlling machinery and spare parts inventory.
an important part of e-Procurement.
Material handling is moving unloading of the materials.
Objective of purchase is to get best the each rupee spent on purchase.
PART B 48 marks
Write any THREE out of the following five questions i.e, Q.5 to Q.9: (16 Marks each)
Q.5 .What is Ethics?Explain IIMM code of ethics& the ethics to be adopted in purchasing.
Q.6. As a Purchase Manager, you are negotiating a price for buying major components for your finished
product. How willyou go ahead for successful negotiation?
Q.7. What are the practical guidelines for purchasing? Mention any five important terms and conditions of
a purchase order and explain their importance.
Q.8. What are the various types of tendering? Explain the importance of two bid system.
Q.9. Short Notes: (any four)
Working of DGS&D
Bench Marking
Green purchasing
Value Analysis
Inventory reviewing Methods
PART C 20 marks
Q.10 Compulsory
M/s Penelop Chemical Inc is chemical manufacturing company having four plants in different part
of India. Mr Ram Kumar is responsible for managing procurement of spares of equipment for all plants.
Procurement of spares is done based on PRs from different user plants. There is no centralized planning
cell for verifying requirement raised by different users. Also there is sub-store at all plants besides
centralized General Stores. Currently there is increased inventory level of spares. Users are also
complaining about quality related issues like fitment/interchangeability. There is overall increase of
emergency procurement of spares.
Ram Kumar is facing following issues also while dealing with OEMs:
Poor response from OEMs
Some of the OEMs have stopped their operations
Equipment is obsolete
Please answer the following questions for the above case:
1. What organizational changes would you suggest for the spares procurement?
2. What strategies do you suggest for improving procurement service level?
3. Which criteria will you include in Vendor Performance Evaluation?
4. How will you shorten the lead time of procurement?
5. Will you advise users to buy new equipment where the equipment is obsolete?