Course: Procurement Management

Lecturer: Duong Vo Nhi Anh

REVIEW MIDTERM
Chap 1:
1. Purchasing process – Industrial Purchasing Process
- List down steps
- Explain and give example for each step

2. Tendering
• Types of tendering
- List down
- Explain and give example for each type

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Course: Procurement Management
Lecturer: Duong Vo Nhi Anh

• Tendering process
- List down steps
- Explain and give example for each step

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Course: Procurement Management
Lecturer: Duong Vo Nhi Anh

3. Case study: Calculate Total Budget and Make Plan

Demand = 1M CPU
Start on 1st Jan 2022
Leadtime = 5-6 weeks
Determine budget + Make plan

1 CPU

1 substrate 10 Capacitor A 4 capacitor B 30 Solder ball 1 Dice

Unit cost 1 CPU = 1*3+10*0.1+4*0.1+30*0.05+1*10 = 15.9

Budget of 1M CPU = Demand *unit cost 1 CPU = 1,000,000*15.9 = $159,000,000
6 weeks = 1.5 month
15th November 2021

Lead time = 6 weeks = 1.5 months (Assume inventory = 0, nếu có phải trừ inventory)

• Buy JIT = Lead time  Most optimal

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Course: Procurement Management
Lecturer: Duong Vo Nhi Anh

Chap 2:
1. What is ROA? Calculate ROA?

Current system:
Inventory = $150,000
Inventory ~ 30% total asset
Total asset = Inventory * 100/30 = 150,000* 100/30 = 500,000
Investment turnover = Sales / total asset = 2
Total cost = Purchase (500,000) + Other Cost = 950,000
Profit = Sale – total cost
Profit margin = profit / sale = 5%
ROA = Investment turnover*Profit margin
10% reduction:
Total cost mới = Purchase (500,000)*90%+Othercost (450,000)
Inventory sau = 150,000*90% = 135,000

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Course: Procurement Management
Lecturer: Duong Vo Nhi Anh

2. Explain why ROA increase when inventory cost decrease

ROA = Investment turnover * Profit margin

Investment turnover = sales/total asset

Profit margin = profit/sale

ROA (tăng) = (sales/total asset)*( profit/sales) = profit/total asset (giảm) (ROA tì lệ

nghịch với total asset)

3. How many type of purchases the company need to be purchased and listed? Give
an example for each type.

4. Case 2-1: Spartan Heat Exchangers Inc

5. Case 2-2: Sabor Inc

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Course: Procurement Management
Lecturer: Duong Vo Nhi Anh

Chap 3:
1. Material requirements planning (MRP): Redraw MRP figure and explain each
component in the MRP diagram and give examples.

Material requirements planning (MRP):

- Item master file: Inventory

- Product structure file: BOM

Muốn làm BOM thì phải làm NORM (lấy định mức): một cái ghế tốn bao nhiêu sơn?

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Course: Procurement Management
Lecturer: Duong Vo Nhi Anh

- Planned order release:

2. Review EOQ, ROP, Quantity discount exercises.

EOQ:

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Course: Procurement Management
Lecturer: Duong Vo Nhi Anh

The ePaint Store stocks paint in its warehouse and sells it online on its Internet Web site. The store stocks
several brands of paint; however, its biggest seller is Sharman-Wilson Iron coat paint. The company
wants to determine the optimal order size and total inventory cost for Iron coat paint given an estimated
annual demand of 10,000 gallons of paint, an annual carrying cost of $0.75 per gallon, and an ordering
cost of $150 per order. They would also like to know the number of orders that will be made annually
and the time between orders (i.e., the order cycle)

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Course: Procurement Management
Lecturer: Duong Vo Nhi Anh

PRODUCTION QUANTITY MODEL

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Course: Procurement Management
Lecturer: Duong Vo Nhi Anh

QUANTITY DISCOUNT

• Purchase mới cộng PD, sản xuất thì KHÔNG cộng PD

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Course: Procurement Management
Lecturer: Duong Vo Nhi Anh

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Course: Procurement Management
Lecturer: Duong Vo Nhi Anh

REORDER POINT

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Course: Procurement Management
Lecturer: Duong Vo Nhi Anh

3. Why make? Why buy?

Chap 4:
1. Review diagram: 6-1 Acquisition Process Chart

2. Based on Acquisition Process Chart, what is the importance of need Identification

and Specification (advantages and disadvantages) (+ drawing + counter-sample
(mẫu đối chứng))

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Course: Procurement Management
Lecturer: Duong Vo Nhi Anh

Chap 5:
1. Definition of Quality
2. List down and explain 5 dimensions of Quality

3. Quality planning process (Explain)

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Course: Procurement Management
Lecturer: Duong Vo Nhi Anh

Exercises
Exercise 1:

Cc = 30%*10 = $3
a. EOQ

2 2 50 300,000
3,163 3,200
30% 10

b. Number of orders per year

300,000
! 93.75 94 &
3,200
c. Total inventory cost

' ( ( )) (*
2
50 300,000 3 3,200
( ( 1,000 3 ( 10 300,000
3,200 2
3,012,487.5
d. Reorder point
300,000
, ̅ . ( )) / 0 2 ( 1,000 13,000
50

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Course: Procurement Management
Lecturer: Duong Vo Nhi Anh

Exercise 2:

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