Which of the following methods has your organization tried which you have found to be the most effective means for lowering your cost within one particular metals category?

 Obtain 3 bids and select the lowest bid on a line item by line item or order by order basis

 Consolidate line items into groups of similar items with comparable specifications and then send out for bid

 Bid out the whole metal or metal related category, if necessary across suppliers, tallying the annual spend by line item so suppliers have the opportunity to bid for the total category

Which sourcing approach most closely resembles how you source your top metals category?

 Electronic multi-round bidding event with market rank back to participants between rounds

 Electronic sealed bids

 Sealed bids by fax, phone or in writing

Which of the following most closely matches your approach to managing the commodity content of your material pricing?

 We are aware that the commodity market is having an affect on the price of the product we buy; however, we do not track or have visibility as to how it impacts the price.

 We actively bid out this category with the intention of fixing the value add portion of the price and allowing periodic adjustments to the raw material portion (or surcharge) on an agreed commodity price formula.

 We keep track of the commodity prices (or surcharges) to see if price increases are justified.

Which of the following statements most closely describes your hedging strategy for this category?

 We do not hedge at all and buy this product category on the price basis set by our supplier.

 We monitor the commodity price and agree on variable dates for price fixing with our suppliers -- either pricing at time of purchase/at time of delivery or fixed prices for a period of time if we feel the market may be moving up.

 We hedge our exposure to price movements on a futures exchange either directly or via our supplier.

 Answers B and C

 None of the above

How does your supplier(s) price material for this category?

 Price per pound or price per ton

 Price per piece or by unit of length or by some other unit (e.g. by sheet)

To what extent do you have visibility into the cost make-up of the delivered price?

 We can see or can calculate raw material costs, value add and handling costs such as packing and delivery.

 We can see item/unit prices and freight costs separately.

 No visibility -- we receive one delivered price.

Which of the following best describes how you selected to purchase from a distributor or a manufacturer?

 We have performed an internal analysis on this category to determine the best source of supplier (e.g. distributor or manufacturer).

 We have not performed an internal analysis on this category to determine whether we should be buying from a distributor or manufacturer.

 We will continue to source this category from our current supplier whether a distributor or manufacturer.

 None of the above

If any scrap is generated from the use of these materials in your production process which of the following best describes your working practice?

 We have it disposed of or the supplier takes it off our hands.

 We sell it back either to the supplier or a third party dealer for the best price we can get.

 We sell it back on a commodity based index price.

If you have a value add portion (premium over the raw commodity price) to the cost of the material or product you buy how would you best describe your contract philosophy?

 We have negotiated and quantified price escalator and de-escalator clauses built into our contract to allow us to justify any price increases or decreases.

 We limit contract length to one year with a view to try to obtain the best terms available at renewal.

 We place a contract for an indeterminate period and prices move over time.

 Answers A and B

 All of the above

Have you ever evaluated the percentage of labor input to the different categories you buy with a view to identifying those categories in which cost compression can be achieved by regularly re-sourcing every 12 months?

 Yes, but we don't think this is an opportunity.

 Yes, and we do have a policy of targeting categories where we believe there is labor cost compression opportunities.

 No

 Answers A and B

 All of the above

This quiz powered by the Quiz Creator plugin for WordPress.