An Example of an Effectiveness-Oriented Metric of Supply Management Performance

question 30

Multiple Choice

An example of an effectiveness-oriented metric of supply management performance:

• A)measures direct and indirect contributions to final customer satisfaction.
• B)calculates operating cost as a percentage of total dollar volume of purchases.
• C)calculates the average dollar cost of a purchase order.
• D)calculates operating cost as a percentage of sales.
• E)measures price reductions from the previous contract.

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Definitions:

Initial Investments

Initial investments refer to the upfront expenditures or capital put into a project or startup business, which may include costs for equipment, inventory, and facilities.

After-Tax Discount Rate

Reflects the rate of return on an investment after all taxes have been paid, useful for evaluating the real profitability of investments.

Working Capital

The variance between an organization's existing resources and immediate liabilities, demonstrating the financial liquidity to support day-to-day operations.

Straight-Line Depreciation

An operation for spreading the cost of a physical asset throughout its effective life in regular yearly installments.