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1. Part I: Say true if the statement is correct and false if the statement is incorrect
(10pts.)
1. Project logistics is a complex set of activities which can be determined by cost,
scope and time.
2. In business call for negotiation is undertaken when the supplier is powerful.
3. Depending on the buyer's position in the project acquisition cycle, the buyer can
be considered as client or contractor.
4. In principle, manager’s favor’s making decisions when the demand for the
product is fluctuating.
5. The planning organizing and controlling of the flow of materials from the initial
purchase through internal operations to distribution of finished goods refers to
materials management.
Part II: Choose the best answer (20pts.)
1. ……………...refers to the management of a business's legal relationships with
vendors, employees and other third parties.
A. Project logistics
C. Contract Administration
B. Procurement Management
D. Material Management
2. Successfully implemented contract management strategy is correctly evidenced
in the following scenarios;
A. Supplier is cooperative and responsive to the organizations needs
B. Organization encounters no contract disputes or surprises
C. Delivery of services is satisfactory to both parties.
D. All
3. Which one of the following is incorrect about logistics?

2. A. Planning, implementing and controlling the efficient flow and storage of goods
and services
B. Consists all operations required for products to be made available at markets
C. Responsible for the movement and storage of materials
D. None
4. One is not the supportive activities of logistics?
A. Warehousing
B. Inventory Management
C. Protective packaging
D. Material handling
of.)
5.…………is the act of obtaining goods or services for business purposes or process
of purchasing goods and services.
A. Material Handling
B. Procurement
C. Inventory Management
D. Transportation
6. The following are described as the best functions and responsibilities of storage
except?
A. Ensure that goods inward notes are raised and distributed without delay
B. Maintain accurate records of materials received, issued and in storage
C. Issue materials against authorized requisitions to production
D. None
7. Make or buy decision originates in any one of the following events except?
A. When the current performance of supplier is satisfactory
B. Changing demand in the external environment

3. C. When planning to produce the new product
D. When planning to modify the existing product
8. Satisfying business needs from markets through the proactive and planned
analysis of supply markets and the selection of suppliers refers
A. Supply chain management
C. Project logistics
B. Strategic sourcing
D. Contract Administration
9. In business world a contractual dispute like disagreements or mistakes or errors
regarding the meaning of a contracts technical term, fraud could involve. During this
time what remedial actions are taken to solve the problem?
A. Rewriting part of a written contract to correct common mistakes
B. Requesting a breaching party to perform their duties according to the contract
C. Allow a non-breaching party to recover monetary damages
D. All
E. A&B
10. The following feature correctly describes or makes an effective policy but one
is not?
A. An effective policy is relevant
B. Effective policy is a vague policy
C. They are timely and current
D. None
Part II: Essay Part
1. To help Buyers formulate appropriate sourcing and competitive strategies,
authors developed a simple positioning matrix based on different factors.
Accordingly, two tools are used in the process (portfolio analysis matrix and supplier

4. evaluation scorecard. The buyers formulate appropriate sourcing or portfolio
analysis and competitive strategies using simple positioning matrix.Thus.
a. Discuss the four key purchasing approaches or strategies/Portfolio analysis (4pts.)
b. Mention and elaborate the four strategic directions for managing category
spending (4pts.)
Strategy Routine. This strategy is aimed at a spend category known as
routine items. The recommended approach here is to follow a strategy based
on efficiency. This quadrant contains products or services of low value or
cost and low technical or supply risk. The recommendation is that these
should be sourced from the most efficient suppliers.
Bottleneck. This strategy is aimed at the spend category known as
bottleneck items. These are items that can seriously affect the delivery of the
buyer firm’s product or service. They tend to be relatively low value but are
relatively rare in terms of the supply market.

5. Leverage. This strategy is aimed at the spend category known as leverage.
The focus of this strategy is to obtain the best deal possible. This strategy
occurs when the buyer perceives market exposure to be low yet the cost or
value of the item is high
Critical. This strategy is aimed at the spending category known as critical.
The suggested strategy for buyers in this quadrant is ‘cooperation’, because
these suppliers are both high risk and can have a high impact on the buyer
firm’s profitability. Suppliers that fall into this segment of the model provide
products or services which are characterized by high supply risk and having
a high impact on the business in terms of value or cost. These suppliers tend
to fall into the top 20 per cent of suppliers account for 80 per cent of the
cost.
2. Mention and clearly discuss the project procurement management process (4
pts)
Answer
Plan Procurements: The process of documenting project purchasing
decisions, the approach, & identifying potential sellers.
Conduct Procurements: The process of obtaining seller responses, selecting
a seller, and awarding a contract.
Administer Procurements: The process of managing procurement
relationships, monitoring contract performance, & making changes &
corrections as needed.
Close Procurements: The process of completing each project procurement.
3. Before making or buying decisions managers should consider certain factor that
favor either buying or making decisions. Hence, list factors that specifically leads to
making decisions than buying (6pts.)

6. Answer
Factors that Specifically Favor the Making Decisions
1)When the cost to make is substantially lower or less than the cost to buy.
2)When the demand for the product is stable & at a higher value, so that the
investment in equipment can be returned.
3)When the companies manufacturing experience & equipment are well suited to
the manufacturing of the product.
4)When the suppliers are unable to meet specifications in terms of quality &
performance. Cont …
5. When the company has idle capacity like, idle space, skilled human resource,
equipment to be utilized in manufacturing the product.
6. When transportation costs can be saved by gathering local materials to make the
products rather than having made at a distant plant.
7. When research break through occurs & the company wants to maintain trade
secrets concerning the product, materials in it & the process involved.
Considerations That Favor Buying Than Making
When the cost to buy is substantially lower or less than the cost to make the
item.
When the demand for the product is fluctuating, creating production problem.
When the quantities of item required is small.
When obsolescence makes machine worthless or substantially reduce their
value.
When other companies hold trade secret or patents on a required product so
that it is not possible to make it.
When high scrap or spoilage rates are inherent in the manufacture of the
product and when the company is assured of getting the same from suppliers.

7. 4. In the business environment, there are five negotiation styles or so-called
approaches which are used in the process of negotiating. Therefore, lean and explain
them clearly. (6pts.)
answer
Competing style- used to get quick results. I win you lose.
Accommodating style- presupposes the result I lose-you win.
Collaborating Style- to satisfy everyone. I win - you win
Avoiding Style- I lose, you lose. Used when the issue of negotiation is
irrelevant for both sides of negotiation
Compromising Style- partial win and partial lose. Based on fairness,
mutually sufficient solutions and rationality.
5. Warehousing is one of the pillars of supply chains; good warehousing is a
significant factor in the effectiveness of supply chain management and its operation
should be organized in a way that the basic storage and flow of goods and materials
is efficient and effective Hence. there are a number of functions in the warehouse
operation that could be shortened in to four major steps. Discuss those steps plainly.
(6pts.)
Bonus
1. Analyze the potential risks and challenges associated with project contract
administration. (4pts.)
These risks and challenges include:
 Contractual Ambiguities:
 Scope Creep:
 Vendor Performance Issues:
 Change Management Challenges:
 Legal and Compliance Risks:
 Resource Constraints:

8.  Communication Breakdowns.
 Inadequate Risk Management:
 Technology Integration Challenges.
 Supplier Dependency Risks:
answer
Part I:
1. True - Project logistics involves managing the movement of materials, resources,
and information to support a project's goals within the constraints of cost, scope, and
time.
2. False - Negotiation in business can occur for various reasons beyond supplier
power dynamics.
3. True - The role of the buyer in a project can vary based on their position in the
acquisition cycle, where they can act as a client or contractor.
4. False - Managers may prefer different decision-making strategies based on factors
like demand stability or volatility.
5. True - Materials management encompasses the planning, organizing, and
controlling of material flow from procurement to distribution.
Part II:
1. C. Contract Administration - Contract administration involves managing legal
relationships with vendors, employees, and other third parties.
2. D. All - A successfully implemented contract management strategy would ideally
lead to cooperative suppliers, minimal disputes, and satisfactory service delivery.
3. D. None - All the statements are correct about logistics.
4. C. Protective packaging - Protective packaging is a primary activity in logistics
that ensures the safe transportation and storage of goods.
5. B. Procurement

9. Explanation: Procurement is the act of obtaining goods or services for business
purposes or the process of purchasing goods and services. It involves acquiring
goods and services from external sources to meet the organization's needs.
6. D. None
Explanation: The best functions and responsibilities of storage include ensuring that
goods inward notes are raised and distributed without delay, maintaining accurate
records of materials received, issued, and in storage, and issuing materials against
authorized requisitions to production. Therefore, the option "None" is the correct
answer as it does not align with the responsibilities of storage.
7. A. When the current performance of the supplier is satisfactory
Explanation: The make or buy decision originates when there are changing demands
in the external environment, when planning to produce a new product, or when
planning to modify the existing product. When the current performance of the
supplier is satisfactory, it may not necessarily trigger a make or buy decision.
8. B. Strategic sourcing
Explanation: Strategic sourcing refers to satisfying business needs from markets
through the proactive and planned analysis of supply markets and the selection of
suppliers. It involves developing long-term relationships with suppliers to achieve
the organization's goals.
9. E. A&B
Explanation: During a contractual dispute, remedial actions taken to solve the
problem may include rewriting part of a written contract to correct common mistakes
(option A) and requesting a breaching party to perform their duties according to the
contract (option B). Therefore, options A and B together are the correct remedial
actions.
10. B. Effective policy is a vague policy

10. Explanation: An effective policy is relevant, timely, and current. Vagueness in
policies can lead to confusion and inefficiencies, making them ineffective.
Therefore, the statement "Effective policy is a vague policy" does not correctly
describe or make an effective policy.