Question

1- Total cost of ownership models require some brainstorming with other functional areas.

True or False

2- What is the percent of SGA?

Labor               $2.00

Material           $3.00

Overhead         $3.00

Cost                 $8.00

SGA                $0.80

Total Cost        $8.80

Profit               $0.88

Price                $9.68

a. 1% b. 5% c. 10% d. 15% e. 100%

3-Executional level of cost modeling looks at labor content and shipping economics of a purchased product.

TrueFalse

4-If there is $625,000 spread over suppliers with a spend of less than $50,000 how much is that as a percent of the total category spend of $2,500,000?

a. 1% b. 5% c. 15% d. 20% e. 25%

5-Suppliers can be segmented in many ways except by:

a. Commodity b. Business unit c. Size of business d. Technological evolution e. All of the above f. None of the above

Answer 1

1 - True, it requires brainstorming with different functional areas to create a total cost of ownership model. For e.g. Finance, Procurement, IT, Sales, etc.

2. Percentage of SGA = SGA/Cost X 100 = (0.80/8.00) X 100 = 10%

3. False, executional level of cost modeling looks at the material, manufacturing, labor content and shipping economics of a purchased product

4. 25%, If there is $625,000 spread over suppliers with a spend of less than $50,000, Percentage = Total Supplier Spend/Total Category spend = ($625,000/$2,500,000) X 100 = 25%

5. option e - All of the above, i.e. Suppliers can be segmented in many ways viz. By Commodity, By Business Unit, Size of Business, Technological evolution