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MGT 5084 Material Acquisition Management

Course Description

This course examines the life cycle process of acquisition of materiel and materiel systems. Examines systems management and its application from acquisition to termination. Studies need requirements, cost and schedule considerations and procurement procedures. May serve as the capstone for certain majors.

Week 1

Lecture: Introduction
Lecture: The Foundation and Progression to Professional Supply Management


  • Describe the impact of effective supply management on overall financial performance
  • Explain the crucial connection between supply management and return on investment
  • Describe the logical progression from purchasing to strategic supply chain management
  • Identify and describe the four factors that influence the importance of supply management in an organization
  • Recognize and explain the five classifications of work in a supply management operation
  • Compare and contrast the advantages of centralized and decentralized supply management decision making
  • Explain the difference between operational activities and strategic activities
  • Explain the significance of integrating supply management with internal and external stakeholders
  • Appreciate the role that supply management plays in the supply chain
  • Recognize the importance of connecting suppliers with the ultimate customers

Week 2

Lecture: Relationships and the Requirements Process 


  • Define the key characteristics of transactional relationships
  • Explain how supply alliances can create win-win solutions for both buyers and suppliers
  • Compare and contrast principal relationships including transactional, collaborative, and strategic alliances
  • Identify situations in which strategic alliances may not be appropriate
  • Delineate and describe the steps in designing and developing new products
  • Assess the impact of involving buyers and suppliers in the product development stage
  • Explain the role of supply management in the new product development process
  • Identify methods and techniques to avoid conflicts in specification development
  • Identify and describe the categories of specifications
  • Explain how standardization differs significantly from simplification

Week 3

Lecture: Managing for Quality, Equipment Procurement, and Purchasing Services


  • Recognize the importance of quality as it relates to industrial and commercial value
  • Describe the role of Six Sigma as it relates to product quality
  • Conceptualize the roles and applications of the International Organization for Standardization
  • Describe the differences between production buys and capital equipment expenditures
  • Explain the factors that drive the needs or requirements for capital equipment expenditures
  • Identify and describe the various costs and factors to consider in managing capital equipment procurements
  • Compare and contrast the benefits of leasing versus buying capital equipment
  • Design and develop basic specifications for procuring capital equipment
  • Describe the purpose of a Statement of Work (SOW)
  • Assess the myriad issues to consider in selecting a service contractor 

Week 4

Lecture: Sourcing Perception and Corporate Outsourcing


  • Identify and describe the strategic issues to consider in deciding to outsource manufacturing
  • Discuss the volatile nature of the make-or-buy decision as it affects the organization
  • Explain the rationale for making a product or component in-house or deciding to outsource manufacturing
  • Recognize the importance of the supplier selection process
  • Compare and contrast methods to evaluate potential suppliers to determine their strengths and weaknesses
  • Identify key strategic issues encountered in developing a strategic sourcing plan
  • Identify when to bid competitively versus entering negotiations with potential suppliers
  • Explain how companies benefit from buying globally and linkage to countertrade
  • Identify which goods, products, and services are best suited for buying offshore
  • Identify and describe the principal global economic alliances and explain what drives these entities

Week 5

Lecture: Total Cost of Ownership, Price and Cost Analysis, and Methods of Compensation


  • Examine the critical value of determining the total cost of buying and/or owning a product
  • Define and contrast the major components that comprise the total cost of a product or service
  • Define and explain the subcomponents of total costs
  • Explain why all cost components must be addressed when appraising the true cost of a product or service
  • Understand how economic and financial conditions drive competitive conditions and price
  • Explain how variable-margin pricing can result in overpriced procurements
  • Identify and explain the various categories of cost that influence price
  • Identify and describe the tools needed for conducting a price analysis
  • Differentiate between direct costs and indirect costs
  • Compare the difference between a price arrangement and a cost arrangement

Week 6

Lecture: Negotiation, Contract Formation, Legal Issues, and Contract Management


  • Describe the negotiation process and understand when to negotiate
  • Identify the principal techniques utilized for effective negotiations
  • Describe the key characteristics that make for successful negotiators
  • Understand the impact of legal issues and options for resolving contract disputes
  • Identify and describe the four basic elements of a contract
  • Explain the concept of breach as it relates to contracts
  • Identify fundamental issues to consider international contract negotiations
  • Appreciate the importance of effective contract management
  • Describe the use of Gantt charts in project management, and the use of PERT charts for identifying the critical path within a project
  • Develop a basic approach for monitoring suppliers’ contract performance

Week 7

Lecture: Ethics, Production, Inventory Control, Demand Management, and Logistics


  • Define the basic principles of organizational ethics and corporate social responsibilities
  • Describe the most important ethical principle for supply managers
  • Explain how global supply management tempers ethical considerations
  • Describe a supply manager’s responsibility to suppliers and the impact of safeguarding confidential supplier information
  • Identify and describe the principal components of production planning and scheduling
  • Define the basic components of material requirements planning (MRP) and understand the differences between dependent demand vs. independent demand
  • Examine the interaction of capacity requirements planning (CRP) with MRP systems
  • Describe the advancement or progression of MRP to MRP II systems
  • Identify the cost breakdown associated with inventories: carrying acquisition
  • Describe the experiential relationship between supply, demand, and logistics management
  • Appreciate the significance of accurate forecasts in managing supply efficiently
  • Define the primary use of time fences in demand management

Week 8

Lecture: Supply Chain Management Review


  • Explain the power of Value Network Management (VNM) 
  • Examine the importance of VNM to supply management, logistics, and marketing 
  • Recognize the future impact that VNM will exert on supply management, logistics, and marketing 
  • Identify and describe the myriad stages of implementation of supply chain management as it evolves into VNM Appreciate the role of leadership in affecting organizational or systemic change to VNM 
  • Distinguish between inconsequential training and training to improve organizational performance

The course description, objectives and learning outcomes are subject to change without notice based on enhancements made to the course.

Total Cost of Ownership, Price and Cost Analysis, and Methods of Compensation