Practice Test Geeks(APP) Accredited Purchasing Practitioner Certification Practice Test
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Purchasing Principles Flashcards

7 cards from real APP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Purchasing Principles flashcards as text

  1. What is the primary benefit of using Electronic Data Interchange (EDI) in purchasing?

    Answer: Enables paperless, automated exchange of purchasing documents between systems

    EDI automates the exchange of standard business documents like POs and invoices between buyer and supplier computer systems.

  2. A buyer is negotiating a long-term supply agreement. Which term defines the minimum quantity the buyer commits to purchase?

    Answer: Guaranteed minimum quantity

    A guaranteed minimum quantity (or minimum purchase commitment) defines the lowest volume the buyer must purchase over the contract period.

  3. Which purchasing approach involves collaborating with suppliers early in the product development process?

    Answer: Early supplier involvement (ESI)

    Early supplier involvement (ESI) brings suppliers into the design phase to leverage their expertise and improve product quality and cost.

  4. What does 'maverick buying' refer to in a corporate purchasing context?

    Answer: Purchasing outside established contracts and procurement channels

    Maverick buying occurs when employees purchase goods or services outside approved suppliers or procurement processes, undermining negotiated contracts.

  5. Which of the following is an example of a 'make-or-buy' decision factor favoring 'buy'?

    Answer: Supplier's unit cost is lower than internal production cost

    When a supplier can produce at a lower cost than internal manufacturing, it supports the 'buy' decision in a make-or-buy analysis.

  6. What is 'supply chain visibility'?

    Answer: The ability to track products, orders, and inventory across the supply chain in real time

    Supply chain visibility enables organizations to monitor the status and location of goods and information throughout the entire supply chain.

  7. Under the APP certification framework, which activity is classified as a 'value-added' purchasing function?

    Answer: Strategic sourcing and supplier development

    Strategic sourcing and supplier development are value-added activities that directly contribute to organizational savings and competitive advantage.