APP APP Strategic Sourcing & Procurement Planning

Question 1

Which analytical tool segments a company's purchases into quadrants based on supply risk and profit impact to guide sourcing strategy?

Accepted Answer

Kraljic Portfolio Matrix

Answer

SWOT Analysis

Answer

ABC Analysis

Answer

PESTLE Analysis

Question 2

A 'spend analysis' in procurement is primarily conducted to:

Accepted Answer

Identify spending patterns, consolidation opportunities, and savings potential

Answer

Evaluate individual supplier financial health

Answer

Set the annual procurement department budget

Answer

Measure buyer performance against KPIs

Question 3

The concept of 'total cost of ownership' (TCO) in procurement decisions includes:

Accepted Answer

All costs across the full lifecycle including acquisition, operation, maintenance, and disposal

Answer

Only the unit purchase price of goods

Answer

The supplier's overhead and profit margin only

Answer

Freight and import duties only

Question 4

In a make-or-buy analysis, which factor MOST strongly suggests that a company should 'buy' rather than 'make'?

Accepted Answer

External suppliers can produce it more efficiently at lower cost

Answer

The component is a core strategic competency

Answer

The company has excess production capacity

Answer

The item requires proprietary technology the company owns

Question 5

Which procurement strategy involves consolidating purchases across multiple business units to leverage combined volume for better pricing?

Accepted Answer

Demand aggregation / leveraged buying

Answer

Decentralized purchasing

Answer

Category management

Answer

Single sourcing

Question 6

A procurement 'savings pipeline' report tracks:

Accepted Answer

Identified cost reduction initiatives from identification through implementation and capture

Answer

The value of open purchase orders awaiting delivery

Answer

The procurement team's headcount and operating budget

Answer

Supplier on-time delivery performance over the prior quarter