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

The Kraljic Matrix categorizes purchases into non-critical, leverage, bottleneck, and strategic quadrants, guiding how much effort to invest in each supplier relationship.

Question 2

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

Accepted Answer

Identify spending patterns, consolidation opportunities, and savings potential

Answer

Spend analysis aggregates purchase data across categories and suppliers to reveal maverick spend, consolidation opportunities, and areas for cost reduction.

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

TCO captures every cost associated with an item from initial purchase through end-of-life, providing a more accurate basis for supplier comparison than price alone.

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

When suppliers have superior scale, technology, or expertise that makes external production cheaper and better, buying is preferred over internal manufacturing.

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

Demand aggregation combines volume from multiple departments or locations into a single negotiating position, increasing bargaining power with suppliers.

(APP) Accredited Purchasing Practitioner Certification Practice Test

(APP) Accredited Purchasing Practitioner Certification Practice Test

APP APP Strategic Sourcing & Procurement Planning