CEH Purchasing and Procurement 1 — Questions and Answers
Question 1: Which purchasing method involves buying goods in large quantities to obtain a lower unit price?
- Just-in-time purchasing
- Volume or quantity buying (Correct answer)
- Consignment purchasing
- Blanket order purchasing
Correct answer: Volume or quantity buying
Volume or quantity buying leverages large purchase orders to negotiate lower per-unit costs, reducing overall supply expenses.
Question 2: What is a 'par stock' level in housekeeping procurement?
- The maximum amount of supplies ever ordered
- The minimum quantity of a supply item needed to meet operational demands between deliveries (Correct answer)
- The amount of inventory written off as waste
- The reorder point at which supplies are returned to vendors
Correct answer: The minimum quantity of a supply item needed to meet operational demands between deliveries
Par stock is the established minimum quantity needed to sustain operations until the next scheduled delivery without running short.
Question 3: Which document formally requests a vendor to supply goods or services at a specified price?
- Invoice
- Receiving report
- Purchase order (Correct answer)
- Bill of lading
Correct answer: Purchase order
A purchase order is an official document sent to a vendor authorizing the purchase of specific goods or services at an agreed price.
Question 4: What is the primary purpose of obtaining competitive bids from multiple vendors?
- To delay purchasing decisions
- To ensure the best value for the hotel's money (Correct answer)
- To build a single exclusive vendor relationship
- To increase the number of approved suppliers on record
Correct answer: To ensure the best value for the hotel's money
Competitive bidding ensures the property receives the best combination of price, quality, and service by comparing multiple vendor proposals.
Question 5: A 'blanket purchase order' is best described as:
- An order placed for emergency linen replacements
- A standing agreement to purchase a set quantity of goods over a defined period at a fixed price (Correct answer)
- A one-time bulk order for seasonal supplies
- An order requiring immediate same-day delivery
Correct answer: A standing agreement to purchase a set quantity of goods over a defined period at a fixed price
A blanket purchase order establishes a long-term agreement with a vendor for recurring purchases, locking in pricing and simplifying the ordering process.
Question 6: When evaluating a vendor for housekeeping supplies, which factor is MOST critical beyond price?
- The vendor's advertising budget
- Reliability of delivery schedules and product consistency (Correct answer)
- The vendor's geographic headquarters location
- Whether the vendor offers branded merchandise
Correct answer: Reliability of delivery schedules and product consistency
Reliable delivery and consistent product quality ensure housekeeping operations run smoothly without costly shortages or substitutions.
Question 7: What does the term 'lead time' mean in procurement?
- The time required for staff to complete a room inspection
- The period between placing an order and receiving the goods (Correct answer)
- The time a cleaning chemical needs to be left on a surface
- The duration of a vendor contract negotiation
Correct answer: The period between placing an order and receiving the goods
Lead time is the elapsed time from submitting a purchase order to receiving the goods, which must be factored into reorder point calculations.
CEH Purchasing and Procurement 1
Which purchasing method involves buying goods in large quantities to obtain a lower unit price?