CEH Purchasing and Procurement 2 — Questions and Answers
Question 1: Which of the following best describes a 'receiving report' in the procurement process?
- A vendor's catalog listing available products
- A document that records and verifies goods received against the purchase order (Correct answer)
- A monthly summary of total purchasing expenditures
- A request to return damaged goods to a vendor
Correct answer: A document that records and verifies goods received against the purchase order
A receiving report documents that delivered goods match the purchase order in quantity and quality, providing an essential check in the procurement cycle.
Question 2: The 'three-way match' in accounts payable refers to matching which three documents?
- Invoice, delivery receipt, and vendor catalog
- Purchase order, receiving report, and vendor invoice (Correct answer)
- Budget request, purchase order, and department approval
- Bid proposal, purchase order, and payment check
Correct answer: Purchase order, receiving report, and vendor invoice
The three-way match compares the purchase order, receiving report, and vendor invoice to ensure all three are in agreement before authorizing payment.
Question 3: What is 'value analysis' in housekeeping procurement?
- Calculating the resale value of used equipment
- Evaluating whether a product's function justifies its cost compared to alternatives (Correct answer)
- Analyzing vendor financial statements before signing a contract
- Determining the dollar value of lost or stolen supplies
Correct answer: Evaluating whether a product's function justifies its cost compared to alternatives
Value analysis examines whether the price paid for a product is justified by its performance, often revealing opportunities to substitute less expensive alternatives without sacrificing quality.
Question 4: Which type of vendor relationship involves a long-term partnership with a single supplier for a specific product category?
- Open-market buying
- Sole-source or single-source procurement (Correct answer)
- Spot purchasing
- Reverse auction procurement
Correct answer: Sole-source or single-source procurement
Single-source procurement involves committing to one preferred vendor for a product category, often yielding better pricing, service, and consistency in exchange for volume commitment.
Question 5: In hospitality purchasing, what does 'FIFO' stand for and why is it important?
- First In, First Out — ensures older stock is used before newer stock to reduce waste (Correct answer)
- Fixed Inventory, Fixed Output — maintains consistent supply levels
- Flexible Invoicing, Fixed Order — allows vendor billing flexibility
- Full Inspection, Final Output — requires quality checks before use
Correct answer: First In, First Out — ensures older stock is used before newer stock to reduce waste
FIFO (First In, First Out) ensures that older supplies are consumed before newly received stock, minimizing waste from expiration or deterioration.
Question 6: When writing product specifications for purchasing, what is the primary goal?
- To limit the number of vendors who can bid
- To clearly describe the exact quality, size, and performance standards required (Correct answer)
- To increase the per-unit price for premium products
- To establish a vendor's exclusive right to supply the property
Correct answer: To clearly describe the exact quality, size, and performance standards required
Detailed product specifications ensure all vendors bid on identical criteria, enabling fair price comparison and guaranteeing the property receives products that meet its operational needs.
Question 7: What is a 'capital expenditure' (CapEx) in the context of housekeeping procurement?
- A recurring monthly supply purchase
- A significant investment in long-lasting assets such as equipment or furniture (Correct answer)
- An emergency spend that exceeds the approved budget
- A one-time vendor rebate applied to future orders
Correct answer: A significant investment in long-lasting assets such as equipment or furniture
Capital expenditures are major investments in durable assets like commercial washers or floor machines that provide value over multiple years, as opposed to everyday consumable supplies.
CEH Purchasing and Procurement 2
Which of the following best describes a 'receiving report' in the procurement process?