CLT Purchasing & Procurement 2

Question 1

What is Economic Order Quantity (EOQ)?

Accepted Answer

The formula that determines the optimal order size to minimize total inventory costs

Answer

The maximum amount of inventory a warehouse can hold

Answer

The quantity of goods that must be reordered immediately upon depletion

Answer

The average daily usage rate of an inventory item

Question 2

What is a Request for Proposal (RFP) in procurement?

Accepted Answer

A document soliciting detailed proposals from suppliers for goods or services

Answer

A document used to authorize payment to a vendor

Answer

A formal internal request for a budget increase

Answer

A shipping document accompanying outbound freight

Question 3

What does 'sole source' procurement mean?

Accepted Answer

Purchasing from one vendor without competitive bidding when no alternatives are available or justified

Answer

Purchasing from multiple vendors simultaneously to reduce risk

Answer

A bidding process limited to only two competing suppliers

Answer

Importing goods exclusively from a single country of origin

Question 4

What is a 'three-way match' in procurement and accounts payable?

Accepted Answer

Verifying that the purchase order, receiving report, and invoice all agree before authorizing payment

Answer

Matching three suppliers' quotes before selecting a vendor

Answer

A triple inventory count performed during receiving

Answer

Comparing shipping documents from three different carriers

Question 5

What is a vendor scorecard primarily used for in procurement?

Accepted Answer

Measuring and monitoring supplier performance over time using quantifiable metrics

Answer

Tracking the number of bids submitted by vendors

Answer

Recording purchase order numbers for audit purposes

Answer

Calculating total annual spend with each vendor

Question 6

What is safety stock in the context of procurement and inventory management?

Accepted Answer

Extra inventory held to protect against stockouts caused by demand variability or supply delays

Answer

Protective equipment required in the warehouse during receiving

Answer

The minimum order quantity required by a supplier contract

Answer

Insurance purchased to cover damaged incoming shipments

Question 7

What is a Preferred Vendor List (PVL)?

Accepted Answer

A pre-approved list of suppliers that have met qualification criteria and are authorized for purchasing

Answer

A list of suppliers that have been disqualified from future bidding

Answer

A catalog of all products purchased during the past fiscal year

Answer

A list of emergency backup suppliers for critical components