CLT Purchasing & Procurement 3

Question 1

What is value analysis in procurement?

Accepted Answer

A systematic review of purchased products to find less costly substitutes without sacrificing function

Answer

Value analysis examines the function of purchased items to identify ways to achieve the same or better performance at a lower total cost.

Question 2

What does 'FOB Origin' mean in shipping and procurement terms?

Accepted Answer

The buyer assumes ownership and responsibility for freight costs at the point of origin

Answer

FOB (Free On Board) Origin means the buyer assumes title and transportation risk as soon as goods leave the seller's facility and is responsible for all freight costs.

Question 3

What is a standing order in procurement?

Accepted Answer

A recurring order for the same goods at regular intervals with pre-set terms

Answer

A standing order automates the recurring purchase of regularly consumed items at predetermined quantities and intervals, reducing administrative workload.

Question 4

What is the primary purpose of receiving inspection in procurement?

Accepted Answer

To verify that incoming shipments match the purchase order in quantity, quality, and condition

Answer

Receiving inspection confirms that delivered goods match PO specifications in terms of item identity, quantity, quality standards, and physical condition.

Question 5

What does procurement cycle time measure?

Accepted Answer

The total elapsed time from identifying a need to having the goods available for use

Answer

Procurement cycle time measures the end-to-end efficiency of the purchasing process, from recognizing a need through requisition, ordering, receiving, and inspection.

CLT - Certified Logistics Technician Practice Test

CLT - Certified Logistics Technician Practice Test

CLT Purchasing & Procurement 3