Supply Planning & Procurement Processes Flashcards
7 cards from real CPIM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Supply Planning & Procurement Processes flashcards as text
When evaluating total cost of ownership (TCO) for a procurement decision, which of the following costs is most commonly overlooked?
Answer: Post-purchase costs such as warranty claims, returns, and rework
TCO includes all lifecycle costs; post-purchase costs like returns and rework are frequently underweighted compared to purchase price.
A planner uses a fixed-period ordering system. Orders are placed every 4 weeks. Demand averages 50 units/week and lead time is 1 week. What is the target inventory level at each review?
Answer: 250 units
Target = (review period + lead time) × demand = (4 + 1) × 50 = 250 units.
Which type of supplier relationship is most appropriate for a commodity with low supply risk and low profit impact?
Answer: Transactional spot purchasing
The Kraljic matrix places low-risk, low-impact items in the 'noncritical' quadrant, best managed through simple transactional purchasing.
In supply planning, 'planned receipts' differ from 'scheduled receipts' in that planned receipts are:
Answer: System-generated replenishment orders not yet released to suppliers
Planned receipts are MRP-generated recommendations that haven't been released, while scheduled receipts are open orders already placed with suppliers.
A company sources a critical component from a single overseas supplier. Which risk mitigation strategy best addresses supply continuity?
Answer: Qualifying a second source while maintaining the primary supplier relationship
Dual sourcing qualifies an alternative supplier to provide continuity if the primary supplier fails, balancing risk and cost.
Which procurement document formally communicates to a supplier that a purchase order has been authorized and accepted?
Answer: Purchase Order Acknowledgment
A purchase order acknowledgment is the supplier's confirmation that they have received and accepted the PO terms.
Which metric measures the percentage of purchase orders delivered on the promised date?
Answer: On-time delivery (OTD)
On-time delivery measures how often suppliers deliver by the agreed due date, reflecting schedule reliability.