CPM CPM Technology and Information Systems in Purchasing 2 — Questions and Answers
Question 1: A purchase order management system helps organizations primarily by:
- Reducing the number of approved suppliers automatically
- Tracking, approving, and managing purchase orders throughout their lifecycle (Correct answer)
- Processing employee expense reports
- Monitoring competitor pricing in real time
Correct answer: Tracking, approving, and managing purchase orders throughout their lifecycle
PO management systems automate order creation, route approvals based on spending thresholds, track order status, and match receipts to invoices for efficient processing.
Question 2: What is a three-way match in accounts payable and purchasing?
- Matching three competing supplier quotes before awarding
- Verifying that the purchase order, receiving report, and supplier invoice agree before payment (Correct answer)
- Comparing three years of spending history for a supplier
- Reconciling purchasing data across three ERP modules
Correct answer: Verifying that the purchase order, receiving report, and supplier invoice agree before payment
Three-way matching validates that the PO quantity and price, goods receipt quantity, and supplier invoice all agree before authorizing payment, preventing errors and fraud.
Question 3: Which technology uses algorithms to automatically route purchase requisitions through the correct approval chain based on rules?
- Robotic process automation
- Workflow automation (Correct answer)
- Blockchain ledger
- RFID tracking
Correct answer: Workflow automation
Workflow automation engines apply pre-configured business rules to route requisitions and POs to the right approvers based on dollar thresholds, commodity type, or department.
Question 4: Robotic Process Automation (RPA) in procurement can be used to:
- Negotiate contracts with suppliers autonomously
- Automate repetitive tasks such as invoice data entry and PO creation (Correct answer)
- Replace procurement strategy development
- Perform physical warehouse inspections
Correct answer: Automate repetitive tasks such as invoice data entry and PO creation
RPA bots execute high-volume, rule-based procurement tasks—like extracting invoice data, matching documents, and updating ERP records—faster and with fewer errors than manual processing.
Question 5: What is the primary advantage of using cloud-based procurement software over on-premise systems?
- On-premise systems always offer lower total cost of ownership
- Cloud systems eliminate the need for any internet connection
- Cloud systems offer faster deployment, automatic updates, and lower upfront IT investment (Correct answer)
- Cloud systems provide stronger data security in all cases
Correct answer: Cloud systems offer faster deployment, automatic updates, and lower upfront IT investment
Cloud procurement platforms reduce capital expenditure on hardware, are updated automatically by the vendor, and can be deployed and scaled faster than on-premise installations.
Question 6: In procurement technology, a contract lifecycle management (CLM) system is used to:
- Manage employee lifecycle from hire to retire
- Automate and track contracts from creation through execution, renewal, and expiration (Correct answer)
- Process customs documentation for imports
- Monitor supplier production capacity in real time
Correct answer: Automate and track contracts from creation through execution, renewal, and expiration
CLM systems centralize contract creation, negotiation, approval, storage, and renewal tracking to ensure compliance, reduce risk, and capture negotiated savings.
CPM CPM Technology and Information Systems in Purchasing 2
A purchase order management system helps organizations primarily by: