Portfolio Management Flashcards
7 cards from real CPP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Portfolio Management flashcards as text
In the Kraljic matrix, which two dimensions are used to position purchased items?
Answer: Profit impact and supply risk
Kraljic classifies items by their profit impact (financial importance) and supply risk (market complexity).
A company buys a custom-engineered component from a sole supplier, and it represents a large share of total spend. Which Kraljic quadrant applies?
Answer: Strategic
High profit impact combined with high supply risk places the item in the strategic quadrant.
What is the recommended primary approach for leverage items?
Answer: Exploit purchasing power through competitive bidding and volume consolidation
Leverage items have many suppliers and high spend, so buyers can use competition to drive value.
Office supplies purchased through a P-card program typically fall into which Kraljic quadrant?
Answer: Non-critical
Low-value, readily available items are non-critical and should be handled with efficient, low-touch processes.
A low-cost specialty chemical is available from only one approved supplier, and a shortage would halt production. What is the best strategy?
Answer: Ensure continuity through safety stock, contracts, and qualifying alternatives
Bottleneck items need supply assurance and risk mitigation rather than price focus.
Which tool complements the Kraljic matrix by showing how attractive the buyer's account is from the supplier's point of view?
Answer: Supplier preferencing model
The supplier preferencing model maps account attractiveness and relative spend to show how the supplier sees the buyer.
In the supplier preferencing model, a supplier views a buyer with high attractiveness but low relative spend as which category?
Answer: Development
Development accounts are attractive but small, so suppliers nurture them for future growth.