CPP Strategic Sourcing & Supplier Management 2

Question 1

In the Kraljic matrix, items with high profit impact and high supply risk are classified as:

Accepted Answer

Strategic items

Answer

Strategic items combine high profit impact with high supply risk and warrant close partnerships.

Question 2

A buyer finds that a critical component has low spend but only one qualified supplier worldwide. Under Kraljic, the best initial strategy is to:

Accepted Answer

Secure supply through buffer stock and search for alternatives

Answer

Bottleneck items (low impact, high risk) call for supply assurance and risk reduction.

Question 3

Which analysis is typically the FIRST step in a strategic sourcing initiative?

Accepted Answer

Spend analysis

Answer

Spend analysis reveals what is bought, from whom, and how much, forming the basis for category strategy.

Question 4

Total cost of ownership (TCO) analysis differs from price analysis because TCO includes:

Accepted Answer

Acquisition, operating, maintenance, and disposal costs over the life cycle

Answer

TCO captures all costs incurred over an item's life, not just the purchase price.

Question 5

A procurement team builds a cost model from material, labor, overhead, and reasonable profit to estimate what a part ought to cost. This is called:

Accepted Answer

Should-cost analysis

Answer

Should-cost analysis estimates a fair price from the supplier's underlying cost elements.

CPP - Certified Procurement Professional Practice Test