Strategic Sourcing & Procurement 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 Strategic Sourcing & Procurement flashcards as text
Which tool is MOST useful for visually mapping an organization's supply chain vulnerabilities and interdependencies?
Answer: Supply chain mapping / value stream mapping
Supply chain mapping visually represents all tiers of suppliers and logistics flows, helping identify risks and dependencies.
A buyer uses a 'reverse auction' sourcing event. What is the DEFINING characteristic of this approach?
Answer: Suppliers compete by submitting decreasing price bids in real time
In a reverse auction, multiple suppliers compete by bidding prices downward in real time, with the lowest qualified bid typically winning.
What is 'supply base rationalization' and why do organizations pursue it?
Answer: Reducing the number of active suppliers to improve leverage, reduce complexity, and lower administrative costs
Supply base rationalization reduces the supplier count to consolidate spend, increase leverage, and lower the cost of managing supplier relationships.
Which of the following is an example of a 'strategic' item according to the Kraljic Portfolio Matrix?
Answer: A proprietary engine component from a single supplier critical to production
Strategic items in the Kraljic Matrix have high supply risk and high profit impact, such as proprietary sole-source critical components.
A procurement manager requests a 'total cost of ownership' (TCO) analysis instead of a simple price comparison. Which cost element is MOST commonly overlooked in price-only comparisons?
Answer: End-of-life disposal and decommissioning costs
End-of-life disposal costs are frequently ignored in simple price comparisons but can be significant in TCO analysis for equipment or hazardous materials.
When a supplier offers a 'most favored customer' (MFC) clause, what does the buyer gain?
Answer: Assurance that the buyer will receive pricing no worse than any other customer
An MFC clause ensures the buyer receives pricing equal to or better than the supplier's best pricing offered to any other customer.
Which sourcing approach BEST mitigates supply disruption risk for a critical single-source component?
Answer: Qualifying a second source and splitting volume between two suppliers
Qualifying a second source and splitting volume creates redundancy that protects against supply disruption from any single supplier failure.