CPP Spend Analysis & Category Management 2

Question 1

What is the purpose of a category strategy document in procurement?

Accepted Answer

To define the sourcing approach, objectives, and action plans for a specific spend category

Answer

To list all approved vendors alphabetically by company name

Answer

To record employee performance reviews for the procurement team

Answer

To document the shipping and receiving procedures for inbound goods

Question 2

Which tool is most commonly used to segment suppliers based on supply risk and impact on profitability?

Accepted Answer

Kraljic Matrix

Answer

Gantt Chart

Answer

PERT Diagram

Answer

Balanced Scorecard

Question 3

In the context of spend analysis, 'maverick spending' refers to:

Accepted Answer

Purchases made outside approved procurement channels or preferred suppliers

Answer

High-volume purchases that exceed the annual procurement budget

Answer

Spending on innovative products not previously purchased

Answer

Emergency purchases approved by senior management

Question 4

In category management, a 'category tree' is used to:

Accepted Answer

Organize all purchased goods and services into a hierarchical taxonomy

Answer

Map the organizational chart of the procurement department

Answer

Display the supplier approval workflow from request to payment

Answer

Show the decision tree for selecting between make vs. buy options

Question 5

What is the primary role of a category council in procurement?

Accepted Answer

To bring together cross-functional stakeholders to govern and align on category strategy

Answer

To audit supplier financial statements on behalf of the CFO

Answer

To resolve disputes between buyers and accounts payable

Answer

To approve employee travel and entertainment expenses

Question 6

Which metric measures the proportion of an organization's total expenditure that is actively managed through formal procurement processes?

Accepted Answer

Spend under management (SUM)

Answer

Return on procurement investment (ROPI)

Answer

Purchase order cycle time

Answer

Supplier on-time delivery rate

Question 7

Demand aggregation in category management primarily aims to:

Accepted Answer

Consolidate purchasing volumes across business units to increase negotiating leverage

Answer

Reduce the number of purchase requisitions submitted each month

Answer

Accelerate the payment terms offered to strategic suppliers

Answer

Decrease the number of categories managed by the procurement team