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

A category strategy outlines the goals, market analysis, supplier landscape, and tactical plans a procurement team will follow to optimize a specific category.

Question 2

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

Accepted Answer

Kraljic Matrix

Answer

The Kraljic Matrix plots suppliers on axes of supply risk and profit impact, classifying them into four quadrants to guide differentiated procurement strategies.

Question 3

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

Accepted Answer

Purchases made outside approved procurement channels or preferred suppliers

Answer

Maverick spending bypasses established procurement processes and preferred suppliers, resulting in lost savings opportunities and increased compliance risk.

Question 4

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

Accepted Answer

Organize all purchased goods and services into a hierarchical taxonomy

Answer

A category tree provides a structured hierarchy that classifies spend into families, categories, and sub-categories to enable consistent analysis and reporting.

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

A category council ensures that procurement strategies reflect the needs of all internal stakeholders and secures organizational alignment and buy-in for category plans.

(CPP) Certified Purchasing Professional Practice Test

(CPP) Certified Purchasing Professional Practice Test

CPP Spend Analysis & Category Management 2