Procurement & Sourcing Flashcards

Which sourcing strategy involves awarding contracts to a single supplier for an entire commodity category?

Answer: Single sourcing

Single sourcing is a deliberate decision to use one supplier for a category, whereas sole sourcing means only one supplier exists in the market.

In the context of procurement, what does 'landed cost' include?

Answer: Purchase price plus freight, duties, and insurance

Landed cost encompasses all expenses required to deliver goods to the buyer's location, including freight, duties, insurance, and handling fees.

A buyer issues a Request for Information (RFI) primarily to:

Answer: Gather market intelligence before defining requirements

An RFI is a non-binding document used to gather information about supplier capabilities and market conditions before formal solicitation.

Which negotiation tactic involves making a concession contingent on receiving one in return?

Answer: Conditional trading

Conditional trading links concessions so that giving something is tied to receiving something of value in return, maintaining negotiation balance.

What is the primary purpose of a procurement spend analysis?

Answer: To identify opportunities for consolidation and cost savings

Spend analysis categorizes and reviews purchasing data to uncover consolidation opportunities, maverick spend, and cost-reduction levers.

Under UCC Article 2, when does title to goods typically pass from seller to buyer?

Answer: At the time and place the seller completes delivery obligations

Under the UCC, title passes at the time and place the seller completes its delivery obligation as specified in the contract.

A procurement team uses a weighted-point evaluation model for supplier selection. What is the main advantage of this approach?

Answer: It provides a structured, objective comparison across multiple criteria

Weighted-point models assign importance scores to criteria, enabling systematic and defensible comparisons among competing suppliers.