CPSM Procurement & Sourcing 3

Question 1

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

Accepted Answer

Single sourcing

Answer

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

Question 2

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

Accepted Answer

Purchase price plus freight, duties, and insurance

Answer

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

Question 3

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

Accepted Answer

Gather market intelligence before defining requirements

Answer

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

Question 4

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

Accepted Answer

Conditional trading

Answer

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

Question 5

What is the primary purpose of a procurement spend analysis?

Accepted Answer

To identify opportunities for consolidation and cost savings

Answer

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

(CPSM) Certified Professional in Supply Management Practice Test