APP Purchasing Principles

Question 1

What is the primary objective of purchasing in a business?

Accepted Answer

Obtain goods and services at the best value

Answer

The goal of purchasing is to acquire the right quality of goods or services at the right time, in the right quantity, from the right source, at the right price.

Question 2

Which of the following best defines the term 'lead time'?

Accepted Answer

Time between order and delivery

Answer

Lead time is the period between placing an order and receiving the goods, and is crucial for maintaining proper inventory levels.

Question 3

Which department is most likely to work closely with purchasing?

Accepted Answer

Production

Answer

The production department depends on purchasing to supply the materials needed for manufacturing on time and in the right quantity.

Question 4

What is 'just-in-time' (JIT) purchasing?

Accepted Answer

Receiving goods only as needed

Answer

Just-in-time purchasing focuses on receiving goods only when needed, reducing inventory carrying costs and waste.

Question 5

What is the main advantage of centralized purchasing?

Accepted Answer

Better pricing and standardization

Answer

Centralized purchasing allows for bulk buying, standardization, and cost efficiency through economies of scale.

(APP) Accredited Purchasing Practitioner Certification Practice Test

(APP) Accredited Purchasing Practitioner Certification Practice Test

APP Purchasing Principles