Procurement & Vendor Management Flashcards
7 cards from real MRP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Procurement & Vendor Management flashcards as text
In MRP-driven procurement, what document formally authorizes a supplier to deliver materials at a specified time and quantity?
Answer: Purchase order
A purchase order is the legally binding document that authorizes a supplier to deliver specific materials at an agreed price, quantity, and delivery date.
Which procurement strategy involves establishing long-term agreements with suppliers that specify pricing and terms but release individual shipments based on MRP signals?
Answer: Blanket purchase order
A blanket purchase order pre-negotiates terms for a period, allowing individual releases to be issued quickly as MRP generates planned orders.
What is the primary purpose of a Vendor Managed Inventory (VMI) arrangement in an MRP environment?
Answer: Allow the supplier to monitor stock levels and replenish without separate purchase orders
In VMI, the supplier monitors the buyer's inventory levels and triggers replenishment, reducing buyer administrative burden and improving supply continuity.
When evaluating suppliers for MRP integration, which metric measures the percentage of orders delivered on or before the required date?
Answer: On-time delivery rate
On-time delivery rate measures the percentage of purchase orders fulfilled by the supplier on or before the scheduled delivery date, which is critical for MRP schedule integrity.
In MRP, what term describes the time between issuing a purchase order and receiving the material into stock?
Answer: Purchase lead time
Purchase lead time is the elapsed time from issuing a purchase order to receipt of the material, and it is a key input MRP uses to offset planned order releases.
Which sourcing strategy reduces supply risk by qualifying multiple suppliers for the same component?
Answer: Dual or multiple sourcing
Dual or multiple sourcing qualifies more than one supplier for a component, reducing dependence on any single source and providing an alternative if one supplier fails.
What is a Request for Quotation (RFQ) used for in procurement?
Answer: To solicit competitive pricing and terms from potential suppliers
An RFQ is sent to potential suppliers asking them to submit price, lead time, and terms for specified materials, enabling buyers to compare and select the best offer.