Supply Chain and Logistics Procurement and Sourcing 2

Question 1

What is a blanket purchase order?

Accepted Answer

A long-term agreement to purchase items at fixed prices over a defined period

Answer

A blanket PO establishes pricing and terms for recurring purchases over a period, reducing the need to issue individual orders.

Question 2

What is spend analysis in procurement?

Accepted Answer

Examining and categorizing all organizational expenditures to identify savings opportunities

Answer

Spend analysis aggregates, cleanses, and categorizes purchasing data to identify cost-saving opportunities, consolidation potential, and compliance issues.

Question 3

Which sourcing strategy involves working closely with a small number of preferred suppliers?

Accepted Answer

Preferred supplier program

Answer

A preferred supplier program qualifies a limited set of vendors and concentrates volume with them in exchange for better pricing and service.

Question 4

What is a reverse auction in procurement?

Accepted Answer

Suppliers compete by submitting progressively lower bids for a buyer's contract

Answer

In a reverse auction, multiple suppliers bid against each other in real time, driving down the price a buyer pays for goods or services.

Question 5

What does 'maverick spending' mean in procurement?

Accepted Answer

Unauthorized purchases made outside approved procurement processes

Answer

Maverick spending occurs when employees bypass procurement policies and approved suppliers, reducing negotiating leverage and compliance.

Supply Chain and Logistics Practice Test

Supply Chain and Logistics Practice Test

Supply Chain and Logistics Procurement and Sourcing 2