Topic 1 - Basics Of Procurement

Question 1

Purchasing

Answer 1

Placement and processing of PO

Question 2

Procurement

Answer 2

P2P process

Question 3

Strategic Sourcing

Answer 3

Focuses on supply chain impacts of procurement and purchasing decisions to achieve overall business goals

Question 4

Procurement staff must:

Answer 4

1. Provide cost reductions
2. Improve supply chain quality (effectiveness and efficiency)
3. Gain access to new sources of materials and technology
4. Involve suppliers in product amd provess development

Question 5

Procurement Objectives

Answer 5

1. Support Operational Requirements
2. Manage procurement process efficiently and effectively
3. Supply base management (develop reliable, high quality sources of supply)
4. Develop strong relationships wifh other functional groups (internal)
5. Develop integrated procurement strategies which support organisational strategies

Question 6

P2P Process

Answer 6

1. Forecast and plan requirements
2. Need clarification/requisition
3. Supplier identification/Selection
4. Approval/contract/po generation
5. Receive material and documents
6. Settle, pay and measure performance

Question 7

Things that can trigger requisitioned

Answer 7

Forecast 
Customer orders (pull demand)
Re-order point
Stock checks
Record on hand vs physical on hand

Question 8

Supplier identification

Answer 8

1. Decide on sourcing strategy
2. Generate portfolio of potential suppliers
3. Shortlist based on evaluation criteria
4. RFQ
5. Select

Question 9

Compensatory vs Non Compensatory

Answer 9

Compensatory: Good performance for one criteria can compensate for a poor performance on another

Question 10

Purchase Situation

Answer 10

1. Product type
2. Buy class (New buy, modified rebuy, straight rebuy)
   Novelty
   Complexity
   Importance
   Uncertainty
   Time pressure