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Anne is confident in the business plan she prepared for an upcoming meeting with her procurement director. The plan includes a budget based on last year’s usage and projected increases from the sales department. What type of budget has Anne developed?
A company needs to justify purchasing a costly piece of equipment, which will be used for at least five years. The equipment is projected to bring in $20,000 annually. The production manager supports the purchase because the payback period aligns with the equipment’s lifespan. Is this justification valid?
If an item is of low financial value and represents minimal risk to the organization, it is categorized as a:
A company produces a product with 50 necessary materials. It aims to reduce costs by eliminating unnecessary materials, bringing the total to 30. What process does this describe?
In a competitive market, the volume purchased by the buyer or industry is crucial to the supplier. Is this statement TRUE or FALSE?
Which event is likely to increase the number of suppliers in a particular market?
Is ISO 14000 a series of environmental standards?
Which two of the following are considered direct costs?
A sports company needs custom racing equipment that must meet precise technical specifications. Which specification type is best for this requirement?
Company Z, which manufactures steel components for the telecommunications industry, is preparing to launch a new product in a year. With sufficient stock for the next three months and a two-month lead time for new orders, what action should Company Z take to maintain supply continuity?
Which of the following strengthens the buyer's negotiating position?
The buyer can produce the product in-house Few suppliers are available to the buyer The buyer faces high switching costs The buyer’s purchases account for a large portion of the supplier’s revenue
How can procurement support finance in creating an accurate project budget forecast?
An engineering company needs to create a conformance specification for steel tubes used in its lifting equipment, which have been supplied by the same vendor for three years. What specifications should be included to ensure a successful tender process? Select TWO.
Jerry, a junior procurement analyst, is analyzing cost breakdowns for key products. He identifies the following relationships. Which of the statements are correct?
Direct product costs are typically variable costs for the organization Indirect product costs are generally fixed costs for the organization Direct costs are also known as overheads Indirect costs are marginal costs for the organization
Which of the following is a secondary source of market data?
Which of the following can be classified as direct costs?
Martha, a new procurement manager at Spann Farm Foods (SFF), instructed her team to create a standard specification template for stakeholders. What benefit does this provide?
Gaskin Gaskets (GG) is seeking new suppliers for parts but has no technical drawings or knowledgeable engineers to write specifications. What should GG do to obtain accurate pricing for the parts?
What is "opportunity cost" when making a business case?
James intends to use a performance-based specification for purchasing a new HR staffing scheduling system. Is this the right decision?
Harpal, the head of procurement, is compiling indirect costs for producing a textbook. Which of the following are considered indirect costs? Select TWO
As lead procurement manager, you are preparing a business case for a large project. What should you include in the business case?
Costs and risks List of potential suppliers Business benefits Informal recommendations
A company is building a two-storey office block and needs desks and chairs. Given limited space, which specifications should be included?
What is the primary benefit of using standards in a specification?
A plastics company needs to specify the exact chemical composition for a new product. Which specification type should they use?
Which of the following are cash outflows in the cash budget?
Overdraft fees Staff salaries Customer payments VAT or sales tax
Which of the following best defines budgetary control?
Estimating likely costs Comparing estimated costs with actual costs Securing fixed prices within the budget Ensuring the full budget is spent
A procurement department requests a pricing structure that allows the supplier to cover costs plus $10,000 profit. What is this called?
Which of the following is an example of a performance specification?
A buyer has a stronger negotiating position when the market has...
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