Purchasing Principles Flashcards
7 cards from real APP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Purchasing Principles flashcards as text
Which purchasing strategy involves maintaining multiple approved suppliers for a single commodity to reduce supply risk?
Answer: Dual or multiple sourcing
Multiple sourcing spreads risk across several suppliers, ensuring continuity if one supplier fails.
What is the primary purpose of a Request for Quotation (RFQ)?
Answer: To obtain competitive pricing for well-defined goods or services
An RFQ is used when specifications are clearly defined and the buyer wants competitive price bids.
Under the Uniform Commercial Code (UCC), what is the statute of limitations for breach of contract for the sale of goods?
Answer: 4 years
The UCC sets a 4-year statute of limitations for breach of contract claims involving the sale of goods.
Which cost analysis technique separates a supplier's price into its component parts (labor, material, overhead, profit)?
Answer: Should-cost analysis
Should-cost analysis breaks down what a product or service ought to cost based on its constituent elements.
A buyer receives goods that appear damaged upon delivery. What should the buyer do FIRST?
Answer: Note the exception on the delivery receipt before signing
Noting exceptions on the delivery receipt preserves the buyer's rights and documents the damage at point of receipt.
What does 'just-in-time' (JIT) purchasing primarily aim to reduce?
Answer: Inventory carrying costs
JIT purchasing schedules deliveries to arrive exactly when needed, minimizing inventory holding costs.
Which of the following best describes 'price analysis'?
Answer: Comparing offered prices to benchmarks without cost breakdown
Price analysis evaluates the reasonableness of a price by comparing it to market rates, historical prices, or catalog prices without examining cost details.