CPP Cost Management & Budgeting Flashcards
6 cards from real CPP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CPP Cost Management & Budgeting flashcards as text
What is 'SKU rationalization' in packaging cost management?
Answer: Reducing the number of packaging variants to eliminate complexity and lower costs
SKU rationalization involves eliminating low-value or redundant packaging stock keeping units to reduce complexity, lower inventory costs, and improve supply chain efficiency.
What is the purpose of a 'spend analysis' in packaging procurement?
Answer: To categorize and analyze all packaging expenditures to identify savings opportunities
A spend analysis systematically categorizes all packaging expenditures by supplier, category, and geography to identify consolidation opportunities, redundancies, and cost reduction levers.
What does 'make vs. buy' analysis determine in a packaging context?
Answer: Whether to manufacture packaging in-house or purchase it from external suppliers
Make vs. buy analysis compares the total cost and strategic implications of producing packaging internally versus purchasing it from outside suppliers.
What is 'demand forecasting' and why is it important for packaging cost control?
Answer: Estimating future packaging volume requirements to optimize order quantities and reduce costs
Demand forecasting estimates future packaging volume needs, enabling optimal order quantities that balance inventory holding costs against purchase price discounts.
What is an 'economic order quantity' (EOQ) in packaging inventory management?
Answer: The optimal order size that minimizes total inventory holding and ordering costs
EOQ is a formula-derived order quantity that minimizes the sum of inventory holding costs and ordering/setup costs for a packaging component.
What is 'should-cost modeling' in packaging procurement?
Answer: An analytical approach to estimate what a packaging component should cost based on its materials, labor, and overhead
Should-cost modeling breaks down a packaging component into its cost drivers (materials, labor, overhead, profit) to estimate a fair target cost and inform supplier negotiations.