Procurement and Sourcing Flashcards
6 cards from real Supply Chain and Logistics practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Procurement and Sourcing flashcards as text
What is a blanket purchase order?
Answer: A long-term agreement to purchase items at fixed prices over a defined period
A blanket PO establishes pricing and terms for recurring purchases over a period, reducing the need to issue individual orders.
What is spend analysis in procurement?
Answer: Examining and categorizing all organizational expenditures to identify savings opportunities
Spend analysis aggregates, cleanses, and categorizes purchasing data to identify cost-saving opportunities, consolidation potential, and compliance issues.
Which sourcing strategy involves working closely with a small number of preferred suppliers?
Answer: Preferred supplier program
A preferred supplier program qualifies a limited set of vendors and concentrates volume with them in exchange for better pricing and service.
What is a reverse auction in procurement?
Answer: Suppliers compete by submitting progressively lower bids for a buyer's contract
In a reverse auction, multiple suppliers bid against each other in real time, driving down the price a buyer pays for goods or services.
What does 'maverick spending' mean in procurement?
Answer: Unauthorized purchases made outside approved procurement processes
Maverick spending occurs when employees bypass procurement policies and approved suppliers, reducing negotiating leverage and compliance.
What is supplier segmentation?
Answer: Classifying suppliers based on strategic importance and risk to prioritize management effort
Supplier segmentation categorizes vendors into tiers (strategic, preferred, transactional) to allocate appropriate relationship and management resources.