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 the purpose of a Request for Proposal (RFP)?
Answer: Solicit detailed proposals from vendors for a product or service
An RFP invites vendors to submit proposals detailing how they would fulfill a buyer's requirements, enabling competitive evaluation.
What is strategic sourcing?
Answer: A systematic approach to supply chain management that optimizes value across the supply base
Strategic sourcing analyzes organizational spending and supplier markets to develop a sourcing strategy that maximizes total value.
What is a purchase order (PO)?
Answer: A legally binding document sent to a supplier authorizing a purchase
A purchase order is a commercial document issued by a buyer to a seller specifying goods, quantities, prices, and delivery terms.
What is supplier diversification?
Answer: Using multiple suppliers to reduce dependency and supply risk
Supplier diversification spreads purchases across multiple vendors to avoid over-reliance on a single source and reduce disruption risk.
What does TCO stand for in procurement?
Answer: Total Cost of Ownership
Total Cost of Ownership encompasses all costs associated with acquiring, operating, and disposing of a product or service over its lifetime.
What is the three-way match process in accounts payable?
Answer: Matching a purchase order, receiving report, and supplier invoice before payment
Three-way matching compares the PO, goods receipt, and invoice to ensure they agree before authorizing supplier payment.