ADVANCED PROCUREMENT
CERTIFICATION QUESTIONS AND
ANSWERS WITH SOLUTIONS 2024
WhatKisKaKsupplyKchainK-
KANSWERKAllKstagesKinvolved,Kdirectly/indirectly,KinKfulfillingKexternalKcustomerKrequests
NetworkKofKmanufacturersKandKserviceKprovidersKthatKworkKtogetherKtoKconvert/moveKgoodsKfromKtheKra
wKmaterialsKstageKthroughKtheKendKcustomer
LinksKtogetherKtheKoperationsKofKmanyKorganizations
MostKareKactuallyKsupplyKnetworks/webs
SetKofK3KorKmoreKorganizationsKlinkedKdirectlyKbyK1KorKmoreKofKupstreamKorKdownstreamKflowsKofKproducts
,Kservices,Kfinances,KandKinformationKfromKaKsourceKtoKaKcustomer
Supplier,Kmanufacturer,Ktransporter,Kwarehouses,Kretailers,Kcustomers
WhatKisKtheKobjectiveKofKaKsupplyKchain?K-KANSWERKMaximizeKoverallKvalueKgenerated
MeasuredKbyKsupplyKchainKprofitability=KrevenueKgeneratedKfromKcustomer-
overallKcostKacrossKsupplyKchain
SupplyKmanagementK-
KANSWERKStrategicKapproachKtoKplanningKfor/acquiringKtheKorganization'sKcurrentKandKfutureKneedsKthrou
ghKeffectivelyKmanagingKtheKsupplyKbase,KutilizingKaKprocessKorientationKinKconjunctionKwithKcrossKfunctio
nalKteamsKtoKachieveKorganizationalKmission
PurchasingK-KANSWERKFunctionalKgroupKandKactivity
AKAKprocurement
ProcurementKmanagerKcanKhelpKincreaseKrevenuesKand/orKdecreaseKcosts
ProfitKleverageKeffectK-
KANSWERKIfKpurchasingKcostsKconstituteKaKmajorKportionKofKtheKtotalKcostKofKaKbusiness,KsavingKinKpurchasi
ngKcostsKhasKgreaterKprofitKpotentialKthanKaKsimilarKincreaseKinKsales
5KrightsKofKpurchasingK-
KANSWERKRightKquality,KinKtheKrightKquantity,KatKtheKrightKtime,KforKtheKrightKprice,KfromKtheKrightKsource
,PurchasingKobjectivesK-KANSWERKSupplyKmarketKresearch
SupplierKidentificationKandKselection
BuyingK(negotiating,Kcontracting)
SupplierKmeasurementKandKimprovement
PurchasingKsystemKdevelopment
StepsKinKprocurementKprocessK-KANSWERK1.KRecognitionKofKneed
2.KTranslationKofKneedKintoKcommerciallyKequivalentKdescription
3.KSearchKforKpotentialKsuppliers
4.KSelectionKofKsuitableKsources
5.KAgreementKonKorders/contractKdetails
6.KDeliverKofKproductsKand/orKservices
7.KPaymentKofKsuppliers
CentralizedKstructureK-
KANSWERKAuthorityKandKresponsibilityKforKmostKsupplyKrelatedKfunctionsKareKassignedKtoKaKcentralKorganiz
ation
HybridKstructureK-
KANSWERKAuthorityKandKresponsibilityKsharedKbetweenKaKcentralKsupplyKorganizationKandKbusinessKunits,K
divisions,KorKoperatingKplants
MayKleanKtowardsKcentralKorKdecentralizedKdependingKonKdivisionKofKdecisionKmakingKauthority
DecentralizedK-
KANSWERKAuthorityKandKresponsibilityKforKsupplyKrelatedKfunctionsKdispersedKthroughoutKtheKorganizatio
n
Purchasing'sKoperationalKandKstrategicKcontributionsK-KANSWERKOperational:KtroubleKprevention
Strategic:KopportunityKmaximization
Direct:KbottomKlineKimpact
,Indirect:KenhancingKperformanceKofKothers
Negative:Koperationally,Kstrategically,KdirectlyKandKindirectlyKdeficient
Neutral:KoperationallyKandKstrategicallyKacceptable,
directlyKandKindirectlyKdeficient
Positive:Koperationally,Kstrategically,KdirectlyKandKindirectlyKacceptable
Resale:K-KANSWERKResellersKcompriseKretailers,Kwholesalers,Kdistributors,Kagents,Kbrokers,KandKtraders
WhatKtheyKcanKresellKcoversKtheKfullKrangeKofKremainingKcategories
RawKandKsemiKprocessedKmaterialsK-KANSWERKMostKusersKareKconvertersK(factories)
IncludesKcommodities,Kagricultural,KandKindustrial
Parts,Kcomponents,KandKpackagingK-
KANSWERKAssemblersKuseKpartsKandKcomponentsKproducedKbyKtheirKsuppliersKtoKcreateKaKfinishedKproduc
t
MayKbeKstandardKorKspecialKdependingKonKdecisionKofKdesigner
MROKandKSVPK-KANSWERKEveryKorganizationKhasKMROKrequirementsKandKSVPs
AvailabilityKofKMROKsuppliersKisKcriticalKtoKmaintainKcontinued,KuninterruptedKoperationKofKtheKoffice,Kfact
ory,Kfacility,Ketc
BecauseKmanyKMROKrequirementsKareKrelativelyKcheap,KSVPsKareKalsoKincludedKinKthisKcategory
ForKSVPs,KassuringKavailabilityKatKminimumKacquisitionKcostKisKaKchallenge
CapitalKAssetsK-
KANSWERKAnyKrequirementKthatKaccountantsKclassifyKasKcapitalKandKthereforeKanKinvestment
Equipment,KIT,KrealKestate,Kconstruction
CanKbeKdepreciated
AreKoftenKboughtKunderKseparateKbudgetaryKallocationKandKmayKrequireKspecialKfinancingKarrangements
ServicesK-KANSWERKIntangibleKandKnonKmanufactured
, EveryKorganizationKrequiredKaKvarietyKofKservices
PerishableK(noKinventories)
Heterogenous:KtheK"serviceKpackage"K(highKlevelsKofKcustomization)
CustomerKparticipationKinKserviceKproductionKprocess
SimultaneousKproductionKandKconsumption
DifficultKtoKmeasureKquality
OtherK-KANSWERKAnythingKnotKcoveredKbyKtheKotherKcategories
EnergyKandKwater
CouldKalsoKincludeKunusual/infrequentKrequirements
ProbablyKbetterKdealtKwithKonKanKadKhocKbasis
EssentialKstepsKinKsupplyKprocessK-KANSWERK1.KRecognitionKofKneed
2.KDescriptionKofKneed
3.KIdentificationKandKanalysisKofKpossibleKsourcesKofKsupply
4.KSupplierKselectionKandKdeterminationKofKterms
5.KPreparationKandKplacementKofKtheKpurchaseKorder
6.KFollowKupKand/orKexpediteKtheKorder
7.KReceiptKandKinspectionKofKgoods
8.KInvoiceKclearingKandKpayment
9.KMaintenanceKofKrecordsKandKrelationships
OpportunityKtoKaffectKvalueKdecreasesKthroughoutKsteps
RecognitionKofKneedK-
KANSWERKAKpersonKorKsystemKidentifiesKaKdefiniteKneedKinKtheKorganizationK(what,KhowKmuch,KwhenKneed
ed)
GreatestKopportunityKtoKaffectKvalueKisKwhenKneedKisKrecognizedKandKdescribedK(productKconceptionKandK
design)
Supply/suppliersKcontributeKmoreKinKtheseKstepsKthanKlaterKinKacquisitionKprocess