CPPB EXAM – DOMAIN VI – STRATEGIC
PROCUREMENT PLANNING EXAM
SWOT analysis is a planning method that evaluates an organization's strengths,
weaknesses, opportunities, and threats.
Pareto Principle - Answer 80% of purchasing costs are generated by 20% of
purchase orders executed.
Spend analysis is the process of gathering, cleansing, classifying, and analyzing
spending data to lower procurement costs, increase efficiency, and monitor
compliance.
procurement profile - ANSWER result created from executing a range of
different analyses on:
- An organization's procurement expenditures
- the variety of commodities and services obtained through procurement (spend
analysis),
-Markets that offer them (market analysis)
-influence of suppliers/entities in the market
-risks inherent in markets
Buying strategy: ANSWER based on demand, market, and supplier evaluate
ons.
should be created for each major category of material intended for purchasing.
,Market research – ANSWER current information to determine the most
effective approach for obtaining, distributing, and sustaining goods and
services.
journals
indexes
Supplier shows
Industry forums,
websites
Conversations with colleagues
forecasting - a tool for determining future needs.
Continuous assessment to explore opportunities is a vital feature of strategic
planning.
Buyers must stay up to date on market trends and surveys, as well as grasp
numerous indicators, business cycles, indices, lead times, and price histories.
affects the timing of spot bids.
The Purchasing Manager's Index (PMI) is an indicator that indicates highs and
lows in the economy.
, Fixed Period Average - ANSWER mathematical calculation used to divide total
usage over a fixed period (usually 12 months), using the most recent fiscal
calendar, by the number of months involved.
The resulting average is forecasted for a comparable future period.
ignores current trends, reflecting ancient patterns rather than the current
direction.
Moving Average approach - ANSWER Continuous average approach for
gathering the most recent usage data.
Always utilizes the most recent data - a 12-month period is the average monthly
usage for the previous 12 months; as the year continues, the forecast is updated
by removing the oldest month and adding the most recent month.
Weighted Moving Average Method - ANSWER emphasizes weighting certain
information, such as seasonal changes.
Mean Absolute Deviation (MAD) is a measure of the total forecast error.
MAD equals the absolute value of errors divided by the number of errors. The
smaller/lower the value of MAD, the more precise the prognosis.
SD - ANSWER Standard deviation
Forecast figures include: - ANSWER, new orders
production
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