CPPB - Domain 1 Procurement Administration (with Complete Solutions)

Good performance measures need to be meaningful for all participants including: correct answers Procurement professionals, clients and suppliers Good performance measures need to be stated in terms of the higher-level objectives of the central procurement office or else they will lose: correct answers their impact Good performance measures need to be: correct answers fair, easy to collect, consistent and objective Performance measure activities must be measured against a metric. Metrics include: correct answers Inputs, outputs, outcomes, efficiency measures and effectiveness measures Inputs: correct answers Measure resources used. They include labor, materials, equipment and supplies. Demand for services may also be considered Outputs: correct answers Record activity or effort that can be expressed in a quantitative or qualitative manner. Consider: total number of new contracts, total number of employees who obtained professional certification, total spend. Cycletime correct answers Time to produce a PO, Inventory turnover Customer Satisfaction correct answers Number of Disputes subtract Number of change orders Outcomes correct answers Assess results of an activity and show whether expected results were achieved (customer service, improved performance of supplier, employee retention) Efficiency Measures correct answers Represent the ratio of inputs to outputs or outcomes Effectiveness Measures correct answers Reflect how long it takes to process a request for procurement (purchase orders, bids, etc.) The following are examples of methods that may be used to measure procurement performance: correct answers Performance reviews, regular staff meetings, benchmarking, performance indicators, performance targets and quality management tools Seven rights of procurement are: correct answers Right materials, right quantity, right time, right place, right source, right service and right price Common performance indicators: correct answers Cost reduction, supplier/industry development, supplier performance, efficiency of internal procurement systems and customer satisfaction