ADVANCED PROCUREMENT CERTIFICATION QUESTIONS AND ANSWERS WITH SOLUTIONS 2024

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