CPPB Prep Domain I Procurement Administration Exam Questions With Correct Answers

Inputs - Answer Measures resources used. They include labor, materials, equipment, and supplies. Demand for services may also be considered an input metric. Outputs - Answer Record activity or effort that can be expressed in a quantitative or qualitative manner. Outcomes - Answer Asses results of an activity and show whether expected results were achieved. Must be benchmarked against other departments and outside organizations. A benchmark is simply a point of reference that can be used as a standard to compare effectiveness and efficiency measurements. Efficiency measures - Answer Represent the ratio of inputs to outputs or outcomes. When outputs are increased and inputs are decreased, more efficiency is generated. Effectiveness measures - Answer Reflect how long it takes to process a request for procurement or the turnaround time to receive a commodity or service. Essentially measures quality and affects customer satisfaction. It should be tied back to the key objective. 7 Rights of Procurement - Answer Right materials, right quantity, right time, right place, right source, right service, right place Automated Procurement Systems - Answer In-house computerized systems and processes used to perform tasks, store information, and facilitate transactions between procurement and client organizations. ERP Systems - Answer Enterprise Resource Planning Systems are business process software systems that manage multiple management systems such as finance, accounting, human resources, procurement, inventory control, and other activities. Cooperative Procurement - Answer 1. Action taken when two or more entities combine their requirements to obtain advantages of volume purchases including administrative savings and other benefits. 2. A variety of arrangements whereby two or more public procurement units purchase from the same suppliers using a single IFB or RFP. 3. May result in contracts upon which other entities may "piggyback". Piggybacking - Answer A form of intergovernmental cooperative contracting in which an entity will be extended the pricing and terms of a contract entered into by a larger entity. The authority to engage in cooperative procurement is determined by the laws of a jurisdiction. Value Analysis - Answer An organized effort directed at analyzing the function of a product or service including specifications, standards, practices, and procedures with the intent to satisfy the required function at the lowest possible cost without impacting functional need and suitability. Value Engineering (VE) - Answer A technique by when contractors may (1) voluntarily suggest methods for performing more economically and may share in an resulting savings or (2) be required to establish a program or identify and submit methods for performing more economically. Usually applied to construction projects. May be a part of a Request for Proposal or action taken by the contractor after the award. Total Cost of Ownership (TCO) - Answer A measure of all the cost components associated with the procurement of a product or service. The sum of all fixed and variable costs attributed to a product or service. A philosophy for understanding all supply chain related costs of doing business with a particular supplier for a particular good or service. Life Cycle Costing - Answer The total cost of ownership over the life span of the asset: a procurement technique that takes into account operating, maintenance, the time value of money, disposal, and other associated costs of ownership as well as the residual value of the item. Cost Reduction - Answer Generally realized when a manufacturer is able to lower its material or labor costs used to make its products; interchangeably used to indicate a lower price paid by the buyer from what was previously paid.