CPPB - Domain 1 Procurement Administration Test Questions and Answers

Good performance measures need to be meaningful for all participants including: 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: their impact Good performance measures need to be: fair, easy to collect, consistent and objective Performance measure activities must be measured against a metric. Metrics include: Inputs, outputs, outcomes, efficiency measures and effectiveness measures Inputs: Measure resources used. They include labor, materials, equipment and supplies. Demand for services may also be considered Outputs: 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 Time to produce a PO, Inventory turnover Customer Satisfaction Number of Disputes subtract Number of change orders Outcomes Assess results of an activity and show whether expected results were achieved (customer service, improved performance of supplier, employee retention) Efficiency Measures Represent the ratio of inputs to outputs or outcomes Effectiveness Measures 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: Performance reviews, regular staff meetings, benchmarking, performance indicators, performance targets and quality management tools