CPPB TEST DOMAIN VI QUESTIONS AND ANSWERS GRADED A+

STRATEGIC PROCUREMENT PLANNING - CORRECT ANSWER Provides the processes and tools to modernize public sector efforts around improving service development and delivery system SWOT analysis - CORRECT ANSWER strengths, weaknesses, opportunities, threats PARETO PRINCIPLE - CORRECT ANSWER 80/20 Rule 80% of Purchasing Cost is created by 20% of the purchase orders issued Spend Analysis - CORRECT ANSWER Collecting, classifying, and analyzing the expenditures data from all sources within the organization. PROCUREMENT PROFILE - CORRECT ANSWER Result produced after conducting a series of various analyses on the procurement expenditures of an organization, the range of commodities and services acquired through procurement. Adds decision making intelligence to spend analysis. BUYING PLAN - CORRECT ANSWER Based on demand, market and supplier analysis EVALUATION STRATEGIES - CORRECT ANSWER • Price analysis • Cost analysis • Life Cycle Costing RESEARCH TECHNIQUES - CORRECT ANSWER Procurement professional must use Market Research to better understand The Who, what, when, why and how in the market. MARKET RESEARCH - CORRECT ANSWER Identify the most beneficial method for acquiring, distributing and supporting supplies and services FORECASTING - CORRECT ANSWER Tool to determine future needs. It should be used to determine the type of solicitation, such as a spot bid or term contract, based upon market fluctuations and conditions PURCHASING MANAGER'S INDEX (PMI) - CORRECT ANSWER WELL ESTABLISHED AND RELIABLE INDICATOR THAT IDENTIFIES HIGHS AND LOWS IN THE ECONOMY FIXED PERIOD AVERAGE - CORRECT ANSWER A mathematical calculation used to divide the total usage for a fixed period (generally 12 months). This method will reflect old patterns and not current directions. Moving Average Method - CORRECT ANSWER Continuous average method used to gather the most current usage information about an item, by taking current trends into accountant always using the most recent data. weighted moving average method - CORRECT ANSWER Builds even more accuracy into the system by giving more significance to weighting specific information such as seasonal variations Mean Absolute Deviation (MAD) - CORRECT ANSWER Importance of using deviations in forecasting is the ability to look at anticipated high and low side of any given forecast. Absolute Value of Errors/Number of Errors The smaller/lower the value of MAD, the more accurate the forecast. FORECAST DATA - CORRECT ANSWER Provides knowledge of the economy and serves as basis to predict what will occur in the future. Examination of current and past economic trends and pricing is critical to planning. economic order quantity - CORRECT ANSWER The most efficient ordering quantity for the firm. The EOQ will allow the firm to minimize the total ordering and carrying costs associated with inventory. STABLE MARKET - CORRECT ANSWER off-the-shelf commodities are produced representing a reasonable and competitive marketplace UNSTABLE MARKET - CORRECT ANSWER Short-run fluctuations. Requires certain considerations: