CPPB Domain II - Procurement Planning & Analysis Questions and Answers 2024/2025

Strategic Procurement Planning (SP2)  Transformation of the entity's missions, goals, and objectives into measureable activities to be used to plan, budget, and manage the procurement function within the entity. SWOT  In any planning situation, procurement professionals should be prepared to analyze the various factors an entity could potentially face (strengths, weaknesses, opportunities, threats) The Pareto Principle  20% of people yield 80% of production, while 80% of people yield only 20% of the production (80% of procurement cost is from 20% of purchase orders issued) a small amount of people produce most of the work and a large amount of people produce the least amount of work. Performance Metrics: Inputs  Measures resources used: labor, materials, equipment, and supplies. Demand for goods and services may also be considered. Performance Metrics: Outputs  Records activity that can be measured (e.g. total spend, total number of new contracts, total number of employees who obtained certification). Performance Metrics: Outcomes 2 0 2 4 /2025 | © copyright | This work may not be copied for profit gain Excel! 1 | P a g e | G r a d e A + | 2 0 24 / 2 0 2 5  Assess results of an activity and show whether expected results were achieved (client service levels, improved performance of suppliers, employee retention). Performance Metrics: Efficiency  Measures ratio of inputs to outputs/outcomes. When outcomes are increased and inputs are decreased, more efficiency is generated. Less administrative time on PO, etc. Performance Metrics: Effectiveness  Measures the quality and effects of the outcomes. How long it takes to process a request or turnaround time to receive goods or services. Common Procurement Delivery Outcomes  Right source, services, place, price, materials, quantity, time (SS/PP/MQT) Benchmarking  Measuring a process, service, or good against the characteristics of the recognized leaders in the given area of review. (Procurement identifies world class entities with which to compare its practices, policies, and performance outcomes). Procurement Profile  Adds decision making intelligence to a spend analysis through Spend Analysis (range of goods and services available), Market Analysis (the markets that provide them), Supply Positioning (risks in the market that could affect the entity's operations). Supply Positioning  Analyzing the complexity of the supply marketplace and its impact on entity service delivery. Two major forces impacting government procurement 2 0 2 4 /2025 | © copyright | This work may not be copied for profit gain Excel! 1 | P a g e | G r a d e A + | 2 0 24 / 2 0 2 5  1) difficulty of securing a supply of goods and services 2) the amount expended for each good and service consumed by the entity. Buying Plan - Includes 4 major parts  Demand Analysis, Market Analysis, Supplier Analysis, Value Analysis. Demand Analysis  Used to estimate annual requirements based on previous year plus anticipated use for upcoming year. Uses ABC system based on Pareto principle and categorizes goods into classifications