Procurement Basics

What is the primary goal of procurement?

• To hire new employees

• To sell products directly to consumers

• To acquire goods and services needed by a business

• To invest in stocks and bonds

What is an example of direct procurement?

• Employee training programs

• Computer chips for a product

• Stationary

• Office rental

What is indirect procurement?

• Investing in marketing and sales efforts

• Directly buying products for consumer sale

• Acquiring services and goods not for resale

• Purchasing raw materials for production

What is the first step in the traditional procurement process?

• Contract negotiation

• Paying the supplier

• Identifying the need

• Placing the order

What does 'agile procurement' emphasize?

• Focusing solely on cost reduction

• Avoiding technological advancements

• Working with multiple suppliers simultaneously

• A sequential process

What is a characteristic of the agile procurement method?

• Strict adherence to a sequential process

• Conducting proof of concepts with multiple suppliers

• Negotiating contracts with one supplier at a time

• Focusing on a single strategy at all times

Which strategy focuses on getting the best cost from suppliers?

• Risk management

• Quality improvement

• Cost reduction

• Supply relationship management

What is a key aspect of supply relationship management?

• Ignoring quality for lower prices

• Focusing only on immediate costs

• Treating key suppliers as partners

• Avoiding long-term contracts

What does risk management in procurement focus on?

• Increasing the speed of delivery

• Reducing the number of suppliers

• Mitigating risks within the supply chain

• Expanding the supplier base

Why is quality improvement important in procurement?

• To simplify the procurement process

• To ensure products meet certain standards

• To guarantee the fastest delivery times

• To ensure the lowest possible cost