Procurement Chapter 1 & 2

What is procurement?

• The process of selling products or services to customers.

• The process of acquiring goods and services needed by an organization.

• The process of marketing and advertising a company's products.

• The process of managing human resources within an organization.

Which of the following is true regarding procurement and purchasing?

• Procurement is solely responsible for making one-time purchases, while purchasing manages long-term supplier relationships.

• Procurement is a cost center, while purchasing is a revenue center.

• Procurement focuses on administrative tasks, while purchasing focuses on supply chain optimization.

• Procurement and purchasing are synonymous terms and can be used interchangeably.

According to the Iceberg Model, which aspect of the procurement process is represented by what is visible above the water?

• Supplier selection and negotiation.

• Order placement and transaction processing.

• Cost savings and price negotiation.

• Strategic sourcing and supplier relationships.

Organize these options into the right categories

Groups:

(a) Transactional

,

(b) Strategic

• Analyzing market trends and identifying potential cost-saving opportunities.

• Reviewing and approving purchase orders for standard items.

• Identifying preferred suppliers for critical product categories.

• Placing routine orders for office supplies.

• Negotiating a long-term contract with a key supplier

• Managing day-to-day supplier inquiries and issues.

• Developing a supplier performance scorecard

• Conducting a supplier audit to assess compliance and quality.

In the Procure-to-Pay (P2P) process, which of the following are key components?

• Vendor selection

• Order fulfillment

• Strategic sourcing

• Supplier evaluation

What is the first step in the Procure-to-Pay process?

• Vendor selection

• Requisition

• Invoice processing

• Supplier evaluation

Which phase of the Procure-to-Pay process involves inspecting received goods and services for quality and quantity?

• Vendor selection

• Requisition

• Invoice processing

• Goods receipt

Match the following

• Payment Processing

• This step involves inspecting received goods and services to ensure they meet quality and quantity requirements.

• Goods Receipt

• In this step, the request for goods or services is initiated and approved by relevant personnel.

• Purchase Order (PO) Creation

• A formal document is generated during this step to specify the items, quantities, and agreed-upon prices.

• Invoice Verification

• This is the final step in the P2P process, where the organization makes payments to the supplier.

• Requisition

• During this step, the organization's financial department verifies the accuracy of supplier invoices.

Match the following

• Purchase Requisition

• To formally request suppliers to submit competitive bids for a specific project.

• Invitation for Bids

• To request price quotations for a specific purchase.

• Request for Information

• To solicit information from potential suppliers without commitment to purchase.

• Request for Proposal

• To initiate the purchase of goods or services internally.

• Request for Quotation

• To request detailed proposals from suppliers to evaluate and select the best solution.

In the procurement process, who typically holds the primary responsibility for resolving discrepancies in price amounts between invoices and purchase orders (POs)?

• The Accounts Payable department

• The Procurement or Purchasing department

• The Finance department

• The Supplier or Vendor