Category Management - Managing and Analysing Costs

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What are direct costs?

• Expenses for running a business

• Costs from shared suppliers

• Expenses for producing a product or service

What is the purpose of using an expenditure tree?

• To categorise direct costs

• To analyse shared suppliers' costs

• To manage indirect costs effectively

In category management, the Pareto Principle suggests that:

• 20% of suppliers account for 20% of spend.

• 80% of suppliers account for 80% of spend.

• 20% of suppliers account for 80% of spend.

What is the purpose of Pareto analysis in category management?

• To identify all suppliers for evaluation.

• To maximise transactions.

• To prioritise cost reduction or value maximisation.

What is the purpose of the Kraljic matrix?

• To analyse customer preferences

• To maximise purchasing power through portfolio analysis

• To evaluate financial risk in procurement

What does the Kraljic matrix help procurement professionals determine?

• Market demand for products

• Pricing strategies for suppliers

• Supplier partnership strategies

When choosing a purchasing cost analysis technique, which two areas must you understand?

• Buying company's strength and supply market strength

• Profit impact and supply risk

• The nature of purchase and type of supplier relationship

What does SWOT analysis identify?

• Strengths, weaknesses, opportunities, and technology

• Strengths, weaknesses, opportunities, and threats

• Sales, weaknesses, objectives, and threats

What does the STEEPLED analysis provide an overview of?

• Internal factors affecting the organisation

• External factors influencing category management

• Economic trends and market opportunities