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Question 299 - CSCP discussion

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For an item with high profit impact and low supply risk, what would be a likely procurement strategy to support the overall supply strategy?

A.
Ensure supply, even at a premium cost.
Answers
A.
Ensure supply, even at a premium cost.
B.
Vertically integrate the supply chain.
Answers
B.
Vertically integrate the supply chain.
C.
Exploit purchasing power and minimize cost.
Answers
C.
Exploit purchasing power and minimize cost.
D.
Form a strategic sourcing group.
Answers
D.
Form a strategic sourcing group.
Suggested answer: C

Explanation:

For items with high profit impact and low supply risk, the recommended procurement strategy is to exploit purchasing power and minimize cost. This approach involves negotiating favorable terms with suppliers, leveraging volume discounts, and seeking cost reductions to maximize profitability. Since the supply risk is low, the focus can be on optimizing costs without significant concern for supply disruptions. Options A, B, and D are appropriate for different supply risk and profit impact scenarios but do not align with the characteristics described.

Kraljic, P. (1983). Purchasing Must Become Supply Management. Harvard Business Review.

https://www.cips.org/knowledge/procurement-topics-and-skills/strategy-policy/models/kraljic-matrix/

asked 16/09/2024
Samy Mameri
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