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Questions and Answers
What is the primary goal of procurement?
What is the primary goal of procurement?
- To maximize profit
- To streamline marketing
- To minimize cost
- To optimize efficiency (correct)
Which factor is most important in supplier selection during procurement?
Which factor is most important in supplier selection during procurement?
- Geographical proximity
- Length of existence in the industry
- Lowest price
- Reputation in the market (correct)
What is the significance of contract management in procurement?
What is the significance of contract management in procurement?
- To reduce the need for specifications
- To avoid communication with suppliers
- To ensure compliance with terms and conditions (correct)
- To promote competition among suppliers
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Study Notes
Procurement Goals and Processes
- The primary goal of procurement is to acquire goods, services, or works from an external source, often via a tendering or competitive bidding process, to achieve the best value for money while minimizing risk and ensuring business objectives are met.
Supplier Selection
- The most important factor in supplier selection during procurement is the evaluation of the supplier's ability to meet the specified requirements, including quality, delivery, price, and sustainability.
Contract Management
- Effective contract management in procurement is crucial to ensure that the agreed-upon terms and conditions are met, risks are mitigated, and the contract delivers the expected value and benefits to the organization.
- Contract management involves managing the contract lifecycle, from procurement planning to contract close-out, to ensure that the contract remains valid, relevant, and beneficial to the organization.
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