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Strategic Sourcing in Procurement

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Questions and Answers

What is the primary goal of strategic sourcing in procurement?

To increase the price of products and services

To focus solely on low purchase costs

To reduce the number of suppliers

To analyze expenditures and supplier relationships (correct)

Which aspect of costs does strategic sourcing prioritize?

Only the purchase price of a product

Cost savings from using fewer suppliers

Total cost of ownership over just purchase price (correct)

Only the maintenance costs related to products

What misconception about procurement practices did many purchasing managers have in the past?

All suppliers provide similar quality products.

Low purchase cost equates to low total cost. (correct)

Lower purchase costs always lead to higher total costs.

Cost reduction is not achievable through effective procurement.

Which of the following is NOT a factor considered in strategic sourcing?

Employee training costs Signup and view all the answers

What outcome have leading companies experienced by implementing strategic sourcing?

Impressive cost reductions Signup and view all the answers

What does strategic sourcing primarily analyze?

Expenditures and supplier relationships Signup and view all the answers

Which cost aspects are taken into account in strategic sourcing?

Transport, support, and disposal costs Signup and view all the answers

How do companies benefit from adopting strategic sourcing?

By reducing costs and improving processes Signup and view all the answers

What misconception about purchasing was common among managers in the past?

Low purchase costs equate to low total costs Signup and view all the answers

What is one of the goals when companies engage in strategic sourcing?

Aligning supplier relationships with company goals Signup and view all the answers

In strategic sourcing, what is often considered beyond the immediate purchase price?

Total cost of ownership Signup and view all the answers

What systematic approach does strategic sourcing utilize?

Analyzing expenditures and influences Signup and view all the answers

Study Notes

Strategic Sourcing in Procurement

Many companies and governments are seeking ways to operate more efficiently.
Effective procurement methods can reduce costs, improve processes, and increase productivity.
Strategic sourcing has become a popular approach in recent years.
Strategic sourcing is a new approach to purchasing products and services.
Strategic sourcing is a structured process.
This process analyzes expenses, internal and external influences, to identify necessary supplier relationships.
The process considers the complete cost of a product or action, not just the immediate price.
Previous methods focused solely on low purchase prices, often overlooking indirect costs.
Strategic sourcing considers all costs, including purchasing, transportation, support, maintenance, and disposal.
Leading companies have seen significant cost reductions through strategic sourcing.

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Description

Explore the concept of strategic sourcing and its significance in procurement processes. This quiz covers how effective procurement methods can enhance efficiency, reduce costs, and improve overall productivity. Learn about this structured approach that takes into account all costs involved in acquiring goods and services.