CIPS L4M2 LO1.0 Business Needs – Questions &
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Terms in this set (69)
What are the three types of -Straight re-buy
purchases? -Modified re-buy
-New purchase
When would a procurement specialist For routine items of low value and low risk which the
use a straight re-buy? org. has previously bought and for which there is an
existing and agreed specification
What are some examples of a -MRO items (maintenance, repair, and operational)
purchase made by a straight re-buy? -Utilities
-Raw materials
How does a modified re-buy differ A modified re-buy is when a procurement specialist
from a straight re-buy? re-orders the same goods/services but at different
terms, prices, suppliers, or specifications
What items are commonly sourced -Components for production
through modified re-buy? -Consulting services that an org. has used before but
with a new brief
-Software bought based on number of users
New purchases follow from -When a new product is added using materials not
completely new requirements such as sourced before
what? -When there are changes in laws that requires new
services to be offered
-When technology changes so new equipment is
needed
, What is the difference between -Closed problems appear when something goes
closed problems and open-ended wrong. To solve closed problems, buyers must find
problems? ways to correct the situation. (Commodity prices fall,
employee under-performs, invoices contain errors
etc.)
-Open-ended problems exist where something
prevents the achievement of an objective. To solve
open-ended problems, buyers must unblock the
blockages. (Competition needs to improve to
prevent monopolies, senior management approval is
needed to get additional budget, a cost-reduction
objective is required etc.
What are the eight steps in solving -Step 1: What is going on?
problems? -Step 2: What do we know?
-Step 3: What are the underlying issues?
-Step 4: What could we do?
-Step 5: What is the best thing to do?
-Step 6: How do we go about it?
-Step 7: Have we achieved our objectives?
-Step 8: Can we improve on what we have?
What does Step 1 involve? Buyers must think about what the problem is.
What does Step 2 involve? Buyers must gather data through interviews,
questionnaires, observations, and documents &
records.
What does Step 3 involve? Buyers must analyse the data and draw conclusions
which define the problem.
Answers | Study Guide
Save
Terms in this set (69)
What are the three types of -Straight re-buy
purchases? -Modified re-buy
-New purchase
When would a procurement specialist For routine items of low value and low risk which the
use a straight re-buy? org. has previously bought and for which there is an
existing and agreed specification
What are some examples of a -MRO items (maintenance, repair, and operational)
purchase made by a straight re-buy? -Utilities
-Raw materials
How does a modified re-buy differ A modified re-buy is when a procurement specialist
from a straight re-buy? re-orders the same goods/services but at different
terms, prices, suppliers, or specifications
What items are commonly sourced -Components for production
through modified re-buy? -Consulting services that an org. has used before but
with a new brief
-Software bought based on number of users
New purchases follow from -When a new product is added using materials not
completely new requirements such as sourced before
what? -When there are changes in laws that requires new
services to be offered
-When technology changes so new equipment is
needed
, What is the difference between -Closed problems appear when something goes
closed problems and open-ended wrong. To solve closed problems, buyers must find
problems? ways to correct the situation. (Commodity prices fall,
employee under-performs, invoices contain errors
etc.)
-Open-ended problems exist where something
prevents the achievement of an objective. To solve
open-ended problems, buyers must unblock the
blockages. (Competition needs to improve to
prevent monopolies, senior management approval is
needed to get additional budget, a cost-reduction
objective is required etc.
What are the eight steps in solving -Step 1: What is going on?
problems? -Step 2: What do we know?
-Step 3: What are the underlying issues?
-Step 4: What could we do?
-Step 5: What is the best thing to do?
-Step 6: How do we go about it?
-Step 7: Have we achieved our objectives?
-Step 8: Can we improve on what we have?
What does Step 1 involve? Buyers must think about what the problem is.
What does Step 2 involve? Buyers must gather data through interviews,
questionnaires, observations, and documents &
records.
What does Step 3 involve? Buyers must analyse the data and draw conclusions
which define the problem.
