CPSM cheat sheet

EOQ = √(2DS/H), where D is annual demand, S is cost per order, and H is annual holding cost per unit.

Reorder point = (average daily demand × lead time in days) + safety stock; safety stock = z × σ of demand during lead time.

Annualized cost of foregoing a cash discount for terms d/D net N = d/(1−d) × 365/(N−D); 2/10 net 30 ≈ 37.2%.

Purchase price variance = (actual price − standard price) × actual quantity purchased; a positive result is unfavorable to the buyer.

Kraljic quadrants: strategic = high profit impact/high supply risk; leverage = high impact/low risk; bottleneck = low impact/high risk; noncritical = low/low.

A ZOPA exists only when the buyer’s reservation price exceeds the seller’s reservation price; BATNA defines each party’s walk-away point.

Firm-fixed-price contracts place cost-overrun risk on the seller; cost-reimbursable contracts place most cost risk on the buyer.

Incoterms: EXW imposes minimum seller obligations; DDP imposes maximum seller obligations; each term specifies the risk-transfer point.

Weighted supplier score = Σ(criterion score × criterion weight); weights should sum to 1.0 or 100%.

Total cost of ownership = acquisition price + transaction costs + logistics + inventory + quality + lifecycle and risk costs.

Make-or-buy analysis compares relevant incremental in-house costs with landed purchase cost plus strategic factors; sunk costs are excluded.

The three-way match compares purchase order, receiving report, and supplier invoice before payment release.

Procure-to-pay cycle: requisition → approval → purchase order → receipt → invoice → payment.

Spend analysis sequence: extract → cleanse → classify → analyze → report; classification often uses a taxonomy such as UNSPSC.

Early supplier involvement in new product development reduces late design changes and shortens time to market when suppliers are selected early.

SRM segmentation typically moves from transactional to preferred to strategic suppliers; governance frequency and collaboration rise with strategic value.

Supply risk score = probability of disruption × impact severity; mitigation includes dual sourcing, buffer stock, and contractual contingency clauses.

S&OP is a monthly cross-functional process that reconciles demand, supply, and financial plans.

Kotter sequence: urgency → guiding coalition → vision → communication → empowerment → short-term wins → consolidation → anchoring in culture.

Lewin change model: unfreeze → change → refreeze.

Tuckman team stages: forming → storming → norming → performing → adjourning.

ADKAR elements: awareness → desire → knowledge → ability → reinforcement.

Transformational leadership dimensions: idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration.

Stakeholder salience = power + legitimacy + urgency; stakeholders with more attributes receive higher priority.

Balanced scorecard perspectives: financial, customer, internal process, and learning and growth.

SMART criteria: specific, measurable, achievable, relevant, and time-bound.

Supply management KPIs include spend under management, cost savings, supplier diversity, cycle time, and compliance rate.