CPSP flashcards
CPSP · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Total Cost of Ownership
- A purchasing decision method that sums acquisition price plus logistics, inspection, inventory carrying, quality failure, and disposal costs over the asset or item lifecycle.
- Economic Order Quantity
- The order size that minimizes total ordering plus holding cost, calculated as the square root of 2DS divided by H, where D is annual demand.
- Reorder Point
- The inventory level triggering a new order; it equals average daily demand multiplied by lead time, plus safety stock held against variability.
- Three-Way Match
- A control that compares purchase order, goods receipt, and supplier invoice for quantity and price agreement before releasing payment to the supplier.
- Spend Under Management
- The portion of total spend that procurement actively influences through contracts, sourcing events, or policy, as distinct from unaddressed tail spend.
- Kraljic Matrix
- A portfolio tool plotting categories by profit impact and supply risk, producing four segments: strategic, leverage, bottleneck, and non-critical.
- Should-Cost Model
- A bottom-up estimate building cost from raw material, conversion, overhead, and supplier margin, used to set negotiation targets independent of quoted prices.
- Reverse Auction
- An online event where prequalified suppliers bid downward against each other on a defined specification, suitable when competition and specification clarity are high.
- Sole Source Versus Single Source
- Sole source means no alternative supplier exists; single source means one supplier is chosen deliberately despite available alternatives, often for volume leverage.
- Weighted Scoring Model
- A supplier evaluation method multiplying criterion weights by normalized scores and summing results, with weights fixed before responses are received.
- Spend Cube
- A three-dimensional analysis of spend by category, business unit or cost center, and supplier, used to find consolidation and compliance opportunities.
- Tail Spend
- The high-transaction, low-value portion of spend, often many suppliers each receiving small amounts, addressed through catalogs or distributor consolidation.
- Demand Management Lever
- Actions that reduce or reshape internal requirements, such as specification standardization, volume consolidation, and contract compliance, often yielding faster savings than price negotiation.
- Category Business Plan
- A document linking category savings targets, supply risk mitigations, sustainability goals, and supplier actions to a timeline with named accountable owners.
- Hard Versus Soft Savings
- Hard savings reduce the budget-visible cost baseline; soft savings are cost avoidance or demand reduction that may not appear in reported financial results.
- BATNA
- The best alternative to a negotiated agreement; it sets the walk-away point because a deal is only preferable to what you can achieve without it.
- Zone of Possible Agreement
- The range between each party's reservation value where a deal is acceptable to both; no ZOPA exists when reservation values do not overlap.
- Integrative Bargaining
- A negotiation approach that expands value by trading on issues the parties value differently, rather than dividing a fixed price concession.
- Incoterms 2020
- Standard trade terms defining who arranges carriage, bears cost, and assumes risk at named points; DDP places most obligations on the seller, EXW on the buyer.
- Evergreen Clause
- An automatic contract renewal provision that extends the term unless a party gives notice within a defined window before expiry.
- Limitation of Liability
- A contract clause capping one party's total financial exposure, often excluding indirect or consequential damages, and sometimes carving out gross negligence.
- On-Time-In-Full
- A supplier delivery metric counting orders received both within the agreed window and at the full ordered quantity, divided by total orders.
- Supplier Scorecard
- A periodic performance report combining quality, delivery, cost, responsiveness, and compliance metrics, shared with the supplier to drive improvement actions.
- Supplier Development
- A structured program of training, coaching, and joint projects that builds a supplier's quality, delivery, or capacity capability rather than replacing the supplier.
- Supplier Code of Conduct
- A document setting minimum labor, ethics, health and safety, and environmental requirements suppliers must meet, verified through audits or self-assessment.
- Time to Recover
- The duration needed to restore supply after a disruption; resilience requires it to be shorter than the time the business can survive without the item.
- N-Tier Visibility
- Mapping suppliers beyond the first tier to expose sub-tier concentration, single sites, and hidden dependencies that create undetected supply interruption risk.
- Force Majeure
- A clause excusing performance when an unforeseeable, unavoidable event prevents it; it does not automatically terminate the contract or excuse payment.
- Scope 3 Emissions
- Indirect value-chain emissions from purchased goods, transport, and product use, usually the largest share of a company footprint and the hardest to measure.
- Conflict Minerals 3TG
- Tin, tantalum, tungsten, and gold, subject to supply chain due diligence and disclosure when sourced from conflict-affected and high-risk areas.
- Spend Taxonomy
- A hierarchical classification scheme for goods and services, such as UNSPSC or an internal category tree, enabling consistent spend analysis and reporting.
- P2P Cycle Time
- The elapsed time from requisition creation to invoice payment, a core procurement process efficiency metric that reveals approval and matching bottlenecks.