Certified Professional Public Buyer (CPPB) Practice Test

In the supply positioning matrix, quadrant III is characterized by what attributes?

1. High expenditure and high risk

2. Low expenditure and high risk

3. High expenditure and low risk

4. Low expenditure and low risk

The correct answer is: Low expenditure and high risk

In the supply positioning matrix, quadrant III is characterized by low expenditure and high risk. This quadrant typically includes items that, while not significantly impacting the budget, carry potential risks due to factors such as supply scarcity, reliance on a limited number of suppliers, or consequences of supply disruption. The rationale for this categorization is important for procurement professionals who need to mitigate risks associated with these items. While they do not consume a substantial portion of financial resources, their strategic importance cannot be overlooked. This quadrant encourages organizations to focus on developing strong relationships with suppliers, diversifying sources, and implementing risk management strategies to ensure continuity. In contrast, other quadrants involve different attributes, such as high expenditure and high risk, which demand intensive management due to their significant financial impact. Understanding these attributes helps public buyers make informed decisions regarding spend management and risk assessment in their purchasing strategies.