Certified Professional Public Buyer (CPPB) Practice Test

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Quadrant IV of the supply positioning matrix includes which of the following?

Low degree of risk and low expenditure
High degree of risk and low expenditure
High degree of risk and high expenditure
Low degree of risk and high expenditure

The correct answer is: High degree of risk and high expenditure

Quadrant IV of the supply positioning matrix is characterized by a high degree of risk and high expenditure. This quadrant represents items or services that are critical to the operations of an organization but also come with significant financial implications. Typically, these are products or services that are not easily substituted and can have a major impact on strategic objectives and performance. In this quadrant, organizations should take a proactive and strategic approach to manage these high-risk, high-investment purchases. Effective risk management practices, such as thorough market research and strong supplier relationships, are crucial to mitigate potential problems associated with supply disruptions or price volatility. Recognizing the significance of this quadrant allows organizations to allocate appropriate resources and attention, fostering more informed decision-making, negotiation strategies, and long-term planning. By prioritizing these high-stakes items, an organization can enhance its overall procurement and supply chain effectiveness.