Certified Professional Public Buyer (CPPB) Practice Test

What defines quadrant II in the supply positioning matrix?

1. Goods with high risk and high expenditure

2. Services that require extensive negotiation

3. Goods with low risk and high expenditure

4. Low demand items with minimal budget impact

The correct answer is: Goods with low risk and high expenditure

Quadrant II of the supply positioning matrix is defined by goods that have a combination of low risk and high expenditure. In this context, "low risk" indicates that these goods are not subject to significant supply chain uncertainties or disruptions, making them relatively stable in terms of availability and reliability. The "high expenditure" aspect means that these goods typically represent a significant portion of an organization’s spending. This quadrant is significant because it encourages organizations to adopt effective sourcing strategies that drive value and efficiency. Since these goods are expensive but not particularly risky, organizations can focus on leveraging their purchasing power to negotiate favorable terms, seek out value-added services, or streamline processes without fearing a high potential for disruption. The other options do not accurately characterize quadrant II. For example, high risk or negotiation-intensive items would typically fall into different quadrants where the strategic focus is more on risk mitigation or relationship management. Thus, understanding what defines the quadrants helps organizations categorize their procurement strategies effectively.