Certified Professional Public Buyer (CPPB) Practice Test

What is a key factor in determining supply positioning?

1. Overall market competition

2. Dependency on specific goods and services

3. Government budget allocation

4. Supplier reputation

The correct answer is: Dependency on specific goods and services

A key factor in determining supply positioning is the dependency on specific goods and services. This dependency highlights the criticality of particular items to an organization's operations and its strategic goals. When a business relies heavily on certain goods or services, it must assess the risks associated with their supply. This can include considerations such as the availability of those items, the stability of their sources, and how easily they can be substituted. Understanding this dependency allows organizations to create effective supply chain strategies, ensuring they have robust relationships with suppliers and contingency plans in place for potential supply disruptions. By accurately assessing this factor, organizations can enhance their supply positioning, which ultimately contributes to better operational resilience and efficiency. Other factors, although important in their own right, do not directly contribute to supply positioning as significantly. Market competition relates to how suppliers and buyers interact but does not dictate the specific dependencies an organization has. Government budget allocation influences financial resources, while supplier reputation is a component of risk management, but neither captures the essence of how critical a good or service is to overall operations and strategic objectives.