Certified Professional Public Buyer (CPPB) Practice Test

Which quadrant of the supply positioning matrix indicates a strategy requiring careful management due to high risk?

1. Quadrant I

2. Quadrant II

3. Quadrant III

4. Quadrant IV

The correct answer is: Quadrant III

The choice indicating Quadrant III highlights the importance of managing strategic items that have both high supply risk and high value. In procurement, these items often require close monitoring and careful management strategies due to their critical nature and the potential issues associated with their supply chain. Organizations must develop strong relationships with suppliers, ensure consistent quality, and mitigate risks such as supplier failure or market volatility that could impact supply. This quadrant typically represents commodities or services that are vital to the organization's operations but are difficult to source reliably. Thus, the focus in Quadrant III should be on risk management techniques, strategic supplier development, and contingency planning to address any disruptions that could occur. Understanding this quadrant helps buyers to prioritize their resources and efforts in effectively managing these critical items, thus ensuring smooth operations and supply chain resilience.