Is that concern justified?

A procurement manager consolidates the company expense on printing and office supplies into broader range of spend category. Other senior managers are concerned that it may increase company’s spend.

Is that concern justified?
A . No, because the broader range of spend category can increase the value of the contract and the buyer may get volume discount
B . Yes, because the consolidation may create a large contract that costs more than placing each purchase order
C . No, because the consolidation will help the supplier to shorten deliver time.
D . Yes, because the suppliers can’t provide a broader range of products and they will fail to deliver

View Answer

Answer: A

Explanation:

Printing and office supplies are often considered as low risk, low value items. Consolidation low value, low risk items into a broader range will dramatically increases the value of the contract and leverage of buying organisation in the negotiation.

Reference: CIPS study guide page 8-9

LO 1, AC 1.1