Which of the following problems may be identified as closed problems? Select TWO that apply:

Which of the following problems may be identified as closed problems? Select TWO that apply:
A . A cyber attack takes down whole company’s IT system
B. Shortage of key medicines in healthcare industry
C. There are not enough data for procurement analytics
D. Logistics costs incur a large portion in wholesale prices
E. The suppliers don’t comply with the company’s policy on underage labour.

View Answer

Answer: A,B

Explanation:

Closed problem is something happens that should not have happened. To solve this type of prob-lem, procurement professional should find a way to correct the situation or try to adapt to it. On the other hand, open ended problem is a obstacle to your short-term objective. You will need to overcome this obstacle.

Shortage of key medicines is a situation in which procurement must find a substitution or try to save the current stock.

In case of cyber attack, procurement should find a way to recover the IT system as soon as possible.

Otherwise, ‘There are not enough data for procurement analytics’ is an open-ended problem be-cause it prevents company to conduct procurement analytics (an objective). ‘Logistics costs incur a large portion in wholesale prices’: In this situation, logistics costs are hur-dles that prevent companies to reach lower wholesale.

‘The suppliers don’t comply with the company’s policy on underage labour’: In this situation, pro-curement should seek ways to help supplier comply with the company’s labour policy. LO 1, AC 1.1