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CIPS Exam L4M7 Topic 10 Question 44 Discussion
Topic #: 10
Which of the following purchases are most likely to have low acquisition costs? Select TWO that apply.
According to L4M7 study guide, acquisition costs in procurement are the costs associated with the activities involved in a purchase. A buying organisation incurs acquisition costs in low-value purchases as well as high-value purchases. The following purchases tend to have lower acquisition costs:
- Straight re-buy from a current supplier
- Purchase of standard catalogued products
Otherwise, any purchases of high value, high-risk items generally require greater attention of buying organisation and thus, they are likely to have higher acquisition costs. Spot purchase of a technically complexed machinery, Purchase of ERP system and Procurement of construction projects are examples of high-value, high-risk purchases.
LO 3, AC 3.1
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