CPIM Practice Exam

What encompasses the functions of procurement planning, purchasing, inventory control, and receiving?

1. Logistics

2. Operations Management

3. Procurement

4. Supply Chain Management

The correct answer is: Procurement

The correct answer is procurement because it specifically focuses on the processes involved in acquiring goods and services for an organization. This includes procurement planning, where organizations strategize on what to purchase and in what quantities; purchasing, which involves executing the actual transactions to acquire goods; inventory control, which manages stock levels to ensure sufficient supply without tying up excess capital; and receiving, which encompasses the processes involved in accepting and inspecting the delivered products. In contrast, logistics generally pertains to the movement and storage of goods throughout the supply chain, operations management is broader and encompasses the overall management of production and operations, and supply chain management includes a wider range of activities that cover the entire flow of materials from suppliers to customers, not exclusively focused on the procurement processes. Thus, procurement is the most fitting choice, as it directly pertains to the functions listed in the question.