{"id":7648,"date":"2020-12-21T00:06:58","date_gmt":"2020-12-21T05:06:58","guid":{"rendered":"https:\/\/www.certitrek.com\/nlpa\/?page_id=7648"},"modified":"2021-05-20T05:30:50","modified_gmt":"2021-05-20T09:30:50","slug":"purchasing-interview-questions","status":"publish","type":"page","link":"https:\/\/www.certitrek.com\/nlpa\/news\/purchasing-articles\/purchasing-interview-questions\/","title":{"rendered":"Purchasing Interview Questions"},"content":{"rendered":"

Top 25 Purchasing\/Procurement Job Interview Questions & Answers<\/h1><\/div>

<\/i><\/i><\/span>How will you go about determining this company\u2019s purchasing patterns?<\/span><\/a><\/h4><\/div>
\n

The basis for determining an organization\u2019s purchasing patterns is conducting a spend analysis<\/a> and building a spend profile. A well-done spend profile will reveal things like the amount of money your organization spends on each category of goods and services it purchases, the amount of money spent with each supplier, changes in spend over time, and other valuable information. Further analyzing that spend can help you determine opportunities for implementing cost savings practices like supplier consolidation, strategic sourcing, and standardization. Spend analysis can be conducted using a variety of tools, from deploying the most cutting-edge source-to-pay software to using PivotTables in Microsoft Excel spreadsheets.<\/p>\n<\/div><\/div><\/div>

<\/i><\/i><\/span>If we buy a customized product from a single source, how will you know if the price is fair?<\/span><\/a><\/h4><\/div>
\n

Price comparison is easy when you are buying a standard product that is offered by multiple suppliers. You have easy access to price data points for comparison. But, when you are purchasing a customized product from a single source, you do not have the luxury of multiple price data points. Therefore, you need to use other techniques. One of those other techniques is using a \u201cshould cost model.\u201d<\/p>\n<\/div><\/div><\/div>

<\/i><\/i><\/span>All we have is raw purchasing transaction data. What can you do to make sense of it?<\/span><\/a><\/h4><\/div>
\n

Raw purchasing transaction data can take up a lot of space on a screen or in a report. It can appear useless. But, modern technology can help you transform that data into information and intelligence. And you don\u2019t need to purchase an expensive procurement technology suite to do so. Microsoft Excel offers many functions that can be very useful for analyzing raw purchasing transaction data. From simple sorting and subtotals to using PivotTables, you can conduct a very thorough spend analysis using Excel alone.<\/p>\n<\/div><\/div><\/div>

<\/i><\/i><\/span>How do you define cost savings in a way that will be embraced by executive management ?<\/span><\/a><\/h4><\/div>
\n

Historically, there has been a gap between what procurement professionals consider to be \u201ccost savings\u201d and what executive management considers to be cost savings. You see, executive management uses standard financial statements as their \u201cscorecard\u201d for the business. Some procurement professionals have never made an effort to understand how financial statements work. Therefore, they have a difficult time reporting cost savings in a way that people using financial statements will consider legitimate. To define cost savings in a way that will be embraced by executive management, you need to communicate cost savings in a way that can be reconciled with data on the organization\u2019s official financial statements using the \u201clanguage of accounting.\u201d<\/p>\n<\/div><\/div><\/div>

<\/i><\/i><\/span>What factors would you consider if you had to produce cost savings in a short time frame?<\/span><\/a><\/h4><\/div>
\n

When it comes down to it, you can look at just two aspects of spend to determine whether a category is ripe for producing cost savings in a short time frame: effort and impact. You can create a quadrant representing the four combinations of these two factors. All categories of spend identified in your spend analysis should be assigned to one of these quadrants. The categories of spend with low effort and high impact should be the first ones considered if you had to produce cost savings in a short time frame.<\/p>\n<\/div><\/div><\/div>

<\/i><\/i><\/span>What process do you go through when conducting a sourcing initiative?<\/span><\/a><\/h4><\/div>
Check out\u00a0Make Sourcing Your Competitive Advantage<\/a>\u00a0and discover four sourcing options that your organization may consider for a competitive advantage.<\/div><\/div><\/div>

<\/i><\/i><\/span>How do you decide if you need a contract for a purchase or not?<\/span><\/a><\/h4><\/div>
There may be an infinite number of reasons that two parties feel that they need a contract. You need world-class contract writing skills to be successful in procurement in the 21st century. Our highly personal and interactive online course\u00a0Supply Management Contract Writing<\/a>\u00a0will give you the skills necessary to minimize your procurement risks.<\/div><\/div><\/div>

<\/i><\/i><\/span>What are some appropriate remedies for a supplier\u2019s failure to perform?<\/span><\/a><\/h4><\/div>
\n

There are a great number of remedies you can use to deal with a supplier\u2019s failure to perform. The key is to know which remedy is appropriate for each situation and to contractually apply that remedy properly. For example, two available remedies are cover damages and contract termination. Cover damages involve you collecting from your contracted supplier any premium you had to pay to another supplier to enable you to require from the contracted supplier\u2019s failure. Termination enables you to cancel a contract completely with a supplier. If there was one small failure in the middle of a massive and important five-year contract with a great supplier, would you want to completely terminate that contract? Probably not. In that case, cover damages would be a more appropriate remedy as your organization would be able to recover any financial loss without having the entire future of a project put at risk while you switch suppliers. Cover damages and termination are only two of the many remedies we teach in our online course, \u201cSupply Management Contract Writing<\/a>.\u201d<\/p>\n<\/div><\/div><\/div>

<\/i><\/i><\/span>How can we reduce our risk through better contract language?<\/span><\/a><\/h4><\/div>
\n

Poorly written contracts either don\u2019t address or don\u2019t clearly address what happens in situations that can be described as the fruition of risk. Well-written contracts reduce risk by specifying exactly what will happen in the event that certain disruptive events occur. For example, a well-written delivery article with a liquidated damages clause can provide a supplier with sufficient incentive to completely avoid the possibility of a late delivery. A well-written indemnity clause can provide legal protection in a case where damage, injury or death occurs and the cause is related to a supplier\u2019s performance. And a Force Majeure clause can help your organization avoid being penalized when its failure to perform was due to an \u201cact of God\u201d or other factors outside of its reasonable control.<\/p>\n<\/div><\/div><\/div>

<\/i><\/i><\/span>How can we reduce our risk through better contract language?<\/span><\/a><\/h4><\/div>
\n

Projects should always be kept track of using tools available in modern technology. Microsoft Project is an excellent project management software program that leading procurement professionals use to track their projects.<\/p>\n<\/div><\/div><\/div>

<\/i><\/i><\/span>What techniques do you use to accelerate progress on your projects?<\/span><\/a><\/h4><\/div>
Even when a project is expertly planned using a great tool like Microsoft Project, the realities of the business world will occasionally require you to accelerate progress on your project. In our online course \u201cProfessional Purchasing Project Management<\/a>,\u201d we teach four techniques for accelerating progress on a procurement project: increasing resource units, finding ways to reduce the projected duration of tasks, adding resources and modifying working hours. These changes are implemented in real life as well as within the project plan.<\/div><\/div><\/div>

<\/i><\/i><\/span>Have you used a vendor management software?<\/span><\/a><\/h4><\/div>
\n

Vendor management software can be an excellent resource for supporting all of the processes that every procurement department should be doing: keeping track of vendor performance metrics, drawing attention to sub-par vendor performance, and identifying opportunities for vendor performance improvement.<\/p>\n<\/div><\/div><\/div>

<\/i><\/i><\/span>What is a purchase requisition and how would you process it?<\/span><\/a><\/h4><\/div>
\n

You may also want to begin a sourcing process via NLPA\u2019s \u201cMake Sourcing Your Competitive Advantage<\/a>.<\/p>\n<\/div><\/div><\/div>

<\/i><\/i><\/span>What are some questions you could ask when getting supplier references?<\/span><\/a><\/h4><\/div>
\n

In 4 Questions To Ask Vendors\u2019 References<\/a>, the NLPA introduced you to four of our favorite questions to ask supplier references:<\/p>\n