A procurement professional is negotiating with a supplier on cleaning service. She realises that there are huge cost-saving opportunities if the supplier agrees to reduce its mark-up and unnecessary employee benefits. Supplier’s mark-up and employee benefits are examples of which of the following?

A procurement professional is negotiating with a supplier on cleaning service. She realises that there are huge cost-saving opportunities if the supplier agrees to reduce its mark-up and unnecessary employee benefits. Supplier’s mark-up and employee benefits are examples of which of the following?
A . Spend waterfall
B . Spend cube
C . Spend tree
D . Addressable spend

View Answer

Answer: D

Explanation:

A key consideration when seeking to negotiate prices is to establish what proportion of the spend is addressable by procurement action such as negotiation. Addressability of spend is influenceable through negotiations or application of other saving effort or leverage with suppliers. LO 2, AC 2.1