Certified Supply Chain Professional (CSCP) Practice Exam

In the buy on the market approach, how are purchases made?

1. They are planned months in advance

2. They are made in response to immediate needs

3. They are negotiated in long-term contracts

4. They are confined to select vendors only

The correct answer is: They are made in response to immediate needs

The buy on the market approach is characterized by making purchases in response to immediate needs. This method allows organizations to acquire goods or services quickly without the constraints of advanced planning or long-term contractual commitments. It provides flexibility and responsiveness to current market dynamics and demand fluctuations, enabling businesses to adapt to changing circumstances, such as sudden increases in customer orders or unexpected supply disruptions. This approach contrasts with methods like long-term contracts or planning purchases months in advance, which require a more stable forecasting environment and limit the ability to act swiftly. The focus on immediate needs leads to sourcing products or services on demand, often relying on prevailing market conditions and pricing. It may involve purchasing from various suppliers, rather than being confined to select vendors, which adds another level of agility in managing supply chain operations.