Discuss APICS CTSC Exam Topic 2 Question 46

Which of the following metrics is measured as the value created by reducing or eliminating cost increases sought by supplier over and above prevailing baseline cost?

BDirect material cost

CIndirect material cost

DAvoidance cost

AOpportunity cost

Suggested Answer: D

According to the CTSC Exam Content Manual, avoidance cost is one of the metrics used to measure the value created by the procurement function1. Avoidance cost is defined as the value created by reducing or eliminating cost increases sought by suppliers over and above prevailing baseline cost1. Avoidance cost is also known as cost avoidance, which is a proactive measure to prevent unnecessary expenses or losses2. Avoidance cost is different from cost savings, which is the value created by reducing the actual cost paid to suppliers below the prevailing baseline cost1. Cost savings is also known as hard cost savings, which is actualized, quantifiable and verifiable3.

Get Premium CTSC Questions as Interactive Web-Based Practice Test or PDF Real Exam Format Detailed Explanations Instant Access Get Your Practice Test

26 comments · newest first

Adria 3 months ago

I agree, it shows supplier negotiation skills.

Florinda 3 months ago

Yeah, it helps in long-term planning.

Lettie 3 months ago

Definitely! It's crucial for budgeting.

Lizbeth 4 months ago

I think it's about cost avoidance.

Curtis 5 months ago

Cost avoidance is key, but I see the confusion here.

Rasheeda 5 months ago

I thought it was more about value creation overall, not just cost.

Jaime 5 months ago

Wait, is that really a metric? Sounds a bit off.

Jerlene 6 months ago

I totally agree, it's all about managing supplier costs.

Ashley 6 months ago

That's definitely about cost savings!

Margart 6 months ago

Cost Avoidance, the true superpower of procurement professionals.

Karrie 6 months ago

Cost Avoidance. Saving money is the name of the game!

Myrtie 6 months ago

Cost Avoidance. Suppliers always trying to squeeze more out of us, am I right?

Joesph 6 months ago

Cost Avoidance, definitely. Gotta keep those suppliers in check!

Mary 7 months ago

The correct answer is Cost Avoidance. It's the value created by preventing supplier cost increases.

Olga 7 months ago

I feel like I saw a similar question in our review materials, possibly about supplier performance metrics, but I can't pinpoint the answer right now.

Mickie 7 months ago

This sounds like it could be related to cost avoidance or maybe even value engineering, but I’m a bit confused about the wording.

Noe 8 months ago

I remember practicing a question about supplier negotiations and cost reductions, but I can't recall the exact term we used for that metric.

Paris 8 months ago

I think this has something to do with cost savings metrics, but I'm not entirely sure which specific one it is.

Winifred 8 months ago

Hm, not 100% sure on this. But I'll start by listing out the common procurement metrics and see which one fits the description best.

Floyd 8 months ago

Ah, I recognize this type of question. It's testing our understanding of supplier cost management strategies. I'll draw on what I know about that.

Von 8 months ago

I'm a bit unsure about this one. Is it asking about a specific procurement or supply chain metric? I'll need to review my notes on those.

Ranee 9 months ago

Okay, I think I know this one. It's about measuring the value from negotiating down supplier cost increases, right? I'll focus on that angle.

Nikita 9 months ago

Hmm, this seems like a tricky one. I'll need to think carefully about the different metrics and how they relate to supplier cost increases.

Louvenia 2 months ago

↳ replying to Nikita

Definitely! It’s crucial for supplier negotiations.

Kaycee 3 months ago

↳ replying to Nikita

Yeah, that sounds right. It’s all about managing costs.

Roxane 3 months ago

↳ replying to Nikita

I think it’s about cost avoidance.

APICS CTSC Exam - Topic 2 Question 46 Discussion