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Which of the following purchases are most likely to have low acquisition costs? Select TWO that apply.
Suggested Answer: B, C
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According to L4M7 study guide, acquisition costs in procurement are the costs associated with the activities involved in a purchase. A buying organisation incurs acquisition costs in low-value purchases as well as high-value purchases. The following purchases tend to have lower acquisition costs:
- Straight re-buy from a current supplier
- Purchase of standard catalogued products
Otherwise, any purchases of high value, high-risk items generally require greater attention of buying organisation and thus, they are likely to have higher acquisition costs. Spot purchase of a technically complexed machinery, Purchase of ERP system and Procurement of construction projects are examples of high-value, high-risk purchases.
LO 3, AC 3.1
26 comments · newest first
CA
Caprice
11 months ago
I thought D would be cheaper, but I guess not!
LE
Leatha
11 months ago
A is definitely not low cost, that's for sure.
LE
Lelia
12 months ago
Wait, how is C low cost? It can vary so much!
KI
Kiera
12 months ago
I agree, B and C make the most sense!
MA
Marcelle
1 year ago
Definitely B and C, those are usually cheaper.
IL
Iluminada
1 year ago
I recall that spot purchases can be risky and often expensive, especially for complex machinery.
JO
Jose
1 year ago
I feel like we had a practice question about ERP systems, and I think they usually have high acquisition costs, right?
TH
Thersa
1 year ago
I'm not entirely sure, but I think straight re-buys tend to have lower costs since they're from current suppliers.
KA
Kandis
1 year ago
I remember discussing how standard catalogued products usually have lower acquisition costs because they're mass-produced.
CA
Candida
1 year ago
I'm going to have to weigh the pros and cons of each option. The key is identifying the purchases that involve the least amount of complexity and customization, which would likely lead to lower acquisition costs.
KA
Kasandra
1 year ago
For low acquisition costs, I'd focus on purchases that are routine, standardized, and don't require a lot of customization or negotiation. B and C seem like the best bets here.
IS
Isadora
1 year ago
This seems straightforward. I'd say the purchases with the lowest acquisition costs are B and C - standard catalogued products and straight re-buys from current suppliers.
RE
Reita
1 year ago
Hmm, I'm not sure about this one. The options seem a bit tricky. I'll have to think it through carefully before selecting my answers.
ER
Ernestine
2 years ago
Haha, I'd love to see someone try to get a 'low acquisition cost' for a construction project! E) is definitely not the right answer. B) and C) are the way to go.
BE
Belen
2 years ago
Spot purchase of technically complex machinery would definitely have high costs.
JE
Jeanice
2 years ago
Yeah, I think standard catalogued products and straight re-buys are the best options for low acquisition costs.
NG
Ngoc
2 years ago
I agree, construction projects definitely have high acquisition costs.
PA
Paulina
2 years ago
I agree with Lawrence. B) and C) are the obvious choices here. D) for a technically complex machinery would definitely have higher acquisition costs.
ST
Steffanie
2 years ago
Spot purchase of a technically complex machinery is definitely expensive.
ST
Steffanie
2 years ago
I think E) procurement of construction projects would have high acquisition costs.
ST
Steffanie
2 years ago
I agree, B) and C) are definitely the most likely to have low acquisition costs.
MA
Mary
2 years ago
I disagree. I believe A and C have low acquisition costs because ERP systems and straight re-buys are more standardized and routine.
WE
Wendell
2 years ago
I think B and C have low acquisition costs.
CA
Carin
2 years ago
I agree with Wendell. Standard catalogued products and straight re-buy from a current supplier are usually cheaper.
LA
Lawrence
2 years ago
I think B) and C) are the most likely to have low acquisition costs. Purchasing standard catalogued products and straight re-buying from a current supplier tend to have fewer complexities and negotiations involved.
VE
Veronika
2 years ago
I think D) and E) would have higher acquisition costs due to their complexity.