Council of Supply Chain Management Professionals (CSCMP) Practice Exam

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In procurement, what term describes an item that is essential for manufacturing but does not appear in the final product?

Direct purchase

Indirect purchase

In procurement, the term that describes an item that is essential for manufacturing but does not appear in the final product is called an indirect purchase. Indirect purchases typically refer to materials or items that support the production process rather than being direct components of the final product. These can include maintenance, repair, and operating supplies (MRO) that are critical for the production environment but do not get incorporated into the finished goods.

Understanding the nature of indirect purchases is vital for effective supply chain management because they contribute to the operational efficiency and functionality of manufacturing processes. By managing indirect purchases well, organizations ensure that production can proceed smoothly, despite these items not being visible in the final products that reach consumers.

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Operational purchase

Strategic purchase

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