Procurement Cheat Sheet
The core ideas of Procurement distilled into a single, scannable reference — perfect for review or quick lookup.
Quick Reference
Total Cost of Ownership (TCO)
A comprehensive assessment of all costs associated with acquiring and using a product or service over its entire lifecycle, including purchase price, transportation, storage, maintenance, disposal, and opportunity costs.
Request for Proposal (RFP)
A formal document issued by an organization to solicit detailed proposals from potential suppliers, specifying requirements, evaluation criteria, terms, and submission guidelines for competitive bidding.
Supplier Relationship Management (SRM)
A systematic approach to evaluating, developing, and managing interactions with suppliers to maximize value, reduce risk, and foster long-term strategic partnerships rather than purely transactional relationships.
Category Management
A strategic approach that organizes procurement activities around groups of similar products or services (categories) rather than individual transactions, enabling specialized expertise, consolidated spending, and tailored strategies for each category.
Competitive Bidding
A procurement method in which multiple qualified suppliers are invited to submit offers for a contract, allowing the buyer to compare proposals on price, quality, capability, and other criteria to select the best value.
Purchase Order (PO)
A legally binding commercial document issued by a buyer to a seller that specifies the types, quantities, agreed prices, delivery dates, and terms for products or services the seller will provide.
Sole Source vs. Single Source
Sole sourcing occurs when only one supplier exists for a required good or service, while single sourcing is a deliberate decision to use one supplier even when alternatives exist, often to build a deeper strategic relationship.
Spend Analysis
The process of collecting, cleansing, classifying, and analyzing organizational expenditure data to identify savings opportunities, improve compliance, monitor supplier performance, and inform sourcing strategies.
Contract Management
The administration of contracts from creation through execution and termination, including monitoring compliance, managing amendments, tracking deliverables, resolving disputes, and ensuring both parties fulfill their obligations.
Sustainable Procurement
The practice of integrating environmental, social, and economic considerations into purchasing decisions to minimize negative impacts on society and the environment while still meeting organizational needs cost-effectively.
Key Terms at a Glance
Get study tips in your inbox
We'll send you evidence-based study strategies and new cheat sheets as they're published.
We'll notify you about updates. No spam, unsubscribe anytime.