| Exam Code/Number: | L5M6Join the discussion |
| Exam Name: | Category Management |
| Certification: | CIPS |
| Question Number: | 92 |
| Publish Date: | Jan 13, 2026 |
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In Category Management, often a small number of categories can be responsible for a large proportion of spend. What is this principle commonly known as? Select TWO.
The process of designing a product with a trusted supplier in order to eliminate costs that may appear at the delivery stage is known as which cost management strategy?
Randoxx Ltd is a manufacturing company which has four main categories of expenditure:
* Category 1: The market of this category is highly innovative and has rapidly changed over the past five years. There are many suppliers who provide similar products at similar price points.
* Category 2: This category of spend is for highly specialised products and it is important to Randoxx that the products are carbon neutral. Because of this, there is a reduced number of suppliers who provide products to this category and Randoxx has little influence over the price that they pay.
* Category 3: This category of spend is for natural resources which are only found in very few parts of the world. Because of this Randoxx imports all of these items from one country abroad and currency fluctuations have a huge impact on the profit margin of this category spend.
* Category 4: This is a highly technical product which has a patent. It is used in the creation of laptops and phones and it would be impossible to make these with a different product. Due to the growing population Randoxx forecasts that demand for this product will increase.
Task:
Complete the table below by identifying each category's Porter's Force driver and STEEPLE factor challenge. Each response should be used only once.
What is the purpose of a Category Board?
What form of procurement is Category Management?
