Certification in Supplier Diversity Practice Exam

What term refers to unauthorized purchasing that bypasses established supply management functions?

1. Discretionary purchasing

2. Rogue buying

3. Authorized purchasing

4. Strategic sourcing

The correct answer is: Rogue buying

The term that refers to unauthorized purchasing that bypasses established supply management functions is known as rogue buying. This practice can occur when individuals or departments make purchases without going through the designated procurement processes, often leading to a lack of oversight and potential issues related to cost management and compliance. Rogue buying can undermine organizational purchasing strategies, as it may result in inconsistent pricing, inferior vendor selections, and a failure to capitalize on bulk purchasing agreements that the company has in place through its formal supply management systems. In contrast, discretionary purchasing typically involves authorized spending within established guidelines, while authorized purchasing refers specifically to purchases that are sanctioned by the appropriate governance structures. Strategic sourcing, on the other hand, is a more systematic approach to procurement focused on continuous evaluation and improvement of purchasing spend and supplier relationships, and does not involve bypassing established processes. As such, rogue buying is a term that vividly captures the essence of unauthorized and uncoordinated purchasing activity.