Certification in Supplier Diversity Practice Exam

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What does aggregation management aim to achieve?

Minimizing costs through individual contracts
Coordinating purchasing to enhance leverage
Fostering competition among suppliers
Encouraging independent supplier relationships

The correct answer is: Coordinating purchasing to enhance leverage

Aggregation management focuses on coordinating purchasing activities across various departments or units within an organization to enhance leverage in negotiations. By consolidating purchasing power, organizations can secure better pricing, terms, and overall value from suppliers. This strategic approach allows for the aggregation of demand, resulting in higher volumes that can be presented to vendors, thereby improving negotiation outcomes, achieving cost savings, and maximizing efficiency. This method not only creates a unified strategy for procurement but also simplifies supplier relationship management by minimizing the number of suppliers an organization has to deal with. Overall, aggregation management supports the goal of enhancing organizational efficiency and effectiveness in procurement processes.