Characteristics of a Group Purchasing Organization (GPO) include which of the following?
A) They are similar in concept to unions which collectively bargain for favorable prices and terms
B) They work well in markets where there are few vendors
C) They work less well where products are more standardized
D) They compile best prices from among many vendors and provide a consolidated price list to member hospitals

Question

Quizplus · Accepted Answer

Characteristics of a Group Purchasing Organization (GPO) include the following:
a. They are similar in concept to unions which collectively bargain for favorable prices and terms - This is true. GPOs aggregate the purchasing power of multiple organizations to negotiate better prices, discounts, and terms from suppliers, much like unions negotiate on behalf of their members for better wages and working conditions.
b. They work well in markets where there are few vendors - This is not necessarily true. GPOs can work well in markets with many vendors as well. The effectiveness of a GPO is not solely dependent on the number of vendors in the market but on its ability to leverage collective buying power to secure favorable terms.
c. They work less well where products are more standardized - This is not necessarily true. In fact, GPOs can work very well with standardized products because it is easier to aggregate demand and negotiate bulk purchases when product specifications are uniform. Standardization can lead to increased purchasing efficiency and lower costs.
d. They compile best prices from among many vendors and provide a consolidated price list to member hospitals - This is true. One of the key functions of a GPO is to conduct market research, negotiate with suppliers, and compile a list of the best available prices for their members. This allows member organizations to benefit from the GPO's negotiations and to purchase goods and services at reduced costs.
In summary, a Group Purchasing Organization (GPO) is designed to leverage collective buying power to secure favorable pricing and terms from suppliers, and it can be effective in various market conditions, including those with standardized products and multiple vendors. It provides a consolidated price list to its members, which can lead to significant cost savings for member organizations.

Characteristics of a Group Purchasing Organization (GPO) Include Which of the Following