What are the two variables used in Kraljic's (1983) purchasing portfolio approach?

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Kraljic's purchasing portfolio approach uses two variables: purchasing impact on the bottom line of the company (financial impact) and supply risk (supply market complexity and supply market dynamism). This approach helps organizations categorize their purchases into four categories: strategic items, bottleneck items, leverage items, and non-critical items. By doing so, organizations can develop procurement strategies for each category to maximize value and mitigate risks.

What Are the Two Variables Used in Kraljic's (1983) Purchasing