CIPS Ethical and Responsible Sourcing (L4M4) 2025 – 400 Free Practice Questions to Pass the Exam

The primary advantage of intra-company trading in a procurement context is that it allows for internal efficiency and cost-effectiveness. When transactions occur within a company, resources can be allocated more flexibly, reducing transaction costs associated with external suppliers. This internal trading can streamline processes, minimize lead times, and optimize inventory management by leveraging existing resources.

Furthermore, intra-company trading can enhance communication and collaboration between different departments or divisions, leading to better alignment of goals and operations. This collaboration often results in improved pricing structures, better quality control, and an overall reduction in costs compared to dealing with external suppliers, where negotiations, contracts, and potential delays can complicate the supply chain.

While elements like competition with external suppliers or market analysis are important in the overall procurement strategy, they are not the main advantages of intra-company trading, which focuses on leveraging internal efficiencies.