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L4M8 - Procurement & Supply in Practise > Chapter 2.1 - Apply the pre-contract stages (stages 1-8) of the CIPS Procurement cycle to the practical procurement and supply environment > Flashcards

Chapter 2.1 - Apply the pre-contract stages (stages 1-8) of the CIPS Procurement cycle to the practical procurement and supply environment Flashcards

1
Q

What stages of the CIPS Procurement cycle relate to pre-contract award

A

Stages 1-8

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2
Q

What stages of the CIPS Procurement cycle relate to post-contract award

A

9-13

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3
Q

At what point do the pre and post contract award stages come together?

A

The contract award and implementation

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4
Q

Name 3 examples of needs with different economic sector classifications

A
  1. Public sector - may have an objective to create new buildings within a school due to population growth within an area
  2. private sector - may have identified a need for new automated machinery to improve process efficiency and production output.
  3. TSO Charity - may have identified a need to purchase branded running apparel for people running a marathon to raise finding for its cause
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5
Q

Name 5 people that can establish a need

A
  1. Individuals noticing that a product is running low on stock
  2. Individuals using the last of something
  3. Individuals making errors and needing replacements
  4. Individuals working on projects and understanding future requirements
  5. Individuals needing to recruit personnel
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6
Q

Name 4 groups of people in an organisation who can raise needs

A
  1. project teams that establish new requirements
  2. Departmental goals whose fulfilment depends on certain needs
  3. Organisational strategic objectives which define needs to meet the company vision
  4. Suppliers who outline needs in order to fulfil contractual obligations
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7
Q

Name 4 stakeholders that can raise needs

A
  1. Consumers who change their requirements
  2. Community groups which request a change in the function of an organisation
  3. Legislation changes which generate additional needs
  4. Technological developments which create needs
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8
Q

Requisition

A

An internal document raised by a user or a store to communicate to procurement the need to buy the product or service specified

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9
Q

What should organisations do to ensure that needs that reach procurement are justified?

A

Have a process in place to evaluate whether the need is a genuine requirement

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10
Q

Name a process that ensures needs are justified

A
  1. Individual, group or stakeholder advises the team leader/manager of the need
  2. Team leader/manager assesses whether the need is justified
  3. If need is justified team leader / manager notified procurement via a requisition using a method in accordance with organisational policy but if it is not justified the team leader takes no further action
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11
Q

Name 4 advantages of expressing a need verbally

A
  1. Information passed quickly
  2. Personal
  3. Informal
  4. Exact quantity stated
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12
Q

Name 5 disadvantages of expressing a need verbally

A
  1. Open to interpretation
  2. Buyer could forget
  3. No proof of requisition has been placed
  4. High risk of human error
  5. Procurement has to check requisition raiser has authority
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13
Q

Name 4 advantages of expressing a need handwritten

A
  1. Contains detail for reference
  2. Informal
  3. Exact quantity stated
  4. No need for technology
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14
Q

Name 6 disadvantages of expressing a need handwritten

A
  1. Risk of getting lost
  2. Waste of paper
  3. Risk of buyer forgetting to action
  4. Difficult to establish the generator
  5. Risk of human error
  6. Procurement has to check requisition raiser has authority
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15
Q

Name 5 advantages of expressing a need via email

A
  1. Information sent quickly
  2. Can track if email has been read
  3. Contains full details
  4. Easy to establish generator
  5. Permanent record
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16
Q

Name 5 disadvantages of expressing a need via email

A
  1. Impersonal
  2. Risk of email not being read
  3. Generator may not respond to emails
  4. Risk of human error
  5. Procurement has to check requisition raiser has authority
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17
Q

Name 5 advantages of expressing a need automatedly

A
  1. Fast and efficient
  2. Full details included
  3. Pre-authorised
  4. Cost effective
  5. Low risk of human error
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18
Q

Name 3 disadvantages of expressing a need automatedly

A
  1. Impersonal
  2. Larger quantity than needed requested
  3. High investment in technology
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19
Q

Paperless

A

Organisations that function without paper and use electronic methods of communication

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20
Q

Name the 4 forms a requisition can take

A
  1. Verbal
  2. Handwritten
  3. Email
  4. Automated
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21
Q

Why are requisitions most commonly raised using email or automated methods?

A

They are less exposed to risk and all sectors are keen to reduce their carbon footprint and promote sustainability

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22
Q

Globalisation

A

The process by which the world is becoming more interconnected, which means that events in one location are shaped by things that happen many miles away. Companies are also increasingly affected by global and long-wave economic cycles

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23
Q

Centralised

A

A procurement structure where all the ordering is conducted from one central point - all requisitions flow to one office, which could be in a different town, region or country from the generator

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24
Q

Name 9 things a requisition should contain?

A
  1. The date it is raised
  2. Description of what is required, including any quality requirements and specifications
  3. Supplier if known
  4. The quantity required
  5. When the need is required
  6. Where the need is required
  7. Why the need is required
  8. Who identified the need
  9. Who approved the need
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25
Q

Inventory

A

Components, raw materials, work in progress, finished goods and supplies required for the creation of goods and services for the customer. It can also refer to the number of units and/or value of the stock of goods held by a company

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26
Q

What are automated processes used to generate requisitions based on?

A

Materials planning requirements (MRP) system

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27
Q

What is the aim of MRP systems

A

To remove the human element of monitoring stock and raising requisitions

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28
Q

Name the 3 main goals of an MRP system

A
  1. To ensure that materials/components are always available as required
  2. To keep inventory as low as possible
  3. To plan manufacturing, procurement and delivery schedules
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29
Q

Name 6 pieces of information used by MRP systems to generate requisitions for procurement

A
  1. Bill of materials
  2. Minimum order quantities
  3. Current stock levels
  4. Sales demand or planning run
  5. Cycle time
  6. Lead time
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30
Q

Can all sectors use STEEPLED and SWOT analysis’?

A

Yes

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31
Q

What 6 decisions are STEEPLED and SWOT analysis good for?

A
  1. When is the right time to procure?
  2. What quantity is most economically viable?
  3. Which currency is the most favourable to buy in?
  4. Should the product or service be made or bought in?
  5. Should the product or service be re-sourced?
  6. Should the product or service be replaced?
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32
Q

What is an onligopoly

A

When a market sector has a few large organisations that supply the product or service

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33
Q

What is a duopoly

A

Where only 2 suppliers exist in the market

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34
Q

What is perfect competition?

A

Where there are many suppliers offering the same products or services

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35
Q

What is monopolistic competition?

A

(Imperfect competition) - where there are many suppliers offering a seemingly similar product but there are significant variances in quality, brand and design

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36
Q

Name 3 features of an oligopoly

A
  1. A few companies dominate the market
    2.Pricing is controlled by a few companies
  2. Very difficult to compete
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37
Q

Name 3 features of a monopoly

A
  1. One company dominates the market
  2. Pricing is controlled by one company
  3. Competition is almost impossible
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38
Q

Name 3 things the supply and demand equilibrium show

A
  1. If the demand increases and supply remains static, a shortfall occurs, and buyers can expect to see an inflated price
  2. If the demand decreases and the supply remains static, a surplus occurs, and buyers can expect to see a reduced price
  3. The ideal market balance is where the demand and supply are equal to each other
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39
Q

Is the price of a product or service directly related to supply and demand?

A

Yes

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40
Q

Just in time (JIT)

A

A philosophy used in manufacturing that is based on suppliers delivering goods at the point that they are needed. It aims to reduce inventory costs and reduce waste in the supply chain

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41
Q

What is a push strategy

A

Based on forecasting requirements

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42
Q

What is a pull strategy

A

Reacts to customer needs

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43
Q

What strategy do suppliers working with just in time systems usually use?

A

Pull

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44
Q

Name 6 features of push systems

A
  1. Low demand variability
  2. Low product personalisation
  3. Better economies of scale
  4. Low manufacturing variability
  5. Low set up change costs
  6. Lower lead times
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45
Q

Name 6 features of pull systems

A
  1. High demand variability
  2. High product personalisation
  3. Low economies of scale
  4. High manufacturing variability
  5. High set up change costs
  6. Higher lead times
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46
Q

Name the 4 ways suppliers can be segmentated

A
  1. Integrated
  2. Strategic
  3. Collaborative
  4. Transactional
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47
Q

What can the Ansoff matrix allow procurement professionals to do

A

Further analyse and test the market before placing any purchase orders in relation to generated needs

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48
Q

Name the 4 options in the Ansoff matrix

A
  1. Market penetration strategy
  2. product development strategy
  3. Market development strategy
  4. Diversification strategy
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49
Q

Name how the 4 options in the Ansoff matrix are linked to decisions organisations can make to grow their business

A
  1. Market penetration - lowest level of risk, based on increasing sales of a current product within a known market
  2. Product development - an element of risk, based on introducing a new product to the current customer base
  3. Market development - based on trying to introduce an existing product into a new market or t a different type of customer
  4. Diversification - highest level of risk, based on introducing a new product into a new market
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50
Q

Early supplier involvement (ESI)

A

The involvement of a supplier in the product development process from a very early stage in order to use the supplier’s experience and expertise

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51
Q

Collaborative

A

Working together for mutual benefit

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52
Q

Economies of scale

A

Cost savings are made as a result of increased levels of production, alternatively the financial benefit gain from purchasing more units of an item resulting in lower unit costs

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53
Q

Name 9 product aspects that procurement professionals can gain information on through ESI

A
  1. technical advice
  2. Cycle times
  3. Lead times
  4. Cost of production
  5. Quality
  6. Potential problems
  7. Risk
  8. Supply chain
  9. Life cycle
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54
Q

Name 9 advantages of ESI

A
  1. Reduces cost for buying organisation
  2. Improves specification
  3. Enhances quality
  4. Access to technology
  5. Promotes innovation
  6. Availability of expert knowledge
  7. Reduces development time
  8. Shares risk
  9. Awareness of supplier cost driver
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55
Q

Name 5 disadvantages of ESI

A
  1. Supplier could unfairly influence buyer
  2. Buyer could become reliant on supplier
  3. Buyer loses control of product
  4. Intellectual property risk
  5. Market may become aware of the plan
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56
Q

Name 5 situations when outsourcing is an acceptable strategy

A
  1. When the product or service is not core to the organisation
  2. When the product or service is a temporary addition to workload
  3. When the product or service is beyond the skills of the organisation
  4. When the product or service is generating a loss for the organisation
  5. When the product or service could be provided more effectively through an external provider
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57
Q

Offshoring

A

The relocation of business or processes, for example, a customer service call centre or the manufacturing of a product, to a country where the costs of production are lower. usually this country will be located overseas

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58
Q

Name 4 features of a country that you may decide to offshore to because they can offer a lower price to produce the goods

A
  1. Lower costs of living
  2. Lower rates of pay
  3. Weaker currency
  4. Lower costs of overheads
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59
Q

Name 5 advantages of offshoring

A
  1. Reduced price
  2. Increase profit
  3. Helping a weak economy
  4. Favourable government policies
  5. Access to raw materials
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60
Q

Name 5 disadvantages of offshoring

A
  1. Loss of control
  2. Risk of intellectual property
  3. Ethical concerns
  4. Environmental concerns
  5. Loss of jobs in home country
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61
Q

Name 5 features of an ITT

A
  1. Documents sent out to invite bids
  2. Formal
  3. Suppliers are often pre-evaluated
  4. Used when purchasing complex products or services
  5. Used when purchasing high-value products or servoces
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62
Q

Name 5 features of a RFQ

A
  1. Documents sent out to invite quotations
  2. Informal
  3. Suppliers not usually pre-evaluated
  4. Used when purchasing standard, regularly used products or services
  5. Used when purchasing low-value products and services
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63
Q

Bid

A

Offer of a price, may be a response to an invitation to tender

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64
Q

Quotation

A

A formal statement from a supplier detailing the cost to provide goods or services. May often include other considerations such as minimum order and lead times

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65
Q

Market engagement

A

A process to gain advance understanding of he market prices or trends

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66
Q

Macroeconomic

A

The economics of a nation, industry or market

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67
Q

Name the 3 aims of the pre-procurement market testing phase

A
  1. How best to develop the specification
  2. If it is the right time to enter the marketplace or fulfil the need
  3. What the cost implications and optimum contracting terms might be
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68
Q

Name the 4 stages of product life cycles

A
  1. Introduction
  2. Growth
  3. Maturity
  4. Decline
69
Q

Name 9 pieces of documentation that need to be prepared

A
  1. Specification
  2. Contractual terms
  3. Date for quotation / bid to be received by
  4. Quantity
  5. Quality standards
  6. Delivery schedule
  7. Delivery address
  8. Key performance indicators
  9. Service level agreements
70
Q

Name 7 ways a procurement professional can identify suppliers

A
  1. Existing relationships
  2. Internet searches
  3. Prior knowledge
  4. Trade shows
  5. Recommendation
  6. Marketing material
  7. Direct approaches
71
Q

Name 7 advantages of selecting a supplier that is known to the organisation and has a relationship with the buying department

A
  1. Existing trading relationship
  2. Awareness of policies and procedures
  3. Due dilligence already carried out
  4. Reduced risk against the unknown
  5. Knowledge of systems/technology
  6. Possibility of economies of scale
  7. Shared innovation
72
Q

Name 5 disadvantages of picking a supplier who is known to the organisation

A
  1. Reduced scope for negotiation
  2. Reduced competition
  3. Could be a better supplier available
  4. Over-reliance
  5. Reduced innovation
73
Q

What is the advantage of using a supplier who is new to the organisation but known to the procurement professional?

A

The risk is reduced

74
Q

Name 9 pieces of supplier information that you can usually find online?

A
  1. Contact details
  2. Location
  3. Personnel
  4. Product range
  5. Quality standards
  6. Internal policies
  7. Service levels
  8. Value and mission statements
  9. Financial performance
75
Q

Network

A

A process where professionals meet to exchange contacts and ideas

76
Q

What are trade shows

A

Events where business professionals can network and learn about industry standards and up-and-coming technology

77
Q

Name 4 reasons why procurement professional may attend trade shows

A
  1. Meet contacts they have never seen face-to-face
  2. Understand what products/services are coming to market
  3. Discuss industry concerns with like-minded professionals
  4. Meet potential new suppliers
78
Q

Name 12 pieces of information procurement professionals should research about potential suppliers after they have been selected

A
  1. Financial performance
  2. Org structure
  3. Culture
  4. Ethical policy
  5. CSR
  6. Sustainability
  7. Environmental awareness
  8. Reputation
  9. Quality
  10. Global accreditations
  11. Location
  12. Technology
79
Q

Due diligence

A

The process of ensuring a prospective supplier is who they claim to be and is capable of delivering the services to the required standard. Due diligence tasks include financial checks, reference checks and ensuring the legal set up of their organisation is correct

80
Q

Statement of Financial position

A

A financial document showing what an organisation owes and owns

81
Q

Liquidity

A

A solvency measure to determine whether an organisation is able to meet its liabilities (short-term debts) when they come from net current assets

82
Q

Profitability

A

The organisation’s revenues minus its total costs

83
Q

Name 5 ways a supplier having financial difficulties could affect the buying organisation

A
  1. Reduced quality of products/services supplied
  2. Delays in product delivery
  3. Shortages of deliveries
  4. Price increases
  5. Failure to supply
84
Q

Name 6 ways you can evaluate a supplier’s financial performance

A
  1. Credit ratings
  2. Reviewing the statement of financial position and the statement of income and expenditure
  3. Reviewing liquidity
  4. Reviewing profitability
  5. Requesting references from other customers
  6. Gearing analysis
85
Q

Assets

A

Items of value owned by an organisation, which can be used to meet debts

86
Q

Liabilities

A

Monies that an organisation owes

87
Q

What does a statement of financial position list?

A

All of an organisation’s assets and liabilities at a set point in time

88
Q

Creditors

A

A person or company to whom money is owed

89
Q

Return on investment (ROI)

A

A measure of profitability that indicates whether a gain or loss has been generated compared with the initial cost

90
Q

Name the 2 ratios you can use to help assess how liquid an organisation is

A
  1. Current ratio
  2. Quick ratio
91
Q

What does the current ratio calculate?

A

An organisation’s ability to pay short-term financial obligations

92
Q

What is the quick ratio also known as

A

The acid test

93
Q

What does the quick ratio aim to reveal?

A

An organisation’s ability to meet its creditors immediate demands

94
Q

What are quick assets

A

Assets that are available quickly and easily such as cash or items that can be quickly converted into cash

95
Q

What is ROI used to evaluate?

A

The benefit of a financial investment

96
Q

What is gross profit

A

The amount of money an organisation has left at the end of a financial period, after deducting all costs associated with producing, selling and providing its products or service

97
Q

What is profit

A

The amount of money left after all expenses have been paid

98
Q

Name the 4 most common types of org structures

A
  1. Flat
  2. Hierarchal
  3. Matrix
  4. Virtual or distributed
99
Q

What is a flat structure

A

Organisations that have no, or very few, layers between the employees

100
Q

What are hierarchal structures

A

Used in larger organisations and include many layers between the employees, from junior level up to the CEO

101
Q

Name 8 features of a flat structure

A
  1. Good communication
  2. Good relationships between staff and senior managers
  3. Fast decision making
  4. Easy for organisation to develop
  5. Employees have a high level of responsibility
  6. Internal confusion as staff do not have a specific manager
  7. Lack of specialist resources
  8. Little chance of promotion
102
Q

Name 8 features of a hierarchical structure

A
  1. Departmental communication may be poor
  2. Limited relationships between staff and senior managers
  3. Slow decision making
  4. Harder to make change happen
  5. Employees have low levels of responsibility
  6. Levels of authority are clearly defined
  7. Employees can specialise in their areas
  8. Lots of chances for promotion
103
Q

Name the 4 dimensions of culture (Handy)

A
  1. Power
  2. Role
  3. Task
  4. Personal
104
Q

Name 7 statements that should be included in an ethics document

A
  1. Bribery
  2. Corruption
  3. Fraud
  4. Human rights
  5. Modern slavery
  6. Working conditions
  7. Conflicts of interest
105
Q

ESG

A

Environmental, social, governance. A measurable sustainability assessment, similar to CSR but more measurable. Financial performance remains key and so can create a sustainable credit rating for the organisation and investors

106
Q

CSR

A

An organisational sustainability framework to embed into strategy and operations and supply chains to have a positive global impact

107
Q

Name 4 types of positive contributions ESG and CSR policies should outline

A
  1. Customers
  2. Consumers
  3. Investors
  4. Community
108
Q

What is the objective of ESG and CSR policies

A

To promote a sustainable and ethical organisation

109
Q

Name 4 things organisations attempt to do when writing and implementing an ESG policy

A
  1. Minimise or repair the damage they do to the environment
  2. Become more sustainable
  3. Contribute positively to their local community
  4. Be seen to be compliant and eradicate corrupt practises from the supply chain
110
Q

Name the 5 themes ESG policies focus on

A
  1. Legality
  2. Business ethics
  3. Protecting the environment
  4. Protecting people
  5. Charity work
111
Q

DEI (diversity, equality and inclusion)

A

Equally ensuring that every individual has fair and equal treatment and opportunities, regardless of their background, identity or experience. Diversity recognises that, although people have things in common with each other, they are also different in many ways such as the protected characteristics - age, disability, sex, race and religion. Inclusion is where those differences are seen as a benefit and where different perspectives are shared and heard, leading to better decisions. Everyone should have equal opportunity to participate and reach their full potential

112
Q

What may suggest that a supplier takes quality seriously?

A

An ISO9001 accreditation

113
Q

What is a total quality management system?

A

A long-term strategic approach to business where the focus is on customer satisfaction

114
Q

Name 8 things that are included in a TQM system

A
  1. Process thinking
  2. Customer satisfaction
  3. Total employee commitment
  4. Strategic thinking
  5. Integrated system
  6. Decisions based on fact
  7. Continuos improvement
  8. Effective communications
115
Q

Name 5 common global standards that may be requested by a buying organisation

A
  1. ISO 9001: quality management
  2. ISO 14001: effective environmental management
  3. Investors in people
  4. International labour organisation
  5. BRC
116
Q

Name 7 examples of electronic procurement activity

A
  1. E-purchase orders
  2. E-delivery notes
  3. Barcoding
  4. Scanning
  5. E-payment
  6. E-tendering
  7. E-invoicing
117
Q

Business to business (B2B)

A

Commercial trade transactions between businesses (as opposed to B2C)

118
Q

Business to consumer (B2C)

A

A transaction between a business and a consumer

119
Q

Name 3 types of risks that could occur due to the location of a supplier

A
  1. Political
  2. Economic
  3. Force Majeure
120
Q

Name 3 economic factors that relate to politics

A
  1. Taxes
  2. Currency fluctuations
  3. Supply and demand
121
Q

Name 6 things force majeure can include

A
  1. Excessive rain
  2. Earthquakes
  3. Hurricanes
  4. Tsunamis
  5. War
  6. Terrorism
122
Q

Name 6 situations when a tender process would be used

A
  1. The need is a large or complex project
  2. The law requires it
  3. Company policy states it
  4. The value is high
  5. A large selection of bids is required
  6. There is lots of competition
123
Q

Name the 7 core stages of tendering

A
  1. Decide which style of tender to use
  2. Prepare ITT
  3. Send the ITT
  4. Buying organisation receives bids
  5. Evaluate bids
  6. Award contract and give feedback
  7. Contract management
124
Q

Prior information notice (PIN)

A

A notice released by a buying organisation through the OJEU to make potential suppliers aware of a sourcing competition that it intends to run in the future

125
Q

OJEU

A

Official Journal of the European Union

126
Q

Name the 5 core types of tender

A
  1. Open procedure
  2. Restricted procedure
  3. Negotiated procedure
  4. Competitive dialogue
  5. Innovation partnership
127
Q

How is an open tender advertised

A

Through relevant media platforms and a PIN

128
Q

Name 4 media platforms tenders can be advertised on

A
  1. Organisations websites
  2. Trade magazines
  3. Online databases
  4. OJEU
129
Q

Name the 2 stages of restricted tendering

A
  1. Shortlist suppliers using PQQ
  2. Send out the ITT once shortlisted
130
Q

When is negotiated tendering used?

A

When the project has very high value and there are multiple solutions to meet the identified need

131
Q

Expression of interest (EOI)

A

An informal notice from a potential supplier that they are interested in supplying goods or services to the buying organisation, possibly following publication of a PIN or other notification of an upcoming opportunity

132
Q

Name the 5 steps of negotiated tendering

A
  1. An opportunity is advertised without any specification on how the need should be met
  2. Interested suppliers can submit and EOI
  3. They are asked to fill in a PQQ
  4. Selection and dialogue phase
  5. Invited to submit their bid
133
Q

Name the 4 steps of competitive dialogue tendering

A
  1. Opportunity is advertised and
  2. Supplier’s are pre-evaluated
  3. Successful suppliers meet to discuss and agree a solution
  4. Once a solution has been agreed the procurement team creates the tender docs and gives it to the suppliers which respond with their bids
134
Q

Name 11 items an ITT is likely to include

A
  1. Opening letter/brief
  2. Company details
  3. Overview of the project
  4. NDA
  5. Specification of the requirement including KPIs and SLAs
  6. Evaluation criteria
  7. Submission date
  8. Compliance requirements
  9. Bid style
  10. Contact details for queries
  11. Terms and conditions of contract
135
Q

NDA

A

Sometimes known as a confidentiality agreement (CA), this signed document is a legal agreement that information received will not be shared and remains the property of the originator

136
Q

SLA

A

Document outlining the expected minimum level of service between a service provider and a client. It clarifies the scope of service, responsibilities of each party and how to escalate among other factors. A SLA is legally enforceable if it is referred to in a contract

137
Q

Name 2 rules that must be followed when sending the ITT

A
  1. Provide the documents to all potential suppliers at the same time
  2. Provide exactly the same documents to all suppliers
138
Q

Name 12 aspects of a bid that evaluation criteria may consider

A
  1. Supplier organisation and associated benefits
  2. Price aspects
  3. Quality/specification conformance
  4. Ethics
  5. Sustainability
  6. Risk
  7. Payment terms
  8. Whole-life costs and considerations such as disposal
  9. Service levels, including communication
  10. Location of supplier and transportation methods
  11. Warranty
  12. Order quantities
139
Q

Warranty

A

A commitment that the product will perform as stated for the specified period. The detailing of the warranty will determine the rights of the owner and responsibilities of the seller. A warranty for a period longer than the guarantee (or with enhanced rights) may be offered for an additional cost

140
Q

Name 4 things you can use to check that something is fit for purpose

A
  1. Technical drawings
  2. Samples
  3. Demonstrations
  4. Testing
141
Q

Sample

A

A small part of or examples of the product that is potentially being supplied

142
Q

Tooling

A

Machinery, jigs, dies or patterns specifically used for one job

143
Q

Aesthetics

A

The way something looks

144
Q

Name 7 tests you may conduct on a sample

A
  1. Aesthetics
  2. Durability
  3. Weight
  4. Size
  5. Strength
  6. Tolerances
  7. Reliability
145
Q

Name 3 forms a conformance specification may take

A
  1. Chemical formulae
  2. Technical drawings
  3. Recipes
146
Q

Exchange rate

A

The value of one currency compared with another, which can vary from day to day

147
Q

What are the two main purposes of import duty

A
  1. To give local, or own-grown, produce an economic advantage
  2. To raise revenue for the country’s government
148
Q

Name 3 organisations/treaties that aim to reduce the amount of import duties

A
  1. World Trade Organisation
  2. North American Free Trade Agreement
  3. The Trans-Pacific Partnership
149
Q

Piece part price

A

Price per individual item

150
Q

What do economies of scale reduce?

A

Piece part price

151
Q

What is the formula for economic order quantity

A

square root of (2* cost per order * annual demand) / (cost of holding one unit for a year)

152
Q

Incoterms

A

Series of commercial terms published by the International Chamber of Commerce covering the allocation of costs and transfer or risks between buyer and seller. the various options are abbreviated to three-letter codes

153
Q

On cost

A

A cost in addition to the quoted price

154
Q

Name 7 incoterms

A
  1. Ex works
  2. Free carrier
  3. Carriage paid to
  4. Carriage and insurance paid to
  5. Delivered at place unloaded
  6. delivered duty paid
  7. Free on board
155
Q

Name one part of dealing with international freight

A

Agreeing incoterms

156
Q

Life cycle costs (LCC)

A

Relates to all costs of acquisition, owning and running the asset but does not include disposal

157
Q

Whole life costing (WLC)

A

An estimate used to help buyers to determine the end to end cost of providing a service, manufacturing or procuring a product. Also commonly referred to as total cost of ownership (TCO) or total life cycle costs (LCC). the use of the terms vary dependent on industry and sector

158
Q

Name the 10 areas included in whole life costing

A
  1. Purchase
  2. Delivery
  3. Installation
  4. Training
  5. Operation
  6. Maintenance
  7. Water
  8. Energy / fuel use
  9. Health and safety
  10. Disposal
159
Q

Name 4 types of cost mechanisms

A
  1. Total cost of acquisition
  2. Total cost of ownership
  3. Life cycle costing
  4. Whole life costing
160
Q

Total cost of acquisition

A

The total cost incurred in acquiring a product from sourcing to receiving and installing

161
Q

What kind of costs do LCC and WLC consider?

A

Medium and long term costs

162
Q

Social value

A

The output from a contract that benefits society at large, rather than the purchaser or end user

163
Q

Corruption

A

Dishonest conduct, often by individuals who hold senior positions within organisation - can include bribery

164
Q

Bribery

A

The offer of a gift financial gain or incentive to influence a decision

165
Q

Fraud

A

Financial deception

166
Q

Weighted scorecard

A

A tool with a systematic and fair process for selecting suppliers, based on predetermined criteria

167
Q

What does the weighted scoring system help to do

A

Make a decision based on the criteria set out at the beginning of the RFQ or tender process

168
Q

Conflict of interest

A

Where an individual is unable to remain impartial due to a personal, professional or public interest

L4M8 - Procurement & Supply in Practise (6 decks)

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