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CIPS L4M2 > L4M2 final revision questions part 3 > Flashcards

L4M2 final revision questions part 3 Flashcards

1
Q
  1. Which of the following are advantages of using standards within a specification?
    a) Remove ambiguity of requirement
    b) Assists negotiation with supplier
    c) Assists accurate comparison of bids
    d) Increased time to market
A

a) Remove ambiguity of requirement

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2
Q
  1. The volume purchased by the buyer or industry is important to a supplier in a competitive market. Is this statement true or false?
A

True, it makes the buyer more powerful as they can force down prices

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3
Q
  1. A large retail firm is seeking to expand further into online shopping with the current ratio being 85% shops and 15% online. The procurement manager has suggested that benchmarking against a larger online supplier would be useful. Is the procurement manager correct to suggest this? Why?
A

Yes, because it will demonstrate how and where performance levels need to be achieved

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4
Q
  1. Which of the following would provide the best method to ensure a car manufacturer can make adjustments to vehicle production to meet future market demands such as the addition of an additional battery to make a hybrid model?
    a) Correct product specification in place to allow variations
    b) Investment in innovation to predict future trends
    c) Investment in versatile robotics to meet changing demand
    d) Adequate labour contracts in place to meet changing demand
A

a) Correct product specification in place to allow variations

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5
Q
  1. The role of the marketing function in the development of specifications is…
    a) To ensure that the organisation gains competitive advantage in the product features
    b) To ensure that the brand name is given precedence over the technical aspects of the specification
    c) To coordinate the stakeholders because procurement is less suited to this role
A

a) To ensure that the organisation gains competitive advantage in the product features

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6
Q
  1. A house builder has requested the use of a sustainable low carbon cladding material to be procured at a competitive rate within the project budget. Who would be the key internal stakeholder in defining the business requirement?
    a) commercial team
    b) Procurement team
    c) Environmental team
    d) Design team
A

d) Design team

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7
Q
  1. A procurement manager is purchasing stationery from a preferred supplier. Is this a straight rebuy?
A

Yes

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8
Q
  1. What is a disadvantage of sourcing from a supplier which is a monopoly in the market?
A

The buyer has a lack of negotiating power on cost

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9
Q
  1. Which if the following is a source of primary data?
    a) Price lists collected from suppliers’ representatives at trade fairs
    b) Price listings on comparison websites and market exchanges
    c) Published economic indices such as the RPI
    d) Financial trade press
A

a) Price lists collected from suppliers’ representatives at trade fairs

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10
Q

A house builder requires a specification to detail the composition of the concrete mix. Which specification should they use?

A

conformance

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11
Q
  1. If established suppliers in a market start a price war, is this a form of competitive rivalry?
A

Yes, it is an aggressive strategy, one firm’s gain is another’s loss. Economies of scale are a barrier to entry for new entrants.

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12
Q
  1. The IT department have a business requirement to procure some new computer software to meet specific technical requirements. Prior to supplier selection, procurement’s key input would be to…
    a) Produce the specification
    b) Agree contractual terms
    c) Act as the key stakeholder
    d) Produce tender question content
A

d) Produce tender question content

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13
Q
  1. Category buyer Raheem has been tasked with receiving innovative bids from coaching and development service providers. How can he achieve this? Select two..
    a) Use a conformance based specification
    b) Apply early supplier involvement
    c) Apply standards within the specification
    d) Invite a small group of suppliers
    e) Use an outcome based specification
A

b) Apply early supplier involvement

e) Use an outcome based specification

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14
Q
  1. Researching market conditions helps improve negotiations with suppliers by providing the buyer with…
    a) Up to date technical information on the product
    b) Details of what pricing other companies are offering
    c) Information on the standards applied to the product
    d) Details of trade fairs the supplier is attending
A

b) Details of what pricing other companies are offering

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15
Q
  1. Which of the following are not a stage in lifecycle costing? Select two…
    a) Product maturity
    b) Product level
    c) Product decline
    d) Product saturation
    e) Obsolescence
A

b) Product level

e) Obsolescence

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16
Q
  1. A global manufacturer has been impacted by competitor investment in advanced robotics and is struggling to compete with production times and cost. This would prove the biggest barrier to entry in which of the following market places?
    a) Hospitality
    b) Finance
    c) Aerospace
    d) Insurance
A

c) Aerospace

17
Q
  1. Which of these purchases by a furniture manufacturer are indirect costs to the company? Select more than one…
    a) Salary of the office accountant
    b) Purchase of the wood for production
    c) Rent of manufacturing site premises
    d) Utility bill from electricity provider
    e) Advertising in a home interiors magazine
    f) Adhesives, stain, paint and nails
A

a) Salary of the office accountant

c) Rent of manufacturing site premises
d) Utility bill from electricity provider
e) Advertising in a home interiors magazine

18
Q
  1. Buyer power may make a supply market more competitive. Which of the following are examples of buyer power? Select two…
    a) Ability to easily switch suppliers
    b) Collusion between competitor suppliers
    c) Suppliers are limited in number
    d) High barriers of entry exist for new suppliers
    e) Consumer large in size relative to suppliers
A

a) Ability to easily switch suppliers

e) Consumer large in size relative to suppliers

19
Q
  1. Which of the following will help the bargaining strength of a buyer? Choose two…
    a) Buyer has the option to make in-house
    b) Limited number of suppliers relative to buyers
    c) Buyer switching costs is high
    d) Buyer spend is a high proportion of a supplier’s revenue
A

a) Buyer has the option to make in-house

d) Buyer spend is a high proportion of a supplier’s revenue

20
Q
  1. Which of these have a negative effect on cash flow?
    a) A supplier reduces its payment terms
    b) The bank grants a loan to the company
    c) A customer agrees to pay upon purchase
    d) Increase in the amount of stock held
A

d) Increase in the amount of stock held

21
Q
  1. It is argued that specifications should be output focused wherever possible, because…
    a) They can be amended easily after contract award
    b) To allow as many suppliers as possible to respond
    c) To reduce the number of options available
    d) So that a specific branded product is provided
A

b) To allow as many suppliers as possible to respond

22
Q
  1. Which of the following are major factors when determining the bargaining power of buyers? Select three that apply:
    a) Number of buyers relative to suppliers
    b) Dependence of a buyer’s purchase on a particular supplier
    c) Lifecycle costs
    d) Cash flow
    e) Switching costs
    f) Interest costs
A

a) Number of buyers relative to suppliers
b) Dependence of a buyer’s purchase on a particular supplier

e) Switching costs

23
Q
  1. Which of the following can feature within a performance specification? (Select two)
    a) Technical inputs
    b) Outputs to be achieved
    c) Materials requirements
    d) Product functions
A

b) Outputs to be achieved

d) Product functions

24
Q
  1. Avram is carrying out a competitive tendering exercise for a security service provider. Is this a straight re-buy?
    a) Yes, the specification for the purchase has been modified
    b) No, as he is sourcing the market for a potential supplier
    c) No, as he has an existing preferred supplier already set up
    d) Yes, as market research is required prior to the purchase
A

b) No, as he is sourcing the market for a potential supplier

25
Q
  1. When are material cost variances likely to arise?
    a) When the actual costs are entered as they occur against the budgeted amount
    b) When the supplier’s system displays prices on the invoices but not the delivery notes
    c) When the new accountant misplaces a batch of unprocessed goods received notes
    d) When the supplier changes from manual to electronic invoicing systems for all transactions
A

a) When the actual costs are entered as they occur against the budgeted amount

26
Q
  1. Which of the following factors relate to end of life costs? Select two:
    a) Maintenance costs
    b) Purchase costs
    c) Usage costs
    d) Disposal costs
    e) Decommissioning costs
A

d) Disposal costs
e) Decommissioning costs

27
Q
  1. The supplier has the advantage where a product is:
    a) In short supply and high demand
    b) Freely available from multiple sources
    c) Widely available with low demand
    d) In short supply with low demand
A

a) In short supply and high demand

28
Q
  1. Which of the following events would increase the number of suppliers in a particular market?
    a) Introduction of minimum wage regulations
    b) High and increasing levels of investment required to enter the market
    c) Requirement for all companies to have 10,000 or more employees
    d) De-regulation of a previously government run industry
A

d) De-regulation of a previously government run industry

CIPS L4M2 (6 decks)

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