CIPS Defining Business Needs - L4M2 FREE EXAM DUMPS QUESTIONS & ANSWERS]

Question 1

A company wants to purchase a piece of equipment that will achieve a particular level of output. It is inviting tenders and has written a conformance specification. Is this the right specification to issue with the invitation to tender?

A. No, the supplier should have responsibility for the equipments performance B. Yes, it is always a good thing to issue a conformance specification C. No, it would be better to issue a performance specification D. Yes, suppliers will know exactly what to produce

Discussion 0

Correct Answer: C Vote an answer

Question 2

A procurement team is categorising their purchased items into four quadrants of Kraljic's supply chain portfolio matrix. They realise that there are some low-value items which come from very few suppliers in the market. The organisation is critically dependent on these suppliers. The team plans to reduce the dependence by finding alternative sources. Is this a right course of action?

A. No, there is no way to escape this dependency B. No, the organisation should run competitive biddings to exploit the competition C. Yes, this action will dramatically increase the supplier's bargaining power D. Yes, the organisation needs to reduce the supply risks

Discussion 0

Correct Answer: D Vote an answer

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Question 3

How can a procurement department meet the business needs when purchasing leverage items?

A. Developing effective contracts such as call-off contracts B. Developing long-term relationships such as partnerships C. Developing efficient order processes such as e-procurement D. Developing buying power such as competitive tendering

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Correct Answer: D Vote an answer

Question 4

A procurement manager includes provision on recovery from natural disaster into a through-life specification.
Some suppliers suppose that provision is unnecessary. Is procurement manager's action justified?

A. Yes, because the regulations require contract to have recovery provision B. Yes, because natural disaster may cause risks in organisation's supply chain C. No, because this provision will incur unnecessary cost to supplier D. No, because with current technology, natural disaster can't disrupt supply chain.

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Correct Answer: B Vote an answer

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Question 5

Rachel has issued a specification for spare parts out to global suppliers. Rachel has asked for these parts to carry a standard from the International Organisation for Standardisation. Is Rachel right to do this?

A. No, as these standards don't apply to spare parts B. No, as this standard will not be recognised outside of the UK C. Yes, as spare parts are the only things these standards apply to D. Yes, as it is an appropriate and recognised standard

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Correct Answer: D Vote an answer

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Question 6

The position of a product in its life cycle can affect the price that suppliers set. Is this statement correct?

A. Yes, it is always the only factor determining the price B. No, customer's perception of value is the ultimate determinant of the suppliers' price C. Yes, each stage in product life cycle requires different levels of investment in promotion and distribution D. No, in market economy, the state decides the price of all goods and services

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Correct Answer: C Vote an answer

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Question 7

An example of a direct cost is ...

A. Raw material B. An overhead expense C. Office cleaning D. Rent for premises

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Correct Answer: A Vote an answer

Question 8

XYZ Ltd is producing an engine which consists of many components. The procurement manager wants to find cost reduction opportunities and minimise part varieties. Which of the following may help her to achieve these objectives?
1. Value analysis
2. Segment analysis
3. Variety reduction
4. Standardisation

A. 2 and 3 only B. 3 and 4 only C. 1 and 3 only D. 1 and 4 only

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Correct Answer: D Vote an answer

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Question 9

When a procurement manager considers a substitution, the number and nature of additional func-tions that substitute provides should be taken into account carefully. Which of the following ratio could help the procurement manager to make the right decision?

A. Reserve requirement ratio B. Price to book value ratio C. Price to Earnings ratio D. Value to price ratio

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Correct Answer: D Vote an answer

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Question 10

A procurement manager is discussing with other stakeholders about the scope and the implementation of the upcoming construction project. A stakeholder argues that the construction projects are often risky as the overall scope of the work can't be accurately estimated from the beginning. Furthermore, the project spans over a long period, the costs of materials can fluctuate widely. The procurement manager suggests that the pricing structure should be able to cover the supplier's costs plus 10% markup on total costs. This arrangement is known as...?

A. Cost-plus Fixed percentage B. Cost-plus incentive fee contracts C. Cost-plus fixed-fee D. Cost-plus award fee

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Correct Answer: A Vote an answer

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Question 11

Which of these are advantages of using a conformance specification? Select TWO that apply.

A. It forces consideration of actual product needs B. It enables value-for-money solutions C. There is a smaller supplier base to select from D. It enables supplier flexibility and product innovation E. It provides evidence of requirements if there is a dispute

Discussion 0

Correct Answer: C,E Vote an answer