Question 1: Correct
Cross-organisational teams can be expected to deliver beneficial outcomes.
Which one of these four is least likely to be such a beneficial outcome?
Quicker procurement cycle times
More accurate specifications leading to higher quality and reduced costs
Improved knowledge sharing
Increased internal competitiveness
(Correct)
Explanation
Knowledge-sharing, better specifications and perhaps even reduced cycle times
might be improvements from cross-organisational teams. Therefore the least likely of
those answers offered would be increased internal competitiveness.
Question 2: Correct
In what sector is there restricted scope for long term supplier relationships due to
internal or statutory procedures?
Private sector
Public sector
(Correct)
Manufacturing sector
•
Not-for-profit sector
Explanation
Public sector, unlike private sector, is compelled by law in most countries, to go back
to the market every so many years. This limits the likelihood of forming genuine
long-term close relationships between buyer and seller organisations.
Question 3: Correct
The abbreviation ‘BCP’ stands for:
Business Continuity Plan(ning)
(Correct)
Basic Competitive Procurement
Business Critical Procurement
Bought at Cost Price
Explanation
Business Continuiy Plan(ning) - planning to manage unanticipated and significant
disruption - an element of responsible risk management
Question 4: Correct
In which one of the following would a public body in Romania be most likely to
advertise very high spend procurements to notify potential suppliers of a large scope
of work?
Local newspapers
Official Journal of the European Union
(Correct)
•
Supply Management website
Trade journals
Explanation
Official Journal of the European Union.
Such an announcement is a legal requirement of public sector buyers within the EU.
Question 5: Correct
Select the two terms below which are not the formal titles of a European Union
procurement process or procedure:
Single source
(Correct)
E-tender
(Correct)
Innovative partnership
Competitive procedure with negotiation
Open tender
Explanation
E-tender and single source.
Question 6: Correct
Which of these mnemonics can help you remember the seven wastes?
•
DEADWOOD
NEWWOOD
TIMWOOD
(Correct)
OLDWOOD
Explanation
Transportation, inventory, motion, waiting, over-production, over-processing,
defects.
TIMWOOD.
Question 7: Correct
Select the internal stakeholders from this list:
suppliers
end users in our firm
(Correct)
our employees
(Correct)
in-house legal
(Correct)
competitors
customers and clients
communities in the local area
government and other agencies
Explanation
In-house legal, end users in our firm, our employees.
All others listed are external to 'our' organisation.
Question 8: Correct
What is one of the main risks of knowledge transfer?
Price considerations
Relationship considerations
IPR considerations
(Correct)
Resource considerations
Explanation
Risk of transfer of intellectual property, and loss of the rights to it.
Question 9: Correct
The acronym ‘MEAT’ stands for:
Multiple electronically accessible tenders
Minimum economically attractive term
Most economically advantageous tender
(Correct)
Most economically advanced tender
Explanation
Most economically advantageous tender - an approach which takes account not only
of price, but other relevant factors too, such as quality, warranties, or whatever is
appropriate in the circumstances.
Question 10: Correct
In a private sector organisation, shareholders are the owners of a company. True or
false?
True
(Correct)
False
Explanation
True.
Question 11: Correct
In what two ways can procurement add value at the specification stage of the
procurement cycle?
•
Make sure the requirement is not over-specified
(Correct)
Purchase on end-user sourcing suggestions
Conduct due diligence on the potential suppliers
Create awareness of the benefits of standardisation
(Correct)
Explanation
Create awareness of the benefits of standardisation
Make sure the requirement is not over-specified
Note that the question is about the specification stage of the procurement cycle.
Question 12: Correct
Who should be included at the evaluation stage of a high risk and high spend tender
after the bids have been submitted (choose two)?
Suppliers
Finance
(Correct)
Payroll
•
Procurement
(Correct)
Explanation
Both finance and procurement should be represented, along with representatives of
users and others.
Question 13: Correct
Which of the following could result in a lack of compliance with procurement
processes and procedures (choose two)?
Contract leakage and coverage
(Correct)
Reduced vendor base
Increased procurement cycle time
Internal stakeholder conflict
(Correct)
Explanation
Internal stakeholder conflict
Contract leakage and coverage
Question 14: Correct
Early Supplier Involvement (ESI) is best suited to which type of relationship (choose
one)?
ESI can be achieved across the relationship spectrum
•
Outsourced
Adversarial
Collaborative
(Correct)
Explanation
The closer the organisations, the easier it would be to involve a supplier early. So
collaborative.
Question 15: Correct
There are some drawbacks using a stakeholder mapping matrix. These include
(choose two):
It does not take into account risk
The matrix is substantially subjective and judgmental
(Correct)
The matrix is only valid for a particular period of time
(Correct)
The mapping should only be carried out by procurement
Explanation
Such a matrix is relatively subjective and is time-limited.
Question 16: Correct
What is one of the main reasons for a price increase of a standard item?
•
Import duties decrease
Demand outstrips supply
(Correct)
Supplier relationship deteriorates
Currency exchange rates stabilise
Explanation
Demand outstrips supply.
At the time of writing (May 2021), very substantial price increases are observed in
steel, wood for building and shipping containers. These all occur because of greatly
increased demand and insufficient supply.
Question 17: Correct
An accommodating approach to conflict is linked to which one of these situations?
Where there is a low level of assertiveness and low level of cooperation
Where there is a high level of assertiveness and low level of cooperation
Where there is a low level of assertiveness and high level of cooperation
(Correct)
Where there is a high level of assertiveness and high level of cooperation
Explanation
Where there is a low level of assertiveness and high level of cooperation
In other words, a strong desire to please or accommodate.
Question 18: Correct
Comparing an element of one business, such as price, quality or service against
another.
Financial reporting
Vendor rating
Supplier development
Benchmarking
(Correct)
Explanation
Benchmarking.
Question 19: Correct
What might be indications that a team is not working together effectively (choose
two)?
Quality of work is only satisfactory
Poor communication between team members
(Correct)
Increased level of constructive conflict
•
Lack of focus on achieving objectives and goals
(Correct)
Explanation
Poor communication and lack of focus might suggest something is wrong, and
requires scrutiny.
Question 20: Correct
Which stage of team development is usually associated with the time when team
members are successfully working towards reaching their objectives?
Performing
(Correct)
Norming
Forming
Storming
Dorming
Explanation
The answer is 'performing'.
Question 21: Correct
Shareholders are a category of stakeholder. True or false?
True
(Correct)
•
False
Explanation
True.
Question 22: Correct
Often internal stakeholders do not follow procurement procedures. What can be the
reasons for this (choose two)?
The procedures have not been signed off by senior management
The stakeholders are unaware of the content in the procedures
(Correct)
Internal stakeholders are mostly corrupt
The stakeholders do not like procurement people
The procurement department is seen as being too slow and bureaucratic
(Correct)
Explanation
Lack of awareness, and bureaucracy are two reasons found for users not following
procedures.
Question 23: Correct
The most advantageous combination of price and quality that makes a product or
service fit for purpose and will achieve the buyer’s required outcomes.
Value for money
(Correct)
The five rights
Output specification
Whole life costs
Explanation
Value for money - price and quality.
This definition is taken from the official CIPS Study Guide.
Question 24: Correct
What is a technique open to buyer and supplier to mitigate the effect of price
fluctuations?
Lean manufacturing
Vendor managed inventory (VMI)
Just in time (JIT) concepts
Forward buying
(Correct)
Explanation
Vendor managed inventory - the other answers offered are irrelevant in price terms.
Question 25: Correct
Normally they are service organisations run by the government and usually funded
by taxes
•
Private sector
Third sector
Public sector
(Correct)
Not-for-profit sector
Explanation
'run by the government' and 'funded by taxes' mean that this has to be public sector.
Question 26: Correct
Which of the following are the four E’s?
Efficacy
Economy
(Correct)
Efficiency
(Correct)
Ergonomics
Equity
(Correct)
Effectiveness
(Correct)
Equality
Explanation
Economy, efficiency, effectiveness, equity.
Question 27: Correct
The axes on Mendelow’s matrix are:
Power and motivation
Power and glory
Authority and interest
Power and interest
(Correct)
Explanation
The Mendelow Matrix, which is a stakeholder management tool, uses 'power' and
'interest' as its axes.
Question 28: Correct
Which benefits accrue from accurate cost modelling (choose two)?
The buyer will have a better understanding of internal costs
•
It will lead to more effective use of procurement resources
The buyer will have an idea of what margin the supplier is charging
(Correct)
Knowing the supplier's costs will greatly assist in negotiation
(Correct)
Explanation
Cost modelling should produce a better understanding of supplier's costs: this will
enable sight of margin %, and can also help in price negotiation.
Question 29: Incorrect
There are risks in failing to map internal stakeholders. These include:
Failing to create a communication strategy
Organisation will fail to meet its objectives
(Incorrect)
Critical stakeholder needs are not satisfied
(Correct)
Wasted resources prioritising the wrong stakeholder
(Correct)
Explanation
Critical stakeholder needs are not satisfied
Wasted resources prioritising the wrong stakeholder
Question 30: Correct
When is it appropriate to use competitive bidding, according to Dobler and Burt?
Select all that apply.
When the requirement is of sufficient value
(Correct)
When there is enough time to complete the process
(Correct)
When there is a clear specification
(Correct)
When there is effective competition in the marketplace
(Correct)
Explanation
If you think about it, the answer(s) to this question are pretty obvious. Competitive
bidding (tendering) only makes sense for high value items, when there is competition
in the supply base, when you know what you want, and when you have time enough
to undertake the exercise - in particular, when you can allow the bidder time to put
together a proper offer.
If any of these elements is missing, the buyer should think again.
There are other requirements of an effective bidding process, which Dobler and Burt
expand upon in their textbook, Purchasing and Supply Management: text and
cases (1996)
Question 31: Correct
When a buyer reduces the number of suppliers it has for a product or service.
Supplier development
Variety reduction
Purchasing research
Supply base rationalisation
(Correct)
Explanation
Supply base rationalisation / reduction.
Normally undertaken on cost and efficiency grounds, consolidating spend with fewer
suppliers.
Question 32: Correct
Mendelow’s matrix is a form of:
Stakeholder control
Shareholder valuation
Steak and eggs
Stakeholder mapping
(Correct)
Explanation
Stakeholder mapping.
A mechanism to help work out how to prioritise and manage stakeholders.
It has nothing to do with steak tartare.
Question 33: Correct
Which one of these is not part of the seven wastes?
Under-processing
(Correct)
Waiting
Defects
Transportation
Explanation
Over-processing is part of the seven wastes, but under-processing is not.
Question 34: Correct
Private sector organisations are owned by private individuals and enterprises. What is
normally the primary motivation for setting up and continuing in business for such
organisations?
To be seen to be doing good
A desire to do good
•
A desire to share wealth with others
The profit motive
(Correct)
Explanation
For most private sector organisations, profit is the primary motivator.
Question 35: Correct
To maintain a healthy ongoing relationship, what is considered to be a best practice
activity after awarding a contract to the successful bidder?
Solely concentrate on the successful bidder and organise a kick-off
meeting
Inform the unsuccessful bidders and provide feedback
(Correct)
Send an email to the unsuccessful bidders that they have failed
Starting ratifying contract terms with the successful bidder
Explanation
Inform the unsuccessful bidders and provide feedback.
Question 36: Correct
What do the letters CPV stand for?
Common procurement vocabulary
(Correct)
•
Continuing purchase value-add
Critically proven vendor
Cost price valuation
Explanation
Common procurement vocabulary.
Question 37: Correct
Select the external stakeholders from this list:
End users in our organisation
Our legal department
Our employees
Customers and clients
(Correct)
Suppliers
(Correct)
Communities
(Correct)
•
Competitors
(Correct)
Government and other agencies
(Correct)
Explanation
Competitors, customers, government, suppliers and communities are external.
Question 38: Correct
Which two internal stakeholders is a buyer most likely to approach when identifying
potential suppliers for a sourcing exercise?
Human Resources
Users who will be using the product or service
(Correct)
Finance
Technical
(Correct)
Explanation
Technical, as well as users who will be using the product or service.
Question 39: Correct
Risk management can be an important activity to assess relationship risk in more
collaborative relationships. Which risk profile should be prioritised in the first
instance?
•
Low likelihood/ high impact
High likelihood/ low impact
Low likelihood/ low impact
High likelihood/ high impact
(Correct)
Explanation
High likelihood/ high impact.
Highly likely to occur, with a large effect felt.
Therefore prioritise.
Question 40: Correct
A document sent to potential suppliers asking for information necessary to support
their approval as an approved supplier, or to enable them to be invited to bid. Select
the two correct answers.
EQ
RFQ
SQ
(Correct)
PQQ
(Correct)
Explanation
'Supplier questionnaire', historically called 'pre-qualification questionnaire'. So, SQ
and PQQ.
