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CIPS L4M2 - Defining Business Needs

Page: 7 / 9
Total 303 questions

Due to increasing demand, a local restaurant is requesting its fish vendor to supply larger quantity. The restaurant manager also asks the vendor whether it is possible to reduce the total price by 5%. This is known as...?

A.

Straight rebuy

B.

Capital purchase

C.

Modified rebuy

D.

New purchase

Which of the following problems may be identified as open-ended problems? Select TWO that apply:

A.

Shortage of key medicines in healthcare industry

B.

A cyber attack takes down whole company’s IT system

C.

Engine failures cause flight cancellations.

D.

Logistics costs incur a large portion in wholesale prices

E.

The suppliers don’t comply with the company’s policy on underage labour.

A company department is writing a business case to justify the purchase of an expensive piece of capital equipment. Which of the following should be included in the business case?

Terms and conditions of contract

Tender evaluation criteria

Degree of added value

Financial plan

A.

1 and 2 only

B.

2 and 3 only

C.

3 and 4 only

D.

1 and 4 only

Would economies of scale be a barrier to entry for potential new entrants to a market?

A.

Yes, it allows established competitors to squeeze new entrants with a price war

B.

No, it makes the buyer more powerful they can force down prices m a price war

C.

No, the volume purchased by the buyer or industry is not important to the market

D.

Yes, it is an aggressive competitive strategy one firm’s gam is another firm’s loss

When preparing through-life specification, which of the following requirements should procure-ment team define besides the physical asset? Select TWO that apply.

A.

Customer service

B.

Objectives

C.

Market analysis

D.

Logistics and installation

E.

Available substitute

Azram, a procurement analyst, has been tasked with applying whole life asset management when purchasing a piece of laboratory equipment. Was this the correct course of action?

A.

Yes, because this focuses only on the price of the equipment

B.

Yes, because this considers all associated costs

C.

No, because this considers the costs of quality

D.

No, because this covers various transactional costs

What are the direct risks that can result from procurement receiving inadequate specifications from a research and development department?

A.

Increased business size

B.

Under or over delivery of goods

C.

Increased labour costs

D.

Under or over statement of need

Which of the following agencies can produce a technical standard?

A.

House of Lords

B.

Marketing department

C.

BSI

D.

Department of State

As the lead procurement manager you have been asked to compile a business case for a large project. Which of the following should you include in the business case?

    Costs and risks

    List of large suppliers

    Business benefits

    Informal recommendation

A.

1 and 3 only

B.

2 and 4 only

C.

1 and 4 only

D.

2 and 3 only

Which of the following factors would mean a buyer had high bargaining power in a competitive market? Select TWO that apply.

A.

Many substitute products are available

B.

Buyers are procuring a low volume of products

C.

High switching costs for the buyer

D.

Buyers are demanding large volumes

E.

Products are highly differentiated