Exam Name: Procurement and Supply in Practice
Certification Provider: CIPS
Corresponding Certification: CIPS Level 4 Diploma in Procurement and Supply
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CIPS L4M8 Exam Syllabus Topics:
| Section | Objectives |
|---|---|
| Topic 1: Contracting and Legal Principles | - Contract management
|
| Topic 2: Procurement Process and Sourcing | - Supplier selection and evaluation
|
| Topic 3: Supplier Relationships and Performance | - Supplier relationship management
|
| Topic 4: Procurement Technology and Innovation | - Digital procurement tools
|
| Topic 5: Risk, Ethics and Sustainability | - Procurement risk management
|
| Topic 6: Procurement and Supply Context | - External business environment
|
CIPS Procurement and Supply in Practice Sample Questions:
What are the reasons that a contract can legally be terminated?
Reveal Solution Discussion 0Correct Answer:
See the answer in explanation.
Explanation:
A contract is written or verbal agreement, made between two or more parties that are legally en-forceable. For a contract to be legally binding it must include intention of parties entering into the contracts. All parties must have the capacity to contract or be contracted. They must be of a sound mind, there should be a promise (offer) for performance from the other party and an exchange (consideration) of one thing for another within an agreement for contract to be binding, there must be an acceptance of the offeror's offer by the offeree.
There are many reasons contract can legally be terminated, including non-performance by one or both parties, a significant change in the requirement.
There are several reasons contract can legally be terminated, including non-performance by one or both parties; breach of material, failure to meet service level agreement, ethical breaches, a significant change in the requirement of either party caused by ethical change in the market, change in Demand, obsolescence, contract completion. The procurement professionals should get an exit strategy that should encourage a stress free disengagement should incase there are no profitable reason to continue with the contract.
Explain which factors should be considered when deciding the quantity of a product to order.
Reveal Solution Discussion 0Correct Answer:
See the answer in explanation.
Explanation:
When reviewing supplier's response the procurement professional should consider the right quantity of product or service that has to be ordered at anytime as against the price to decide how to gain the best cost.
Factors to consider include the following
(1)Cost of inventory
(2) cost of insurance
(3) cost of transportation.
* Refer to the question column for response
Describe three ways in which a supplier could improve the effect its company has on the environ-ment.
Reveal Solution Discussion 0Correct Answer:
See the answer in explanation.
Explanation:
Responsible and ethical sourcing promotes working with suppliers who want to have a positive effect on the environment or at least minimize the damage they cause. Suppliers can make effort to reduce their impact on the planet through reducing the pollution, taking steps to recycle or reuse products can improve on supplier's impact on the environment, also supplier can consider sustainability as another environmental factor.
Suppliers with strong values on ethics will have a programme to return anything taken from nature in the form of replanting or replacing.
When should whole life asset management be applied?
Reveal Solution Discussion 0Correct Answer:
See the answer in explanation.
Explanation:
When organization has made the decision about which option is best for sourcing the asset, it can then begin to work on the whole life asset management strategy.
Whole life asset management is the process of evaluating the total price and all associated costs of a product to make an informed decision as to which option will provide the organization with the best value for money.
This strategy is only under taken for large-value procurements because; 1) It takes considerable time (2) It involves many stakeholders and require numerous resources; If whole life asset management were conducted on every purchase it would not create value for the organization and that may tie up valuable resources.
Describe two ways in which an organization with which you are familiar could use continuous im-provement as part of whole life asset management.
Reveal Solution Discussion 0Correct Answer:
See the answer in explanation.
Explanation:
Continuous improvement relates to removing waste from the supply chain and improving processes to increase efficiency within whole life asset management in a full power project (a flour producing firm) can benefit from continuous improvement in the following ways;
1) Reduce cost of spears by recondition parts, instead of disposing them out rightly.
2) Can reduce down time by conducting routine maintenance after hours.
3) Can reducing accident by up skilling operators on safety
4) Can reduce waste oil by following owner's manual instead of relying on experience.
5) Create efficiencies by operating a 24/7 shift pattern.
* Refer to the question column for response
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