A procurement manager is writing a conformance specification for a non-core component. She thinks that if the requirements in specification are higher than ISO standards, her company can achieve greater cost-savings. Is the procurement manager’s opinion correct?

Andrew is responsible for procurement of capital assets at Lumber Ltd. He is devising new business case for the purchase of a new band saw. The purchase price of the saw is $50,000. Andrew estimates that the machine will generate $10,000 per year of net cash flow. What is the payback period of this band saw?

Which of the following are typical social considerations throughout the contract life cycle? Select the TWO that apply.

It could be argued that wherever possible, specifications should be more output and outcome focused. Why is this?

When devising a business case for purchasing a new copier, Maria analyses its whole-life costs as following:

Though cost generating activities are identified, she has not categorised the costs. What is the total value of copier's end of life costs?

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

Which of the following are typically included in a conformance specification? Select TWO that apply.

Which of the following is the new technology that has impact on manufacturing sector?

FSB Group is developing a building specification that ensures fair labour practices and prioritises local employment. What type of sustainability criteria does this describe?

What does the acronym RAQSCI stand for?

Raw materials used in the production of a saleable product are classed as ...

Why should procurement professionals develop business case before seeking approval to purchase capital equipment?

Which of the following is a risk to buying organization when using conformance specification?

Which of the following specific markets is most likely to have the lowest entry barrier?

Which of the following are characteristics of effective financial markets?

Market stability is maintained

Market volatility is encouraged

Investment is encouraged

The level of regulation is reduced

What issue is a buyer most likely to experience if the technical specification sent to suppliers as part of a Request For Quotation (RFQ) is insufficient?

Which of the following activities would apply to a straight rebuy procurement?

Reviewing existing specifications and arrangements

Engaging in extensive purchasing research

Engaging in proactive value engineering

Optimising inventory replenishment methods

A consulting firm in London had previously had static budgets. They were set once and locked in for the year. This resulted in departments meeting their budgets early and doing virtually nothing the rest of the accounting period. To address this imbalance, the company tossed out the static budget and developed a new one for each department of the next 18 months. And each month, real sales figures are analyzed against the plan and the budget is adjusted accordingly. Then the company adds another month into the budgeting plan. What type of budget this company is using?

What is the contribution of marketing function to the development of specification?

In 2016, ANA Airlines had to cancel some of its flight. The airline said it had discovered the cracks to the jet engine turbine blades. What should ANA procurement team do next to solve this problem?

A buyer in Housing Authority is considering using performance specification in upcoming social housing project. What should buyer be aware when using this type of specification?

Which of the following is an assumption of Kano model?

A state school has a procurement requirement to buy new art materials for the next school semester and needs to forecast purchases against its restricted budget. What would be the key business requirement in this purchasing decision?

James Hunter has received a price increase request from a supplier with its justification. The supplier has requested the price increase because there has been an increase in staff sickness absence. James has reviewed the original contract and found a buyer provision for 'risk for additional resource.' This is the first year the supplier has experienced a resource issue. What should James do?

The buyer's database is regarded as a primary data source. Which of the following is also a source of primary data?

Which of the following factors should be assessed to understand the competitiveness of a supply market?

Which of the following are recognised competitive strategies?

1. Winning new business at all cost

2. Getting more customers’ attention

3. Creating stand-out products and brands

4. Focusing on niche market

5. Acquiring competitors

Which of the following are typical examples of secondary sources of market data? Select TWO that apply.

A supplier of software has received a request to quote for a product. The software supplier considers that the buying organisation making the request provides relatively little benefit or alignment to their own strategy. Which one of the following options describes how the supplier might react to the buyer?

Total cost of ownership of a solar panel is $5,000 and it is expected that the panel will make a sav-ing of $1,000 each year. So it would take 5 years for the benefits to repay the investment. Therefore, the firm plans to keep the solar panel for at least 5 years. Is payback period calculation right for making the business decision?

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

What is the purpose of sending value engineering analysis to external suppliers?

Which of the following factors are likely to be direct barriers to a new entrant in a supply market?

What is the output of regression analysis?

Why is the specification considered as the most important document in procurement?

Lider Ltd is a leading bathroom furniture manufacturer in India. The company has more than 30 years experience in the market with extended knowledge of engineering and customers' taste. Lider is planning to launch a new type of bath fitting next year which offers Bluetooth connectivity and thermostat display. The company gathers a team of multi-disciplines, including engineering, procurement, sales and marketing. At the first team meeting, the project leader tells the team to discuss which functions will be valued by the customers, and how to deliver those functions with the lowest costs possible. Which of the following describes the process that the project team is undertaking?

A hospital extensively spends on medical and implantable devices, medical, surgical and pharma-ceutical supplies, costs of supplies related to buildings and maintenance operations. Hospital’s procurement manager suggests that the hospital has an opportunity to reduce operational costs by reducing variation of medical devices and pharmaceutical supplies. Which of the following best describe the procurement manager's suggestion?

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

When drafting a business case. Benjamin believes he has power over a supplier and will consider this when detailing budget information. Is adopting a powerful approach with the supplier a reasonable approach?

A company has installed a new piece of capital equipment but needs to arrange a maintenance contract for three years. The company wants to know as accurately as possible what this price will be for the full contract. What would be an appropriate type of pricing mechanism to use when asking suppliers to quote prices?

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?

Which of the following are considered as direct costs in a construction company? Select TWO op-tions

At which stage of through-life contract management, procurement team needs to identify sources of risk and the ways to mitigate them?

Which factor would increase a buyer’s bargaining power in a negotiation?

Ray is a procurement officer working for a medium-sized enterprise. Ray is due to renew the IT support package for one of the company's software systems, which is used for selling a niche, but important product.

Tech Solutions are the only supplier who can provide support for this specialist software. The software support package represents only 3% of Tech Solutions' overall sales income, however. Ray and Tech Solutions have an effective working relationship Which statement below describes the bargaining power in this situation?

A company is considering buying a new computer system to handle large amounts of personal data and expects the system to perform in a particular way. Which of the following should be included in the performance specification? Select TWO that apply.

System operating conditions

XYZ Ltd operates in the plumbing and heating industry. The company has developed and patented a new range of alternative products, using a different material from conventional brass that offers substantial cost savings. XYZ Ltd plans to launch the full range of new products. Will this change the impact on competitive forces in the market?

XYZ Ltd is a large supermarket chain which operates mainly in the UK and Europe. Their custom-ers are increasingly concerned about sustainability. Therefore, procurement manager is required to source the products from suppliers who have good environmental performance. Which of the fol-lowing can be an assurance that the supplier has procedures and policies to enhance its environmental performance?

Aldar Properties is a property developer in UAE. In last month, it spent $2,160 for 10 tons of steel. In this month, it had planned 10% increment in budget for steel comparing to last month. But the number of orders boosted and total spend on steel reached $1,992.1 while Aldar has imported 11 tons. What is the main cost driver of steel budget?

GSC Ltd is a manufacturer of car parts. To accommodate growing demands of electric cars, the company is developing a new component which requires different type of steel. The project team estimates that the component will be ready for production in 1.5 years. Until then, they need to keep the production busy.

After checking the inventory records, the production team sees that the company has 3 months of stock. The lead time for each batch is two months. Which of the following should be a priority ac-tion of the company?

Despite of better improvement rates than other types of benchmarking, functional benchmarking still has downsides. Which of the following is most likely to be a disadvantage of functional benchmarking?

Josh, a junior procurement analyst, was asked to analyse the cost breakdowns for some of the major

category products that he purchases for the engineering company he works for. He has looked at various types of costs and has identified some correlations. Which of the following are correct?

Simon has received a requisition for a product identical to one already purchased, but this time the product requires specific customer-branded packaging. What type of purchase is this?

Which of the following positively affects a buyer's company cash flow? Select TWO that apply:

ABC Ltd has recently set up a stationery contract with a large stationery provider, obtaining fixed prices on core stationery items. The brochures have been distributed within ABC Ltd and one of the key users wants to order a corner desk and office chair from the brochure. Is this within scope?

The finance department of a large organisation is collating budget information received from its various departments, including sales, marketing, and production. These budgets include forecast information on costs and revenues. The finance department will be using the information to establish which of the following?

Builder Inc is a rapidly expanding business in construction sector. Due to an increase in projects, it cannot manage the flow of materials by Excel spreadsheets but by more dedicated software. Who would be a key internal stakeholder in defining software compatibility with company's current system?

The bargaining strength of suppliers is likely to be high in which of the following situations? Select TWO that apply:

Which of the following are potential advantages of using a product performance specification?

It reduces the need for the buyer to produce a detailed design

It can widen the potential supply base

The buyer can specify the product's actual design in detail

Products are provided using the buyer's methodology

A food manufacturer wants to predict the pricing point for a new and innovative health drink. Which method of market research would be beneficial to receive the most accurate information?

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?

Housing Ltd is inviting a number of contractors to a tender for the construction of a commercial building. In the attachment to the invitation to tender, there is a document which describes the re-quired materials and installation methods. This document is known as...?

Which of the following will help the bargaining strength of a buyer?

The buyer has the option to make the product in-house

There are a limited number of suppliers available to the buyer

The buyer's switching costs are high

The buyer's spend is a high proportion of the supplier's revenue

Which of the following is part of a conformance specification?

A buyer can use sources of information to review indirect costs associated with the manufacture of goods to support negotiations. Is this statement true?

Which of the following are major factors when determining the bargaining power of buyers? Select THREE that apply.

SET Group are a start-up company trying to estimate the direct costs of materials for a project. The organisation has limited procurement records available. Would using general industry averages as a benchmark provide an accurate estimation of the project costs?

What is a form of testing used to establish if a supplier is meeting the requirements of a specification?

Which of the following is the disadvantage of embedding standards in a specification?

The buyer’s database is regarded as a primary data source. Which of the following is also a source of primary data?

Which of the following technology is likely to be an innovation in financial sector?

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

Buyer power may make a supply market more competitive. Which of the following are examples of buyer power? Select TWO that apply.

A garment manufacturer supplies global retailers with t-shirts, shirts, and linen trousers. Because of currency fluctuations, the manufacturer is aware that they must control their direct costs in order to ensure profits. Which of the following is a direct cost for the garment manufacturer?

A procurement manager consolidates the company expense on printing and office supplies into broader range of spend category. Other senior managers are concerned that it may increase company’s spend. Is that concern justified?

Which of the following factors is most likely to be a barrier to new entrant in agriculture?

The bargaining strength of suppliers is likely to be high in which of the following situations? (Select TWO)

A charity is reviewing their spend and budget after an operation in flooded areas. They realise that the operators save money against the budgeting plan. This saving is known as...?

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

Standards are documents that stipulate or recommend minimum levels of performance and quality levels of goods and services. The government is the only source of any standards that are applied by businesses in nations. Is this correct?

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

Over the life of a product, which of the following would be considered non-value-adding costs?

Rework costs

Production costs

Maintenance costs

Waste disposal costs

Which of these causes variances in budgets?

Quantity discounts

Substitute goods

Loan repayments

Corporation tax

A market has a considerable number of buyers and suppliers. Analysis of the market reveals that loyalty from buyers is relatively low and switching to alternative providers is commonplace. Which of the following market characteristics is supporting this type of buyer behaviour?

A buyer can use sources of information to review indirect costs associated with the manufacture of goods to support supplier negotiations. Is this statement true?

Synergy Ltd is a fast-growing tool and hardware retailer. The company's customer services team has been using Excel worksheets to manage customer relationships. When the company is expend-ing its market presence, this way of working leads to poorer customer services as the database is scattered around in spreadsheet, leading to patchy and inconsistent conversations with customers. The company decides to purchase a CRM system. What requirement should Synergy's procurement team take into account in the specification for CRM system?

Which of the following bodies provides standards for the products and services in the US?

The procurement officer for Hunter Manufacturing has been tasked to procure a new manufacturing software management system. They have consulted all relevant internal stakeholders and have the following high-level requirements: flexibility throughout the project, and the supplier to recommend the best solutions for building the system. Which type of specification should be developed?

Raheem is the head of procurement at a care home. He decides to use a performance specification for the purchase of a new intelligent patient record IT system. Is this a correct approach?

Royal Navy is preparing a through-life contract. They put to the contract a term on rectification of operational defects and planning and delivery of Fleet Time Support Periods. Which part of through-life requirement does this term belong to?