Spot the odd one out.
- A . Effectiveness
- B . Ecology
- C . Efficiency
- D . Economy
C
Explanation:
You should be familiar with the meaning of the terms economy, efficiency and effectiveness and able to distinguish one from the other.
You have invited quotations for some building maintenance work to be done at your organisational headquarters. Your sister has recently taken up a position as Head of Marketing at one of the firms which has quoted for the work.
What should you do?
- A . Disbar the firm your sister works in, from the exercise, as the connection could create undesirable rumours about malpractice.
- B . Do nothing C you know you are honest and that is what matters.
- C . Ask your sister to take you out for dinner on her expense account to discuss the matter.
- D . Advise your line manager in writing, and ask to be excused from participation in this particular procurement exercise.
D
Explanation:
A simple solution is to ‘recuse’ yourself from anything to do with this procurement. That way, neither you, your employer or your sister can be accused of malpractice.
Disbarring your sister’s employer punishes them simply because both they and your firm employed high-quality people. 🙂
Sometimes knowing you are honest is not enough: sometimes you have to demonstrate that.
So the only answer which makes sense is the correct one, as above.
Disclose, distance, delegate, …?
- A . Dislocate
- B . Disassociate
- C . Discriminate
- D . Discombobulate
B
Explanation:
Disassociate is the correct answer.
This is the 4 D’s model of how to deal with a conflict of interest.
‘Discombobulate’ means to disconcert or confuse, as if you didn’t know.
Where performance of the contract may be impossible because of external unforeseen factors, this may be called:
- A . Force majeure
- B . Force supérieure
- C . Force ouvrière
- D . Mutatis mutandis
A
Explanation:
A force majeure clause in a contract may give rights to either party to suspend its obligations in the event of something untoward happening which is outside the control of the parties.
Examples might volcanic dust clouds, tidal waves or a pandemic. Often lesser events trigger (or are used to try to trigger) the use of such a clause.
KPIs should be:
- A . START
- B . SMART
- C . SWART
- D . SHARP
B
Explanation:
Key Performance Indicators should be specific, measurable, achievable, realistic and time-bound; or words very similar to those, meaning broadly the same.
‘Something which carries on over time, going round in repetitive circles’, is called a:
- A . Scheme
- B . Cycle
- C . Circuit
- D . Process map
B
Explanation:
It’s a cycle.
This is relevant to the measurement of cycle times, as featured in your syllabus.
In the period in question, the budget for staff overtime and bonuses is zero.
The actual expenditure is 2,900.
Is this variance:
- A . Averse?
- B . Favourable?
- C . Adverse?
- D . Zero?
C
Explanation:
The variance is adverse – more was spent than budgeted – this is not favourable.
‘EBI’ stands for:
- A . Earnest business interest
- B . Early buyer involvement
- C . Ethical business interest
- D . Eager buyer involvement
B
Explanation:
Early buyer involvement
Which of the following most closely represents ‘the five rights’?
- A . PTQQQ
- B . QQPTT
- C . QQPPT
- D . PPTTQ
C
Explanation:
Quality, quantity, price, place, time. You will need to memorise these.
Note that for CIPS purposes, none of: goods (product or service), manner (ethics) or supplier, is in-cluded in this list. For the sake of ease, perhaps best to just go along with CIPS’ view.
Which of the following is not a concept related to quality management?
- A . SPC
- B . FMEA
- C . TQM
- D . SPQR
D
Explanation:
SPQR is a symbol of the Roman Empire, not a quality management concept.
Failure Mode and Effects Analysis, Total Quality Management and Statistical Process Control are all concepts which relate to quality management.
The crime of obtaining money through threats or force, is called:
- A . Fraud
- B . Bribery
- C . Embezzlement
- D . Extortion
D
Explanation:
This is a definition of extortion.
The other terms shown as possible answers are within the syllabus for this course and may be the subject of other questions within this test.
The axes on the Mendelow stakeholder management matrix are:
- A . Power and interest
- B . Power and influence
- C . Risk and interest
- D . Risk and reward
A
Explanation:
How powerful are stakeholders?
How much interest do they have?
Using these measures to help manage stakeholders effectively.
The abbreviation ‘SOP’ stands for:
- A . Standard office procedure
- B . Standard operating procedure
- C . System operating perfectly
- D . Standard operations process
B
Explanation:
Standard operating procedure.
A set of step-by-step instructions to direct employees how to perform routine operations (Profex Publishing).
A specification which focuses on the outputs of a requirement is called:
- A . Non-conformance
- B . Performance
- C . Conformance
- D . Non-performance
B
Explanation:
A performance specification concentrates on the outputs of whatever it is you’re buying.
‘Value engineering is a structured approach to increasing the value obtained from a product by of-fering the same level of XXXXX at a lower cost’.
What is XXXXX?
- A . Functionality
- B . Service
- C . Applicability
- D . Practicality
A
Explanation:
Functionality.
The idea of value analysis or value engineering is that cost should be taken out of the product, whilst enabling the same performance.
The Pareto Principle, broadly speaking, is also known as (choose two):
- A . ABC Analysis
- B . The Rule of Three
- C . The 80-20 Rule
- D . Value Analysis
A, C
Explanation:
Pareto Analysis is sometimes known as the 80-20 Rule. It is the basis of ABC Analysis.
‘in any series of elements to be controlled, a selected small factor [say 20%] in terms of number of elements almost always accounts for a large factor [say 80%] in terms of effort’. The figures in square brackets are illustrative – Pareto did not include these numbers and the % can be otherwise. The principle that a small percentage of ‘things’ will soak up a large amount of resource is what actually matters.
For example, if you have 100 suppliers, a disproportionate amount of energy / time / spend will be devoted to a small number of them. Similarly if you have 100 staff members. Or a stock range of thousands. Similarly for customers. And so on.
A relatively simple concept, worth it’s weight in gold in my opinion – my favourite management concept.
Select the two words which explain least well why the procurement of services can be more challenging than the procurement of physical products:
- A . Intangible
- B . Variable
- C . Permeable
- D . Inseparable
- E . Perishable
- F . Unimaginable
A, D
Explanation:
The correct answers to the QUESTION NO: are: ‘unimaginable’ and ‘permeable’. ‘Permeable’ makes no sense here; and it is possible to imagine both physical products and services.
The other four answers are distinguishing features of services, which result in services being more challenging to buy.
Giving or taking a payment of money to induce a person to act in breach of trust and do something they should not do is called:
- A . Embezzlement
- B . Extortion
- C . Fraud
- D . Bribery
D
Explanation:
Procurement professionals may be faced with offers of gifts including money in return for awarding contracts to a particular bidder, or similar. This is an attempt at bribery, which is illegal in most countries, and would be a breach of the CIPS Code of Conduct if the buyer were to accept. Anti-bribery legislation in countries such as the UK and US extends across borders, and penalties for breach of this legislation can include imprisonment.
A margin within which a specification can vary slightly C the outer limits of what is acceptable to the buyer C can be described as:
- A . Impedances
- B . Balances
- C . Tolerances
- D . Ordinances
C
Explanation:
The correct answer is ‘tolerances’. The tighter the tolerance ie the more restrictive the specification, the more challenging for a supplier to deliver, and the more costly it is likely to become.
A chart of the concept of ‘economies of scale’ would have two axes.
Which two?
- A . Price per unit
- B . Cost per unit
- C . Scale of operations
- D . Economies of operation
B, C
Explanation:
The principle of economies of scale is that cost will decrease as the scale / volume of operations in-creases. Remember that ‘cost’ is not the same as ‘price’.
See also ‘learning curve’ or ‘experience curve’. A clear mathematical ratio between volumes and cost per unit can be calculated / determined. The concept of the learning curve originated within the air-craft manufacturing sector in the United States, where engineers drew up precise cost benefits as the quantity of aircraft manufactured increased – as experience was gained.
These ideas can be very useful when negotiating price for large volumes, especially for new or be-spoke goods or services – the supplier’s costs may decrease significantly as volumes or experience increase(s).
The Profex textbook for this subject, states that ‘specifications are said to be ‘the heart of the con-tract’. The book then goes on to state that goods supplied must be ‘fit for…’
- A . A King
- B . Usage
- C . The requirement
- D . Purpose
D
Explanation:
‘Fit for purpose’.
This expression is used as / in definitions of quality, as well as being included in parts of UK legisla-tion (Sale of Goods Act).
You work as a buyer for a large international corporation. You are currently involved in negotiating a high-value contract, and one of the supplier’s representatives offers to take you to a dog-racing event, with all expenses paid. The offer is open to the whole of your procurement team.
What do you do?
- A . Decline
- B . Accept
A
Explanation:
Surely you know readily you should decline?
The purpose of a specification is (select all that apply):
- A . Provide a means of evaluation of a product or service
- B . Act as a means of exchange
- C . Define the requirement
- D . Communicate the requirement clearly
A, C, D
Explanation:
All of the ones shown, except acting as a means of exchange, which is one of the parts of a defini-tion of money.
Van Weele wrote that ‘quality is the degree in which XXXX requirements are met. We speak of a quality product or quality service when supplier and XXXX agree on requirements and those requirements are met’.
- A . Replace XXXX.
- B . Specifier
- C . Designer
- D . Customer
- E . Manufacturer
D
Explanation:
Quality, like most things in business, is ultimately about the customer.
Thinking of Carter’s 10 C’s, the ‘c’ for Commitment refers to:
- A . Delivery
- B . Profit
- C . Quality
- D . Customer
C
Explanation:
Commitment to Quality.
You will need to know the 10 C’s for various exams at Advanced Certificate, CIPS Diploma, and possibly beyond…
Restricted or limited tendering is also sometimes known as:
- A . Effective
- B . Elective
- C . Selective
- D . Invective
C
Explanation:
Selective, restricted and limited are all essentially the same idea: not open tendering, but using some kind of prequalification approach.
‘Efficiency is measured in terms of a quantity of …’
- A . Output per unit of input resource
- B . Resource per unit of input
- C . Input per unit of output resource
- D . Throughput
C
Explanation:
Output per unit of input resource.
Efficiency is, in a sense, seeking to get as much out of a system, while putting in as little as possible.
Which two of the following would be unlikely to increase value for money for an organisation?
- A . Attending social events at supplier’s expense
- B . Use of value analysis or value engineering
- C . Standardisation of components
- D . Accepting a late bid in a tender process
A, C
Explanation:
Suppliers entertain to retain or generate business – there is a cost to this, which is recovered from customers – the antithesis of value for money. Late bids are sometimes related to inflated prices and instances of malpractice. A late bid is extremely unlikely to increase value for money in the long term and is a serious breach of organisational procedure.
‘Expediting’ is:
- A . Setting off for Nepal
- B . Taking an audit of warehouse stock
- C . Seeking approval for organisational expenditure
- D . Chasing up orders already placed
D
Explanation:
Expediting – a task, which in an ideal world would not normally need to exist – is seeking to ensure delivery is made in line with contract and / or organisational needs.
It has nothing to do with permission to spend, auditing, or preparing for an expedition.
XXXX can be defined as ‘easy and timely access to information’, according to the Profex textbook for this subject.
What is XXXX?
- A . E-procurement
- B . Tendering
- C . Due diligence
- D . Transparency
D
Explanation:
Transparency.
We can talk about the ‘make, do or XXXX decision’. XXXX represents:
- A . Buy
- B . Procure
- C . Lease
- D . Build
A
Explanation:
Make, do or buy decision.
Historically ‘make or buy’. Now up dated to take account of services procurement ie ‘should we do it ourselves?’
A short definition of quality sometimes used (including in some UK legislation), said originally to come from Joseph Juran, is:
- A . Fitness for sale
- B . Fitness for purpose
- C . Fitness for consumption
- D . Fitness for shipping
B
Explanation:
Is it fit for purpose? Can it do the job required? This is one definition of quality.
The nearest answer to this would have been ‘fitness for sale’ perhaps, but this has no legal or such a strong traditional standing.
An effective specification is one that is (select all that apply):
- A . Compliant with all legislation
- B . Concise – succinct
- C . Comprehensive C leaving nothing to doubt or misinterpretation
- D . Clear and unambiguous
- E . Comprehensible to all
- F . Current C up to date with the latest technology, standards, etc
A, B, C, D, E
Explanation:
A specification should be all of the above.
Where the buyer’s and seller’s conditions of contract clash, this is commonly known as ‘the battle of the…’
- A . Bulge
- B . Terms
- C . Firms
- D . Forms
- E . Papers
- F . Titans
D
Explanation:
Buyers should work hard to ensure that their terms and conditions apply to the contract between buyer and seller.
They should seek to win ‘the battle of the forms’.
An internet-based auction between competing sellers or suppliers in real time, is called a:
- A . Competitive e-tender
- B . Dutch e-auction
- C . Reverse e-auction
- D . Forward e-auction
C
Explanation:
Reverse e-auction.
This term is used in your syllabus.