L3M2 Practice Exam Questions with Answers Ethical Procurement and Supply Certification

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Suboptimal

Less than optimum.

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Commitment to Quality.

You will need to know the 10 C's for various exams at Advanced Certificate, CIPS Diploma, and possibly beyond...

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It's the 'materials usage budget'.

This budget would help monitor whether the usage of materials was in line with forecast (budget), or whether there was a variance.

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Achieving an objective.

There is an implication that it should be the right objective.

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Standard operating procedure.

A set of step-by-step instructions to direct employees how to perform routine operations (Profex Publishing).

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A performance specification concentrates on the outputs of whatever it is you're buying.

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Key Performance Indicators should be specific, measurable, achievable, realistic and time-bound; or words very similar to those, meaning broadly the same.

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The correct answer is 'long life'.

Lifetime doesn't really make sense in respect of the other answers offered.

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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.

Explanation

The answer is 'six'.

Six Sigma is a statistical approach to quality management.

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Value analysis.

This is simply a distinction between VA and VE.

Explanation

Surety of supply is not in question; cost of supply is.

Sacking the Head of Procurement is probably a rash move, unless there is much more going on.

Using competition, and ensuring effective skills are in place would seem to be good options in the circumstances.

Explanation

E-sourcing.

Try to be clear on the difference between e-sourcing and e-auctions.

Other related e-terms include e-contracting, e-procurement, and possibly more.

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.

Explanation

While one can take the view that your weekend is yours and nothing to do with your main employ-er, many contracts of employment prohibit extra work unless pre-agreed. In any event, it is likely to be seen as polite and respectful to seek permission from your main employer. The point about need-ing to rest at weekends (and during annual holidays) is a serious point: we should be able to func-tion effectively during normal working hours.

If your main employer does not give consent, you may wish to ask for a pay rise. :)

Explanation

All aspects of an acquisition may be impacted by the use of competition - normally favourably - but the one we are most likely to see immediate impact on is 'price'.

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Lifetime costing is of greatest applicability when an asset has a long life.

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Anytime, up to bid receipt closing date, would be acceptable normal practice.

Late bids should never be accepted.

Explanation

The Economic Order Quantity is a formula which attempts to calculate the most efficient quantity to order at any given time, by attempting to reconcile the cost of stockholding and the cost of plac-ing an order. This could then have implications for the timing of an order being placed.

The cost of holding stock can be reasonably accurately calculated and agreed with one's peers. However, determining the cost of placing an order can keep colleagues up late into the night, and can be a great topic to liven up a sleepy procurement / finance function.

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).

Explanation

Decline.

It seems pretty obvious, and I hope you can come up with one or two reasons for this being the cor-rect answer.

Explanation

Lifetime costing, TCO and whole life costing are essentially the same concept - looking at buying based on total costs over the useful life of an asset, not just the purchase price. Although this con-cept seems obvious once you know it, very many people, including senior managers as well as politi-cians, seem to be unfamiliar with the notion.