CIPS L4M8 CORRECT EXAMS QUESTIONS AND
ANSWERS SET A+
✔✔The buying organisation can test samples it receives. Tests can include the
following - ✔✔- Aesthetics
- Durability
- Weight
- Size
- Strength
- Tolerances
- Reliability
✔✔Working with engineers, designers and technical staff can help a buyer to -
✔✔ensure that the specification offered meets the need that was defined
✔✔Conformance specifications are often in the form of - ✔✔- Chemical formulae
- Technical drawings
- Recipes
✔✔The two main purposes of inport duties are - ✔✔- To give local, or own-grown
produce an economic advantage
- To raise revenue for the countrys government
✔✔There are several organisations and treaties that aim to reduce the amount of import
duties and so promote globalistion. These bodies negotiate with their member countries
to promote free trade.
These organisations are - ✔✔- The World Trade Organisation
- The North American Free Trade Agreement
- The Trans-pacific Partnership
,✔✔The procurement professional has to balance the required volume against the price
to decide how to gain the best cost. Factors to consider include the following - ✔✔- Cost
of inventory
- Cost of insurance
- Cost of transport
versus price
✔✔Incoterms - ✔✔- EXW (Ex Works)
- FCA (Free Carrier)
- FAS (Free Alongside Ship)
- FOB (Free On Board)
- CPT (Carriage Paid To)
- DDU (Delivery Duty Unpaid)
- DDP (Delivery Duty Paid)
- DAP (Delivery At Port)
✔✔EXW - ✔✔Ex Works
✔✔FCA - ✔✔Free Carrier
✔✔FAS - ✔✔Free Alongside Ship
✔✔FOB - ✔✔Free On Board
✔✔CPT - ✔✔Carriage Paid To
✔✔DDU - ✔✔Delivery Duty Unpaid
✔✔DDP - ✔✔Delivery Duty Paid
✔✔DAP - ✔✔Delivery At Port
✔✔- EXW (Ex Works) - ✔✔The buying organisation takes full responsibilty for all
charges and arranges collection from the supplier
✔✔- FCA (Free Carrier) - ✔✔The supplier delivers the goods to a carrier chosen by the
buyer, at a named destination. The supplier pays for the delivery to the named
destination
✔✔- FAS (Free Alongside Ship) - ✔✔The supplier takes the goods to the port and
clears the goods for export. Responsibility then passes to the buyer
, ✔✔- FOB (Free On Board) - ✔✔The supplier takes the goods to the port, clears the
goods for export and ensures that they are loaded onto the vessel. Responsibility then
passes to the buyer
✔✔- CPT (Carriage Paid To) - ✔✔The supplier delivers the goods to their chosen
carrier and the carrier then delivers the goods to the agreed destination. The supplier is
responsible for all the costs of getting the goods to the agreed destination
✔✔- DDU (Delivery Duty Unpaid) - ✔✔The supplier delivers the goods to the port/airport
of the buyers country. The buyer takes ownership when the goods arrive in the buyers
home country and is responsible for payment of any import taxes, insurance and
customs clearance
✔✔- DDP (Delivery Duty Paid) - ✔✔The supplier delivers the goods to the port/airport of
the buyers country. The supplier is responsible for paying any import taxes or insurance
and clearing customs
✔✔- DAP (Delivery At Port) - ✔✔The supplier delivers the goods to the buyers chosen
location and incurs all the risk until the buying organisation has unloaded them. The
buying organisation is responsible for paying the import clearance
✔✔Part of dealing with international freight is - ✔✔agreeing Incoterms
✔✔The areas included in whole life cycle costing - ✔✔- Purchase
- Delivery
- Installation
- Training
- Operation
- Maintenance
- Water
- Energy / fuel use
- Health and safety
- Disposal
✔✔The final area to think about before making a decision on which supplier to offer and
then award the contract to is organisational benefits.
Procurement professionals should consider the following questions - ✔✔- Would this
contract enhance an existing supplier relationship?
- Does the supplier contribute towards a cause that the buying organisation believes is
important?
- Does the supplier have a good reputation?
- Would working with the supplier open up further opportunities?
- Would awarding the contract to an existing supplier gain the buying organisation
economies of scale or savings on deliveries?
ANSWERS SET A+
✔✔The buying organisation can test samples it receives. Tests can include the
following - ✔✔- Aesthetics
- Durability
- Weight
- Size
- Strength
- Tolerances
- Reliability
✔✔Working with engineers, designers and technical staff can help a buyer to -
✔✔ensure that the specification offered meets the need that was defined
✔✔Conformance specifications are often in the form of - ✔✔- Chemical formulae
- Technical drawings
- Recipes
✔✔The two main purposes of inport duties are - ✔✔- To give local, or own-grown
produce an economic advantage
- To raise revenue for the countrys government
✔✔There are several organisations and treaties that aim to reduce the amount of import
duties and so promote globalistion. These bodies negotiate with their member countries
to promote free trade.
These organisations are - ✔✔- The World Trade Organisation
- The North American Free Trade Agreement
- The Trans-pacific Partnership
,✔✔The procurement professional has to balance the required volume against the price
to decide how to gain the best cost. Factors to consider include the following - ✔✔- Cost
of inventory
- Cost of insurance
- Cost of transport
versus price
✔✔Incoterms - ✔✔- EXW (Ex Works)
- FCA (Free Carrier)
- FAS (Free Alongside Ship)
- FOB (Free On Board)
- CPT (Carriage Paid To)
- DDU (Delivery Duty Unpaid)
- DDP (Delivery Duty Paid)
- DAP (Delivery At Port)
✔✔EXW - ✔✔Ex Works
✔✔FCA - ✔✔Free Carrier
✔✔FAS - ✔✔Free Alongside Ship
✔✔FOB - ✔✔Free On Board
✔✔CPT - ✔✔Carriage Paid To
✔✔DDU - ✔✔Delivery Duty Unpaid
✔✔DDP - ✔✔Delivery Duty Paid
✔✔DAP - ✔✔Delivery At Port
✔✔- EXW (Ex Works) - ✔✔The buying organisation takes full responsibilty for all
charges and arranges collection from the supplier
✔✔- FCA (Free Carrier) - ✔✔The supplier delivers the goods to a carrier chosen by the
buyer, at a named destination. The supplier pays for the delivery to the named
destination
✔✔- FAS (Free Alongside Ship) - ✔✔The supplier takes the goods to the port and
clears the goods for export. Responsibility then passes to the buyer
, ✔✔- FOB (Free On Board) - ✔✔The supplier takes the goods to the port, clears the
goods for export and ensures that they are loaded onto the vessel. Responsibility then
passes to the buyer
✔✔- CPT (Carriage Paid To) - ✔✔The supplier delivers the goods to their chosen
carrier and the carrier then delivers the goods to the agreed destination. The supplier is
responsible for all the costs of getting the goods to the agreed destination
✔✔- DDU (Delivery Duty Unpaid) - ✔✔The supplier delivers the goods to the port/airport
of the buyers country. The buyer takes ownership when the goods arrive in the buyers
home country and is responsible for payment of any import taxes, insurance and
customs clearance
✔✔- DDP (Delivery Duty Paid) - ✔✔The supplier delivers the goods to the port/airport of
the buyers country. The supplier is responsible for paying any import taxes or insurance
and clearing customs
✔✔- DAP (Delivery At Port) - ✔✔The supplier delivers the goods to the buyers chosen
location and incurs all the risk until the buying organisation has unloaded them. The
buying organisation is responsible for paying the import clearance
✔✔Part of dealing with international freight is - ✔✔agreeing Incoterms
✔✔The areas included in whole life cycle costing - ✔✔- Purchase
- Delivery
- Installation
- Training
- Operation
- Maintenance
- Water
- Energy / fuel use
- Health and safety
- Disposal
✔✔The final area to think about before making a decision on which supplier to offer and
then award the contract to is organisational benefits.
Procurement professionals should consider the following questions - ✔✔- Would this
contract enhance an existing supplier relationship?
- Does the supplier contribute towards a cause that the buying organisation believes is
important?
- Does the supplier have a good reputation?
- Would working with the supplier open up further opportunities?
- Would awarding the contract to an existing supplier gain the buying organisation
economies of scale or savings on deliveries?
