CIPS L4M1 Exam Review Questions with
Verified Correct Answers
Stakeholders
In any activity an organization undertakes, whether strategic, operational or tactical, the
activity can only be successful with the input, commitment and support of its key
stakeholders. Gaining and maintaining the support and commitment of stakeholders requires
a continuous process of engaging the right stakeholders at the right time and understanding
and managing their expectations.
Global Supply Chains
a dynamic worldwide network when a company purchases or uses goods or services from
overseas. It involves people, information, processes and resources involved in the production,
handling and distribution of materials and finished products or providing a service to the
customer.
Whole Life Costing
takes into account the total cost of a product or service over its lifetime, from concept through
to disposal including purchase, hire or lease, maintenance, operation, utilities, training and
disposal. It is important for procurement to take all these elements into consideration when
making decisions and comparing the costs of buying, renting or leasing equipment
particularly. In most cases the purchase costs are only a small proportion of the cost of
operating it.
Stakeholder mapping
A systematic way to identify the expectations, needs, importance, and relative power of
various stakeholders.
,Value Generation
Creating value from the supply base can be achieved by not only focusing on price but also
increasing operational performance, driving efficiencies, working collaboratively or
developing continuous improvement activities.
Procurement Cycle
the cyclical process of key steps when procuring goods or services.
Steps of the Procurement Cycle
1. Understand Need and develop High level Spec.
2. Market/Commodity and options (inc make or buy assessment).
3. Develop Strategy/plan
4. Pre-procurement market test and market engagement.
5. Develop documentation, PPQ/detailed spec/combine with 1.
6. Supplier selection to participate in ITT/RFQ/negotiation.
7. Issue ITT/RFQ.
8. Bid/Tender Evaluation and validation.
9. Contract award and implementation.
10. Warehouse logistics and receipt.
11. Contract performance review and continuous improvement.
12. SRM and SC management and development.
13. Asset management/end of life and lessons learnt.
Contract Management
delivers a great amount of data and intelligence that support the smooth running of a
business. Historically, the purpose of a contract as a legal document was to protect the parties
,from negative consequences of its breaches. Today, when companies are facing increasing
pressures to reduce costs and improve financial and operational performance, forming and
managing new trading relationships is critical for success. How well an organisation manages
its relationships with partners defines the two core elements of bottom line performance:
increasing revenues and decreasing costs. ... plays an important role by ensuring the smooth
running of operations, protecting the organisation from risks and shaping the buyer-supplier
relationships (Aberdeen Group, 2007; Saxena, 2008).
Application of Technology
E-Procurement systems can be utilised in the Request for Information (RFI), Request for
Proposal (RFP) and Request for Quotation (RFQ) process as well as for e-Tendering, e-
Auctioning, vendor management, catalogue management, purchase ordering, order status,
shipment status, e-invoicing, e-payment and contract management.
eSourcing / eProcurement systems P2P
relates to the electronic procurement of products or services via the internet. Other systems
such as electronic data interchange (EDI) and enterprise resource planning (ERP) are also
forms of...
International Labour Organisation
The only tripartite U.N. agency, since 1919 it brings together governments, employers and
workers of 187 member States , to set labour standards, develop policies and devise
programmes promoting decent work for all women and men.
Supplier evaluation & appraisal
is conducted at the tender stage and can be in the form of either a questionnaire, interview or
site visit to assess the supplier's capability in terms of capacity, financial stability, quality
, standards, performance and organisational structure and processes in place. Both existing and
potential suppliers are scored on suitability and either approved or rejected to be added onto
the approved supplier list (ASL). This helps to improve existing suppliers performance and
also can periodically ensure you have the right sized and fit of suppliers on you approved list.
Supplier Selection
is an important organisational process: purchased products represent between 40% and 60%
of end product sales and have a direct impact on the cost and quality of products. In addition,
even a small cost gained by selecting a good supplier can have great impact on benefits (Aiter
et al., 2011).
It relies on multiple assessment techniques which include both quantitative and qualitative
methods (Choi and Hartley, 1996). At the same time, many organisations continue to select
suppliers based on experience and intuition - selective and unreliable approaches (Kontio,
1996). The most common evaluation criteria used to select suppliers are: financial health,
expertise, operational performance metrics, business processes and practices, enabling
behaviours or cultural factors and risk factors (Aiter et al., 2011).
eSourcing
automates contract lifecycle management (CIPS: Electronic Commerce and e-Business).
Today, eSourcing and eProcurement form the core of the e-Purchasing cycle (BuyIT, 2004).
eProcurement is the process through which employees of the purchasing organisations access
supplier online catalogues, select items, conduct the purchasing process and communicate
directly with suppliers (Leenders et al., 2002). ESourcing, on the other hand, is a broader
concept as it incorporates the key elements of the buying process, such as knowledge,
Verified Correct Answers
Stakeholders
In any activity an organization undertakes, whether strategic, operational or tactical, the
activity can only be successful with the input, commitment and support of its key
stakeholders. Gaining and maintaining the support and commitment of stakeholders requires
a continuous process of engaging the right stakeholders at the right time and understanding
and managing their expectations.
Global Supply Chains
a dynamic worldwide network when a company purchases or uses goods or services from
overseas. It involves people, information, processes and resources involved in the production,
handling and distribution of materials and finished products or providing a service to the
customer.
Whole Life Costing
takes into account the total cost of a product or service over its lifetime, from concept through
to disposal including purchase, hire or lease, maintenance, operation, utilities, training and
disposal. It is important for procurement to take all these elements into consideration when
making decisions and comparing the costs of buying, renting or leasing equipment
particularly. In most cases the purchase costs are only a small proportion of the cost of
operating it.
Stakeholder mapping
A systematic way to identify the expectations, needs, importance, and relative power of
various stakeholders.
,Value Generation
Creating value from the supply base can be achieved by not only focusing on price but also
increasing operational performance, driving efficiencies, working collaboratively or
developing continuous improvement activities.
Procurement Cycle
the cyclical process of key steps when procuring goods or services.
Steps of the Procurement Cycle
1. Understand Need and develop High level Spec.
2. Market/Commodity and options (inc make or buy assessment).
3. Develop Strategy/plan
4. Pre-procurement market test and market engagement.
5. Develop documentation, PPQ/detailed spec/combine with 1.
6. Supplier selection to participate in ITT/RFQ/negotiation.
7. Issue ITT/RFQ.
8. Bid/Tender Evaluation and validation.
9. Contract award and implementation.
10. Warehouse logistics and receipt.
11. Contract performance review and continuous improvement.
12. SRM and SC management and development.
13. Asset management/end of life and lessons learnt.
Contract Management
delivers a great amount of data and intelligence that support the smooth running of a
business. Historically, the purpose of a contract as a legal document was to protect the parties
,from negative consequences of its breaches. Today, when companies are facing increasing
pressures to reduce costs and improve financial and operational performance, forming and
managing new trading relationships is critical for success. How well an organisation manages
its relationships with partners defines the two core elements of bottom line performance:
increasing revenues and decreasing costs. ... plays an important role by ensuring the smooth
running of operations, protecting the organisation from risks and shaping the buyer-supplier
relationships (Aberdeen Group, 2007; Saxena, 2008).
Application of Technology
E-Procurement systems can be utilised in the Request for Information (RFI), Request for
Proposal (RFP) and Request for Quotation (RFQ) process as well as for e-Tendering, e-
Auctioning, vendor management, catalogue management, purchase ordering, order status,
shipment status, e-invoicing, e-payment and contract management.
eSourcing / eProcurement systems P2P
relates to the electronic procurement of products or services via the internet. Other systems
such as electronic data interchange (EDI) and enterprise resource planning (ERP) are also
forms of...
International Labour Organisation
The only tripartite U.N. agency, since 1919 it brings together governments, employers and
workers of 187 member States , to set labour standards, develop policies and devise
programmes promoting decent work for all women and men.
Supplier evaluation & appraisal
is conducted at the tender stage and can be in the form of either a questionnaire, interview or
site visit to assess the supplier's capability in terms of capacity, financial stability, quality
, standards, performance and organisational structure and processes in place. Both existing and
potential suppliers are scored on suitability and either approved or rejected to be added onto
the approved supplier list (ASL). This helps to improve existing suppliers performance and
also can periodically ensure you have the right sized and fit of suppliers on you approved list.
Supplier Selection
is an important organisational process: purchased products represent between 40% and 60%
of end product sales and have a direct impact on the cost and quality of products. In addition,
even a small cost gained by selecting a good supplier can have great impact on benefits (Aiter
et al., 2011).
It relies on multiple assessment techniques which include both quantitative and qualitative
methods (Choi and Hartley, 1996). At the same time, many organisations continue to select
suppliers based on experience and intuition - selective and unreliable approaches (Kontio,
1996). The most common evaluation criteria used to select suppliers are: financial health,
expertise, operational performance metrics, business processes and practices, enabling
behaviours or cultural factors and risk factors (Aiter et al., 2011).
eSourcing
automates contract lifecycle management (CIPS: Electronic Commerce and e-Business).
Today, eSourcing and eProcurement form the core of the e-Purchasing cycle (BuyIT, 2004).
eProcurement is the process through which employees of the purchasing organisations access
supplier online catalogues, select items, conduct the purchasing process and communicate
directly with suppliers (Leenders et al., 2002). ESourcing, on the other hand, is a broader
concept as it incorporates the key elements of the buying process, such as knowledge,
