CIPS L4M4 LO1 EXAM | QUESTIONS & 100% CORRECT ANSWERS (VERIFIED) | LATEST UPDATE | GRADEA+

CIPS L4M4 LO1 EXAM | QUESTIONS & 100% CORRECT ANSWERS (VERIFIED) | LATEST UPDATE | GRADEA+ What is sourcing? Correct Answer: Sourcing is the location, acquisition and management of all the vital inputs required for an organisation to operate. What is tactical/operational sourcing? Correct Answer: Low-level decision making High profit, low risk items Short-term projects Transactional relationships What is strategic sourcing? Correct Answer: Top-level decision making High-profit, high-risk items Long-term projects Collaborative relationships What aspects typically represent value for money? Correct Answer: Price Delivery Quality Ethics Sustainability Availability 2 What are the stages of Novack and Simco's 11-stage sourcing process? Correct Answer: 1) Identify needs 2) Define user requirements 3) Decide whether to make or buy 4) Identify purchase type (new buy, modified re-buy, straight re-buy) 5) Carry out market analysis 6) Identify potential suppliers 7) Pre-screen suppliers and create a shortlist 8) Evaluate shortlisted suppliers 9) Supplier selection 10) Final product or service delivered 11) Evaluate supplier performance What is outsourcing? Correct Answer: Contracting an external supplier to manage and run a function that was previously handled in-house. Reasons why outsourcing may be the preferred option for a procurement organisation Correct Answer: - To allow costs to be kept as effective as possible and enable the organisation to obtain value for money - To reduce the need to continually invest in new machinery and work instead with suppliers that already have knowledge and resource in specialist areas. - To avoid the need to recruit additional staff or invest in training - To enable an organisation to benefit from an outsourced suppliers' skills - To enable an organisation to focus more on its core activities - To move the requirements for managing services to another organisation What is the make or buy decision? Correct Answer: Whether to manufacture a product or provide a service in-house, or to source it from an external supplier. 3 What are Porters Five Forces? Correct Answer: - Threat of new entrants - Bargaining power of buyers - Threat of substitutes - Bargaining power of suppliers - Rivalry among existing competitors Benefits of the make decision Correct Answer: - strategy of the organisation is to be self-sufficient - enhanced control over processes - improved quality control - workforce remains stable - continuity of supply - no suitable 'buy' suppliers - economies of scale available - reduced risk - easier to amend volumes/specifications Benefits of the buy decision Correct Answer: - specialised knowledge available - technological advancements available - small volumes are not cost effective for 'make' - cheaper to buy in than to manufacture/deliver - 'make' organisation does not have the machinery required - economies of scale available - no capacity in-house - less inventory - reduced overheads What costs are associated with all forms of sourcing? 4 Correct Answer: - procurement professionals salary - resources, such as computers and telephones - training - development of policies and procedures - time Why is outsourcing not recommended for core activities? Correct Answer: it poses too much of a risk to the organisation What should be used to help evaluate which functions within the organisation could be considered for outsourcing? Correct Answer: Outsourcing Decision Matrix What functions are often outsourced? Correct Answer: - IT support - catering - cleaning - marketing - social media - human resources - accountancy and payroll What questions does the pre-qualification questionnaire seek to answer? Correct Answer: 1) is the supplier financially stable? 2) does the supplier have the relevant and required experience and accreditations to carry out the contract? 3) does the supplier have the capacity, control and commitment to manage the contract? 4) does the supplier follow ethical and sustainable practices? What happens once the the procurement professional receives the PQQ back