CIPS L4M4 LO1 QUESTIONS AND ANSWERS 100% PASS

CIPS L4M4 LO1 QUESTIONS AND ANSWERS 100% PASS What is sourcing? Sourcing is the location, acquisition and management of all the vital inputs required for an organisation to operate. What is tactical/operational sourcing? Low-level decision making High profit, low risk items Short-term projects Transactional relationships What is strategic sourcing? Top-level decision making High-profit, high-risk items Long-term projects Collaborative relationships What aspects typically represent value for money? Price Delivery Quality Ethics Sustainability Availability What are the stages of Novack and Simco's 11-stage sourcing process? 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? 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 - 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? Whether to manufacture a product or provide a service in- house, or to source it from an external supplier. What are Porters Five Forces? - Threat of new entrants - Bargaining power of buyers - Threat of substitutes - Bargaining power of suppliers