CIPS L4M8 LO1 with verified solutions 2024/2025

CIPS L4M8 LO1 Name all stages of the Procurement Cycle? - correct answer 1) understand need and develop a high-level specification 2) market/commodity options including make vs buy assessment 3) develop strategy/plan 4) pre-procurement market tests and market engagement 5) development of required documentation, e.g request for quotation (RFQ) 6) supplier selection to participate in an invitation to tender (ITT) exercise 7) issue ITT/RFQ 8) bid/tender/quotation evaluation and validation 9) contract award and implementation 10) warehouse logistics and receipt 11) contract performance review and continuous improvement 12) supplier relationship/contract management 13) asset management/end of life what is a performance specification? - correct answer specifies what the product or service will do or achieve. this covers the outputs required, tolerances and any functions the product/service may have to perform what is a technical/conformance specification? - correct answer specifies which standards a requirement must meet or exceed what does variance mean? - correct answer the difference between the budgeted amount and the actual spend what is a commodity? - correct answer a raw material that can be bought or sold e.g oil, gas, coffee What are Porter's Five Forces? - correct answer - rivalry among existing competitors - threat of new entrants - threat of substitutes - bargaining power of suppliers - bargaining power of buyers what are core competencies? - correct answer the processes that are critical to an organisation achieving success and competitive advantage What is outsourcing? - correct answer contracting an external company to supply goods or services that were once produced internally what are the benefits to outsourcing? - correct answer - saves money - reduces overheads - reduces headcount - using external knowledge - focusing internally on core competencies - helping with shortfalls in labour/expertise what are the disadvantages to outsourcing? - correct answer - losing some control within an organisation - relying on external organisations - reducing quality - losing some internal knowledge what is the STEEPLE analysis used for? - correct answer it is an effective way to evaluate the external environment. this helps buyers to assess which factors could affect their need and helps them to develop the plan accordingly what does STEEPLE stand for? - correct answer Social