CIPS L4M4 LO1 questions with answers graded A+ 2024

CIPS L4M4 LO1 What is sourcing? - correct answer Sourcing is the location, acquisition and management of all the vital inputs required for an organization 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 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. 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