CIPS L4M8 Chapter 1 Questions
and Answers 100% Correct
The 13 Stages of the Procurement Cycle - ANSWER-Stage 1 - Identify need
and develop spec.
Stage 2 - Market commodity/make or buy options.
Stage 3 - Develop Strategy/Plan
Stage 4 - Pre procurement market tests
Stage 5 - Prepare Documentation
Stage 6 - Supplier Selection
Stage 7 - Send ITT
Stage 8 - Receive & Evaluate Bids
Stage 9 - Award contract
Stage 10 - Warehouse/logistics prep
Stage 11 - Contract management
Stage 12 - Relationship management
Stage 13 - End of life/asset management
,Procurement Cycle - Stage 1 - Understand need and develop a high-level
specification - ANSWER-The person generating the need should communicate
with the buyer to ensure there is no misinterpretation. Once the need is
clearly understood, the procurement professional should develop a
specification
Core Competencies - ANSWER-The processes that are critical to an
organisation achieving success and competitive advantage
Make or buy decisions are about - ANSWER-whether a product or service
should be made within the organisation or bought-in from an external
supplier
A procurement professional can use Carter's Outsource Matrix when -
ANSWER-deciding whether to make or buy
Two types of specification - ANSWER-Performance and conformance
Performance specifications - 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
,Conformance specifications (technical) - ANSWER-Specifies which standards
a requirement must meet or exceed
Characteristics of Performance specifications - ANSWER-- Allow supplier
innovation
- Promote competition in the marketplace
- The supplier bears the risk
- Buyer may not know exactly what they will be getting
- Shorter document
- Quicker to prepare
- Takes advantage of supplier expertise
Characteristics of Conformance specifications (technical) - ANSWER-- No
supplier innovation
- Reduce competition
- The buyer bears the risk
- Buyer knows exactly what they are getting
- Longer, complex document
- More time consuming to prepare
, - Disregards supplier expertise
Procurement Cycle - Stage 2 - Market commodity/make or buy options -
ANSWER-Once specification has been developed, the procurement
professional is aware of what is required, why and when. The options to
consider include the budget available to spend on the procurement, the
number of suppliers available and whether to make or buy
To fully understand the market pricing, procurement professionals should
research the level of competition. The .... .... ... model is an established way
of assessing the competition - ANSWER-Porter's Five Forces
Porter's Five Forces Model - ANSWER-- Threat of new entrants
- Threat of substitutes
- Bargaining power of buyers
- Bargaining power of suppliers
- Rivalry among existing Competitors
The four quadrants of Carter's Outsource Matrix - ANSWER-- Strategic
Alliance
and Answers 100% Correct
The 13 Stages of the Procurement Cycle - ANSWER-Stage 1 - Identify need
and develop spec.
Stage 2 - Market commodity/make or buy options.
Stage 3 - Develop Strategy/Plan
Stage 4 - Pre procurement market tests
Stage 5 - Prepare Documentation
Stage 6 - Supplier Selection
Stage 7 - Send ITT
Stage 8 - Receive & Evaluate Bids
Stage 9 - Award contract
Stage 10 - Warehouse/logistics prep
Stage 11 - Contract management
Stage 12 - Relationship management
Stage 13 - End of life/asset management
,Procurement Cycle - Stage 1 - Understand need and develop a high-level
specification - ANSWER-The person generating the need should communicate
with the buyer to ensure there is no misinterpretation. Once the need is
clearly understood, the procurement professional should develop a
specification
Core Competencies - ANSWER-The processes that are critical to an
organisation achieving success and competitive advantage
Make or buy decisions are about - ANSWER-whether a product or service
should be made within the organisation or bought-in from an external
supplier
A procurement professional can use Carter's Outsource Matrix when -
ANSWER-deciding whether to make or buy
Two types of specification - ANSWER-Performance and conformance
Performance specifications - 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
,Conformance specifications (technical) - ANSWER-Specifies which standards
a requirement must meet or exceed
Characteristics of Performance specifications - ANSWER-- Allow supplier
innovation
- Promote competition in the marketplace
- The supplier bears the risk
- Buyer may not know exactly what they will be getting
- Shorter document
- Quicker to prepare
- Takes advantage of supplier expertise
Characteristics of Conformance specifications (technical) - ANSWER-- No
supplier innovation
- Reduce competition
- The buyer bears the risk
- Buyer knows exactly what they are getting
- Longer, complex document
- More time consuming to prepare
, - Disregards supplier expertise
Procurement Cycle - Stage 2 - Market commodity/make or buy options -
ANSWER-Once specification has been developed, the procurement
professional is aware of what is required, why and when. The options to
consider include the budget available to spend on the procurement, the
number of suppliers available and whether to make or buy
To fully understand the market pricing, procurement professionals should
research the level of competition. The .... .... ... model is an established way
of assessing the competition - ANSWER-Porter's Five Forces
Porter's Five Forces Model - ANSWER-- Threat of new entrants
- Threat of substitutes
- Bargaining power of buyers
- Bargaining power of suppliers
- Rivalry among existing Competitors
The four quadrants of Carter's Outsource Matrix - ANSWER-- Strategic
Alliance
