L4M1 - CIPS: PAST EXAM
REVIEW 100% PASS
QUESTIONS WITH
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DETAILED ANSWERS | A+
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GRADE ASSURED //
LATEST
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, O1. Outline FIVE differences between purchasing goods and purchasing services. - ANS 1.
Goods are tangible, services are intangible:
2. Services cannot be separated from their supplier:
3. Heterogeneity: goods are usually uniform in nature while services are unique at each delivery
4. Services 'perish' immediately on delivery whereas goods can be stored until required
5. Products are easier to specify, being tangible
O2. Explain THREE circumstances in which a competitive tendering exercise might not be the
best approach to making a purchase. - ANS 1. Urgency
2. Commercial confidentiality or national security (e.g. military organizations):
3. Value of the purchase:
4. Production costs cannot be measured accurately:
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5. Price is not the only criterion for supplier selection and contract award
6. Intellectual Property Rights and monopoly
O2. Describe TWO e-sourcing tools and their use in procurement and supply. - ANS 1.
E-Catalogues
2. E-Tendering
3. E. Auction
4. Reverse Auctions
5. Online supplier evaluation data
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O3. Explain the role of a shared services unit (SSU). - ANS SSUs reflect a desire to centralize
and share services
The shared service provider becomes a dedicated provider of services such as; finance, HR, IT
and procurement which continue to be provided internally
An SSU manages costs and quality SLAs to demonstrate value for money.
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An SSU's benefits may be summarized as:
• cost effective internal service;
• liaison with its customers;
• anticipating future demand;
• employing resources and providing higher levels of service more cost effectively than if they
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were provided by a department or an external provider.
O3. A manufacturer of electrically powered tools for the engineering industry consists of four
separate business units, each of which undertakes its own purchasing activities.
Discuss THREE benefits of centralizing all purchasing activities with those of retaining the
present decentralized structure. (1 of 2) - ANS Centralisation' and 'decentralization' refer to the
degree to which responsibility and authority is delegated. Arguments for centralisation can only
be evaluated in the context of specific organizational environment and might include:
1. Policies & procedures
REVIEW 100% PASS
QUESTIONS WITH
ck
DETAILED ANSWERS | A+
lo
GRADE ASSURED //
LATEST
yc
ud
st
, O1. Outline FIVE differences between purchasing goods and purchasing services. - ANS 1.
Goods are tangible, services are intangible:
2. Services cannot be separated from their supplier:
3. Heterogeneity: goods are usually uniform in nature while services are unique at each delivery
4. Services 'perish' immediately on delivery whereas goods can be stored until required
5. Products are easier to specify, being tangible
O2. Explain THREE circumstances in which a competitive tendering exercise might not be the
best approach to making a purchase. - ANS 1. Urgency
2. Commercial confidentiality or national security (e.g. military organizations):
3. Value of the purchase:
4. Production costs cannot be measured accurately:
ck
5. Price is not the only criterion for supplier selection and contract award
6. Intellectual Property Rights and monopoly
O2. Describe TWO e-sourcing tools and their use in procurement and supply. - ANS 1.
E-Catalogues
2. E-Tendering
3. E. Auction
4. Reverse Auctions
5. Online supplier evaluation data
lo
yc
O3. Explain the role of a shared services unit (SSU). - ANS SSUs reflect a desire to centralize
and share services
The shared service provider becomes a dedicated provider of services such as; finance, HR, IT
and procurement which continue to be provided internally
An SSU manages costs and quality SLAs to demonstrate value for money.
ud
An SSU's benefits may be summarized as:
• cost effective internal service;
• liaison with its customers;
• anticipating future demand;
• employing resources and providing higher levels of service more cost effectively than if they
st
were provided by a department or an external provider.
O3. A manufacturer of electrically powered tools for the engineering industry consists of four
separate business units, each of which undertakes its own purchasing activities.
Discuss THREE benefits of centralizing all purchasing activities with those of retaining the
present decentralized structure. (1 of 2) - ANS Centralisation' and 'decentralization' refer to the
degree to which responsibility and authority is delegated. Arguments for centralisation can only
be evaluated in the context of specific organizational environment and might include:
1. Policies & procedures
