CIPS Level 3 Module 1- Questions and Answers 100%
Pass
What is cost reimbursable pricing arrangement? Correct Ans-The supplier is reimbursed all
of its costs as well as an agreed amount for profit. This is commonly used when the amount of
work required isn't clear at the start of the project.
What is gain share pricing? Correct Ans-When the supplier achieves a level of performance
above what would be expected and the buyer and seller share the savings.
What is incentive based pricing? Correct Ans-When the price is tied to the achievement of
an agreed level of performance.
What is a letter of credit? Correct Ans-A letter from the bank guaranteeing that payment
will be made in full on the due date.
What is lean thinking? Correct Ans-A business methodology that aims to create more
value with fewer resources.
What are economies of scale? Correct Ans-reductions in unit cost resulting from
production being increased
What is a SWOT analysis? Correct Ans-a study undertaken by an organization to identify its
internal strengths and weaknesses, as well as its external opportunities and threats.
, CIPS Level 3 Module 1- Questions and Answers 100%
Pass
What are Porter's Five Forces? (Analyse supply market data) Correct Ans-1. Buyer Power
2. Supplier Power
3. Threat of substitute products or services
4. Threat of new entrants
5. Rivalry among existing competitors
What does STEEPLED stand for? (External factors - macro environment) Correct Ans-
Sociological, technological, economic, environmental, political, legal, ethical, demographic
How many employees does a micro business have? Correct Ans-Less than 10
How many employees does a small business have? Correct Ans-Less than 50
How many employees does a medium business have? Correct Ans-250 or fewer
What are the support activities of porters value chain model? Correct Ans-Firm
infrastructure, human resource management, technology development and procurement
What are the primary activities of porters value chain model? Correct Ans-Logistics,
operations, marketing and sales and after sales service
Pass
What is cost reimbursable pricing arrangement? Correct Ans-The supplier is reimbursed all
of its costs as well as an agreed amount for profit. This is commonly used when the amount of
work required isn't clear at the start of the project.
What is gain share pricing? Correct Ans-When the supplier achieves a level of performance
above what would be expected and the buyer and seller share the savings.
What is incentive based pricing? Correct Ans-When the price is tied to the achievement of
an agreed level of performance.
What is a letter of credit? Correct Ans-A letter from the bank guaranteeing that payment
will be made in full on the due date.
What is lean thinking? Correct Ans-A business methodology that aims to create more
value with fewer resources.
What are economies of scale? Correct Ans-reductions in unit cost resulting from
production being increased
What is a SWOT analysis? Correct Ans-a study undertaken by an organization to identify its
internal strengths and weaknesses, as well as its external opportunities and threats.
, CIPS Level 3 Module 1- Questions and Answers 100%
Pass
What are Porter's Five Forces? (Analyse supply market data) Correct Ans-1. Buyer Power
2. Supplier Power
3. Threat of substitute products or services
4. Threat of new entrants
5. Rivalry among existing competitors
What does STEEPLED stand for? (External factors - macro environment) Correct Ans-
Sociological, technological, economic, environmental, political, legal, ethical, demographic
How many employees does a micro business have? Correct Ans-Less than 10
How many employees does a small business have? Correct Ans-Less than 50
How many employees does a medium business have? Correct Ans-250 or fewer
What are the support activities of porters value chain model? Correct Ans-Firm
infrastructure, human resource management, technology development and procurement
What are the primary activities of porters value chain model? Correct Ans-Logistics,
operations, marketing and sales and after sales service
