CIPS L4M1 QUESTION AND ANSWER
Purchasing involves the........ - Answers - Acquisition of supplies or inputs to the
organisations activities
Some organisations have purchasing departments, but this function can also be carried
out by .... - Answers - Individuals, or teams in other departments
The basic objective of purchasing is ... - Answers - To buy materials of the right quality,
in the right quantity, delivered to the right place at the right time at the right price.
Supply is the act of ..... - Answers - Providing something or making something available,
often in response to buyers or customers requirements. Involving the transfer or flow of
goods/services and info from on party to another.
Purchasing function has a role not just in buying inputs but also in ... - Answers -
Securing supply.
The role of purchasing and supply is therefore .... - Answers - help secure inputs from
suppliers into outputs.
Procurement is - Answers - The process of obtaining goods or services in any way,
including purchasing, hiring, leasing and borrowing.
Procurement embraces a broader process than purchasing, therefore procurement
reflects the more .... - Answers - proactive, relational, strategic and integrated role of the
function in modern organisations.
Lysons and Farrington describe procurement as - Answers - the process undertaken by
the organisational unit that, either as a function or as part of an integrated supply chain,
is responsible for procuring or assisting users to procure, in the most efficient manner,
requoted supplies at the right time, quality, quantity and price and the management of
supplies.
What does the procurement function do - Answers - 1. Supply market monitoring, and
identifying potential sources of supply.
2. Supplier evaluation and selection.
3. Processing procurement/stock replenishment requests.
4. Providing input in specifications for new purchases
5. Negotiating, buying and developing contracts
6. Expediting or contact management.
7. Clerical and administrative tasks.
, Goods are .... - Answers - Tangible or material items, which can be consumed.
Services are ..... - Answers - actions individuals or organisations perform which confer a
benefit, but do not result in the ownership of anything.
Constructional work includes projects such as .... - Answers - Construction, alteration,
repair, maintenance/demolition of buildings or structures.
Direct procurement refers to, - Answers - the procurement of inputs and consumables
for the primary revenue-earning activity's of the enterprise.
Indirect procurement refers to, - Answers - the procurement of inputs and consumables
for the support activities.
Direct costs are, - Answers - Costs associated directly with a job or contract. (e.g. cost
of paper a book is published on)
Indirect costs are, - Answers - Costs not directly associated with a particular job or
contract. (e.g. Salary of a supervisor in the printing plant)
A fixed cost is, - Answers - A cost that remains the same, whatever the level of activity.
A variable cost is, - Answers - A cost that increases or decreases in line with he level of
activity.
Porters value chain distinguishes between the, - Answers - Primary activities of an
organisation and the secondary/support activities
Primary actives are, - Answers - Concerned with brining resources into the organisation,
transforming them by production process, moving the finished products to customers
and marketing them.
Secondary activities are, - Answers - Concerned with supporting the primary business
functions.
Materials used in manufacturing can be classified under what three headings? -
Answers - Raw materials
Components and assemblies
Work in progress
what three things must procurement staff bear in mind in relation to production
materials? - Answers - The 'make or buy' decision
The need for cross functional collaboration
The need to involve potential suppliers early in the procurement process
Purchasing involves the........ - Answers - Acquisition of supplies or inputs to the
organisations activities
Some organisations have purchasing departments, but this function can also be carried
out by .... - Answers - Individuals, or teams in other departments
The basic objective of purchasing is ... - Answers - To buy materials of the right quality,
in the right quantity, delivered to the right place at the right time at the right price.
Supply is the act of ..... - Answers - Providing something or making something available,
often in response to buyers or customers requirements. Involving the transfer or flow of
goods/services and info from on party to another.
Purchasing function has a role not just in buying inputs but also in ... - Answers -
Securing supply.
The role of purchasing and supply is therefore .... - Answers - help secure inputs from
suppliers into outputs.
Procurement is - Answers - The process of obtaining goods or services in any way,
including purchasing, hiring, leasing and borrowing.
Procurement embraces a broader process than purchasing, therefore procurement
reflects the more .... - Answers - proactive, relational, strategic and integrated role of the
function in modern organisations.
Lysons and Farrington describe procurement as - Answers - the process undertaken by
the organisational unit that, either as a function or as part of an integrated supply chain,
is responsible for procuring or assisting users to procure, in the most efficient manner,
requoted supplies at the right time, quality, quantity and price and the management of
supplies.
What does the procurement function do - Answers - 1. Supply market monitoring, and
identifying potential sources of supply.
2. Supplier evaluation and selection.
3. Processing procurement/stock replenishment requests.
4. Providing input in specifications for new purchases
5. Negotiating, buying and developing contracts
6. Expediting or contact management.
7. Clerical and administrative tasks.
, Goods are .... - Answers - Tangible or material items, which can be consumed.
Services are ..... - Answers - actions individuals or organisations perform which confer a
benefit, but do not result in the ownership of anything.
Constructional work includes projects such as .... - Answers - Construction, alteration,
repair, maintenance/demolition of buildings or structures.
Direct procurement refers to, - Answers - the procurement of inputs and consumables
for the primary revenue-earning activity's of the enterprise.
Indirect procurement refers to, - Answers - the procurement of inputs and consumables
for the support activities.
Direct costs are, - Answers - Costs associated directly with a job or contract. (e.g. cost
of paper a book is published on)
Indirect costs are, - Answers - Costs not directly associated with a particular job or
contract. (e.g. Salary of a supervisor in the printing plant)
A fixed cost is, - Answers - A cost that remains the same, whatever the level of activity.
A variable cost is, - Answers - A cost that increases or decreases in line with he level of
activity.
Porters value chain distinguishes between the, - Answers - Primary activities of an
organisation and the secondary/support activities
Primary actives are, - Answers - Concerned with brining resources into the organisation,
transforming them by production process, moving the finished products to customers
and marketing them.
Secondary activities are, - Answers - Concerned with supporting the primary business
functions.
Materials used in manufacturing can be classified under what three headings? -
Answers - Raw materials
Components and assemblies
Work in progress
what three things must procurement staff bear in mind in relation to production
materials? - Answers - The 'make or buy' decision
The need for cross functional collaboration
The need to involve potential suppliers early in the procurement process
