Cips L4m1 - Question & Answer Past
Exam Questions With Correct Answers
O1. cOutline cFIVE cdifferences cbetween cpurchasing cgoods cand cpurchasing cservices.
c- ccorrect canswers✔✔1. cGoods care ctangible, cservices care cintangible:
2. cServices ccannot cbe cseparated cfrom ctheir csupplier:
3. cHeterogeneity: cgoods care cusually cuniform cin cnature cwhile cservices care cunique
cat ceach cdelivery
4. cServices c'perish' cimmediately con cdelivery cwhereas cgoods ccan cbe cstored cuntil
crequired
5. cProducts care ceasier cto cspecify, cbeing ctangible
O2. cExplain cTHREE ccircumstances cin cwhich ca ccompetitive ctendering cexercise
cmight cnot cbe cthe cbest capproach cto cmaking ca cpurchase. c- ccorrect canswers✔✔1.
cUrgency
2. cCommercial cconfidentiality cor cnational csecurity c(e.g. cmilitary corganisations):
3. cValue cof cthe cpurchase:
4. cProduction ccosts ccannot cbe cmeasured caccurately:
5. cPrice cis cnot cthe conly ccriterion cfor csupplier cselection cand ccontract caward
6. cIntellectual cProperty cRights cand cmonopoly
O2. cDescribe cTWO ce-sourcing ctools cand ctheir cuse cin cprocurement cand csupply. c-
ccorrect canswers✔✔1. cE-Catalogues
2. cE-Tendering
3. cE. cAuction
4. cReverse cAuctions
5. cOnline csuppleir cevaluation cdata
O3. cExplain cthe crole cof ca cshared cservices cunit c(SSU). c- ccorrect canswers✔✔SSUs
creflect ca cdesire cto ccentralise cand cshare cservices c
The cshared cservice cprovider cbecomes ca cdedicated cprovider cof cservices csuch cas;
cfinance, cHR, cIT cand cprocurement cwhich ccontinue cto cbe cprovided cinternally
An cSSU cmanages ccosts cand cquality cSLAs cto cdemonstrate cvalue cfor cmoney.
An cSSU's cbenefits cmay cbe csummarised cas:
• ccost ceffective cinternal cservice;
• cliaison cwith cits ccustomers;
• canticipating cfuture cdemand;
• cemploying cresources cand cproviding chigher clevels cof cservice cmore ccost ceffectively
cthan cif cthey cwere cprovided cby ca cdepartment cor can cexternal cprovider.
, O3. cA cmanufacturer cof celectrically cpowered ctools cfor cthe cengineering cindustry
cconsists cof cfour cseparate cbusiness cunits, ceach cof cwhich cundertakes cits cown
cpurchasing cactivities.
Discuss cTHREE cbenefits cof ccentralising call cpurchasing cactivities cwith cthose cof
cretaining cthe cpresent cdecentralised cstructure. c(1 cof c2) c- ccorrect
canswers✔✔Centralisation' cand c'decentralisation' crefer cto cthe cdegree cto cwhich
cresponsibility cand cauthority cis cdelegated. cArguments cfor ccentralisation ccan conly cbe
cevaluated cin cthe ccontext cof cspecific corganisational cenvironment cand cmight cinclude:
1. cPolicies c& cprocedures
2. cConsolidation cof crequirements
3. cLocation
4. cSupply cmarket cstructure
5. cExpertise crequired:
6. cCustomer cdemands
O3. cA cmanufacturer cof celectrically cpowered ctools cfor cthe cengineering cindustry
cconsists cof cfour cseparate cbusiness cunits, ceach cof cwhich cundertakes cits cown
cpurchasing cactivities.
Discuss cTHREE cbenefits cof ccentralising call cpurchasing cactivities cwith cthose cof
cretaining cthe cpresent cdecentralised cstructure. c(2 cof c2) c- ccorrect canswers✔✔The
cbenefits cof cretaining cthe cpresent cde-centralised cstructure cinclude:
1. cLocal cresponsibility
2. cKnowledge cof cthe clocal cenvironment, cculture cand ccustomer cneeds
3. cSkills cdevelopment cof cbuyers cin ceach cunit c
4. cBetter ccommunication cand ccoordination cbetween cprocurement cand coperating
cdepartments,
5. cCustomer cfocus: cbuyers care c'closer' cto cinternal cand cexternal ccustomers
cdeveloping cunderstanding cof cuser cneeds cand cproblems.
6. cQuicker cresponse cto coperational cand cuser cneeds, c
7. cSmaller cpurchase cquantities: c
8. cAccountability: cd
9. cFreeing ccentral cprocurement cunits cto cfocus con chigher-level, cvalue-adding ctasks.
O3. cExplain cthe cfollowing cIT csystems cused cby cthe cprocurement cor csupply cchain
cfunction:
(i) c'Enterprise cResource cPlanning'
(ii) c'Materials cRequirement cPlanning'
(iii) c'Purchase cto cPay c(P2P)'. c- ccorrect canswers✔✔ERP cis ca csingle cdata cbase cto
cmanage ca cwide crange cof cfunctions cand cresources cacross ca cbusiness. cIt coffers
creal ctime csolutions. c
MRP cis ca cset cof crecords, cdecision crules cand cprocedures cto cmanage cdemand. c
Exam Questions With Correct Answers
O1. cOutline cFIVE cdifferences cbetween cpurchasing cgoods cand cpurchasing cservices.
c- ccorrect canswers✔✔1. cGoods care ctangible, cservices care cintangible:
2. cServices ccannot cbe cseparated cfrom ctheir csupplier:
3. cHeterogeneity: cgoods care cusually cuniform cin cnature cwhile cservices care cunique
cat ceach cdelivery
4. cServices c'perish' cimmediately con cdelivery cwhereas cgoods ccan cbe cstored cuntil
crequired
5. cProducts care ceasier cto cspecify, cbeing ctangible
O2. cExplain cTHREE ccircumstances cin cwhich ca ccompetitive ctendering cexercise
cmight cnot cbe cthe cbest capproach cto cmaking ca cpurchase. c- ccorrect canswers✔✔1.
cUrgency
2. cCommercial cconfidentiality cor cnational csecurity c(e.g. cmilitary corganisations):
3. cValue cof cthe cpurchase:
4. cProduction ccosts ccannot cbe cmeasured caccurately:
5. cPrice cis cnot cthe conly ccriterion cfor csupplier cselection cand ccontract caward
6. cIntellectual cProperty cRights cand cmonopoly
O2. cDescribe cTWO ce-sourcing ctools cand ctheir cuse cin cprocurement cand csupply. c-
ccorrect canswers✔✔1. cE-Catalogues
2. cE-Tendering
3. cE. cAuction
4. cReverse cAuctions
5. cOnline csuppleir cevaluation cdata
O3. cExplain cthe crole cof ca cshared cservices cunit c(SSU). c- ccorrect canswers✔✔SSUs
creflect ca cdesire cto ccentralise cand cshare cservices c
The cshared cservice cprovider cbecomes ca cdedicated cprovider cof cservices csuch cas;
cfinance, cHR, cIT cand cprocurement cwhich ccontinue cto cbe cprovided cinternally
An cSSU cmanages ccosts cand cquality cSLAs cto cdemonstrate cvalue cfor cmoney.
An cSSU's cbenefits cmay cbe csummarised cas:
• ccost ceffective cinternal cservice;
• cliaison cwith cits ccustomers;
• canticipating cfuture cdemand;
• cemploying cresources cand cproviding chigher clevels cof cservice cmore ccost ceffectively
cthan cif cthey cwere cprovided cby ca cdepartment cor can cexternal cprovider.
, O3. cA cmanufacturer cof celectrically cpowered ctools cfor cthe cengineering cindustry
cconsists cof cfour cseparate cbusiness cunits, ceach cof cwhich cundertakes cits cown
cpurchasing cactivities.
Discuss cTHREE cbenefits cof ccentralising call cpurchasing cactivities cwith cthose cof
cretaining cthe cpresent cdecentralised cstructure. c(1 cof c2) c- ccorrect
canswers✔✔Centralisation' cand c'decentralisation' crefer cto cthe cdegree cto cwhich
cresponsibility cand cauthority cis cdelegated. cArguments cfor ccentralisation ccan conly cbe
cevaluated cin cthe ccontext cof cspecific corganisational cenvironment cand cmight cinclude:
1. cPolicies c& cprocedures
2. cConsolidation cof crequirements
3. cLocation
4. cSupply cmarket cstructure
5. cExpertise crequired:
6. cCustomer cdemands
O3. cA cmanufacturer cof celectrically cpowered ctools cfor cthe cengineering cindustry
cconsists cof cfour cseparate cbusiness cunits, ceach cof cwhich cundertakes cits cown
cpurchasing cactivities.
Discuss cTHREE cbenefits cof ccentralising call cpurchasing cactivities cwith cthose cof
cretaining cthe cpresent cdecentralised cstructure. c(2 cof c2) c- ccorrect canswers✔✔The
cbenefits cof cretaining cthe cpresent cde-centralised cstructure cinclude:
1. cLocal cresponsibility
2. cKnowledge cof cthe clocal cenvironment, cculture cand ccustomer cneeds
3. cSkills cdevelopment cof cbuyers cin ceach cunit c
4. cBetter ccommunication cand ccoordination cbetween cprocurement cand coperating
cdepartments,
5. cCustomer cfocus: cbuyers care c'closer' cto cinternal cand cexternal ccustomers
cdeveloping cunderstanding cof cuser cneeds cand cproblems.
6. cQuicker cresponse cto coperational cand cuser cneeds, c
7. cSmaller cpurchase cquantities: c
8. cAccountability: cd
9. cFreeing ccentral cprocurement cunits cto cfocus con chigher-level, cvalue-adding ctasks.
O3. cExplain cthe cfollowing cIT csystems cused cby cthe cprocurement cor csupply cchain
cfunction:
(i) c'Enterprise cResource cPlanning'
(ii) c'Materials cRequirement cPlanning'
(iii) c'Purchase cto cPay c(P2P)'. c- ccorrect canswers✔✔ERP cis ca csingle cdata cbase cto
cmanage ca cwide crange cof cfunctions cand cresources cacross ca cbusiness. cIt coffers
creal ctime csolutions. c
MRP cis ca cset cof crecords, cdecision crules cand cprocedures cto cmanage cdemand. c
