CIPS LEVEL 4 MODULE 1 EXAM | QUESTIONS & 100% CORRECT ANSWERS (VERIFIED) | LATEST UPDATE | GRADEA+

CIPS LEVEL 4 MODULE 1 EXAM | QUESTIONS & 100% CORRECT ANSWERS (VERIFIED) | LATEST UPDATE | GRADEA+ The Purchasing process Correct Answer: 1. Define Specification. 2. Select Supplier 3. Contract Agreement 4. Ordering 5. Expediting 6. Evaluation Follow up Definition of Procurement & Supply Correct Answer: recognition of the fact that the purchasing function has a role in not just "buying inputs" but in "securing supply" Direct Costs Correct Answer: These are costs which can be identified directly with the production of a good or service; e.g. raw materials. Usually strategic or leverae suppliers Indirect Costs Correct Answer: These are costs which cannot be matched against each product because they need to be paid whether or not the production of good or services takes place; e.g. rent on the premises. Kraljic Matrix 2 Correct Answer: A tool for portfolio analysis: a four-box matrix that reflects the segmentation of spend based on an assessment of the value of the spend relative to the market risk to acquire 1. Leverage Suppliers 2. Strategic Suppliers 3. Routine Suppliers 4. Bottleneck Suppliers CAPEX is Correct Answer: 1. Capital expenditures are for major purchases that will be used in the future. 2. The life of these purchases extends beyond the current accounting period in which they were purchased. 3. Because these costs can only be recovered over time through depreciation, companies ordinarily budget for 4. CAPEX purchases separately from preparing an operational budget. OPEX Correct Answer: Operating expenses are the costs for a company to run its business operations on a daily basis. CAPEX Correct Answer: 1. Useful beyond its curent year 2. Lump sum up front 3. 3-10 year accounting lifespan for depreciaiton 4. Listed as preprty or equipment 5. Tax deducted as asset depreciated Name the 13 stages of the procurement cycle Correct Answer: 1. Understand the need. 2. Market Commodity options. 3 3. Develop Stratgey/ Plan. 4. Pre-procurement / market test. 5. Develop required documentation. 6. Supplier Selection. 7. Issue invitation to tender. 8. Bid / tender evaluation. 9. Contract Award. 10. Warehouse logistics & receipt. 11. Contract performance review and continuous improvement. 12. Supplier relationships / contract management. 13. Asset management / end of life. Scope of Procurement Correct Answer: 1. Contributor of Added Value 2. Manages cost of procured materials & services on behalf of an organisation 3. Helps manage inventory 4. Works alongside logistics partner function 5. Helps mange quality in procurement 6. Manages delivery performance 7. Manages & controls waste in the supply chain Porters Value Chain Correct Answer: Primary - Inbound Logistics, Operations, Outbound Logistics, Marketing & sales, Services Support Activities - Firm Infrastructure, HR Management, Technology, Procurement Action points for CAPEX purchasing Correct Answer: 1. Documentation or guidline and standard procedure 2. Cross-functional team for appraisal & evaluation 3. Appropriate project evaluation methology 4 4. Process automation (E-platform) 5. TCO / Life cycle costing 6. Regular review for better control & monitoring 5 rights of procurement Correct Answer: Right Quality Right Quantity Right Price Right Place Right Time Right Quality Correct Answer: goods which are of satisfactory quality and fit for their intended purpose e.g. ensuring an accurate specification of the requirement and its quality standards. Right Quantity Correct Answer: sufficient to meet demand and maintain service levels while minimising stock holding e.g. by ensuring that there is accurate demand forecasting and efficient inventory management.