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Question # 4

Which of the following areas of legislative and regulatory requirements prevent the deliberate limit-ing of supply and the formation of cartels?

A.

data protection

B.

product safety standards

C.

marketplace competition

D.

ethical practice

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Question # 5

If a company is concerned with ethical sourcing and has concerns about issues such as corruption and modern day slavery within the supply chain, what course of action should they take?

A.

Only work with known suppliers

B.

Complete Due-Diligence on all new suppliers

C.

Only work with suppliers who have a published Anti-Slavery policy

D.

Complete formal tenders to find the best suppliers

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Question # 6

Brooklyn Ltd is a manufacturer of windows and has a single sourcing relationship with their supplier of glass. What relationship style would be best suited?

A.

collaborative

B.

transactional

C.

adversarial

D.

non-critical

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Question # 7

When conducting a competitive tender, is it appropriate to use a supplier's credit rating as a criteria for pre-section?

A.

yes- because a low rating would have a negative impact on the company's reputation

B.

yes- because a low rating would indicate the supplier is financially unstable

C.

no- because a low rating would not affect the quality of the products supplied

D.

no- because a low credit rating would have a negative impact on the supply chain

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Question # 8

Which of the following are secondary research sources that can be used when investigating markets and suppliers? Select THREE that apply.

A.

Professional magazines

B.

Focus groups

C.

Economic indices

D.

Supplier websites

E.

Direct conversations

F.

Supplier interviews

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Question # 9

Ramesh is an IT category manager within the UK's National Health Service and is responsible for the procurement of a new high-value network system, which will be used across multiple doctors’practices and community health centres. Ramesh has reviewed the different tender approaches and has concluded that the use of a restricted tender is the most appropriate. Which of the following statements is true for a restricted tender process?

A.

Suppliers responding to the tender are pre-qualified

B.

It is only relevant when there are few suppliers in the market

C.

Direct negotiations occur prior to suppliers submitting their offer

D.

The contract will be awarded strictly on pricing criteria

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Question # 10

Which of the following are considerations when evaluating quality as a criterion for supplier selection? Select TWO that apply.

A.

The existence of policies and initiatives toward more sustainable packaging and materials

B.

The existence of Total Quality Management (TQM) and a continuous improvement culture

C.

Certification to the management system ISO 9001

D.

Certification to the management system ISO 14001

E.

The supplier's environmental impact analysis

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Question # 11

Commodities are items which can be traded on the stock exchange. These are generally divided into four categories. What are these four categories?

A.

metals, energy, elements and agriculture

B.

fruit, vegetables, meat and dairy

C.

energy, agriculture, metals, livestock

D.

chemicals, agriculture, metals and livestock

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Question # 12

Luke has sent out a Request for Information to test the waters of the supply market for a new product he is sourcing. He has received a high number of detailed documents back from suppliers. Which of the following is Luke now likely to know about the marketplace? Select THREE

A.

acceptable lead times

B.

amount of product competition

C.

expected changes in the marketplace

D.

exact costs of the item he's procuring

E.

samples of the product

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Question # 13

Which of the following financial ratios would indicate a supplier's potential exposure risk to a steeprise in inflation?

A.

acid test

B.

current ratio

C.

gross profit margin

D.

gearing ratio

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Question # 14

Why would you use a credit score to appraise a supplier?

A.

to understand the level of risk the supplier poses to your organisation

B.

to understand if their prices reflect market value

C.

to find out how much money the supplier has in the bank

D.

to find out if the supplier has any unethical business practices

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Question # 15

What is the best way to prevent potential issues of conflicts of interest?

A.

do not hire family members

B.

openly declare potential conflicts

C.

do not work with suppliers who have relationships with the procurement team

D.

create a risk register

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Question # 16

Which of the following can be interpreted as a normal business practice by some cultures but a form of bribery by others?

A.

phishing

B.

verbal contracts

C.

golden handshake

D.

facilitation payment

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Question # 17

Tracey Collum is a procurement professional and married to Nick Collum. Tracey has been leading a tender for a new radar system, where four suppliers have submitted their bids. After the bids were received, Nick joined one of the suppliers (Supplier X) as the project director for radar systems. Nick has asked Tracey to award the contract to Supplier X. What should Tracey do?

A.

Award the contract to Supplier X because Nick will be promoted if Supplier X wins the contract

B.

Award the contract to Supplier X because Tracey can ask for a better price because they are married

C.

Ask to be removed from the tender due to a conflict of interest and complete a conflict of interest form

D.

Remove Supplier X from the tender due to a conflict of interest and continue with the tender

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Question # 18

It is good practice for the procuring organisation's auditors to undertake the following upon completion of a supplier's audit. Select the TWO that apply.

A.

Do nothing, after all, this is a known supplier incapable of serious breaches

B.

Inform the supplier of any non-conformances and improvement opportunities

C.

Report non-compliance to police and have the supplier arrested for lapses

D.

Prepare an audit report that may be shared with the supplier in advance

E.

Call for a meeting with colleagues and share confidential details of the audit

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Question # 19

Bob works in the procurement department of a construction firm. He has been asked to procure an item for a short-term project which is considered low risk. What type of sourcing will he be completing?

A.

tactical

B.

strategic

C.

outsourcing

D.

insourcing

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Question # 20

When looking at credit scores, a supplier may be classified as a high risk for reasons that are notlinked to poor credit. Which of the following could these be? Select TWO

A.

The organisation is new

B.

The organisation has no loans or credit cards

C.

The organisation has lots of fixed assets

D.

The organisation does not employ many people

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Question # 21

What type of relationship should a buyer seek when making strategic sourcing for their business?

A.

transactional

B.

collaborative

C.

arms-length

D.

partnership

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Question # 22

Which of the following are examples of secondary data? Select TWO

A.

economic indices

B.

trade fairs and exhibitions

C.

networking

D.

commissioned market research

E.

comparison websites

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Question # 23

If a commodity index shows that the price of a commodity is continually rising, what does this indicate about the market?

A.

that there is little demand in the marketplace

B.

demand is exceeding supply

C.

there is a threat of substitution

D.

the marketplace is a monopoly

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Question # 24

When assessing the financial performance of a potential supplier, it is important to understand how much gross profit they are making. The gross profit margin ratio uses which of the following pieces of information from the profit and loss (statement of financial performance)? Select TWO that apply.

A.

Cost of goods sold

B.

Value of equity capital

C.

Income from sales

D.

Current liabilities

E.

Total current assets

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Question # 25

A buyer has been tasked with placing an order for steel from another country and using Incoterms for the delivery. The buyer's organisation has an in-house transportation and export clearance department. During negotiations, the buyer achieved a 25% cost reduction by accepting responsibility to arrange loading, transportation, and export clearance. Which Incoterm has been agreed?

A.

CIP - Carriage and Insurance Paid

B.

FOB - Free on Board

C.

FCA - Free Carrier

D.

EXW - Ex Works

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Question # 26

In which circumstances would a procurement manager effectively use competitive tendering for the award of contracts?

A.

When the value of the procurement is high and special tooling is a major factor

B.

When the requirement is needed urgently and price is not the most important factor

C.

When the suppliers have technical expertise, and the value of the procurement is relatively high

D.

When the specification is likely to be continuously reviewed as the contract progresses

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Question # 27

Henry is importing cheese from South East Asia into the UK. He is doing some research on the costs and risks of this and has discovered that the product may be considered of 'non-preferential origin'. What implications would this mean for Henry?

A.

he will require insurance

B.

the goods are subject to tariff quotas

C.

there are no duty charges or limitations

D.

the goods are banned in the UK

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Question # 28

A procurement manager of a medium-sized company has suggested to their executive board that implementing an ISO environmental standard would improve procurement practices and reduce environmental and social impacts. However, some colleagues are concerned about the potential complexity and supplier resistance. Should the company go ahead with the recommendation?

A.

Yes, as it would align with, and help to achieve, sustainability goals

B.

No, ISO standards are too complex for staff and suppliers to understand and follow

C.

No, because ISO standards are only relevant to large organisations

D.

Yes, implementation would guarantee that the company is compliant with all environmental laws

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Question # 29

A buyer is responsible for the procurement of metals within the raw materials department. The buyer is preparing for next year’s purchase orders and has been asked to confirm the month of order placement. The buyer has found three trends:

    In January and April, the supplier's local currency is stronger

    November typically has the lowest demand

    May typically has the highest demand

Which month should the buyer plan to place the purchase order?

A.

November

B.

May

C.

January

D.

April

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Question # 30

The gross profit of a company can be calculated by using a simple formula. What is this?

A.

total revenue - cost of sales

B.

assets - liabilities

C.

cost of sales - fixed assets

D.

debt owed - total sales

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Question # 31

A company has a requirement for an item that has been identified as strategic on the positioning model. The company needs to invite competitive tenders and make sure the selected supplier of this item is in a good financial position. What should the company ask the suppliers to send to show that their current assets cover their current liabilities?

A.

Gearing ratio

B.

Acid test

C.

Profit and loss account

D.

Annual turnover

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Question # 32

It is important that buyers take an approach that is reasonable and fair when selecting suppliers to work with. Which of the following is a voluntary document which can help procurement professionals treat suppliers respectfully?

A.

EU Procurement Directive 2014

B.

CIPS Code of Conduct

C.

ISO 9001

D.

ILO is an organization

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Question # 33

Ji Yuan is a procurement manager who is looking for a new supplier to complete reactive maintenance activities throughout his property portfolio. The reactive maintenance will include an array of plumbing tasks as well as fixing electrical items. Suppliers therefore need to be extremely skilled and knowledgeable about a variety of tasks. Ji Yuan has done some initial research and doesn't believe that there are many suppliers who can complete this type of contract. What type of tender should he use?

A.

negotiated

B.

restricted

C.

open

D.

competitive dialogue

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Question # 34

Which of the following are remedial actions that may be undertaken by the purchasing organisation following a supplier audit? Select the TWO that apply.

A.

Violating the terms of the supplier contract

B.

Define specific corrective actions for the supplier

C.

Daily brainstorming meetings with the supplier

D.

Employing the supplier’s staff for job training

E.

Running supplier development programmes

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Question # 35

Credit rating agencies can assist procurement professionals. Typically, which of the following can be obtained from a credit rating agency report? Select TWO that apply.

A.

Product pricing information

B.

Payment history

C.

Financial stress score

D.

Tender submission pricing

E.

Rebate information

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Question # 36

Credit rating agencies can assist procurement professionals. Typically, which of the following can be obtained from a credit rating agency report? Select TWO that apply.

A.

Product pricing information

B.

Payment history

C.

Financial stress score

D.

Tender submission pricing

E.

Rebate information

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Question # 37

A buyer has been working with their business managers on a tender. The buyer is now assessing the tender proposals from the external market. Is it good practice for the procurement buyer to makesourcing recommendations?

A.

Yes, the procurement buyer should assess and take all decisions to award the tender independently of the business managers to avoid conflict of interest

B.

No, it is a lengthy, costly, and unnecessary step for the procurement buyer to engage business managers

C.

No, the buyer's recommendations are not relevant to the final sourcing decision, which must be taken by the business managers

D.

Yes, the procurement buyer can advise on the competitive proposal but should engage with the business managers about the decision to award the tender

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Question # 38

A business may be faced with the challenge of deciding whether to source some of its requirements from external suppliers or whether to make them internally. Which of the following factors is likely to justify the decision to make the requirements internally?

A.

The other suppliers are using older technology

B.

The availability of in-house competencies and capacity to carry out the production

C.

External suppliers are likely to be overcharging

D.

External sourcing involves cumbersome tendering procedures

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Question # 39

Which of the following is an example of intracompany trading? Select TWO

A.

a manufacturer in the UK buys raw copper from a supplier in Chile

B.

two companies owned by the same entity conduct business

C.

two companies join together to create a new product

D.

two departments within the same company collaborate on a project

E.

cleverness

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Question # 40

A company has a low gearing of 20%. This shows that the company relies on equity capital and should therefore have less difficulty coping during tough economic times. Is this statement TRUE?

A.

Yes- a low gearing ratio means the company's finances are made up of equity rather than debt

B.

Yes- a low gearing ratio shows that the business is solvent and can deal with supply chain disruptions easily

C.

No- a low gearing suggests that the company is financed by long-term debt rather than equity

D.

No- a low gearing shows you that a company isn't likely to be profitable

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Question # 41

Which of the following is not a type of fraud that procurement professionals should be vigilant for?

A.

coersion

B.

phishing

C.

kickback

D.

identity theft

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Question # 42

Which of the following are signs that modern-day slavery might be taking place within the supply chain? Select THREE.

A.

suspiciously low labour costs

B.

poor quality products

C.

workers that live on-site

D.

suppliers who speak English as a second language

E.

supplier based in a country with a low score on the Corruption Perception Index

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Question # 43

Which award criteria can be applied when sourcing requirements from external suppliers?

A.

Delivery promises of goods

B.

Price and total life-cycle costs

C.

Plans and manpower numbers

D.

Understanding of supplier operations

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Question # 44

Many organisations prefer a multi-sourcing approach because of the advantages it provides. Which of the following might be an advantage of multi-sourcing?

A.

It is the only approach that supports the open tendering process

B.

It is the only approach that enables the buyer to isolate the best supplier from among many

C.

It helps the buyer to increase stock varieties to avoid stock-outs

D.

It increases process flexibility and switching using a range of approved suppliers

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Question # 45

In which instance would multiple sourcing be the most applicable approach?

A.

Sourcing for the provision of a service, where close relationship management is required

B.

Sourcing a specialised, unique component where the supplier's knowledge is key

C.

Sourcing for high-cost, strategically important components

D.

Sourcing for components required at short notice

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Question # 46

Ramesh is a procurement manager who is looking at his supplier base. He is pursuing a sourcing strategy with the aim of enabling logistical cost reductions. He has made the decision to scale-down his supplier base and purchase from one supplier.

Which type of sourcing arrangement has Ramesh began?

A.

dual

B.

multiple

C.

single

D.

sole

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Question # 47

The procurement team at Grape Juice Limited often use a weighted point system when ap-praising potential suppliers. What is a disadvantage of using a weighted point system?

A.

it allows transparency

B.

it is time-consuming to create

C.

it is easy to manipulate

D.

it is hard to be objective

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Question # 48

Other than price, what should a buyer consider when evaluating supplier quotations?

    Lead times

    Add-on costs

    Wastage rates

    Past performance

A.

1, 2, and 4 only

B.

1, 2, and 3 only

C.

2, 3, and 4 only

D.

1, 3, and 4 only

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Question # 49

Private sector procurement organisations should always allow suppliers at least 35 days to respond to invitations to tender. Is this statement true?

A.

No, because this timeframe will cause delays that are unacceptable to stakeholders

B.

Yes, because it helps suppliers to plan and prioritise their work

C.

No, because the complexity of the tender should inform the response timescale

D.

Yes, because that timeframe is internationally recognised as being appropriate

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Question # 50

What is the best way to prevent potential issues of conflicts of interest?

A.

do not hire family members

B.

openly declare potential conflicts

C.

do not work with suppliers who have relationships with the procurement team

D.

create a risk register

Full Access
Question # 51

When evaluating a supplier's proposal in relation to ESC (Environmental, Social, Governance, and ethical elements), it is common to send questionnaires to suppliers requesting information, which can later be scored. Which of the following questions would be assessing any of the ESC criteria?

    Could you provide details on your manufacturing and raw material costs as part of an open-book pricing contract?

    How do you promote equal opportunity for your employees, customers, and suppliers?

    What is the annual turnover and profitability of your company?

    Does your company have an anti-bribery policy?

A.

1 and 3

B.

2 and 3

C.

2 and 4

D.

1 and 4

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Question # 52

Ji Yuan is a procurement manager who is looking for a new supplier to complete reactive maintenance activities throughout his property portfolio. The reactive maintenance will include an array of plumbing tasks as well as fixing electrical items. Suppliers therefore need to be extremely skilled and knowledgeable about a variety of tasks. Ji Yuan has done some initial research and doesn't believe that there are many suppliers who can complete this type of contract. What type of tender should he use?

A.

negotiated

B.

restricted

C.

open

D.

competitive dialogue

Full Access
Question # 53

What are the two main financial accounting statements of an organisation that show the values of assets and liabilities, and the profit earned in the period?

A.

Cash flow statement (statement of cash flow) and balance sheet (statement of financial position)

B.

Balance sheet (statement of financial position) and profit and loss account (statement of financial performance)

C.

Profit and loss account (statement of financial performance) and chairman’s statement (in the annual report)

D.

Cash flow statement (statement of cash flow) and profit and loss statement (statement of financial performance)

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Question # 54

Compared with single sourcing, what is a key advantage to dual or multiple sourcing? Select TWO

A.

It is easy to drive down costs

B.

There is a risk of failure to supply

C.

Economies of scale

D.

Supplier Loyalty

E.

Low risk of failure to supply

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Question # 55

In which circumstances would a procurement manager effectively use competitive tendering for the award of contracts?

A.

When the value of the procurement is high and special tooling is a major factor

B.

When the requirement is needed urgently and price is not the most important factor

C.

When the suppliers have technical expertise, and the value of the procurement is relatively high

D.

When the specification is likely to be continuously reviewed as the contract progresses

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Question # 56

Which of the following are remedial actions that may be undertaken by the purchasing organisation following a supplier audit? Select the TWO that apply.

A.

Violating the terms of the supplier contract

B.

Define specific corrective actions for the supplier

C.

Daily brainstorming meetings with the supplier

D.

Employing the supplier’s staff for job training

E.

Running supplier development programmes

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Question # 57

Pierre is constructing a tender for a security contract. As well as cost, he would like to ask the security companies some questions about their health and safety processes and staff qualifications. He has created several questions and weighted these so that they add up to 25. is this the correct thing to do?

A.

yes- point systems can be weighted any way a buyer choses so long as this is explained in the ITT

B.

yes- 25 is the correct weighting for quality question

C.

no- the weighting should total 10

D.

no- the weighting should total 100

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Question # 58

Dylan is looking to appoint a new supplier of paint to his manufacturing business. The paint will be used to paint buses and taxis and therefore needs to be high quality and durable. Which of the following should Dylan look for in terms of quality management when appraising the suppliers?

A.

ISO9001

B.

Carter's 10 Cs

C.

ESG

D.

conformance specification

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Question # 59

A company has a requirement for an item that has been identified as strategic on the positioning model. The company needs to invite competitive tenders and ensure the selected supplier of this item is in a good financial position. What should the company ask the suppliers to send to show that their current assets cover their current liabilities?

A.

Profit and loss account

B.

Annual turnover

C.

Gearing ratio

D.

Acid test

Full Access
Question # 60

The bill of lading is one of the main documents associated with sea freight within international sourcing. Which of the following statements represent some of the uses of the bill of lading? Select TWO that apply.

A.

It provides evidence of the contract of carriage for the goods

B.

It provides evidence of the title of ownership of the goods

C.

It provides evidence of the country of origin of the goods

D.

It provides evidence that the goods are fully insured in transit

E.

It provides evidence guaranteeing the use of Incoterms on the goods

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Question # 61

The procurement team received an urgent request from the business to source quotations for pestcontrol services. The team decided to use a local newspaper to advertise the requirements. Was this an appropriate approach to use in the circumstances?

A.

Yes, so that the local pest control sector can decide between them who should bid

B.

No, because they might receive too many irrelevant proposals which may delay the assessing process

C.

No, because international vendors must also be notified of the opportunity

D.

Yes, they must seek as many bids as possible, even if it takes longer

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Question # 62

Which of the following should be considered when calculating ratios relating to a supplier's liquidity?

A.

inventory

B.

reserves

C.

receivables

D.

profit

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Question # 63

An organisation wants to measure its Triple Bottom Line. Which of the following should be considered to help achieve this goal?

A.

Quality and lead time and performance

B.

Innovation and creativity performance

C.

Financial and environmental performance

D.

Procedure and process performance

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Question # 64

What are the risks of outsourcing?

    Loss of control of a project

    Loss of assets

    Loss of future business opportunities

    Loss of private information

A.

1 and 4 only

B.

2 and 3 only

C.

3 and 4 only

D.

1 and 2 only

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Question # 65

Weighted points systems can be applied to evaluate and compare potential suppliers. For which of the following factors would it be appropriate to use this method?

    Financial stability

    Supplier reliability

    Market demand

    Negotiation styles

A.

1 and 2 only

B.

2 and 3 only

C.

3 and 4 only

D.

1 and 4 only

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