Pareto Analysis is based on the 80/20 principle , which CIPS uses to help procurement professionals:

Identify the small number of items accounting for the majority of spend or value

Focus effort where it adds the most value

Key activities include:

Prioritising procurement time and resources (Statement 1 ✔ )

Separating spend into critical few and trivial many (Statement 3 ✔ )

Statement 2 relates to Kraljic portfolio analysis , and Statement 4 relates to supplier preferencing , not Pareto.

L4M6 Reference:

Learning Outcome 1: Understand procurement analysis and segmentation tools

Topic: Pareto (80/20) analysis

CIPS L4M6 Study Guide – Spend analysis and prioritisation

A partnership relationship allows Joseph to collaborate with suppliers on cost savings in manufacturing, logistics, and installation, providing a competitive edge over rival companies.

Explanation

The correct answer is ‘Yes- IPR is a valid concern for both parties but will survive the termination of the agreement’ (p.112). See the section on ‘Legal considerations’ in chapter 2.4

Explanation

The correct answer is ‘Yes- the Public Sector is regulated by EU procurement regulations which prohibits this’. This is stated on p.122. Please note that this study guide and exam were written before Brexit. Once Brexit happens, nobody knows what will happen with this.

Explanation

The correct answers are information sharing and trust. Further qualitative KPIs are listed on p.102. Deliveries in full and on time would be a quantitative KPI and early supplier involvement is not a KPI at all.

Explanation

A PIN is a ‘prior information notice’ – it is sent out before the ITT to let suppliers know that an opportunity is coming up and they should look out for it. See p 72 “supplier identification- public sector” for more details.

Drivers for partnership include a high spend with the supplier, criticality of the product, and technical complexity. These factors encourage collaboration for cost efficiency, quality improvement, and risk management. Partnerships are less likely when there are many suppliers or the product is a commodity, as competition and standardization reduce the need for close collaboration.

Explanation

The definition of value mapping is given on p.69 this is; ‘a process in which value is created through the elimination of waste and operational inefficiencies’. It ties into JIT / Lean.

Using Kraljic’s Portfolio Matrix , CIPS classifies items based on:

Financial impact

Supply risk

Engines have:

High financial value

High supply risk , as production cannot proceed without them

This places the supplier firmly in the strategic quadrant , requiring close relationship management, risk mitigation, and long-term collaboration.

L4M6 Reference:

Learning Outcome 2: Understand supply positioning and risk

Topic: Kraljic portfolio analysis

CIPS L4M6 Study Guide – Strategic items and supplier relationships

Explanation

The correct answer is ‘They may gain an increased volume of business’. The other options are just not true. See p.130 for advantages and disadvantages of partnerships from both the buyer and supplier’s perspective. This is a hot topic for the exam.