CIPS L3M1 Procurement and Supply Environments Exam Practice Test

Explanation

All answers are correct. Each of these areas can create safety hazards for people in the workplace, and so in many countries government legislation has been passed to make these topics subject to regulation.

For example, within the UK, it is mandatory for employers to provide compulsory training for em-ployees who may be involved in lifting heavy items, and there are limits placed on the weight which can be handled by any one person. In many cases, mechanised lifting equipment is used to aid or replace humans.

Explanation

Gross National Product; Gross Domestic Product.

Seen by some commentators as outdated measures, although it's difficult to know what they should / would be replaced by.

Explanation

Both wind power and hydro-electric can be used many times over - they are renewable - wind, riv-ers, tides return each day, more or less.

On the other hand, coal, oil as well as wood, turf and gas are non-renewable - that is, there are lim-ited stocks and they will run out.

Many economies are now switching to use of renewables to generate electricity, heat, etc

Explanation

This is a broad group of people deriving income from employment, including some skilled people through to unskilled.

A, B and C1 would be those people often referred to as upper middle class or upper class; whereas E would describe a broad group of the poor, the unemployed, etc.

These are rough generalisations regarding people's likelihood of income, taste, lifestyle, etc. To take an extreme example, there is probably not much point in trying to market Dom Perignon (an expen-sive brand of champagne) to the E group. But the E group might welcome promotion of a low-cost brand of tobacco or cigarettes.

Explanation

This is normally true, often resulting in greater complexity in managing public sector organisations.

Explanation

'Retention' - from the word 'retain', meaning to 'keep in place', 'hold back', 'keep possession of' something (Concise Oxford Dictionary, fifth edition) . In this case, 5% of the contract price.

Explanation

Social arrangement because it involves people; they have a collective goal eg to be a profitable or-ganisation; and their performance must be controlled to work towards or to achieve that goal / those goals.

Explanation

The x-axis shows time. For some products, it may represent a year; for others, a century.

The other answers given could all be shown on the y-axis of the PLC, depending on circumstances.

Explanation

An earlier widely-used definition of value for money as the right combination of price and quality has been updated to include the notion of whole-life costing.

The other answers shown are simply 'red herrings'.

Explanation

A local independent supermarket would be a private sector organisation - that is one intended to make a profit. The others suggested here would all be not-for-profit.

Public sector organisations, although not created to make a profit, are generally referred to as 'public sector' - often funded from taxation - with 'not-for-profit' often being funded from members, do-nors, or other voluntary sources.

Explanation

All except the self-employed tutor have a social arrangement with collective goals, and controls on performance.

The self-employed tutor may have a goal, but it is not collective; is not part of a(n internal) social arrangement and controls on performance may be entirely in their own hands, or perhaps even ab-sent altogether.

Explanation

Third sector organisations often rely on charitable contributions. An example might be Medecins Sans Frontieres.

They also sometimes receive grants from taxpayers, sometimes in return for work done eg the chari-ty Barnardo's receive government funding in return for advising the British government on man-agement of some children in its care.

Finally some NFPs have, for example, retail outlets which generate income to aid the organisation. Oxfam is such an example.

Third sector can be expected to ster clear of certain areas for ethical reasons. Alcohol, gambling, to-bacco, and weapons are examples.

Explanation

Inflation, in this case, is created by the increased cost of production coming through into the econ-omy.

The other answers are essentially names of alternative types of inflation.

Explanation

Demographics now seen as being a part of STEEPLED.

The other terms shown have nothing to do with this topic and are simply fillers.

Explanation

The correct answer is 'taxpayers'. On occasion, part of a public sector organisation may make sales which will generate revenue. In some mega-projects (eg power generation), public sector bodies will sometimes into long-term arrangements with private sector financiers, but this is not the mainstream. Delaying payments to suppliers is a tactic used by some organisations, but they are more likely to be private sector, and such a practice is regarded as unethical by many, including CIPS.

Explanation

All of these are ways of classifying organisations.

Examples: Retailers, SMEs, limited companies, etc

Explanation

The definition shown refers to the word 'price'. The price is what someone will pay for something - the extent to which a customer values something - and the reference to the standard monetary unit refers to, for example, a dollar, a Euro, a dinar or whatever.

The other answers are, to some extent, intended to confuse, as they use some of the words shown in the definition. Care must be taken not to jump to a conclusion here.

The response 'cost' should give pause for thought, as, in a sense, the cost of doing or making some-thing may have value. But value is determined by the customer - this definition is a reference to the value the customer would pay - the price.

Explanation

This is true.

A limited company has its own legal identity.

(Your syllabus makes reference to 'unincorporated companies'. This is something of a contradiction - the term 'company' implies incorporation. Although I have not been permitted to see your actual ex-am QUESTION NO:s, it seems unlikely that you will be QUESTION NO:ed on this particular point).

Explanation

The answer is 'not-for-profit', meaning 'third sector' (charities, co-operatives, NGOs, etc). This is not the same as 'public sector'. You should be clear on this terminology.

Explanation

Sources of funds for private sector commonly include revenues from sales, shareholders and long-term loans. Taxpayers would not normally be thought of as a source of funds for private sector, alt-hough in recent Coronavirus times, in some countries, such as the UK, businesses have received considerable support. But that is abnormal.

Short-term sources such as overdrafts are not to be relied upon on a regular or long-term basis.

Explanation

It's climate change.

Interestingly I've seen writings from climate activists who say that the film provides clear evidence that human-made climate change will be disastrous for the human race; and I've seen writings from climate-change deniers saying that if things were that bad we'd have become extinct a while ago. You decide.

Explanation

The Act was introduced in 2010. Although this is a UK-centric QUESTION NO:, it is valid for several rea-sons. Firstly, the UK was one of the first countries to introduce such a wide-ranging Act; secondly the Act is so wide-ranging that all UK managers need to be familiar with it. People who live and work outside the UK may wish to familiarise themselves with the content of the Act to have an idea of what the impact of such legislation might be like.

Interestingly, in the UK, the Act has seldom been used 'in anger'.

Explanation

A well-known measure of carbon footprint.

Procurement professionals are encouraged to incorporate environmentally-friendly thinking into their workplace activities and decision-making.

Explanation

The GRN, invoice and PO should all match to enable payment to occur.

The BoM will help calculate the extent of the requirement, prior to the PO being issued.

An SLA will help ensure adequate and contractual delivery of any services required.

Explanation

It's a supplier quotation.

Both the RFQ and the PQQ (sometimes known as 'SQ') are issued by the buying side, not the sell-ing side.

A commercial invoice doesn't tell you what the price 'would be' - it tells you what is owed after the event (usually - an exception being with prepayment in mind; or a 'proforma invoice' which is issued in some circumstances, especially internationally).

Explanation

Coal and oil are the correct answers. These are finite resources and will run out some day.

The others shown are renewables.

Explanation

Specification is the answer. The second sentence in the rubric makes it clear that this is the correct answer.