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CIPS L4M6 Supplier Relationships Exam Practice Test

Demo: 36 questions
Total 180 questions

Supplier Relationships Questions and Answers

Question 1

‘tail spend’ is a common category used in procurement and describes a category of items. What characteristics do theses items have?

Options:

A.

High value, low volume

B.

High value, high volume

C.

Low value, high volume

D.

Low value, low volume

Question 2

Which of the following are considered ‘wastes’ which can be removed from a business? Select THREE.

Options:

A.

Over-processing

B.

Stockout

C.

Equity

D.

Transportation

E.

Inventory

Question 3

Which of the following is characteristic of an adversarial relationship?

Options:

A.

The communication is always poor

B.

The price is more important than the quality of the product

C.

They are only used for one-off purchases

D.

The outcome of the deal is more important than the long term relationship

Question 4

Victoria runs a hotel and has recently had several security issues such as attempted robberies. She has decided that she needs to hire a security firm to ensure these issues don’t continue. She has done some research and has found there are several local security firms who may be able to provide services to her hotel. However, she hasn’t decided exactly what she would require the security firm to do. What should be Victoria’s next steps?

Options:

A.

Issue a Request for Proposal

B.

Issue an Invitation to Tender

C.

Issue a Request for Quotation

D.

Issue a Prior Information Notice

Question 5

A ‘synergy’ within a partnership can lead to what?

Options:

A.

Poor performance

B.

Increased costs

C.

Miscommunications

D.

Greater creativity

Question 6

Andrew runs a factory that makes cakes. Vanilla Extract is a vital ingredient in Andrew’s cakes and this is a monopolistic market. Andrew has noticed recently that the quality of the supplier’s product has reduced, and this has led to several complaints from customers. Andrew is considering entering into a Partnership with this supplier as he believes this will help increase the supplier’s performance. Is this the correct thing to do?

Options:

A.

Yes- partnership sourcing can improve performance which will ultimately satisfy the end customer

B.

Yes- partnership sourcing will improve sales figures

C.

No- Andrew should use an alternative supplier

D.

No- Andrew should outsource the vanilla extract.

Question 7

Which of the following are Intellectual Property Rights that you would you encounter in procurement and supply contracts? Select THREE.

Options:

A.

Method Statements

B.

Risk Assessments

C.

Patents

D.

Copywrite

E.

Trademark

Question 8

Fred is a new procurement manager at a large engineering firm. They procure 100s of components and use these to make kitchen appliances such as kettles and toasters. He has been asked by his manager to look into procuring a new component which will go into a new environmentally friendly kettle and has been asked to ensure that the firm receives value for money. What should Fred do?

Options:

A.

Hold an open competition

B.

Contact current suppliers to try and get a good deal

C.

Invite known suppliers to bid for the contract

D.

Put together a business case to make the product in-house

Question 9

Which of the following are not a valid reasons to terminate a relationship with a supplier? Select TWO.

Options:

A.

The supplier suddenly increases prices

B.

The supplier made one late delivery

C.

Supply base rationalisation

D.

The supplier becomes insolvent

E.

The supplier has a change in senior management

Question 10

Mandy is looking to source windows and doors for a new build apartment block. She has done some initial research and has discovered that there are many suppliers in the marketplace that can supply the items she needs. As it is a high-value project she is thinking of running a formal tender. What should be Mandy’s first step?

Options:

A.

Run an open competition – send out an ITT

B.

Run a restricted competition – send out a PQQ

C.

Run an open competition – send out a RFQ

D.

Run a restricted competition- send out a RFI

Question 11

Which of the following is not a stage in the relationship life-cycle?

Options:

A.

on-boarding

B.

qualification

C.

performance management

D.

design the specification

Question 12

David is sourcing a new cleaning contract as he is not impressed with his current cleaning company’s performance. He believes that his current supplier has been overcharging him, and due to budget cuts, he is keen to secure a lower price than what he is paying now. His Manager has suggested using an e-auction as the procurement method. Is this the correct way forward?

Options:

A.

Yes- an e-auction is an electronic system so it will be easy for David to compare bids

B.

Yes- an e-auction will allow David to secure the lowest possible price

C.

No- a reverse e-auction would be more suitable as it will secure the lowest price

D.

No- a reverse e-auction will ensure only high quality suppliers bid for the opportunity

Question 13

Which of the following would you use to qualify new suppliers? Select THREE.

Options:

A.

competency

B.

cash

C.

culture

D.

cooperation

E.

coordination

Question 14

Which of the following are primary activities, according to Porter's Value Chain? Select THREE.

Options:

A.

Procurement

B.

Operations

C.

Marketing and Sales

D.

Human Resources

E.

Inbound Logistics

Question 15

When outsourcing, which legislation details the rights of employees who may find themselves now working for the outsourcing company?

Options:

A.

ITT

B.

PCR 2015

C.

OJEU

D.

TUPE

Question 16

Which of the following is a valid reason for ending a relationship with a supplier?

Options:

A.

the supplier delivered one delivery late

B.

force majeur

C.

the contract has ended

D.

the supplier has a new CEO who you don't like

Question 17

Which of the following are considered part of the '5 Rights of Procurement'? Select THREE.

Options:

A.

place

B.

quality

C.

cost

D.

focus

E.

time

Question 18

Which of the following documents can be used at the selection stage of a tender process to ensure that short listed bidders meet the requirements of the buying organisation? Select TWO.

Options:

A.

Request for Information

B.

Request for Quotation

C.

Pre-Qualification Questionnaire

D.

Invitation to Tender

Question 19

A company has just hired a new cleaning firm to clean their offices. The specification for the clean was detailed in an appendix in the contract and included a list of pre-approved products that the cleaning firm should use. The cleaners that were sent to site had not read the contract and therefore did not use the appropriate products. What is the reason for the failure of this?

Options:

A.

Poor communication

B.

Miscommunication

C.

Distortion of the facts

D.

Communication overload

Question 20

Rachel and Jacky work in the procurement department of Foddy Foods Ltd. They have been told by their CEO to build better relationships with strategic suppliers as this will create value for money for the company. In what ways can value for money be achieved by building strong relationships with suppliers? Select TWO.

Options:

A.

Better payment terms

B.

Reduction of waste

C.

Innovation developed as part of collaborative projects

D.

Reducing costs

Question 21

If a stakeholder has high power in a business but isn’t interested in your procurement activity, what should be your management style for dealing with this stakeholder?

Options:

A.

Keep them satisfied – they have high power

B.

Keep them informed – they have high power

C.

Manage closely – they’re a key player

D.

Minimum effort is required as they’re not interested- do nothing

Question 22

What is a disadvantage of including qualitative KPIs into a contract?

Options:

A.

They can lead to poor supplier performance

B.

They pull focus from the more important quantitative KPIs

C.

They are hard to measure

D.

They make the buyer seem weak

Question 23

The Queen Victoria is a traditional British pub which serves a range of alcoholic beverages. It has a partnership relationship with a local brewery which supplies several types of beer and cider. Logistics is a key concern for the Queen Victoria as deliveries must be made when there is room in the cellar to store the barrels of beer and cider. In what ways could the logistics risk be reduced?

Options:

A.

Using several suppliers instead of one

B.

Batch ordering

C.

Sharing up-to-date information

D.

Issuing POs electronically.

Question 24

Pablo has run an open- competition to secure a new contract for a supplier of paper for his Birthday Card making company. He has received 10 submissions from various suppliers and needs to put a team together to evaluate the bids. What type of team should Pablo consider?

Options:

A.

A team composed of internal stakeholders

B.

A cross-functional team

C.

A team of procurement experts

D.

A team composed of internal and external stakeholders

Question 25

In the 1990s a company spent a lot of time and money developing a device that you could carry around that could play CDs. The product spent a long time in development but when it was released the sales figures were very disappointing. This was in part due to the fact another product was released at a similar time which had much more developed technology and could play music without the cumbersome size of a portable CD player. Which of the following did the company not consider when developing the product?

Options:

A.

threat of substitution

B.

threat of new entrant

C.

rivalry among existing competitors

D.

power of buyers

Question 26

In public sector procurement, according to EU legislation, certain items must be procured via open-competition. What type of items are these?

Options:

A.

Items that are imported from outside the EU

B.

Items of high value

C.

Items of strategic importance

D.

Items that are produced by lots of suppliers

Question 27

Richie has come up with a new idea for sourcing items for the business but feels that it will have mixed reviews within the team. He thinks that some people will be in favour of the idea, and some will be against it. He doesn’t think the CEO will have a strong opinion either way. In order to decide whether to put a business case together and present his idea to the CEO- what should Richie do?

Options:

A.

Cost Analysis

B.

Make vs Buy Analysis

C.

Force Field Analysis

D.

Value Engineering Analysis

Question 28

The procurement department is sourcing new uniforms for its housekeeping team. Although the housekeeping team in itself doesn’t hold a lot of power within the business, they have a high interest in the activity as it will be them who is wearing the items. When designing the specification, how should the procurement department manage the housekeeping team?

Options:

A.

Keep them satisfied- they will be wearing the uniform so need to be happy with it

B.

Manage them closely- they’re key players in this procurement activity

C.

Keep them informed- it’s important the housekeeping team know what’s going on at each stage of the procurement

D.

Minimal effort is required as they do not hold a lot of power in the business.

Question 29

The ABC Analysis, also known as the Pareto Analysis, is a technique that can be used by procurement to which purpose?

Options:

A.

supplier positioning

B.

cost analysis

C.

relationship spectrum

D.

cost engineering

Question 30

A doctor's surgery requires a complex database system to manage all of its patients data, which is highly sensitive. The system also needs to link to other departments of the health service such as physiotherapy and intensive care. The Manager of the surgery is considering outsourcing the management of the database to an IT company. What is the Manager's main motivation for doing this?

Options:

A.

The supplier is an expert in their field

B.

This will result in economies of scale

C.

This will free-up internal resources

D.

This will result in cost-savings

Question 31

A competitive advantage can be gained by doing what?

Options:

A.

Increasing your prices

B.

Engaging in market research

C.

Building better relationships with primary stakeholders

D.

Completing formal tenders for all buying requirements

Question 32

Phone Maker Incorporated is a manufacturer of mobile phones. It is considering investing in a partnership with its supplier of batteries and circuit boards as it wishes to produce new models of its phone more regularly. What is the main driver for Phone Maker Incorporated?

Options:

A.

Cheaper costs

B.

Changes in the marketplace

C.

Better quality products

D.

Reduced product life-cycles

Question 33

A partnership relationship can be described as any relationship between a buyer and supplier where there is a good level of communication and both parties are happy with each other’s performance. Is this statement TRUE?

Options:

A.

Yes- partnerships are characterised by strong relationships

B.

Yes- partnerships are the only relationship type where both parties are happy with each other’s performance

C.

No- good levels of communication can exist in other types of relationships

D.

No- only strategic relationships involve good levels of communication.

Question 34

Which of the following are elements of a business that can develop a company's competitive advantage? Select THREE.

Options:

A.

cost focus

B.

cost leadership

C.

human resource management

D.

organisation culture

E.

natural resources

Question 35

Lion Manufacturing is about to enter into a partnership with Penguin Logistics, who will provide delivery to and from Lion Manufacturing's factories and warehouses. In this relationship, what type of negotiation strategy should Lion manufacturing use?

Options:

A.

win: win

B.

win: lose with the supplier winning

C.

lose: lose

D.

win: lose with the buyer winning

Question 36

Kirsty is designing a specification for a new contract and wants to include some qualitive KPIs for the new supplier, as well as quantitative. Which of the following could she include? Select TWO.

Options:

A.

Deliveries in full and on time

B.

Information sharing

C.

Trust

D.

Cost savings

E.

Early supplier involvement

Demo: 36 questions
Total 180 questions