CIPS L4M6 Exam Practice Test Instant Access

Question 1

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?

APoor communication

BMiscommunication

CDistortion of the facts

DCommunication overload

Answer : A

This is an example of poor-communication. The information was not passed from the person who signed the contract to the staff on site who were to do the cleaning. See p.158 on communication issues.

Question 2

In the public sector, there are many sources of information that a buyer can use to identify a suitable supplier. Which of the following could be used? Select THREE

AIntranet

BTradeshows

COJEU

DInternal stakeholders' knowledge

EProcurement Platforms

Answer : B, D, E

The correct answers are; tradeshows, internal stakeholders' knowledge and e-procurement platforms. Intranet is incorrect as this is an internal system so you wouldn't find information on external suppliers on here the careful not to confuse intranet with internet). OJEU is also incorrect; this is the platform on which tender opportunities in the public sector are published- its not a list of suppliers.

Question 3

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.

ABetter payment terms

BReduction of waste

CInnovation developed as part of collaborative projects

DReducing costs

Answer : B, C

Supplier relationships can result in value for money in the reduction of waste and in innovation developed as part of collaborative projects. Remember that in CIPS waste doesn't necessarily mean physical waste (as in stuff you don't want any more). There are 7 types of waste including waiting, inventory, transportation etc. So when you develop a relationship with a supplier, this can reduce waste (e.g. you may be able to get deliveries quicker by integrating your ordering system with the supplier's, or you might reduce transportation by agreeing a Consignment stock). Having a good relationship with a supplier isn't necessarily going to get you a reduction in cost or better payment terms. See p.70 for more details on this- there's a short list of ways in which good supplier relationships can bring value for money to a business.

Question 4

Agile Cars Ltd is creating a 'lean' business model which involves receiving deliveries of components only when they are required. Which of the following 'wastes' is being removed from the business?

ATransportation

BDefects

COver-production

DInventory

Answer : D

This would reduce inventory (holding stock). Inventory is considered a business waste because it costs money to store stuff (e.g. paying the rent on a warehouse, electricity to light it up etc). If you can reduce the need to store materials and components on site- you reduce costs. You also save time because you get deliveries when you need them- you don't need to allow for staff unpacking things, storing them away, then going back to them later when they need them. For more information on the 7 Business Wastes see p.70. This comes up in a couple of modules, so it's worth remembering.

Question 5

What is value mapping?

AAnalysing the costs that go into making a product

BCreating value through the elimination of waste and operational inefficiencies

CSegmenting suppliers based on the value they bring to the company

DMake vs Buy decision

Answer : B

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.

Question 6

Value for money in the private sector is concerned with what?

AGetting the best price possible

BShareholder profit and business benefit

CEnsuring taxpayers' money is spent wisely

DGetting the best quality possible

Answer : B

Value for money in the private sector is about achieving shareholder profit and busines benefit (p.66). In the public sector it is about ensuring taxpayers' money is spent wisely. Value for money is a mixture of price and quality.

Question 7

Achieving value for money can often be described as the three Es? What are these?

AEthics, Environment, Economy

BEconomy, Efficiency, Environment

CEfficiency, Economy, Ethics

DEffectiveness, Efficiency, Economy

Answer : D

The three Es are; Effectiveness, Efficiency and Economy. Sometimes a 4th E is added which is Equity (but this is mainly for the public sector).

CIPS L4M6 Supplier Relationships Exam Practice Test