L4M8 Procurement & Supply in Practice 2024 Questions & Answers 100% Correct Verified
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L4M8 Procurement & Supply in Practice
2024 Questions & Answers | 100%
Correct | Verified
How many stages are there within the CIPS Procurement Cycle? - The CIPS procurement cycle has 13
stages:
1. Understand need and develop a high-level specification.
2. Market/commodity options including ma...
L4M8 Procurement & Supply in Practice
2024 Questions & Answers | 100%
Correct | Verified
How many stages are there within the CIPS Procurement Cycle? - ✔✔The CIPS procurement cycle has 13
stages:
1. Understand need and develop a high-level specification.
2. Market/commodity options including make-versus-but assessment.
3. Develop strategy/plan.
4. Pre-procurement market tests and market engagement.
5. Development of required documentation, e.g. request for quotation (RFQ).
6. Supplier selection to participate in an invitation to tender (ITT).
7. Issue invitation to tender/request for quotation.
8. Bid/tender/quotation evaluation and validation.
9. Contract award and implementation.
10. Warehouse logistics and receipt.
11. Contract performance review and continuous improvement.
12. Supplier relationship/contract management.
13. Asset management/end of life.
What is stage 1 of the CIPS Procurement Cycle? - ✔✔Understand need and develop a high-level
specification.
What is stage 2 of the CIPS Procurement Cycle? - ✔✔Market/commodity options including make-versus-
but assessment.
What is stage 3 of the CIPS Procurement Cycle? - ✔✔Develop strategy/plan.
,What is stage 4 of the CIPS Procurement Cycle? - ✔✔Pre-procurement market tests and market
engagement.
What is stage 5 of the CIPS Procurement Cycle? - ✔✔Development of required documentation, e.g.
request for quotation (RFQ).
What is stage 6 of the CIPS Procurement Cycle? - ✔✔Supplier selection to participate in an invitation to
tender (ITT).
What is stage 7 of the CIPS Procurement Cycle? - ✔✔Issue invitation to tender/request for quotation.
What is stage 8 of the CIPS Procurement Cycle? - ✔✔Bid/tender/quotation evaluation and validation.
What is stage 9 of the CIPS Procurement Cycle? - ✔✔Contract award and implementation.
What is stage 10 of the CIPS Procurement Cycle? - ✔✔Warehouse logistics and receipt.
What is stage 11 of the CIPS Procurement Cycle? - ✔✔Contract performance review and continuous
improvement.
What is stage 12 of the CIPS Procurement Cycle? - ✔✔Supplier relationship/contract management.
What is stage 13 of the CIPS Procurement Cycle? - ✔✔Asset management/end of life.
When developing a specification, on what two models can it be focused? - ✔✔• Performance
specification
• Technical (conformance) specification
,How should a specification be developed? - ✔✔The specification should be developed together with
stakeholders and colleagues to ensure that the final design is fit for purpose and that it meets the
generated need.
What are the main points of Performance specifications? - ✔✔• Allow supplier innovation
• Promote competition in the marketplace
• The supplier bears the risk
• Buyer may not know exactly what they are getting
• Shorter document
• Quicker to prepare
• Takes advantage of supplier expertise
What are the main points of Conformance specifications? - ✔✔• No supplier innovation
• Reduced competition
• The buyer bears the risk
• Buyer knows exactly what they are getting
• Longer, complex document
• More time consuming to prepare
• Disregards supplier expertise
Why is it important to understand the budget before sending out any information to suppliers? -
✔✔Understanding the budget is essential for keeping within budget. The amount of budget that is
available will affect the quality of the product or service that can be obtained.
What is "Variance" against budget? - ✔✔Variance is the difference between the budgeted amount and
the spend.
What is a commodity? - ✔✔A raw material that can be brought or sold e.g. oil, gas, or coffee.
What model can be used to establish & assess market competition? - ✔✔Porters Five Forces
, What are the key areas of Porters Five Forces? - ✔✔Centralising around Rivalry among existing
competitors, the four further forces of the model are:
Threat of new entrants
Bargaining power of suppliers
Threat of substitutes
Bargaining power of buyers
When would the 'make or buy decision' be made during the procurement cycle? - ✔✔During Stage 2:
Market commodity options.
What should be established during the 'make or buy' decision? - ✔✔To establish which method offers
best value, the businesses should think about whether the item in question is core to the company.
A core competency within an organisation is a product or service that is strategic to the success or failure
of the business - it is the main focus of the business.
What are 'core competencies' defined as? - ✔✔The processes that are critical to an organisation
achieving success and competitive advantage
What matrix can be used when a procurement professional is deciding whether to 'make or buy' during
Stage 2 of The Procurement Cycle? - ✔✔Carter's Outsource Matrix
Using this matrix professionals can decide whether the product or service has a high or low contribution,
assess its strategic importance and act accordingly.
Products or services best suited to the 'buy' decision or ones that have a high contribution to operational
performance but low strategic importance.
What are the four quadrants & two axis's of the Carter's Outsource Matrix? - ✔✔1. Strategic alliance
2. Retain
3. Eliminate
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