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CIPS L4M8 Chapter 1- Questions and Answers 100% Solved To fully understand the market pricing, procurement professionals should research the level of competition. The .... .... ... model is an established way of assessing the competition Correct Ans-Porter's Five Forces

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  • October 3, 2024
  • 48
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • cips l4m8 chapter 1 questions and answers

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CIPS L4M8 Chapter 1- Questions and Answers 100%
Solved

To fully understand the market pricing, procurement professionals should research the level
of competition. The .... .... ... model is an established way of assessing the competition
Correct Ans-Porter's Five Forces




Porter's Five Forces Model Correct Ans-- Threat of new entrants

- Threat of substitutes

- Bargaining power of buyers

- Bargaining power of suppliers

- Rivalry among existing Competitors




Core Competencies Correct Ans-The processes that are critical to an organisation achieving
success and competitive advantage




Make or buy decisions are about Correct Ans-whether a product or service should be
made within the organisation or bought-in from an external supplier




A procurement professional can use Carter's Outsource Matrix when Correct Ans-deciding
whether to make or buy




The four quadrants of Carter's Outsource Matrix Correct Ans-- Strategic Alliance

(High strategic importance/Low Contribution to operational performance)

, CIPS L4M8 Chapter 1- Questions and Answers 100%
Solved
- Retain

(High importance/Low contribution)

- Eliminate

(Low importance/Low contribution)

- Outsource

(Low importance/High contribution)




Benefits of Outsourcing Correct Ans-- Saving money

- Reducing overheads

- Reducing headcount

- Using external knowledge

Focusing internally on core competencies

- Helping with shortfalls in labour/expertise




Disadvantages of Outsourcing Correct Ans-- Losing some control within an organisation

- Relying on external organisations

- Reducing quality

- Losing some internal knowledge




Procurment Cycle - Stage 3 - Develop strategy/plan Correct Ans-Once the decision to make
or buy has been made and the market has been evaluated, the next stage is to develop the
strategy or plan of how to achieve the procurement. Buyers should think about the external

, CIPS L4M8 Chapter 1- Questions and Answers 100%
Solved
environment when developing this plan and take several factors into account that could affect
their decisions (STEEPLE)




The 13 Stages of the Procurement Cycle Correct Ans-Stage 1 - Identify need and develop
spec.

Stage 2 - Market commodity/make or buy options.

Stage 3 - Develop Strategy/Plan

Stage 4 - Pre procurement market tests

Stage 5 - Prepare Documentation

Stage 6 - Supplier Selection

Stage 7 - Send ITT

Stage 8 - Receive & Evaluate Bids

Stage 9 - Award contract

Stage 10 - Warehouse/logistics prep

Stage 11 - Contract management

Stage 12 - Relationship management

Stage 13 - End of life/asset management




Procurement Cycle - Stage 1 - Understand need and develop a high-level specification
Correct Ans-The person generating the need should communicate with the buyer to
ensure there is no misinterpretation. Once the need is clearly understood, the procurement
professional should develop a specification

, CIPS L4M8 Chapter 1- Questions and Answers 100%
Solved

Two types of specification Correct Ans-Performance and conformance




Performance specifications Correct Ans-Specifies what the product or service will do or
achieve. This covers the outputs required, tolerances and any functions the product/service
may have to perform




Conformance specifications (technical) Correct Ans-Specifies which standards a
requirement must meet or exceed




Characteristics of Performance specifications Correct Ans-- Allow supplier innovation

- Promote competition in the marketplace

- The supplier bears the risk

- Buyer may not know exactly what they will be getting

- Shorter document

- Quicker to prepare

- Takes advantage of supplier expertise




Characteristics of Conformance specifications (technical) Correct Ans-- No supplier
innovation

- Reduce competition

- The buyer bears the risk

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