The CIPS L4M1 exam covers procurement and supply fundamentals, and include a mix of objective and constructed response questions all answered 100% verified correct!!
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O1. Outline FIVE differences between purchasing goods and purchasing services. -
correct answer ✔ 1. Goods are tangible, services are intangible:
2. Services cannot be separated from their supplier:
3. Heterogeneity: goods are usually uniform in nature while services are unique at
each delivery
4. Services 'perish' immediately on delivery whereas goods can be stored until
required
5. Products are easier to specify, being tangible
O2. Explain THREE circumstances in which a competitive tendering exercise might
not be the best approach to making a purchase. - correct answer ✔ 1. Urgency
2. Commercial confidentiality or national security (e.g. military organisations):
3. Value of the purchase:
4. Production costs cannot be measured accurately:
5. Price is not the only criterion for supplier selection and contract award
6. Intellectual Property Rights and monopoly
O2. Describe TWO e-sourcing tools and their use in procurement and supply. -
correct answer ✔ 1. E-Catalogues
2. E-Tendering
3. E. Auction
4. Reverse Auctions
5. Online suppleir evaluation data
O3. Explain the role of a shared services unit (SSU). - correct answer ✔ SSUs
reflect a desire to centralise and share services
The shared service provider becomes a dedicated provider of services such as;
finance, HR, IT and procurement which continue to be provided internally
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An SSU manages costs and quality SLAs to demonstrate value for money.
An SSU's benefits may be summarised as:
• cost effective internal service;
• liaison with its customers;
• anticipating future demand;
• employing resources and providing higher levels of service more cost effectively
than if they were provided by a department or an external provider.
O3. A manufacturer of electrically powered tools for the engineering industry
consists of four separate business units, each of which undertakes its own
purchasing activities.
Discuss THREE benefits of centralising all purchasing activities with those of
retaining the present decentralised structure. (1 of 2) - correct answer ✔
Centralisation' and 'decentralisation' refer to the degree to which responsibility
and authority is delegated. Arguments for centralisation can only be evaluated in
the context of specific organisational environment and might include:
, CIPS L4M1 - Question & Answer 100% verified satisfaction
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O3. A manufacturer of electrically powered tools for the engineering industry
consists of four separate business units, each of which undertakes its own
purchasing activities.
Discuss THREE benefits of centralising all purchasing activities with those of
retaining the present decentralised structure. (2 of 2) - correct answer ✔ The
benefits of retaining the present de-centralised structure include:
1. Local responsibility
2. Knowledge of the local environment, culture and customer needs
3. Skills development of buyers in each unit
4. Better communication and coordination between procurement and operating
departments,
5. Customer focus: buyers are 'closer' to internal and external customers
developing understanding of user needs and problems.
6. Quicker response to operational and user needs,
7. Smaller purchase quantities:
8. Accountability: d
9. Freeing central procurement units to focus on higher-level, value-adding tasks.
O3. Explain the following IT systems used by the procurement or supply chain
function:
(i) 'Enterprise Resource Planning'
(ii) 'Materials Requirement Planning'
(iii) 'Purchase to Pay (P2P)'. - correct answer ✔ ERP is a single data base to
manage a wide range of functions and resources across a business. It offers real
time solutions.
MRP is a set of records, decision rules and procedures to manage demand.
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