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| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Understand compliance issues when sourcing from suppliers | 25% | - Legislative and regulatory requirements
|
| Topic 2: Understand ethical and responsible sourcing principles and practices | 25% | - Ethical frameworks and concepts
|
| Topic 3: Understand options for sourcing requirements from suppliers | 25% | - Tendering and selection processes
|
| Topic 4: Understand key processes to analyse potential external suppliers | 25% | - Supplier appraisal and evaluation
|
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NEW QUESTION # 156
A supplier operates in a monopolistic market where the threat of entry is low. The product that they offer is key in manufacturing certain types of submarines and there is no known substitute for the product at present.
What type of sourcing relationship is a buyer likely to have with this supplier?
Answer: C
Explanation:
This is sole sourcing as there is only one supplier in the marketplace.
Be careful not to confuse single sourcing and sole sourcing. Single sourcing is when a buyer chooses to work with only one supplier (usually to achieve economies of scale), sole sourcing, on the other hand, is when the buyer doesn't have a choice- they work with one supplier because there is only one supplier in the market.
Types of sourcing is a key concept for this exam.
NEW QUESTION # 157
A company has actively included supporting of disadvantaged groups within their ESG commitment. Which of the following groups are considered disadvantaged?
Answer: C
Explanation:
Pregnant women and children are considered 'disadvantaged' by the UN. The other groups the UN call disadvantaged include; the elderly, the immunocompromised, those with disabilities and those living in poverty. This is the list given in the study guide.
A company could help disadvantaged groups in several ways. Firstly by offering employment (obviously not to the children). It could also include helping these groups as part of a Social Value out-come or community benefit scheme.
NEW QUESTION # 158
Which of the following financial documents would show whether a supplier has sufficient funds to pay their subcontractors in the short term?
Answer: B
Explanation:
A cash flow statement shows the money coming in and out. This would therefore show whether a supplier has enough money coming in, to be able to pay some of it out to a subcontractor.
P&L and Balance Sheets look more broadly at finances, rather than saying what's physically in the bank at a specific given time.
Do learn the difference between these three financial documents for the exam.
Balance Sheet: Explanation, Components, and Examples (investopedia.com) Profit and Loss Statement Meaning, Importance, Types, and Examples (investopedia.com) Cash Flow Statement: How to Read and Understand It (investopedia.com)
NEW QUESTION # 159
Other than price, what should a buyer consider when evaluating supplier quotations?
* Lead times
* Add-on costs
* Wastage rates
* Past performance
Answer: A
Explanation:
In addition to price, factors like lead times, add-on costs, and past performance are important to ensure the supplier meets the buyer's requirements sustainably and reliably. These criteria align with ethical sourcing by promoting value and accountability beyond just cost considerations.
NEW QUESTION # 160
Which of the following would you use to work out a company's gearing ratio? Select TWO.
0current liabilities
Answer: A,C
Explanation:
Gearing measures how much of an organisation's long-term funding is made up of long term debt and loans.
Therefore the correct answers are 'shareholder equity' and 'long term debt'.
There are many question about financial ratios that can come up on the exam. If you're unsure on them I suggest doing further reading outside of the study guide as this will help. I like this youtube video (I'm not associated with the makers of this video but think they're really good at explaining things to beginners) Gearing Ratio explained (youtube.com)
NEW QUESTION # 161
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