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| Section | Objectives |
|---|---|
| Understand how to develop a business case for requirements to be sourced from external suppliers | - Analyse how market factors affect procurement |
| Understand market management in procurement and supply | - Compare the competitive forces that influence markets
|
| Understand the use of specifications in procurement and supply |
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151. Frage
The procurement team of a global supermarket has created a business case for a corporate social responsibility (CSR) sourcing strategy to meet the corporate objective of sustainability. This would require sourcing only from suppliers who meet ethical standards, a reduction in plastic, and using recycled material where possible. Which of the following business benefits would be mentioned in the business case? Select TWO that apply:
Antwort: A,D
Begründung:
Detailed Explanation:
* A (Fulfilment of business objective): Aligning procurement practices with sustainability goals supports the overall corporate strategy.
* D (Improved brand equity): Sustainable practices enhance reputation and consumer trust.Other options, like increased capacity or reduced costs, are secondary or unrelated to CSR initiatives.
Reference: CIPS Level 4, CSR and Sustainability.
152. Frage
Interserve is a construction contractor in UK. When receiving a huge and complex project, Inter-serve's procurement manager assesses the risks by quantifying them and recommends other stake-holders to plan mitigating actions. Is the procurement manager's action justified?
Antwort: A
Begründung:
Assessing the risks by quantifying them should be done. Even with qualitative risk assessment, quantifying is still important since risks need to be prioritised.
Risk assessment can be qualitative or quantitative. Perform qualitative and perform quantitative risk analysis are two processes within the project risk management knowledge area, in the planning process group. While qualitative risk analysis should generally be performed on all risks, for all projects, quantitative risk analysis has a more limited use, based on the type of project, the project risks, and the availability of data to use to conduct the quantitative analysis.
Qualitative Risk Analysis
A qualitative risk analysis prioritises the identified project risks using a pre-defined rating scale. Risks will be scored based on their probability or likelihood of occurring and the impact on project objectives should they occur.
Probability/likelihood is commonly ranked on a zero to one scale (for example, .3 equating to a 30% probability of the risk event occurring).
The impact scale is organizationally defined (for example, a one to five scale, with five being the highest impact on project objectives - such as budget, schedule, or quality).
A qualitative risk analysis will also include the appropriate categorization of the risks, either source-based or effect-based.
Quantitative Risk Analysis
A quantitative risk analysis is a further analysis of the highest priority risks during a which a numerical or quantitative rating is assigned in order to develop a probabilistic analysis of the project.
A quantitative analysis:
- Quantifies the possible outcomes for the project and assesses the probability of achieving specific project objectives
- Provides a quantitative approach to making decisions when there is uncertainty
- Creates realistic and achievable cost, schedule or scope targets
In order to conduct a quantitative risk analysis, you will need high-quality data, a well-developed project model, and a prioritized lists of project risks (usually from performing a qualitative risk analysis).
153. Frage
The procurement officer for Hunter Manufacturing has been tasked to procure a new manufacturing software management system. They have consulted all relevant internal stakeholders and have the following high-level requirements: flexibility throughout the project, and the supplier to recommend best solutions for building the system. Which type of specification should be developed?
Antwort: A
Begründung:
This scenario points to a Performance Specification, where the output or outcome is defined, but the supplier has the freedom to decide how it is achieved.
The CIPS L4M2 Study Guide, Chapter 1: Developing Specifications, defines performance specifications as:
"Performance specifications set out the function or performance outcomes required rather than prescribing how the solution should be delivered. This approach allows suppliers to innovate and recommend best-fit solutions." Review:
* A. Performance - Correct. The buyer outlines the outcome (flexibility and best-fit), not the specific method. The supplier is expected to design the solution.
* B. Conformance - Refers to adherence to existing standards; not suitable for a flexible or innovative solution.
* C. Design - Specifies exactly how something must be made; limits supplier input and flexibility.
* D. Technical - Similar to design, focusing on detailed product specifications, not outcome-based.
Correct answer: A
CIPS Study Guide Reference:
* Module: L4M2 - Defining Business Needs
* Chapter 1: Types of Specification
* Section: Performance Specifications
154. Frage
What is the document that defines the activities, deliverables and timelines a supplier must carry out during contract performance?
Antwort: B
Begründung:
Statement of Work (SoW) is the document that captures and defines all aspects of your project. You'll note the activities, deliverables and the timetable for the project. It's an extremely detailed document as it will lay the groundwork for the project plan.
Project Initial Document is an important document and should precede any specification writing project. It sets out the scope of the project and it is the team's mandate from senior management Work instructions are also called work guides, Standard Operating Procedures (SOPs), job aids or user manuals, depending on the situation. In any case, the purpose of work instructions is to clearly explain how a particular work task is performed.
Framework agreements are arrangements between one or more buyers and one or more suppliers that provide the terms governing contracts to be established for a certain period of time, in particular with regard to price and, where necessary, the quantity envisaged.
Reference: CIPS study guide page 124
LO 3, AC 3.1
155. Frage
Which kind of these following costs belong to fixed costs? Select TWO that apply.
Antwort: B,E
Begründung:
Based on variability, the costs has been classified into three categories, they are fixed, variable and semi variable. Fixed costs, as its name suggests, is fixed in total i.e. irrespective of the number of output produced. Variable costs vary with the number of output produced. Semi-variable is the type of costs, which have the characteristics of both fixed costs and variable costs (Source: Key Differences).
Among above costs, leasing and depreciation are relatively static and do not change if volume of business activities increase or reduce.
Packaging, utilities and annual business rate (tax) are variable costs.
Reference:
LO 1, AC 1.2
156. Frage
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