Advanced Certificate in Procurement and Supply
ETHICAL PROCUREMENT AND SUPPLY L3M2
Date: May 2020
Duration: 45 minutes
QUESTION PAPER INSTRUCTIONS FOR CANDIDATES
1. Do not open this question paper until instructed by the invigilator.
2. All answers must be in question paper provided.
3. Circle, tick or put a cross on the correct answer
1. Which of the five rights of procurement relates to the need for a company
to maintain service levels while also minimising excess stockholding?
A. Place
B. Quantity
C. Time
D. Quality
2. Which of the following is an appropriate definition of ‘adding value’ for
commercial companies
A. The extra revenue from providing a feature in a product or service,
less the additional cost of providing it
B. The selling price obtainable for a product or service
C. The extra profits obtained from improvements in operational
efficiency
D. The additional benefits provided to customers from a product or
service, compared with similar products of competitors
3. For which one of the following items would it be appropriate to consider
whole life costs before making a purchase decision?
A. Hiring materials handling equipment
B. Purchasing robotic packing equipment for finished goods
C. Buying consultancy services
D. Buying materials for use in production operations
4. A buyer for the government’s health services has switched to buying a
different drug for the treatment of a medical condition. This drug is more
successful in treating the medical condition than the drug purchased
previously, and does not cost more. This is an example of getting value for
money through greater:
A. Economy
B. Entrepreneurship
C. Efficiency
D. Effectiveness
5. Which one of the following is the most appropriate definition of economies
of scale?
A. Achieving more output at a lower cost per unit with a given amount
of input resources
B. Saving costs through bulk purchase discounts for buying in larger
quantities
C. Achieving the lowest possible cost per unit of output
D. Reducing the average cost per unit of output by producing in larger
quantities
6. Eliminating functions in an existing product that no longer provides value
is a possible outcome of:
A. Economies of scale
B. Value analysis
C. Value engineering
D. Efficiency improvements
7. Which of the following terms can be defined as the degree to which a set
of inherent characteristics fulfils requirements:
A. Quality
B. Efficiency
C. Value
D. Effectiveness
8. A company buys office cleaning services from an external contractor.
Which of the following criteria are most likely to be used to judge the
quality of the service provided by the contractor?
A. Courtesy and consistency
B. Consistency and accuracy
C. Convenience and timeliness
D. Timeliness and completeness
9. Which of the following is a particular advantage of ISO standards for
assessing the quality of a supplier?
A. Certification by the ISO is an assurance of the supplier’s quality
B. ISO standards are internationally recognised, making it easier to
assess suppliers from any part of the world
C. ISO standards establish standard operating procedures that must be
followed
D. ISO standards are more reliable than national product quality
standards
10. An external lead time is measured as
the time between:
A. Recognising the need for more stock and delivery from the supplier
B. Negotiating a contract with a supplier and placing the order
C. Placing the order and receiving delivery
D. Recognising the need for more stock and receiving delivery
11. An external lead time can be shortened
by:
A. Reducing the time required to prepare the specification
B. Selecting the supplier from a list of pre-approved suppliers
C. Electronic procurement methods
D. Quality assurance
12. Delivery performance on a long term
project can be monitored by checking actual deliveries against:
A. Milestones
B. Budgets
C. Purchase contracts
D. Early payment
13. Value for money (VFM) can be achieved
by :
A. Re-ordering stock more frequently
B. Reducing the number of stockouts during reorder period
C. Lowering sales prices for finished goods
D. Reducing purchase costs for materials but with some loss of quality
14. Which one of the following is an aspect
of value for money?
A. Supplier selection
B. Ethical business practices
C. Price fixing
D. Delivering quality
15. How might the procurement function in
a company improve the performance of suppliers?
A. By responding more quickly to customer complaints
B. By allowing suppliers a longer lead time for delivery
C. By giving preference to suppliers with the best performance record
D. By monitoring production downtimes
16. A critical first step in the procurement
process is.....
A. Understanding user needs
B. Supplier appraisal
C. Creating order specifications
D. Deciding the maximum price to pay
17. A process whereby procurement staff
are involved with technical staff at an early stage in the preparation of
purchase order specifications is known as:
A. Cross-functional contribution
B. Early buyer involvement
C. Early supplier involvement
D. User liason
18. In which of the following situations is it
most likely that a medium-sized manufacturing business will outsource
supply of a product or service rather than do the work internally?
A. Performing core activities
B. Producing items protected by patent
C. Producing technically important components
D. Producing technically complex new software
19. For which of the following requirements
would a performance specification rather than a conformance
specification be required?
A. Material components
B. Physical dimensions
C. Ease of use
D. Meeting international standards
20. If something is not specified in a
purchase order, the supplier is unlikely to provide it. This is a reason why
a specification with a purchase order should be:
A. Comprehensive
B. Concise
C. Compliant with international standards
D. Clear and understandable
21. KPIs for suppliers may be used for the
purpose of.....
A. Open competitive bidding
B. Preparing conformance specifications
C. Preparing performance specifications
D. Performance rating
22. Why do buyers usually prefer selective
tendering to an open tendering process?
A. To save time and expense
B. To comply with regulations for the award of government contracts
C. To obtain a lower price
D. To ensure genuine competition between potential suppliers
23. An extensive supplier appraisal process
should NOT be required for the selection or pre-selection of suppliers for:
A. Outsourced services
B. Non-standard items
C. Low-value items
D. High-value items
24. In relation to a bidding process, which
one of the following terms means providing clear and easily accessible
information to bidders?
A. Transparency
B. Confidentiality
C. Fairness
D. Integrity
25. A term for the activities that are carried
out after a buyer has selected the supplier for a contract, but before the
selected supplier commences work, is known as:
A. Supplier appraisal
B. Verification
C. Value analysis
D. Mobilisation
26. A reverse e-auction is:
A. Always won by the bidder offering the lowest price
B. Always won by the bidder offering the highest price
C. A transparent process
D. Sometimes held in a physical auction room
27. Which of the following is not an
advantage of lifetime costing?
A. Improved awareness
B. Lifetime costing does not take a long time to complete
C. Improved forecasting
D. Enables action to be taken if required
28. David Garvin has produced a theory
based on five approaches to defining quality. Which of the following
defines the transcendental approach to defining quality?
A. An approach whereby the consumer assesses the cost of the goods
against what they can offer
B. An approach that uses specifications to meet the requirement. If the
requirement detailed on the specification is met, the quality is
acceptable
C. An approach that is quantifiable
D. An approach whereby people cannot logically or quantifiably define
quality but know it when they see it
29. Which one of the following is a disadvantage of e-sourcing?
A. Confidentiality improved
B. Allows global sourcing
C. Difficult to evaluate remote suppliers
D. Halts up the process
30. Some tenders actually include a second bid as part of their process.
This form of tender process is referred to as?
A. Open tendering
B. Restricted tendering
C. Two-stage tendering
D. EOI tendering
