Category Management (L5M6) Free Practice Test

Question 1

Which category of spend item would be most suitable to purchase through an e-auction?

A. Bottleneck

B. Strategic

C. Leverage

D. Non-critical

Correct Answer: C

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Question 2

Bill is collecting data on a mobile phone category item. Which of the following can he find from the phone's
'line item' details? [Select TWO]

A. Price

B. Functionality

C. Quantity ordered

D. Components

Correct Answer: A,C

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Question 3

A list of direct costs within a manufacturing organisation could be found on which of the following?

A. Specification

B. Profit and Loss Account

C. Bill of Materials

D. SWOT Analysis

Correct Answer: C

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Question 4

Total Cost of Ownership [TCO] is important in Category Management. Steve is sourcing machine parts and IT systems.
Which of the following should Steve consider as part of TCO?

A. Maintenance and Downtime

B. Location of the Items

C. Purchase Price

D. Supplier Relationship

E. Training

Correct Answer: A,C,E

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Question 5

When implementing procurement projects, it is important for Category Managers to consider the "human side" of change. Why is this?

A. Change will always bring about a positive result

B. Ignoring stakeholders' feelings may result in rework or a poor result

C. Everybody is resistant to change

D. A change cannot be made without buy-in from everyone

Correct Answer: B

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Question 6

CEB Research states that there are 6 competencies which drive strategic performance in Procurement. The ability to stay calm under pressure and handle criticism is which competency?

A. Innovator

B. Results seeker

C. Adaptor

D. Influencer

Correct Answer: C

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Question 7

Sarah is a Category Manager at a shoe manufacturer. She works with a key supplier of raw materials [leather and rubber] and is using a cost-out approach. Which type of relationship is most suited to this approach?

A. Closer tactical

B. Strategic alliance

C. Arm's length

D. Transactional

Correct Answer: B

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Question 8

In mitigating risks within the supply chain, which two factors should be assessed when evaluating potential risks?

A. Location

B. Cost

C. People involved

D. Severity

E. Likelihood

Correct Answer: D,E

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Question 9

Francis is a Category Manager within a large agricultural company which has over 10 categories. He believes that the Category with the largest spend (in £) is the most important category to the business. Is he correct?

A. Yes - A larger spend signifies that the category is buying larger volumes of items than other categories

B. No - All categories are equally as important to the business

C. Yes - Categories with larger budgets buy more important items

D. No - This fails to address the importance of the item to the organisation's service / product

Correct Answer: D

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Question 10

What form of procurement is Category Management?

A. Planned

B. Strategic

C. Reactional

D. Tactical

Correct Answer: B

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CIPS Category Management (L5M6) Free Practice Test