CIPS Supplier Relationships (L4M6) Free Practice Test

Question 1

An IT company is developing and launching a new product to the market. The project requires experts from different divisions of the business. What type of team should run this project?

A. Cross-organisational team

B. Finance team

C. Existing performing team

D. Virtual team

Correct Answer: A

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Question 2

A low-cost fashion retailer based in Europe is looking at adding value in their procurement activities. The retailer buys clothing for re-sale with a very small profit margin applied, relying on volume salesto make profit. Which of the following added-value approaches will be the most critical for the procurement team of the retailer to focus on with their supply chain?

A. Price management

B. Quality enhancement

C. Reduction of inventory

D. Improving timescales

Correct Answer: A

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Question 3

Lion Manufacturing is about to enter into a partnership with Penguin Logistics, who will provide delivery to and from Lion Manufacturing's factories and warehouses. In this relationship, what type of negotiation strategy should Lion manufacturing use?

A. lose: lose

B. win: lose with the supplier winning

C. win: lose with the buyer winning

D. win: win

Correct Answer: D

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Question 4

What is a disadvantage of including qualitative KPIs into a contract?

A. They pull focus from the more important quantitative KPIs

B. They can lead to poor supplier performance

C. They make the buyer seem weak

D. They are hard to measure

Correct Answer: D

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Question 5

The procurement department is sourcing new uniforms for its housekeeping team. Although the housekeeping team in itself doesn't hold a lot of power within the business, they have a high interest in the activity as it will be them who is wearing the items. When designing the specification, how should the procurement department manage the housekeeping team?

A. Keep them satisfied- they will be wearing the uniform so need to be happy with it

B. Manage them closely- they're key players in this procurement activity

C. Keep them informed- it's important the housekeeping team know what's going on at each stage of the procurement

D. Minimal effort is required as they do not hold a lot of power in the business.

Correct Answer: C

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Question 6

Which of the following relationship types are listed on the relationship spectrum?
* Partnership
* Contractual
* Transactional
* Conspiratorial

A. 2 and 4 only

B. 1 and 2 only

C. 1 and 3 only

D. 2 and 3 only

Correct Answer: C

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Question 7

What is value mapping?

A. Make vs Buy decision

B. Segmenting suppliers based on the value they bring to the company

C. Analysing the costs that go into making a product

D. Creating value through the elimination of waste and operational inefficiencies

Correct Answer: D

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Question 8

Achieving value for money can often be described as the three Es? What are these?

A. Efficiency, Economy, Ethics

B. Economy, Efficiency, Environment

C. Ethics, Environment, Economy

D. Effectiveness, Efficiency, Economy

Correct Answer: D

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Question 9

Mandy is looking to source windows and doors for a new build apartment block. She has done some initial research and has discovered that there are many suppliers in the marketplace that can supply the items she needs. As it is a high-value project she is thinking of running a formal tender. What should be Mandy's first step?

A. Run a restricted competition- send out a RFI

B. Run a restricted competition - send out a PQQ

C. Run an open competition - send out an ITT

D. Run an open competition - send out a RFQ

Correct Answer: B

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Question 10

A large construction group has a critical contract with a brick supplier. This represents high-value spend and the contract has a five-year duration. What type of commercial relationship would be the most appropriate?

A. Closer Tactical

B. Outsourcing

C. Transactional

D. Partnership

Correct Answer: D

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CIPS Supplier Relationships (L4M6) Free Practice Test