Procurement and Supply Environments (L3M1) Free Practice Test

Question 1

Which of the following might be objectives of private sector organisations? Select all that apply.

A. Shareholder value

B. To minimise profit

C. To maximise taxation

D. Market share

Correct Answer: A,D

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Question 2

Sources of finance for a private sector entity primarily include (select all that apply):

A. Taxpayers

B. Sales revenues

C. Long-term bank loans

D. Shareholders' funds

Correct Answer: B,C,D

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Question 3

Thinking of Michael Porter's Industry Structure Analysis (commonly referred to as Five Forces Analysis), the content of the centre circle is about:

A. Governmental interference in an industry

B. Competitor price-cutting to increase market share

C. Competitive rivalry within the industry

D. Governmental regulation of competition within an economy

Correct Answer: C

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Question 4

In one format for describing socio-economic groupings, skilled, semi-skilled and unskilled working class people would be classified as:

A. A,

B. D

C. C1

D. C2,

Correct Answer: C

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Question 5

Because of the need for frequent or semi-frequent uses of competition, public sector buyers are less likely to find themselves in a close partnership arrangement with a supplier than private sector buy-ers. True or false?

A. False

B. True

Correct Answer: B

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Question 6

A contract clause which entitles the buyer to hold back 5% of the final price for six months to en-sure everything is in order is known as a --------- clause:

A. Redemption

B. Intention

C. Retainer

D. Retention

Correct Answer: D

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Question 7

Which of the following would often be subject to health and safety legislation?

A. Floors, passages and stairs should be properly constructed, maintained and kept clear

B. Smoking cigarettes inside offices, factories and other buildings

C. The manual lifting of heavy objects

D. The need for appropriate firefighting equipment in a factory

Correct Answer: A,B,C,D

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Question 8

Shareholders of a limited company are not liable for unpaid debts'. True or false?

A. False

B. True

Correct Answer: B

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Question 9

Value for money can be defined by 'the three E's',
Select those which are not part of 'the 3 E's'.

A. Effluence

B. Ecology

C. Efficiency

D. Economy

E. Effectiveness

F. Energy

G. Efficacy

Correct Answer: A,B,E,F

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Question 10

The letters 'MNC' stand for:

A. Multi-national conglomerate

B. Multi-national corporation

C. Multi-national co-operative

D. Multi-national company

Correct Answer: B

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CIPS Procurement and Supply Environments (L3M1) Free Practice Test