CIPS L3M2 Exam Practice Test Instant Access

Question 1

The crime of obtaining money through threats or force, is called:

AFraud

BBribery

CEmbezzlement

DExtortion

Answer : D

This is a definition of extortion.

The other terms shown as possible answers are within the syllabus for this course and may be the subject of other questions within this test.

Question 2

According to the Profex textbook for this subject, specifications are said to be 'the heart of the con-tract'.

AThe book then goes on to say the goods supplied must be of satisfactory:

BQuality

CCost

DSturdiness

EQuantity

Answer : B

Question 3

The purpose of a specification is (select all that apply):

AProvide a means of evaluation of a product or service

BAct as a means of exchange

CDefine the requirement

DCommunicate the requirement clearly

Answer : A, C, D

All of the ones shown, except acting as a means of exchange, which is one of the parts of a defini-tion of money.

Question 4

'Expediting' is:

ASetting off for Nepal

BTaking an audit of warehouse stock

CSeeking approval for organisational expenditure

DChasing up orders already placed

Answer : D

Expediting - a task, which in an ideal world would not normally need to exist - is seeking to ensure delivery is made in line with contract and / or organisational needs.

It has nothing to do with permission to spend, auditing, or preparing for an expedition.

Question 5

'Value engineering is a structured approach to increasing the value obtained from a product by of-fering the same level of XXXXX at a lower cost'.

What is XXXXX?

AFunctionality

BService

CApplicability

DPracticality

Answer : A

Functionality.

The idea of value analysis or value engineering is that cost should be taken out of the product, whilst enabling the same performance.

Question 6

A chart of the concept of 'economies of scale' would have two axes. Which two?

APrice per unit

BCost per unit

CScale of operations

DEconomies of operation

Answer : B, C

The principle of economies of scale is that cost will decrease as the scale / volume of operations in-creases. Remember that 'cost' is not the same as 'price'.

See also 'learning curve' or 'experience curve'. A clear mathematical ratio between volumes and cost per unit can be calculated / determined. The concept of the learning curve originated within the air-craft manufacturing sector in the United States, where engineers drew up precise cost benefits as the quantity of aircraft manufactured increased - as experience was gained.

These ideas can be very useful when negotiating price for large volumes, especially for new or be-spoke goods or services - the supplier's costs may decrease significantly as volumes or experience increase(s).

Question 7

Which of the following most closely represents 'the five rights'?

APTQQQ

BQQPTT

CQQPPT

DPPTTQ

Answer : C

Quality, quantity, price, place, time. You will need to memorise these.

Note that for CIPS purposes, none of: goods (product or service), manner (ethics) or supplier, is in-cluded in this list. For the sake of ease, perhaps best to just go along with CIPS' view.

CIPS Ethical Procurement and Supply L3M2 Exam Practice Test