CIPS Contract Administration L3M3 Exam Practice Test

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Total 90 questions
Question 1

Intangibility means:



Answer : D

Inability to touch something.

Services are intangible, which may present challenges when specifying / buying.


Question 2

Revenue-earning possibilities which are foregone as a result of implementing a plan; the cost of not doing something else.



Answer : A

An opportunity cost is the cost of not being able to do something else.

For example, if a firm opts to build a new factory, it may not be able to create ten new retail outlets which was another option open to it, in spending these particular funds. Or if you buy a holiday, you may not be able to buy a new television. The television is the opportunity cost of the holiday ie the benefit foregone.

The other types of cost shown are methods of classifying actual (real) costs. Opportunity costs are, in a sense, not real; they are hypothesized and therefore do not show in the balance sheet or profit and loss account of a business.


Question 3

'The CIPS Code of Conduct states that procurement professionals should not accept any business gifts under any circumstances.' True or false?



Answer : B

Surprisingly, 'declared gifts of nominal value' can be accepted.


Question 4

Win-win style negotiations are said to be:



Answer : A

Win-win negotiations require a collaborative approach.


Question 5

Conducting individual and group-based (focus groups) in-depth interviews.

Is this quantitative or qualitative data gathering?



Answer : A

The benefit of in-depth interviews is that one may unearth deeper thoughts, ideas or concerns than through a larger quantitative exercise. Qualitative exercises lend themselves to more freedom to ex-plore interesting issues.


Question 6

The letters 'ESE' stand for:



Answer : D

Early supplier engagement - one of the assessment criteria for this course (3.1)


Question 7

A situation where suggestions made, often by a bidder, unnecessarily widen the scope of the requirement.



Answer : B

Specification creep - where the requirement becomes more complex or sophisticated than originally thought necessary for the buying organisation's purposes. Naturally, this can be expected to increase cost to the buying organisation.


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Total 90 questions