CIPS L4M8 Exam Questions Instant Access - No Installation Required

Question 1

What two areas of an organization do the Kraljic Portfolio matrix uses to establish the category of a product or service?

AExplanation:
The Kraljic Portfolio Matrix shows where a product or services fits into in an organization. It is based on two areas 1) the risk of supply (Risk Impact). 2) Effect it has on profit (cost impact).

Answer : A

Question 2

What are the four quadrants within the Kraljic portfolio matrix?

AExplanation:
At the early stages In procurement and supply cycle, buyers begin segmenting current supplies in the categories, depending on their level of integration into the organization. To help get this done, the buyer may use the Kraljic portfolio matrix. The kraljic portfolio matrix segment suppliers into four categories, which are;
1) Routine 2) Bottleneck 3) Leverage 4)strategic supplier

Answer : A

Question 3

What is business case?

AExplanation:
A business case is a document containing the justification and the commercial benefits achievable for a potential project or an identified need, for example, the purchase of a capital equipment, con-struction of an additional warehouse or procuring more innovative software to replace the current on in use.
The essence of the business case is to obtain support and get buy-in from senior management.
In order to gain authority to apply whole life asset management a business case will need to be created and presented. A developed business case will cover the following element.
1) Introduction: Outline of what the business case is all about
2) Objective: Explanation of what the business case desired outcome is.
3) Approach that will be undertaken
4) List of resources required
5) Benefits of achieving the objective
*
Refer to the question column for response

Answer : A

Question 4

Explain how a lack of understanding of a global supplier's culture and ethical behavior could cost buying organization money.

AExplanation:
Organizational culture is made up of behaviors, traits, values and beliefs and these differ signifi-cantly across the globe. Gestures that may be positive in one country can be highly offensive in another. This culture could mean; for example, individualistic/collectivistic, masculine/feminine, uncertainty avoidance, power distance, Time perspective, indulgence/restraint.
When negotiating and forming contracts within the extended supply chain, it is important that the culture of the suppliers is understood to be compatible with the buying organization or else their might be loss of reputation, time, money material and equipment.
Also, being not aware of what is an acceptable ethically behavior in global sourcing can cost a buying organization. In some countries, bribery and kickbacks are a standard part of doing business. If procurement professional is not aware of the fact that some countries methods of doing business involves or expect kickbacks, for example, this could be costly to the organization and cancel out any savings that had originally been seen.
Cost of poor quality and rework: if the product or service quality is poor the organization may not satisfy it customers and this can lead to a loss of reputation in the market. For example, a residential building construction company contracting a supplier that supply would require home owners to reinstall a new door within three months. The organization would spend more funds in carrying out rework.
More administrative cost in contract management: an organization will have to manage it sup-pliers and the contracts to ensure they are delivering what they were contracted to do. A poor con-tract management is a waste in the process of delivery that can lead to loss of money. Also, to cor-rect this would cost the organizations administrative cost.

Answer : A

Question 5

Think of a supply chain with which you are familiar and distinguish between the primary, second-ary and tertiary sector organization within it.

AExplanation:
Supply chain involves a network of individuals, organizations, technology activities and resources to make sure goods or services flow along the chain. If one point fails, every part further along the chain fails.
Fullpower projects (a flour manufacturer) supply chain begins with producers (raw materials, wheat farmers), suppliers, manufactures, distributors, retailers and end users (customer).
Fullpower projects supply chain falls within the primary sector (producers of wheat), the secondary sector include the manufacturing (those that converts the wheat the suppliers brings into flour) and tertiary sector (the distributor those that takes the wheat to the end users).

Answer : A

Question 6

What are the four quadrants in the Mendelow stakeholder matrix?

AExplanation:
Stakeholder are individuals or organizations that can be affected directly or indirectly by any project or decision. For successful procurement activities to take place, stakeholders must be identified, engaged and managed. Not all stakeholders require the same level of engagement and management. To appropriately manage identified stakeholders, the Mendelow management matrix has categorized stakeholders in four quadrants, according to how low or high their power and interest in the project could be. The four categories are:
1) Minimum effort (low power-Low interest)
2) Keep satisfied (high power-Low interest)
3) Keep informed (Low power -- high interest)
4) Manage closely (High power- High interest)
*
Refer to the question column for response

Answer : A

Question 7

Which Incoterm applies here?

The supplier is responsible for delivering the goods to the buyer's premises include arranging any custom clearances that applies, bearing all risk up until this point.

ADAT -- Delivered At Terminal

BDAP -- Delivered At Place

CDDP -- Delivery Duty Paid

DFAS -- Free Alongside Ship

Answer : C

CIPS Procurement and Supply in Practice L4M8 Exam Questions