CIPS L6M5 Exam Practice Test Instant Access

Question 1

In which scenario would a Cost Reimbursable contract be most suitable?

Answer Options:

AA research project where the exact scope of work is unknown at the onset

BA construction project where raw material prices may fluctuate

CThe creation of a new product, where time is critical, and the client wishes to reward the contractor for speedy delivery

DThe manufacturing of food items, where the client may return raw materials that do not meet specifications

Answer : A

Cost Reimbursable contracts are widely used in research projects where the exact scope is uncertain (p.69). These contracts allow for flexibility in cost adjustments based on project progress. Option B describes a contract using cost-plus pricing, and Options C and D do not fit this contract model. [P.69]

Question 2

Which project management methodology outlines a process for closing a project?

Answer Options:

AMonte Carlo

BCritical Path

CMRP

DPrince2

Answer : D

Prince2 has a defined 'Closing a Project' phase (p.136).

Monte Carlo (A) relates to risk analysis.

Critical Path (B) maps dependencies but does not specify closure.

MRP (C) is used for inventory planning. [P.136]

Question 3

What is the purpose of a Project Audit?

Answer Options:

ATo ensure the budget is managed effectively

BTo assess project requirements

CTo present findings to senior leadership

DTo review financial and performance status after completion

Answer : D

A Project Audit (p.141) occurs post-completion to assess:

Financial health

Performance evaluation

Lessons learned

It is not a planning tool (Option B), nor is it for active budget management (A) or solely for senior leadership (C). [P.141]

Question 4

Under which style of contract is the client, rather than the construction company, responsible for the design of a building?

AEPC

BManagement Contracting

CDBO

DDBOO

Answer : B

In Management Contracting, the client retains responsibility for the design.

Question 5

Mustard Ltd contracted Red Ltd for IT services, requiring 98% internet connectivity.

Red Ltd has only achieved 90% connectivity despite multiple meetings.

Mustard Ltd now seeks to terminate the contract.

Q: Can Mustard Ltd terminate the contract?

Answer Options:

AYes -- connectivity was written into the contract, and Red Ltd is failing to deliver

BYes -- since previous meetings have failed to resolve the issue, termination is justified

CNo -- Red Ltd should be given more time to fix the issue

DNo -- the contract would not allow for termination

Answer : D

Connectivity is listed as a warranty, not a condition (p.125).

Warranty breaches allow for damages but do not permit contract termination.

If it were a 'condition' instead of a warranty, termination would be allowed. [P.125]

Question 6

Which of the following is NOT a benefit or function of a professional body?

Professional bodies are established organizations that promote industry standards, ethical conduct, and professional development.

Answer Options:

AGovernance and ethical standards

BEnsuring prices remain low

CRaising productivity

DCreating international networks

Answer : B

Professional bodies do NOT control pricing in the industry, as this would be market interference. Governance, productivity improvements, and networking are valid functions. [P.31]

Question 7

Spaceman Ltd's R&D team has a strong relationship with its supplier of spaceship parts.

The space exploration industry is becoming highly competitive.

The team is looking for ways to enhance profits and market share.

Q: What strategy should Spaceman Ltd use?

Answer Options:

AVariance Analysis

BValue Engineering

CConsortium-Based Procurement

DOpen-Book Costing

Answer : B

Value Engineering (p.100) is used to optimize costs and improve profitability in competitive industries. It leverages supplier relationships to cut costs and increase value. Variance Analysis (A) is for budgeting, and Consortium Procurement (C) relates to bulk purchasing, which is not the issue here. [P.100]

CIPS Strategic Programme Leadership L6M5 Exam Practice Test