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NEW QUESTION 53
Debbie is a procurement manager at a small manufacturer company. She had a contract in place with a company that provides uniforms, but finds that she doesn't need to order much from them as the staff re-wear the same clothes to work. The contract has now expired. Should Debbie do a Competitive Tender to source a new contract?
Answer: D
Explanation:
The correct answer is 'no-the contract is not of significant value'. CIPS state that competitive tenders should only be used when 'the item or service is of significant value' p.73. Debbie could continue using the same supplier, but she should organise a contract extension or a new contract if she does.
NEW QUESTION 54
Andrew runs a factory that makes cakes. Vanilla Extract is a vital ingredient in Andrew's cakes and this is a monopolistic market. Andrew has noticed recently that the quality of the supplier's product has reduced, and this has led to several complaints from customers. Andrew is considering entering into a Partnership with this supplier as he believes this will help increase the supplier's performance. Is this the correct thing to do?
Answer: D
Explanation:
The correct answer is 'Yes- partnership sourcing can improve performance which will ultimately satisfy the end customer'. The important thing to note in this Question: is the word 'monopolistic'. This means that there are no alternative suppliers- so the 'no' options are wrong- there are no alternative suppliers and no opportunity to outsource. The other answer is incorrect as sales figures isn't Andrew's concern - it's the complaints and quality of the product. Improving performance to satisfy end customers is therefore his main driver for considering a Partnership. See p. 127 for more information on Drivers of Partnership Sourcing. This comes up a lot in the exam
NEW QUESTION 55
Tim manages the procurement department at a large retailer. He wants to ensure that his team are achieving value for money in their procurement activities. Which of the following should Tim set up?
Answer: C
Explanation:
Tim should do an audit. P.71 of the textbook says "to ensure that a procurement department is achieving value for money, an audit should be undertaken"
NEW QUESTION 56
Which of the following would not affect rivalry in a marketplace? Select TWO.
Answer: C,D
Explanation:
Legislative changes wouldn't affect rivalry in a market as all suppliers would be equally as affected, the same with supply chain disruptions. Factors which do affect rivalry include; industry growth and decline, product differences, brand identity, switching costs, diversity of competitors and exit barriers. These are listed on p.41
NEW QUESTION 57
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