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1. Which of the following will help the bargaining strength of a buyer?

1. The buyer has the option to make the product in-house

2. There are a limited number of suppliers available to the buyer

3. The buyer’s switching costs are high

4. The buyer’s spend is a high proportion of the supplier’s revenue

2. As the lead procurement manager, you are asked to compile a business case for a large project.

Which should be included?

1. Costs and risks

2. List of large suppliers

3. Business benefits

4. Informal recommendation

3. After a project, the procurement team at CLK Ltd meets up and summarises on the performance. They see that they actually spent $5,000 less than planned budget. The team tries to identifies why there is such difference.

This activity is known as...?

4. Which of the following is an environmental criterion that can be included when drafting a specification for new machinery?

5. Raheem, Head of Procurement, uses a performance specification for a new intelligent patient record IT system. Is this correct?

6. A procurement manager includes provision on recovery from natural disaster into a through-life specification. Some suppliers suppose that provision is unnecessary.

Is procurement manager’s action justified?

7. Daytona Ltd is developing a new product which is more environmental friendly. Though the objectives are set, the project team has no idea on which functions will be customers' favourites.

Which of the following will help them decide the 'should-have' functions of the new product?

8. Which of the following may allow suppliers free to choose the materials, manufacturing process or delivery process?

9. A procurement manager is supporting operational colleagues in writing a specification for an existing product. They analyse existing functions, processes, costs, and value added.

What is this an example of?

10. Which of the following events would increase the number of suppliers in a particular market?

11. What is the document that defines the activities, deliverables and timelines a supplier must carry out during contract performance?

12. Simon has received a requisition for a product identical to one already purchased, but this time the product requires specific customer-branded packaging.

What type of purchase is this?

13. EV Inc is facing the following challenges:

1. The capital investment is enormous.

2. Most of company's working capital is in form of inventories, which include raw materials, work-in-progress and finished goods.

3. Competitors are increasingly deploying robotics and automation to boost productivity.

Which of the below business sectors does EV Inc belong to?

14. A procurement manager is writing a conformance specification for a non-core component. She thinks that if the requirements in specification are higher than ISO standards, her company can achieve greater cost-savings.

Is the procurement manager’s opinion correct?

15. Azram, a procurement analyst, has been tasked with applying whole life asset management when purchasing laboratory equipment. Was this the correct course of action?

16. Housing Ltd is inviting a number of contractors to a tender for the construction of a commercial building. In the attachment to the invitation to tender, there is a document which describes the re-quired materials and installation methods.

This document is known as...?

17. A market has many buyers and suppliers. Loyalty is low and switching is common.

Which market characteristic supports this behaviour?

18. Which of the following factors might prompt an organisation to procure an alternative product? Select THREE that apply:

19. When analysing competitive forces in a market, which of the following indicate that a supplier has

low bargaining power? (Select TWO)

20. Ymira is asked to develop the specification for water purifier which will be used at the company headquarter. She believes that the specification can be drafted based on the information available on the Internet, such as blog posts, comparison websites, how-to websites, life hacks, etc.

Which of the following traits will make the information more useful?

21. Due to increasing demand, a local restaurant is requesting its fish vendor to supply larger quantity.

The restaurant manager also asks the vendor whether it is possible to reduce the total price by 5%.

This is known as...?

22. A buyer can use sources of information to review indirect costs associated with the manufacture of goods to support negotiations. Is this statement true?

23. A procurement team is categorising their purchased items into four quadrants of Kraljic's supply chain portfolio matrix. They realise that there are some low-value items which come from very few suppliers in the market. The organisation is critically dependent on these suppliers. The team plans to reduce the dependence by finding alternative sources.

Is this a right course of action?

24. Which of the following is the core of value analysis process?

25. When procuring a machinery, at which stage buyer must check whether it is working to the standards set out in the design specification?

26. Why is the specification considered as the most important document in procurement?

27. To strengthen its market presence, ABC Group decided to develop a new product. A cross-functional team was formed to discuss the scope and the functions of the product. They will also survey the potential customers to see what they like, what they love, and what they dislike.

What is this process called?

28. Which of the following might be the consequences of under-specification? Select TWO that apply:

29. Dana is an automobile manufacturer. It has a new electrification strategy that aims at making eco-friendly electric pick-up trucks. To implement this strategy, the procurement department must source new categories of parts that make motors, sensors, solenoids and stators. He starts to analyse the market by identifying specific supply market segments for those parts and finding suppliers who have the best capabilities in those segment. He intends to segment the market based on specific features of the products.

Which variable is used by Dana procurement manager to shape and

manage supply market?

30. Which of the following is a risk to buying organization when using conformance specification?

31. At which stage of product life cycle, price competition between sellers will be the most intense?

32. The buyer’s database is regarded as a primary data source.

Which of the following is also a source of primary data?

33. FSB Group is developing a building specification that ensures fair labour practices and prioritises local employment.

What type of sustainability criteria does this describe?

34. Outcome specifications should be used when:

35. A buyer can use sources of information to review indirect costs associated with the manufacture of goods to support supplier negotiations. Is this statement true?

36. Which of the following would be an example of direct costs for a decorating contractor?

37. Which of the following problems may be identified as open-ended problems? Select TWO that apply:

38. Which of the following is the best definition of target costing?

39. Which of the following factors are likely to be direct barriers to a new entrant in a supply market?

40. An automotive manufacturer is sourcing rubber components from Company A. The specification given to the supplier state that the component should be 1 meter long, without mentioning the tolerance. Enthusiast with the opportunity, engineers at Company A work hard to cut the components with tolerance at only +/- 1mm. The head and tail of the component is then joined together to form a circular band. After that it is stretched over another component.

To fit this purpose, the rubber component can be at any length from 80cm to 110cm. This is an example of...?