CIPS L2 NC1 Principles I

1.Which of the following is a definition of the supply chain?

• A)the way in which information passes from user to procurement to supplier

• B)The range of suppliers used by a purchasing organisation

• C)The types ,frequency and organization of deliveries to the end user

• D)The network of organisation and activities involved with the flow and transformation of

  goods

2.Which of the following are tasks required in the ‘Pre award phase’ of the purchasing cycle?

• A)Identification of needs and producing specification if required

• B)Expediting,reviewing quotations,gaining authorization and placing order.

• C)reviw quotations,gaining authorization and placing orders

• D)Assesing supplier performance and checking invoice details if required

3.which of the following reflects the sustainability principle of the ‘triple bottom line’

• A)Turnover,gross profit,net profit

• B)Decrease purchasing cost,increase value added,extended credit period

• C)Profitability,social accountability,environmental sensitivity

• D)Reduce stock,reduce staff overheads

4.A buyer is quoted a price of $20 by a supplier for each item purchased.The buyer negotiates a $2

reduction from the supplier.The buyer’s organisation sells the item to customers for $36.Which of

the following statements is true.?

• A)The buying organization will achieve a 10% profit for each item sold

• B)The buying organisation will achieve a mark up of 100% on each item sold

• C)Buying organization will achieve a mark of 50% on each item sold

• D)The selling organization has made a loss of 10% on each item ordered by the buyer

5.Which of the following explains the category of supply term indirect supplier?

• A)Products are used by business which are bought though a tiered supplier

• B)Products are used by business which are not specified by a buyer

• C)Products used by a business which are bought through a supply chain

• A)Products that do not form part of the end product

6.Which of the following explains the activities required when assessing quotations for capital

goods purchases?

• A)Checking the suppliers terms and conditions of contract

• B)Establishing the specification

• C)Calculating the total cost of ownership

• D)obtaining a framework agreement

7.Which of the following activities required prior to paying invoice for goods ordered?

• A)Check invoice against original documents,check for receipt of goods,check for problems with

  goods

• B)Check suppliers financial capability,check all goods being used or sold,ask for discount.

• C)Find the goods,prepare a requisition form,and send an order acknowledgement

• D)Check if budget holder has authorised the purchase order,wait until the supplier chases for

  payment

8.Which of the following explains the actions involved as part of an efficient ’expenditing system’?

• A)Check the requirements for exports of goods from another country

• B)Mainataining contact with important suppliers to reduce the likelihood of problems with orders

• C)updating users on progress and ensuring speedy release of the purchase order

• D)Ensuiring invoices are checked and supplier payment is not delayed

9.Which of the following explains specific characteristics of a ‘tiered supplier’

• A)A supplier which has been graded as part of benchmarked vendor rating systems

• B)A supplier which manages a proportion of the organisation s supplier base

• C)A supplier which a much part larger in a multi national company

• D)A supplier which deals with pre- scheduled ,phased deliveries as part of a long term contact

10.Which of the following describes the use of ‘incortems’when buying internationally?

• A)They allow the same import duty terms to apply all goods imported from other countries

• B)They allow a uniform approach to payment terms and method for import and export

• C)They allow incorporation of exchangerate to be used as part of the terms and conditions

• D)They allow an understanding and incorporation of buyer and seller responsibilities in a contact