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CIPS L4M4 LO1 exam solutions verified|2024, Exams of Business Management and Analysis

Durham UniversityBusiness Management and Analysis

CIPS L4M4 LO1 CIPS L4M4 LO1 exam solutions verified|2024

Typology: Exams

2023/2024

Available from 03/20/2024

johnNice
johnNice 🇺🇸

541 documents

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P a g e 1 | 12
1
1. What is sourc-
ing?
2. What is
tactical/opera-
tional sourcing?
3. What is strategic
sourcing?
4. What aspects
typically repre-
sent value for
money?
5. What are the
stages of No-
Sourcing is the location, acquisition and management of
all the vital inputs required for an organisation to operate.
Low-level decision making
High profit, low risk items
Short-term projects
Transactional relationships
Top-level decision making
High-profit, high-risk items
Long-term projects
Collaborative relationships
Price
Delivery
Quality
Ethics
Sustainability
Availability
1) Identify needs
2) Define user requirements
vack and Simco's 3) Decide whether to make or buy
11-stage sourc-
ing process?
6. What is out-
sourcing?
7. Reasons why
outsourcing may
be the preferred
4) Identify purchase type (new buy, modified re-buy,
straight re-buy)
5) Carry out market analysis
6) Identify potential suppliers
7) Pre-screen suppliers and create a shortlist
8) Evaluate shortlisted suppliers
9) Supplier selection
10) Final product or service delivered
11) Evaluate supplier performance
Contracting an external supplier to manage and run a
function that was previously handled in-house.
- To allow costs to be kept as effective as possible and
enable the organisation to obtain value for money
- To reduce the need to continually invest in new ma-
pf3
pf4
pf5
pf8
pf9
pfa

Partial preview of the text

Download CIPS L4M4 LO1 exam solutions verified|2024 and more Exams Business Management and Analysis in PDF only on Docsity!

P a g e 1 | 12 1

1. What is sourc- **ing?

  1. What is** tactical/opera- **tional sourcing?
  2. What is strategic** **sourcing?
  3. What aspects** typically repre- sent value for **money?
  4. What are the** stages of No- Sourcing is the location, acquisition and management of all the vital inputs required for an organisation to operate. Low-level decision making High profit, low risk items Short-term projects Transactional relationships Top-level decision making High-profit, high-risk items Long-term projects Collaborative relationships Price Delivery Quality Ethics Sustainability Availability 1) Identify needs 2) Define user requirements vack and Simco's 3) Decide whether to make or buy 11 - stage sourc- **ing process?
  5. What is out-** **sourcing?
  6. Reasons why** outsourcing may be the preferred 4) Identify purchase type (new buy, modified re-buy, straight re-buy) 5) Carry out market analysis 6) Identify potential suppliers 7) Pre-screen suppliers and create a shortlist 8) Evaluate shortlisted suppliers 9) Supplier selection 10) Final product or service delivered 11) Evaluate supplier performance Contracting an external supplier to manage and run a function that was previously handled in-house. - To allow costs to be kept as effective as possible and enable the organisation to obtain value for money - To reduce the need to continually invest in new ma-

P a g e 2 | 12 2 option for a pro- curement organi- sation

8. What is the make **or buy decision?

  1. What are Porters** **Five Forces?
  2. Benefits of the** **make decision
  3. Benefits of the** buy decision chinery and work instead with suppliers that already have knowledge and resource in specialist areas.
    • To avoid the need to recruit additional staff or invest in training
    • To enable an organisation to benefit from an outsourced suppliers' skills
    • To enable an organisation to focus more on its core activities
    • To move the requirements for managing services to an- other organisation Whether to manufacture a product or provide a service in-house, or to source it from an external supplier.
    • Threat of new entrants
    • Bargaining power of buyers
    • Threat of substitutes
    • Bargaining power of suppliers
    • Rivalry among existing competitors
    • strategy of the organisation is to be self-sufficient
    • enhanced control over processes
    • improved quality control
    • workforce remains stable
    • continuity of supply
    • no suitable 'buy' suppliers
    • economies of scale available
    • reduced risk
    • easier to amend volumes/specifications
    • specialised knowledge available
    • technological advancements available
    • small volumes are not cost effective for 'make'
    • cheaper to buy in than to manufacture/deliver
    • 'make' organisation does not have the machinery re- quired
    • economies of scale available
    • no capacity in-house
    • less inventory
    • reduced overheads

P a g e 4 | 12 4 sional receives the PQQ back?

18. What should be used to con- sistently monitor supplier perfor- **mance?

  1. What does** SMART mean in **terms of KPIs?
  2. How does out-** sourcing help low cost coun- **tries?
  3. What does TUPE** **stand for?
  4. Why was TUPE** **created?
  5. What is single** **sourcing?
  6. What circum-** stances is single **sourcing used?
  7. What is dual** sourcing? buying organisation then evaluates the short listed suppli- ers in more detail against specific criteria. they will remove any suppliers from the list that would not add value. Key performance indicators (KPIs) or Service level agree- ments (SLAs) specific measurable achievable relevant time bound helps to build their economy Transfer of Undertakings (Protection of employment) This legislation was created to protect employees and ensure that any individuals working to provide a service keep their jobs when the supplier is changed. where one supplier is contracted by the buying organisa- tion to supply all the needs for an item.
    • there is a monopoly supplier and the buyer has no choice
    • economies of scale can be achieved
    • order quantities are very small
    • one supplier offers outstanding value for money against the competition where two suppliers are responsible for supplying all the needs for an item to the buying organisation

P a g e 5 | 12 5

  1. What^ circum- stances is dual sourcing used?
    • there is a risk of one supplier not being able to supply
    • a product or service is critical to an organisation
  2. What is multiple where many suppliers are responsible for supplying all the sourcing? needs for an item to an organisation.
  3. What circum- - supplier competition is vast stances is mul- - the supplier relationship is not critical tiple sourcing - constant supply is critical used?
  4. How does the - there must be partnerships or strong collaborative rela- supplier relation- tionships within single sourcing approaches as the buying ship depend on organisation is completely reliant on this one supplier to the sourcing ap- fulfill its needs proach? - with dual sourcing the relationship still needs to be strong and should be collaborative in the form of a strategic alliance
    • when adopting a multiple sourcing strategy, the rela- tionships are not as critical as there are so many supply options so the style is likely to be more transactional
  5. What is open ten- the opportunity is widely advertised allowing any supplier dering? to make a bid
  6. What is restrict- a two stage tendering process, used when the buyer ex- ed tendering? pects there to be a high interest from bidders.
  7. What is negotiat- when only a single or few suppliers are approached based ed tendering? on a previous relationship or track record.
  8. What are the 1) the buyer wins and the supplier loses five possible out- 2) the supplier wins and the buyer loses comes of negoti- 3) the buyer wins and the supplier wins ation? 4) the buyer loses and the supplier loses
    1. neither the buyer nor the supplier wins (a compromise)

P a g e 7 | 12 7

  1. What are the ben- - reduced costs efits of interna- - exposure to world class technology tional sourcing? - availability of materials that may not be readily available in the home country
    • improved quality
    • wider selection of supplier available internationally
  2. What are the - extended lead times risks of interna- - importation/exportation rules and regulations tional sourcing? - currency exchange fluctuations
    • payment methods and guarantees
    • cultural differences
    • quality issues
    • logistical problems
    • infringement of intellectual property rights
    • conflict is harder to resolve.
  3. What details will Details on the potential suppliers policies and situations in be asked for in a the following areas: PQQ? - quality assurance
    • Environmental awareness and sustainability
    • technical capabilities
    • systems capabilities
    • labour standards
    • financial capabilities
    • credit rating scores
  4. What is a perfor- states what the product or service should do but does not mance specifica- give instructions on how this is to be achieved. the supplier tion? can meet the specification however they think is best.
  5. What is a confor- more structured and details exactly how the product or mance specifica- service must be made. Examples of conformance spec- tion? ifications include recipes and chemical formulae.
  6. What is the ISO An international standard for quality standard 9001?
  7. A concept based on constantly improving processes to eliminate waste

CIPS L4M4 LO

8 / 12 What is con- tinuous improve- ment?

  1. What are the 4 1) Identify - opportunities in the process workflow stages of con- 2) Plan - how can the current process be improved tinuous improve- 3) Execute - implement changes ment? 4) Review - how are changes working for the team
  2. What is total A management approach linked to organizational culture quality manage- and attitudes, which aims to gain complete customer sat- ment (TQM)? isfaction
  3. What are Ohno's Motion, inventory, over-production, waiting, defects, seven wastes? over-processing, transportation
  4. What is corpo- The responsibility of an organisation to act favorably to- rate social re- wards the environment, contribute to the community and sponsibility? behave ethically
  5. What behaviours are important in a
    • contribute positively to the environment
    • do not pollute the atmosphere supplier? - replace any natural resources that they use within their supply chain
    • giving something back to the community where they are located
  6. What is modern Individuals being forced to work for little or no pay, or slavery? humans who are trafficked to work in foreign countries
  7. What will buy- - check they are free from modern slavery ers check to - check that potential suppliers work in accordance with ensure suppliers the standards and policies set by the International Labour treat their em- Organisation (ILO) ployees ethical- ly?
  8. What is a credit A process to evaluate an organisation to determine its check? financial stability

CIPS L4M4 LO

10 / 12

  1. What^ does high gearing sug- gest? means that there is a lot of long-term debt within the company, which may present a risk in the long-term
  2. What does low that the organisation is relying on equity capital and should gearing sug- therefore have less difficulty coping during tough econom- gest? ic times.
  3. What do invest- used to evaluate the financial strength and sustainability ment ratios do? of an organisation
  4. What are the lim- - the data used is historic itations of ratio - the current rates of inflation are not taken into account analysis? - ratios do not show the reasons for trends
    • operational changes are not always considered
    • the economic situation may not always be taken into account
    • not all organisations operate the same strategy
    • the information from ratios is purely numerical and needs supporting with other data
    • they are not very effective as a short-term tool
    • accountancy methods may vary
    • if some ratios are good and some are bad, what does that actually mean?
  5. What should you - total life-cycle costs take into account **as well as price?
  6. What should be checked in or- der to compare prices using a fair analysis?
  7. What does total life-cycle costs include?**
  • technical merit
  • added value
  • systems and resources
  • the exchange rate
  • batch quantities quoted for
  • is carriage included?
  • are taxes included?
  • are there any conditions on payment terms?
  • pricing mechanism used: fixed-cost, cost-plus
  • price of product
  • transport/delivery
  • packaging

CIPS L4M4 LO

11 / 12

  • insurance
  • cost of installation
  1. What does EXW Ex works - goods are required to be collected by the mean? buying organisation from the suppliers' premises
  2. What does DDP Delivery duty paid - goods are delivered to the buying mean? organisations location of choice with all associated costs included and paid for by the supplier
  3. What does the total cost involved in terms of inventory, including pur- life-cycle costs chasing price, inward delivery, receipt and handling stor- mean? age, packing and preparation, dispatch costs, insurance and overheads
  4. What is total cost a structured approach to calculating the full costs associ- of ownership? ated with buying and using an asset or acquisition over its entire life cycle
  5. What are acquisi- costs associated with acquiring an asset such as sourcing, tion costs? transport, insurances and installation
  6. What are tooling costs associated with any specific moulds, cutting acces- costs? sories or fixings that have to be purchased with the asset
  7. What are insur- costs associated with insuring the asset against damage, ance costs? theft or downtime
  8. What are operat- costs associated with running the asset e.g electricity or ing costs? water consumption
  9. What are mainte- costs associated with keeping the asset in good condition nance costs? - is there a maintenance package included or is this an additional expense?
  10. What are training costs associated with training the operators of the asset, costs? and health and safety requirements
  11. What are storage costs?