Free Practice Questions for CIPS L3M3 Exam

Explanation

Bidders compete against each other, reducing bid prices until one winner is found - this is the sub-mission of the lowest-priced bid (unless stated otherwise in the auction documentation).

Explanation

Equilibrium price.

The closing price is the price at the end of the day when the market closes.

The other 'prices' shown are nonsense.

Explanation

Cost transparency - this requires a high trust level, as both parties open up and share information on the costs of their operations.

Open book costing is a one-way share - the seller allows the buyer to look at their actual costs.

Explanation

When a company's goals, resources, plans are aligned we should hope for better performance. And when the employee's values are also aligned, it just gets better.

Explanation

The Executive Summary summarises the situation for busy executives to save them working all the way through the detail.

The summary needs to be very well written, accurately reflective of the entire document, and in-clude the key points needed to make a balanced decision.

The executive summary should be written last of all the sections, and is often the only part of a document which will be read.

Explanation

An opportunity cost is the cost of not being able to do something else.

For example, if a firm opts to build a new factory, it may not be able to create ten new retail outlets which was another option open to it, in spending these particular funds. Or if you buy a holiday, you may not be able to buy a new television. The television is the opportunity cost of the holiday ie the benefit foregone.

The other types of cost shown are methods of classifying actual (real) costs. Opportunity costs are, in a sense, not real; they are hypothesized and therefore do not show in the balance sheet or profit and loss account of a business.

Explanation

Milestone plan.

This is difficult, and if you opted for 'staged', that is understandable. 'Milestone' or 'gateway' are terms often used to describe a situation in which a particular point must be reached on a project, pri-or to release of funds. By this means, a close linkage can be made between outputs achieved and payments made. The idea of stages goes towards this, and 'progress payments' ie payment based on alleged progress or simply time, have been shown in many cases, to be ineffective in achieving value for money.

Explanation

The three-year contract is a term contract.

The other requirements shown are of a 'one-off' nature, and could therefore be called 'spot'purchases.

Explanation

Other customer data.

It would, I think, be very unusual for a contract manager to feel it appropriate to ask for information from a supplier representative about other customers. Business partners normally want their dealings to be private. However, in informal discussions, in the normal course of conversation, information is often transferred in a benign manner.