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John has been asked to develop a business case before obtaining approval to purchase a large piece of capital equipment for a glove manufacturing unit. Is this the right thing to do?

A.

Yes, because this will help compare alternatives and options

B.

No, because risk consideration is not John's responsibility

C.

Yes, because this will assist the purchase order

D.

No, because this can lead to business-focused thinking

A supplier of software has received a request to quote for a product. The software supplier considers that the buying organisation making the request provides relatively little benefit or alignment to their own strategy. Which one of the following options describes how the supplier might react to the buyer?

A.

The supplier will seek to exploit the situation and drive a high price

B.

The supplier will attempt to foster a strategic relationship with the buyer

C.

The supplier will provide the buyer with attractive additional software support benefits

D.

The supplier will seek to offer the lowest price possible

Which of the following statements describes a correct example of an indirect cost?

A.

The wages of an automotive electrician responsible for testing vehicle lights during a night shift at a car assembly plant

B.

The cost of alloy rims fitted on new cars during the night shift at a car assembly plant

C.

The salary of the manager in charge of the night shift in the car assembly plant

D.

The cost of paint used in the manufacture of new cars during the night shift at a car assembly plant

Which of the following are likely to be disadvantages of using outcome-based specifications? Select THREE that apply

A.

Time consuming to produce

B.

Stifling innovation

C.

Difficulty to measure performance

D.

Long time delay between action and result

E.

Responsibility for product failure falling to buyer

F.

Ambiguity of outcome

Which of these are advantages of using a conformance specification? Select TWO that apply.

A.

It enables supplier flexibility and product innovation

B.

It enables value-for-money solutions

C.

It forces consideration of actual product needs

D.

It provides evidence of requirements if there is a dispute

E.

There is a smaller supplier base to select from

Despite of better improvement rates than other types of benchmarking, functional benchmarking still has downsides. Which of the following is most likely to be a disadvantage of functional benchmarking?

A.

Legal issues regarding intellectual property

B.

Unfair competition

C.

Difference of corporate cultures across companies

D.

Benchmarking can only be undertaken within an industry

Which of the following factors should be assessed to understand the competitiveness of a supply market?

A.

Presence of a minimum wage

B.

Gross National Product of the country of manufacture

C.

Number of suppliers within the market

D.

Previous price paid for goods

A food manufacturer wants to predict the pricing point for a new and innovative health drink. Which method of market research would be beneficial to receive the most accurate information?

A.

Focus groups

B.

Consumer data

C.

Sales trends

D.

Internet searches

Which of the following is a challenge of making a business case for straight re-buys?

A.

Terms and conditions

B.

Research of procurement process

C.

Effective inventory control

D.

Identifying suitable suppliers

What would provide the best method to ensure a car manufacturer can make adjustments to vehicle production to meet future market demands, such as the inclusion of an additional battery to make a hybrid model?

A.

Correct product specification in place to allow variations

B.

Investment in innovation to predict future trends

C.

Investment in versatile robotics to meet changing demand

D.

Adequate labour contracts in place to meet changing demand