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Freefields Housing Authority (FHA) is a housing provider that has outsourced a range of management services using fixed-price long-term contracts. FHA’s regular supplier credit reviews have identified that some key outsourced service suppliers are at risk of insolvency due to high inflation rates observed in the macroeconomic climate. Which of the following actions would enable FHA to reduce this risk for the lifetime of the affected contracts?

A.

Allow affected suppliers to review and resubmit their fixed costs

B.

Introduce indexation of contracts linked to the Consumer Prices Index

C.

End the contracts and procure the services

D.

Offer advance payment terms to the affected suppliers

When is the best time to adopt accommodating style according to Thomas-Kilmann conflict mode instrument?

A.

When both buyer and supplier want to find an integrative solution as their concerns are too important to be compromised

B.

When buyer needs to gather more information to gain more advantages in later negotiations

C.

When preserving harmony and avoiding disruption with supplier are especially important

D.

When buyer and supplier have equal power but are strongly committed to mutually exclusive goals

Rose is a senior buyer from a skiing equipment retailer. Rose is concerned about the current ski boot shortage and the number of invoicing problems from a key supplier. She has decided to have a video conference with Victor, CEO of the supplier. Initially, she intends to threaten Victor with contract termination unless he can improve the situation. However, she is a little wary of doing this as the switching costs are high. Eventually, she decides to seek solutions by encouraging the other party to offer their views and ideas. Rose also prepares some ideas to discuss with Victor. Which of the following is the persuasion method that Rose intends to use in the forthcoming conference?

A.

Directive (push)

B.

Persuasive reasoning (push)

C.

Collaborative (pull)

D.

Visionary (pull)

There are many factors which will influence supplier pricing decisions. Which of the following are external factors that may apply? Select THREE that apply:

A.

Customer perceptions of value

B.

Cost of production

C.

Price elasticity of demand

D.

Environmental factors affecting the cost of raw materials

E.

Where the product is in its ‘lifecycle’

F.

Objectives of the organisation

Buying organisation may increase its leverage with suppliers by concentrating spend. Which of the following are most likely to be forms of supplier spend consolidation? Select THREE that apply.

A.

Forming purchasing consortia

B.

Volume consolidation across categories

C.

Volume separation

D.

Paying supplier on time

E.

Volume redistribution

F.

Simplify procurement process

The procurement manager of a private healthcare provider is running an IT project. Who would be the stakeholders?

    General public

    Pharmaceutical suppliers

    Senior Management

    Software support developers

A.

2 and 4 only

B.

1 and 3 only

C.

1 and 2 only

D.

3 and 4 only

A public agency opens a tendering process for a road building project that lasts approximately 1 year. They post their requirements on public journal and receive some interests. After conducting due diligence process and selecting the lowest bidder, the project commences. However, the supplier complains that price of material increases because of a shortage of supply, then they demands an 5% uptick in contract value. The agency investigates the increment and sees that there is indeed a fluctuation in prices of supplier's input. They are likely to accept the proposal, but they are also concerned that supplier may demand more. To avoid making another concession with the supplier, which of the following should be a priority action of the agency?

A.

Disapprove supplier's demands until they finish the project

B.

Seek approval from higher authority

C.

Document a contract variation that only allows another concession if some specific conditions arise

D.

Postpone the decision making until the budget is ready

A supplier can produce a product for $160. The supplier sells the product to their client for $240, making a profit before tax of $80 on the transaction. What is the mark-up profit percentage earned by the supplier on this transaction?

A.

33%

B.

159%

C.

50%

D.

67%

At the first stage of CIPS Procurement and Supply Cycle (Understand need), which of the following is the most important duty of procurement professional?

A.

Demand management

B.

Evaluating the interests from suppliers

C.

Undertaking 'reverse marketing'

D.

Deciding whether RFQ or ITT should be used

In what circumstances is the bargaining power of suppliers likely to be high, in relation to buyer power? Select the THREE that apply:

A.

The number of suppliers is limited

B.

The demand is not urgent

C.

The product the buyer requires is undifferentiated

D.

The volume required is low

E.

The supplier has highly specialized machinery

F.

The buying firm is large in comparison to the supplier