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Frequently Asked Questions
Question # 1
For complex and high value tenders, which document is the most appropriate to send tothose suppliers who have already been appraised and deemed suitable?
A. PQQ
B. ITT
C. RFQ
D. RFT
Question # 2
If a company is described as 'liquid' what does this mean?
A. the company is funded on equity rather than debt
B. the company spends a lot of money
C. the company is highly profitable
D. the company has enough money to pay short-term liabilities
Question # 3
When working closely with a supplier, waste can be reduced which can lead to improvedbusiness functions and cost savings. Which of the following are wastes that can beremoved from the supply chain? Select THREE.
A. Over-analyzing
B. Barriers
C. Motion
D. Waiting
E. Inventory
Question # 4
Amnesty International, Oxfam and CIPS are examples of what type of organisation?
A. partnerships
B. limited liability
C. not-for-profit
D. public limited companies
Question # 5
A buyer is only interested in working with suppliers who have strong Environmental andSocial Governance practices. It is therefore using ethical criteria as supplier selection stageto determine which suppliers to work with. Which of the following statements is true?
A. compliance with Codes of Conduct from professional bodies is mandatory
B. ethical behaviour is impossible to determine as issues such as Modern Slavery often goundetected
C. the buyer should ask suppliers to be accredited to ISO9001a supplier who follows the CIPS Code of Conduct is more likely to meet the buyer's needs
Question # 6
Which of the incoterms listed are suitable for transporting goods via train?
A. FAS
B. FOB
C. CRF
D. EXW
Question # 7
According to the CIPS code of conduct, which laws should a procurement professionaladhere to?
A. all laws within the country they work in
B. all international procurement legislation
C. all laws published by international organisations such as ILO
D. all laws within countries they have business and contracts in
Question # 8
Which of the following financial documents would show whether a supplier has sufficientfunds to pay their subcontractors in the short term?
A. balance sheet
B. ESG policy
C. profit and loss account
D. cash flow statement
Question # 9
During the quality assurance of a supplier, Margaret is looking for an international standardthatshows the supplier's commitment to sustainable procurement. What document should the supplier provide to show this?
A. ISO20400
B. ISO14000
C. ISO9001
D. ISO27000
Question # 10
A balance sheet will show a company's assets, liabilities and shareholder equity. What isshare-holder equity?
A. the profit from sales once tax has been deducted
B. the amount of money held in the company's bank account
C. the owners' residual claim once all debt has been paid
D. the amount of money from retained earnings
Question # 11
When conducting an ABC analysis- what category of items and type of suppliers would youtypically find in the A category?
A. low value items, transactional suppliers
B. low value items, strategic suppliers
C. high value items, strategic suppliers
D. high value items, transactional suppliers
Question # 12
A company has actively included supporting of disadvantaged groups within their ESGcommitment. Which of the following groups are considered disadvantaged?
A. endangered species
B. pregnant women and children
C. international suppliers
D. Muslims
Question # 13
Which of the following is a regulatory body which protects the rights of workers?
A. ISO
B. ILO
C. FairTrade
D. WWF
Question # 14
When using a 'credit account' payment mechanism, when does a supplier receive paymentfor the goods?
A. after delivery
B. in advance of delivery
C. when they receive the PO
D. before the order is placed
Question # 15
When would a procurement professional use the Pareto principle?
A. when considering changing a supplier
B. when conducting a value analysis
C. when looking at whole-life-cycle costs
D. when appraising a supplier
Question # 16
What is a major benefit to using Incoterms when sourcing goods internationally?
A. it ensures value for money
B. it ensures ethical business practices
C. it replaces lengthy contractual clauses
D. it replaces the need for insurance
Question # 17
Robert is appraising suppliers and is keen to evaluate suppliers' contribution to thecommunity and the environment. Which of the following should Robert look at?
A. ESG Policy
B. Anti-Slavery Policy
C. ISO9001
D. ISO27000
Question # 18
When sourcing an item of strategic importance and high value in the public sector, is itimportant to advertise this publicly?
A. no- buyers can approach known contractors
B. no- buyers in the public sector do not source strategic items
C. yes- the public sector should advertise the opportunity as a call for competition
D. yes- the public sector should advertise through the Freedom of Information Act
Question # 19
Which of the following are reasons to outsource part of a business to an external supplier? Select TWO.
A. the product or service is core to the organisation
B. there are more resources in-house
C. overheads can be kept as effective as possible
D. the reduction in the need to continually invest in new machinery
Question # 20
The procurement team at Grape Juice Limited often use a weighted point system when appraisingpotential suppliers. What is a disadvantage of using a weighted point system?
A. it allows transparency
B. it is time-consuming to create
C. it is easy to manipulate
D. it is hard to be objective
Question # 21
The Freedom of Information Act is a piece of UK legislation which allows members of thepublic to request information on issues such as public sector sourcing. When a request ismade, it is compulsory for the public sector to provide this information to the public. Is thisstatement true?
A. yes- the information must be provided within 28 days
B. yes- the information must be posted publically online
C. no- the public sector can choose not to publish information if it is not deamed to be in the public interest
D. no- the public sector does not need to provide information on sourcing activities
Question # 22
Which of the following is considered as part of ESG?
A. bribery, corruption and the environment
B. market conditions and product lifecycle
C. liquidity, gearing and profitability
D. economic and social governance
Question # 23
Which of the following would you use to work out a company's gearing ratio? Select TWO.0current liabilities
A. net profit
B. shareholder equity
C. long term debt
D. gross sales
Question # 24
Which of the following is an example of intracompany trading? Select TWO
A. a manufacturer in the UK buys raw copper from a supplier in Chile
B. two companies owned by the same entity conduct business
C. two companies join together to create a new product
D. two departments within the same company collaborate on a project
E. cleverness
Emanuel Perkins
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