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NEW QUESTION 23
Rachel and Jacky work in the procurement department of Foddy Foods Ltd. They have been told by their CEO to build better relationships with strategic suppliers as this will create value for money for the company. In what ways can value for money be achieved by building strong relationships with suppliers? Select TWO.
- A. Innovation developed as part of collaborative projects
- B. Reducing costs
- C. Better payment terms
- D. Reduction of waste
Supplier relationships can result in value for money in the reduction of waste and in innovation developed as part of collaborative projects. Remember that in CIPS waste doesn’t necessarily mean physical waste (as in stuff you don’t want any more). There are 7 types of waste including waiting, inventory, transportation etc. So when you develop a relationship with a supplier, this can reduce waste (e.g. you may be able to get deliveries quicker by integrating your ordering system with the supplier’s, or you might reduce transportation by agreeing a Consignment stock). Having a good relationship with a supplier isn’t necessarily going to get you a reduction in cost or better payment terms. See p.70 for more details on this- there’s a short list of ways in which good supplier relationships can bring value for money to a business.
NEW QUESTION 24
The CEO of a business has asked his procurement manager to source new machinery for the factory. This machinery will help create a new line of products which will give the company a competitive edge. The CEO is heavily invested in this procurement activity as profits have been lower than expected this year and this new line of products could help increase profitability. How should the procurement manager include the CEO in the procurement activity?
- A. It is important to keep the CEO informed of all decisions that are made
- B. The CEO is a key player- so it is important he is involved early in the process
- C. The CEO is a key player- so should be given regular updates on progress
- D. It is important to keep the CEO satisfied as he runs the business
The correct answer is ‘The CEO is a key player- so it is important he is involved early in the process’. The CEO has high power and high interest which puts him in the top right-hand corner of Mendelow’s Stakeholder Matrix (p.81). CIPS says Key Players should be involved early in the procurement process (p.82).
NEW QUESTION 25
In a partnership who is responsible for decision making?
- A. Both the supplier and the buyer
- B. The project steering committee
- C. The buyer
- D. The supplier
The correct answer is both the supplier and the buyer- joint decision making is a key aspect of partnership relationships. A project steering committee decides on priorities, suggests improvements, conducts audits etc. See p.152
NEW QUESTION 26
Which of the following documents can be used at the selection stage of a tender process to ensure that short listed bidders meet the requirements of the buying organisation? Select TWO.
- A. Request for Quotation
- B. Invitation to Tender
- C. Request for Information
- D. Pre-Qualification Questionnaire
Request for Information and Pre-Qualification Questionnaire can be used for short-listing suppliers. Request for Quotation is used when the only variable is price and you would like suppliers to submit a price for you. Invitation to Tender would be the next stage after RFI / PPQ- this is sent out to those suppliers who have passed selection, and details the second stage of the competition. See p.75 for more details.
NEW QUESTION 27
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