L4M2 Dumps Help You Study Objectives

1. Datong is a defense and law enforcement equipment supplier. They are developing new product but largely concerns about the detailed specifications of components and the capability of supply market.

Which of the following approach should Datong adopt in order to optimise the specification and shorten time to market?

2. 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?

3. Which of the following factors would mean a buyer had high bargaining power in a competitive market? Select TWO that apply.

4. Due to increasing demand, a local restaurant is requesting its fish vendor to supply larger quantity.

The restaurant manager also asks the vendor whether it is possible to reduce the total price by 5%.

This is known as...?

5. What is the document that defines the activities, deliverables and timelines a supplier must carry out during contract performance?

6. Which of the following are fixed costs? Select TWO that apply.

7. Which of the following standards specifies requirements for a quality management system?

8. Why should procurement professionals develop business case before seeking approval to purchase capital equipment?

9. What criteria can be applied in the production of a business case?

10. XYZ Ltd is the largest consumer of brass in the country. It consumes 48% of all brass manufactured, while the second-largest consumes less than 10% of brass manufactured.

Which force or power does XYZ Ltd possess?

11. At which stage of product life cycle, price competition between sellers will be the most intense?

12. A conformance specification with designs should contain more detail than a performance specification with outputs. Is this statement TRUE or FALSE?

13. Informal recommendation

14. Which of the following are typical environmental considerations throughout the contract life cycle? Select the TWO that apply.

15. A procurement manager includes provision on recovery from natural disaster into a through-life specification. Some suppliers suppose that provision is unnecessary. Is procurement manager’s action justified?

16. Which of the following always impact negatively on a company's cash flow? Select TWO that ap-ply

17. 1.The position of a product in its life cycle can affect the price that suppliers set. Is this statement correct?

18. An example of a performance specification is a ...

19. This is the information on an organisation’s activities over the past year

• Sale were $5,000,000. The value of accounts receivable was $450,000 at the start of the year and $525,000 at the end of the year

• The value of direct costs was $2,500,000 and 75% of this was bought on credit

• Indirect costs were $3,000,000 and 25% of this was bought on credit

• During the year the organization spent $1,500,000 on new assets and sold $150,000 of old assets. $1,000,000 of the spend on assets was funded by a bank loan

• The organization declared a dividend of $200,000 at the end of the year but this was not paid for another two months

• Opening balance was $175,000

Which of the following is the bank balance of that organization at the end of the year?

20. A manufacturing organisation has initiated a project focusing on costs, with a view to making significant savings. A procurement manager is leading the project. The initial data sources have focused on the cost of raw materials.

Which of the following describes this cost?

21. ABC Ltd has recently set up a stationery contract with a large stationery provider, obtaining fixed prices on core stationery items. The brochures have been distributed within ABC Ltd and one of the key users wants to order a corner desk and office chair from the brochure.

Is this within scope?

22. Why is the specification considered as the most important document in procurement?

23. Which of the following is a risk to buying organization when using conformance specification?

24. Which of the following is the new technology that has impact on manufacturing sector?

25. Which of the following problems may be identified as open-ended problems? Select TWO that apply:

26. Which kind of these following costs belong to fixed costs? Select TWO that apply.

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

28. When procuring a machinery, at which stage buyer must check whether it is working to the standards set out in the design specification?

29. Which of the following factors might prompt an organisation to procure an alternative product?

Select THREE that apply:

30. An increase in the amount of stock held

31. It could be argued that wherever possible, specifications should be more output and outcome focused.

Why is this?

32. Which of the following activities are considered as secondary activities of an organization? Select TWO that apply

33. A construction company requires a specification that details the exact composition of the concrete mix and the exact methods of construction required for its use.

Which specification should it adopt?

34. When devising a business case for purchasing a new copier, Maria analyses its whole-life costs as following:





Though cost generating activities are identified, she has not categorised the costs.

What is the total value of copier's end of life costs?

35. A procurement manager is requested to source a major component. She needs information on sup-pliers’ direct and indirect cost, fixed and variable costs to prepare for negotiations. Therefore, she collects 17 annual reports from potential suppliers who are competing in the same industry.

In order to estimate an approximate value of fixed and variable costs in that industry, which of the following technique should be adopted by the procurement manager?

36. Corporation tax

37. 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?

38. A market has a considerable number of buyers and suppliers. Analysis of the market reveals that loyalty from buyers is relatively low and switching to alternative providers is commonplace.

Which of the following market characteristics is supporting this type of buyer behaviour?

39. Which of the following are typical social considerations throughout the contract life cycle? Select the TWO that apply.

40. Ymira is asked to develop the specification for water purifier which will be used at the company headquarter. She believes that the specification can be drafted based on the information available on the Internet, such as blog posts, comparison websites, how-to websites, life hacks, etc.

Which of the following traits will make the information more useful?

41. Optimising inventory replenishment methods

42. At which stage of through-life contract management, procurement team needs to identify sources of risk and the ways to mitigate them?

43. Buyer's database on market data

44. Which of the following are the fair and reasonable comparators in price analysis? Select TWO that apply:

45. A procurement organisation is keen to encourage innovation available within the supply market in the execution of an upcoming significant contract opportunity. A team member suggests that the specification should define the performance indicators so that supplier's solution can be checked against them.

Which of the following will enable the organisation to achieve this goal?

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

47. A buying organisation may not have technical capability to produce a highly complex specification.

Which of the following are sources of information that can be used to create the specification? Select

TWO that apply

48. Logistics support stage

49. Which of the following is part of a conformance specification?

50. Procurement should work closely with colleagues in accounts when creating an annual budget. This is because the budget will help the company ...

51. Which of the following might be consequences of over-specification? Select TWO that apply:

52. Category buyer Raheem has been tasked with receiving innovative bids from coaching and development service providers.

How can he achieve this? Select TWO that apply.

53. Bob is a new procurement specialist at XYZ Ltd. He is assigned to categorise the company's sup-plies. After analysing, Bob realises that a group of low value products is sourced from a tiny geo-graphical area which is prone to flooding.

What would be the best strategy to manage this category of products?

54. Apple’s CPO is planning a budget for purchasing carbon-free aluminium next year. There are 27.4 tonnes of aluminum in stock, while Apple will need 200 tonnes for production next year and double inventory for production in the following year.

How much aluminum will Apple need to purchase in next year?

55. An IT category buyer wishes to include social and environmental criteria within a supplier specification. The focus is on the avoidance of hardware manufacturing inputs that have been derived from 'conflict minerals', e.g. from politically unstable areas.

Is this the right approach?

56. Aircraft Category Manager, Harpal Patel, is purchasing several aircraft engines. He is seeking to determine which category of specification will be most appropriate. He decides on using a conformance-based specification.

A conformance-based specification is most appropriate in which one of the following instances?

57. A large sports organisation requires some additional racing equipment to be built. It should match exactly the pre-determined technical specifications and requires exact compatibility.

Which of the following specifications would be most appropriate?

58. Acquiring competitors

59. Honda of America Manufacturing is a well established automobile manufacturer. It purchases tens of thousands of materials and parts from suppliers, however, only few of them are strategic. To these suppliers, Honda's procurement manager requires them to send details of labour, materials, overhead cost and profit. However, the suppliers are reluctant to submit such confidential information.

Is the procurement manager’s action appropriate?

60. FSB Group is developing a specification for the construction of a new building. The project stakeholders need the specification to set specific criteria to ensure fair labour practices and local employment opportunities are prioritised.

Which of the following describes this type of sustainability criteria?

61. Why should the buying organization require the supplier to carry out acceptance testing?

62. Which of the following is an advantage of competitive benchmarking over other types of bench-marking?

63. A consulting firm in London had previously had static budgets. They were set once and locked in for the year. This resulted in departments meeting their budgets early and doing virtually nothing the rest of the accounting period. To address this imbalance, the company tossed out the static budget and developed a new one for each department of the next 18 months. And each month, real sales figures are analyzed against the plan and the budget is adjusted accordingly. Then the company adds another month into the budgeting plan.

What type of budget this company is using?

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

65. Modification cost

66. Which of the following are most likely to negatively affect the suppliers’ bargaining power in a specific market? Select TWO that apply:

67. Robert is a senior buyer at MMC Construction Ltd. His company is doing multiple development projects in the country, which increases procurement workload significantly. Meanwhile, most of the tasks are handled manually, which causes bottlenecks in the workflows. The procurement team is overwhelmed by the workload and complains from other departments. From previous experience, Robert knows that electronic system may help his procurement team. He writes a business case to submit to the senior management, in which he insists on the possible productivity improvement by adopting e-system in procurement.

Is Robert's action reasonable?

68. When analysing a market, the availability of substitute products or suppliers is the only competitive force to consider. Is this statement correct?

69. Facing fiercer competition at home and abroad, IKEA, the leading furniture retailer, needs to im-prove its competitiveness. In order to do this, IKEA must decrease operating costs and improve quality of current and new retail stores. The company establishes a project team. The job of the team is to collect data on performance from multiple stores in several countries, then select the best performing one. The team will work closely with best performing store and study its processes. After the research, the team will recommend best practices to other retail stores. IKEA management can also apply these practices to new stores in the future.

Which of the following correctly describe the process undertaken by IKEA project team?

70. Which of the following is the core of value analysis process?

71. Low switching costs

72. A procurement manager has noticed that profitability within a market has increased steadily over the years. In addition, the market is relatively easy to enter, and demand within the market is predicted to remain high.

Which of the following is likely to happen in this particular market as a direct consequence of these factors?

73. Company A sells a product for $100. The total unit variable costs are $60. Fixed costs as in its ac-count are $20,000.

How many products does the company have to sell to achieve break-even point?

74. The bargaining strength of suppliers is likely to be high in which of the following situations? Select TWO that apply:

75. Which of the following can directly affect labour variance? Select TWO that apply: