NS

Level 3 Advanced Certificate in Procurement and

Supply Operations

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AC2 - Procurement and

supply operations

EXAM EXEMPLAR QUESTIONS

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MULTIPLE CHOICE QUESTIONS AND ANSWERS

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The correct answer will be identified as the [KEY]

Q1 Question

Which of the following is an advantage of using a performance specification?

Answers
(a) The risk of meeting the required function is borne by the supplier [KEY]

(b) The purchaser is able to give detailed measurements and dimensions

(c) All the quotations from suppliers will be the same and therefore easy to evaluate

(d) There are a reduced number of suppliers able to supply thereby reducing tendering time.

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Learning outcome: 2.2

CIPS study guide reference: Chapter 6 - section 3.1, page 88

Q2 Question

A suppliers price make up is often shown as:

Price = Suppliers material cost + suppliers labour cost + suppliers profit + missing element

Which of the following is the missing element?

Answers

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(a) Suppliers overhead [KEY]

(b) Suppliers annual dividend to shareholders

(c) Suppliers payment to their suppliers

(d) Suppliers margin.

Learning outcome: 1.2

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CIPS study guide reference: Chapter 2 - section 3.3, page 24

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AC2 Exam Exemplar Questions Mar2013

Q3 Question

Which of the following is the correct definition of total lead time?

Answers
(a) Time between identification of need and issue of the purchase order

(b) Time between receipt of purchase order and despatch by the supplier

(c) Time between identification of need and their use by the buyer [KEY]

(d) Time between the goods leaving the supplier and receipt by the buyer.

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Learning outcome: 1.4

CIPS study guide reference: Chapter 4 - section 4.6, page 65

Q4 Question

Which of the following is a recognised definition of quality?

Answers

(a) Percentage of poor quality products produced

(b) Conformance to specification [KEY]

(c) Proven life of the equipment

(d) Use of standard materials in the product.

Learning outcome: 1.3

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CIPS study guide reference: Chapter 3 - section 1.2, page 36

AC2 Exam Exemplar Questions Mar2013

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Q5 Question

Which of the following describes implied terms?

Answers
(a) Clear agreement between the parties, and always written down in the contract

(b) Clauses that both parties have agreed to change from the standard terms and conditions

(c) The first and therefore the most important clauses in the buyers terms and conditions

(d) Not necessarily discussed by the parties but nonetheless form part of the
contract. [KEY]

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Learning outcome: 2.4

CIPS study guide reference: Chapter 8 - section 1.25, page 115

Q6 Question

Which of the following is a benefit for both the buyer and the sellers in using e-auctions ?
Answers

(a) Provides platform to develop specifications

(b) Increased transparency of the contract award process [KEY]

(c) The buyer does not pre-qualify suppliers so all suppliers able to bid

(d) No contract terms and conditions are required.

Learning outcome: 2.4

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CIPS study guide reference: Chapter 8 - section 3.17, page 121

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AC2 Exam Exemplar Questions Mar2013

Q7 Question

Which of the following activity is incorporated in P2P systems?

(a) Engineering drawings

(b) Purchase order [KEY]

(c) Negotiation plans

(d) Training records.

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Learning outcome: 3.1

CIPS study guide reference: Chapter 9 - section 5.5, page 132

Q8 Question

Inventory control systems generally fall into two categories: push systems and pull systems.
Which of the following is an example of a method used in a pull system?

(a) Just in time [KEY]

(b) Periodic review

(c) Fixed order quantity

(d) Economic order quantity.

Learning outcome: 1.4

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CIPS study guide reference: Chapter 4 - section. 3.16, page 59

AC2 Exam Exemplar Questions Mar2013

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Q9 Question

Which of the following describes when a supplier appraisal should take place?
Answers
(a) After the goods have been delivered but before the invoice is paid

(b) When liquidated damages are included in a contract

(c) At the end of the financial year

(d) Before any orders are placed. [KEY]

Learning outcome: 2.3

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CIPS study guide reference: Chapter 7 - section 2.1, page 101

Q10 Question

At which stage in the typical procurement cycle can procurement add most value?
Answers

(a) At the point the business is setting out and defining their needs [KEY]

(b) At the point the business is ready to source the market

(c) At the point the business is selecting the right supplier

(d) At the point the business is to start the final negotiation with the short listed vendor.

Learning outcome: 2.1

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CIPS study guide reference: Chapter 5 - section 1.10, page 73

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