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CIPS Supplier Relationships Sample Questions (Q60-Q65):

NEW QUESTION # 60
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. Better payment terms
B. Reducing costs
C. Innovation developed as part of collaborative projects
D. Reduction of waste

Answer: C,D

Explanation:
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 # 61
Lee is a procurement manager at Real Pirates Ltd and he has a contract with Peg Leg Industries for the supply of fake, wooden legs for his team of Pirates. Real Pirates Ltd have been working with Peg Leg Industries for almost 10 years but recently Lee has discovered he will need to terminate the contract due to 'Contract Frustration'. What could be the reason for this?

A. The supplier has become insolvent
B. An unexpected incident has occurred beyond anyone's control
C. The supplier has leaked confidential information about Real Pirates Ltd to a competitor
D. The supplier has committed a material breach

Answer: B

Explanation:
The correct answer is 'An unexpected incident has occurred beyond anyone's control'. A good example of this would be the Covid-19 pandemic- neither the buyer nor supplier could have predicted this, and if this means that the contract can't be completed - then the contract can be terminated (in the UK at least). A way to avoid this would be to include a Force Majeur clause listing possible circumstances that could occur. When there's a Force Majeur clause, these eventualities are now classed as foreseen rather than unforeseen. See p.108

NEW QUESTION # 62
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. It is important to keep the CEO satisfied as he runs the business
C. The CEO is a key player- so should be given regular updates on progress
D. The CEO is a key player- so it is important he is involved early in the process

Answer: D

Explanation:
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 # 63
A local government procurement team is undertaking a full review of their current internal working processes.
The team of buyers currently have a partnership-style relationship with their routine suppliers. Is this the best relationship style to use?

A. No, as these are critical items to the buying organization
B. Yes, as these are low-value items
C. No, as there are many suppliers available
D. Yes, as they present a great deal of risk to the organization

Answer: C

Explanation:
Routine suppliers typically supply low-value, low-risk items. Maintaining partnerships in such cases is inefficient since alternative suppliers are readily available. Adopting a transactional or adversarial relationship would be more appropriate.

NEW QUESTION # 64
A garden centre has recently purchased some lollypop sticks to use as plant labels. The staff have written the name of the plant on the lollypop stick and put it next to the plant. This helps them identify which plant is which. However, after a couple of weeks, the lollypop sticks have become mouldy and the writing has faded.
Staff are now struggling to identity their plants. The Manager of the garden centre is considering returning the lollypop sticks and asking for a full refund as they were not fit for purpose. Can the Manager do this?

A. No- the manager cannot prove that the product is faulty
B. Yes- the lollypop sticks have gone mouldy- this is unacceptable
C. Yes- so long as the manager kept the receipt
D. No- as this was not the lollypop sticks intended purpose

Answer: D

Explanation:
The correct answer is 'no- as this was not the lollypop sticks intended purpose'. When deciding if something is fit for purpose, you must consider its intended and common purpose. In this case it would be for making lollypops. As the garden centre is using them for something other than their intended purpose, they can't complain if it doesn't work. Fit for purpose is discussed on p.65 p.s. there's a question like this in the real exam - it's just not lollypop sticks ; )

NEW QUESTION # 65
......

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CIPS Supplier Relationships Sample Questions (Q60-Q65):

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