For which of the following supply examples is trust in the supplier least important?
Answer(s): B
Non-critical items involve low value and low risk, usually managed via transactional or arm's-length relationships where trust plays a minor role.Short cited term: "non-critical = low trust required." (L5M7 Study Guide, p. 221)
CIPS L5M7 Study Guide, p. 221.
Tom, a Procurement Manager, is initiating a Supplier Rationalisation project. What should he complete first to direct the project?
Answer(s): D
A Spend Analysis identifies where money is spent and with which suppliers--vital to determine consolidation opportunities before rationalising the base.Short cited term: "spend analysis precedes supplier rationalisation." (L5M7 Study Guide, p. 203)
CIPS L5M7 Study Guide, p. 203.
Which of the following are incentives for suppliers to perform well on a contract? Select TWO.
Answer(s): A,C
Revenue-based and Outcome-based pricing share financial benefits and performance gains, motivating suppliers to excel.Short cited term: "gainshare, revenue and outcome pricing as supplier incentives." (L5M7 Study Guide, p. 198)
CIPS L5M7 Study Guide, p. 198.
Which of the following is an example of Variable Pricing?
Answer(s): A
Variable Pricing changes the unit price based on quantity purchased; larger volumes trigger discounts.Short cited term: "price varies with quantity ordered." (L5M7 Study Guide, pp. 188191)
CIPS L5M7 Study Guide, pp. 188191.
Farmer Joe sells wheat and barley. He charges more when demand is high and less when demand falls. What pricing strategy does he follow?
Answer(s): C
Dynamic Pricing adjusts prices in real time to reflect market demand and supply conditions, commonly used in commodities.Short cited term: "dynamic pricing prices adjust to demand fluctuation." (L5M7 Study Guide, p.189)
CIPS L5M7 Study Guide, p. 189.
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