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CIPS L4M8 Exam Syllabus Topics:
| Section | Weight | Objectives |
|---|---|---|
| Application of Procurement Cycle | 25% | - Key stages of procurement cycle in practice
|
| Ethics, Responsibility & Compliance | 25% | - Ethical and responsible sourcing application
|
| Whole Life Asset & Cost Management | 25% | - Total cost of ownership concept
|
| Sourcing Process & Supplier Management | 25% | - Stages of strategic sourcing
|
CIPS Procurement and Supply in Practice Sample Questions:
Explain with examples three differences between offers and invitation to treat.
Reveal Solution Discussion 0Correct Answer:
See the answer in explanation.
Explanation:
An offer is created when one party communicates to another or to multiple parties that they wish to enter into a legal binding agreement in accordance with the terms stated, for example; a company in promotion advertising for buyers to buy one and get one free, an offer is a buying organization communicating to a supplier to supply X number of goods and be paid x amount upon delivery at company premises, an offer is when a football club proposes to pay X amount to a player if agrees to play for them for a month. An offer can be legally banded if accepted, whereas invitation to treat does not. An invitation to treat is just an invitation from one party to another to begin negotiations with the intention of creating an offer. If an offer is made without stating terms, this becomes an invitation to treat, for example, an invitation to treat is when a pharmacy displays a drug in its shelf. An invitation to treat can be linked to a request a buyer send to suppliers asking them for specific information.
Describe three ways that hidden cost could present themselves within the logistics operation
Reveal Solution Discussion 0Correct Answer:
See the answer in explanation.
Explanation:
Hidden costs are costs that do not always present themselves at the onset of the project.
Logistics can provide a hidden cost within global sourcing. The movement of goods can generate risk within a localized supply chain, but the risk is greater within global sourcing. Within global sourcing there are usually many more aspects to the logistics operation, hidden cost associated with the logistics process includes,;1) delays that can be experienced after placing orders, 2) unclear and poor/incorrect communication that might affect the successes of the transaction, also 3) goods could be confiscated by customs for unseen reasons.
* Refer to the question column for response
Which Incoterm applies here?
The supplier is responsible for delivering the goods to a point alongside a water vessel (such as a dock or quay) as determined by the buyer at a named port. Once delivered, all risk is transferred to the buyer until the goods are transported and delivered to their name destination.
- A. DAT - Delivered At Terminal
- B. FAS - Free Alongside Ship
- C. DAP - Delivered At Place
- D. DDP - Delivery Duty Paid
Correct Answer: B 🗳️
Which Incoterm applies here?
The supplier is responsible for delivering the goods directly onto the vessel that will transport them to their named destination and must also cover the cost of this. The supplier bears all risks until the goods are delivered to the buyer at their named place.
- A. AS - Free Alongside Ship
- B. DAP - Cost and Freight
- C. FOB - Free On Board
- D. CIF - Cost Insurance and Freight
Correct Answer: B 🗳️
Explain the difference between bonded and forced labor.
Reveal Solution Discussion 0Correct Answer:
See the answer in explanation.
Explanation:
Bonded labour and forced labour are among the five types of modern slavery which is against ethical and responsible sourcing.
Bonded labour also known as debt bondage, this is an individual's promise to provide services through exploitation as repayment, or part of them, of a debt or other obligation whereas forced labour is work that people are forced to do with the heat of punishment if it is not carried out.
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