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NEW QUESTION # 61
Explain with examples three differences between offers and invitation to treat.
Answer:
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.
NEW QUESTION # 62
What is the method of monitoring suppliers?
Answer:
Explanation:
When a contract has been awarded, either is to meet tangible needs or intangible needs, contractors or suppliers should be managed to ensure that they are meeting up with fulfilling their contractual agreement. To establish this, there are methods of managing contracts and suppliers.
Service level agreement (SLA) clauses: is placed in contract to ensures that supplier meets the expected and agreed level of service Key performance indicator (KPI): are used to manage contracts that fulfill tangible needs, the KPIs are set performance thresholds that are used to monitor supplier's performance.
Management by objectives (MBO): is the process of defining objective that are strategic to the organization relating them to the vision and mission and communicating them to the supplier through the contract and ensuring that this objective is met during contract performance.
Reviews: Regular supplier reviews are good practices, for it gives the buyer opportunity to give feedback on performance.
Continuous Improvement: Contracts and suppliers can be monitored through how they are chang-ing for better incrementally as they are fulfilling the schedule. There must be a set down system to timely improve on the process, people and continuously reduce waste.
Training: It is essential that training, are provided to come up on areas supplier is lacking.
NEW QUESTION # 63
Why is it important to have adequate procedures in place within an organization in relation to bribery?
Answer:
Explanation:
Bribery is the act of giving someone something of value to persuade them to do something that benefits you. Ethical and responsible sourcing requires conducting due diligence on bribery before going into contractual relationship because failure to this might lead to loss in reputation.
In other for an organization to defend itself against a case of suspected bribery, the United Kingdom bribery Act introduced in 2010 suggests that organizations should have adequate procedures' in place.
The following are six procedures an organization should have in place to be able to defend itself against bribery
1) Proportionate procedure
2) Top level commitment
3) risk assessment
4) due diligence
5) communication
6) monitoring and reviewing
NEW QUESTION # 64
Describe two negative factors associated with ordering excess inventory.
Answer:
Explanation:
In the decision to not run out of supplies, organizations can anticipate a peak were by it products will be in a high demand or a period of scarcity of raw materials and may want to increase the in-ventory. However, if this forecast is not accurate, it may lead the organization to holding excess inventory. This can expose the organization to some negative factors.
Acquisition Cost: The organization will incur an acquisition cost for the excess inventory which is inclusive of the cost of placing the order and the cost of purchasing the goods.
Holding Cost: The organization will spend more money holding the stock, trying to keep it in good condition by providing the required light, temperature, skilled handlers and so on.
Working Capital not adding value: This will off shoot the holding cost. Also valuable working capital in excess stock which in the time not adding value, can affect the liquidity of the business. This is also an opportunity cost and increase solvency.
NEW QUESTION # 65
Explain the difference between bonded and forced labor.
Answer:
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.
(Correct)
NEW QUESTION # 66
The supplier is responsible for delivering the goods to a named port or destination (such as an air-port or warehouse), as well as unloading them from the terminal from this point, risk passes to the buyer.
- A. DP - Delivery Duty Paid
- B. DAP - Delivered At Place
- C. DAT - Delivered At Terminal
- D. FAS - Free Alongside Ship
Answer: C
NEW QUESTION # 67
Research the ethical standard or accreditation of an industry with which you are familiar.
Answer:
Explanation:
If a supplier is accredited or is a member of an association that promotes good ethical conduct, a statement to this effect is likely to be featured on its company documentation. This could be in a form of letters after the organization name or the authorized use of logo.
Accreditation information should be verified by procurement professionals either asking organiza-tion for certification to prove membership or accreditation or checking on a professional register.
Below are associated bodies that form some industries.
1. ISO 14001 - for quality management
2. CIPS - for procurement and Supply
3. Red Tractor - NGO Registered in the UK, promoting human right
4. Amnesty International - human right
5. Carbon Trust - For Carbon neutral status.
*
Refer to the question column for response
NEW QUESTION # 68
What is business case?
Answer:
Explanation:
A business case is a document containing the justification and the commercial benefits achievable for a potential project or an identified need, for example, the purchase of a capital equipment, con-struction of an additional warehouse or procuring more innovative software to replace the current on in use.
The essence of the business case is to obtain support and get buy-in from senior management.
In order to gain authority to apply whole life asset management a business case will need to be created and presented. A developed business case will cover the following element.
1) Introduction: Outline of what the business case is all about
2) Objective: Explanation of what the business case desired outcome is.
3) Approach that will be undertaken
4) List of resources required
5) Benefits of achieving the objective
NEW QUESTION # 69
Describe a current or recent trade war of which you are aware and explain the implication it has for world trade.
Answer:
Explanation:
Trade war is an economic conflict where countries make it difficult for global trading to happen. Trade wars can make importing products to a country very expensive. A recent example is the US-China trade war; prices were raised on us-built vehicles exported to China. This affected consumer the most as there was an upshot of price.
NEW QUESTION # 70
What are the four quadrants in the Mendelow stakeholder matrix?
Answer:
Explanation:
Stakeholder are individuals or organizations that can be affected directly or indirectly by any project or decision. For successful procurement activities to take place, stakeholders must be identified, engaged and managed. Not all stakeholders require the same level of engagement and management. To appropriately manage identified stakeholders, the Mendelow management matrix has categorized stakeholders in four quadrants, according to how low or high their power and interest in the project could be. The four categories are:
1) Minimum effort (low power-Low interest)
2) Keep satisfied (high power-Low interest)
3) Keep informed (Low power - high interest)
4) Manage closely (High power- High interest)
NEW QUESTION # 71
Describe three benefits of working cross-functionally
Answer:
Explanation:
Working cross-functionally is the involvement of all departments involved in an organization to contribute knowledge, skills and innovation towards adding value of achieving the organization's strategic goal. All functions may include; procurement, maintenance, marketing, finance, human resources working together in procurement activity to come up with the best strategy or selecting the supplier that best suit the organization.
When working cross functionally, members of the organization gives support by believing in the end goal, assist during difficult time, help troubleshoot any issue, providing the required resources and sharing information.
NEW QUESTION # 72
Explain why you think quality should be investigated before working with potential supplier?
Answer:
Explanation:
Quality is fitness for purpose. It is important that quality is investigated by procurement professionals before forming relationship with potential supplies.
If quality is not investigated before selecting supplier the organization might stand the risk of facing the following disadvantages; Reputational Damages Cost of Rework Cost of Downtime Cost of Material Cost of being stocked with the wrong supplier Cost of being stocked in a project that may not come to an end at the forecasted time.
How buyer can choose a supplier with a good quality culture is first by defining the quality of the product or services to be carried out .Having knowledge of the product or service quality, supplies can rightly select and evaluated supplier with total quality management (TQM) in their system, ISO 9001 accreditation. TQM includes everyone in the organization with knowledge on the required quality; there would be little or no rejection/reworks. Thus is an added value to the organization.
NEW QUESTION # 73
What Incoterm applies here?
The goods are considered 'delivered' at the point of release from the supplier's premises or another name place. The supplier is not responsible for loading or transporting the goods and does not have to arrange export clearance - this must be arranged by the buyer. The risk is on the buyer from this point.
a) EXW - Ex Works
b) FCA - Free Career
c) CPT - Carriage Paid To
d) CIP - Carriage and Insurance Paid to
- A. FCA - Free Career
- B. CPT - Carriage Paid To
- C. EXW - Ex Works
- D. CIP - Carriage and Insurance Paid to
Answer: C
NEW QUESTION # 74
Write all of factors that contribute towards value for a product that you regularly purchase.
Answer:
Explanation:
Factors that contribute towards value for clothe gum in a fashion firm;
1) How much money does the gum cost?
2) How much is the benefits of using the clothe gum?
3) Does customers prefer clothe gum at the bottom of their garment?
4) Is the clothe gum difficult to use?
5) Does the clothe gum beautifies the fabric when placed properly?
6) Does it give a better finishing?
7) Is it ethical to use?
8) Is it from a sustainable source?
9) is it environmental friendly?
10) Does using clothe gum suggest innovation in fashion?
NEW QUESTION # 75
Describe three ways that hidden cost could present themselves within the logistics operation
Answer:
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.
NEW QUESTION # 76
What are the eight elements of whole life asset management?
Answer:
Explanation:
Whole life asset management is the process of evaluating the total price and all associated costs of a product to make an informed decision as to which option will provide the organization with the best value for money option: To achieve this the organization works at the following eight elements.
1. Identify need/objectives/risk: The first stage of the whole life asset management is the same as the first stage in the CIPS procurement and supply cycle: identify the need prior to any asset being procured; the need could be competition in the marketplace, raised/reduced demands or financial concern. Once this need has been identified, the objectives of the new assets need to be set, and this may include being more energy efficient, reducing cost or saving money.
Risk also needs to be explored. When investing in a new asset there are factors to be considered that may or may not be advantageous to the investment. These include; downtime, lost sale/revenue or associated cost.
2. Procurement: Procurement professional would have to source and arrange supply of the asset.
3. Construction: ones the supply has being arranged, then the designing and the manufacturing of the asset begins.
4. Commissioning
5. Deterioration/maintenance
6. Condition performance monitoring
7. Decommissioning
8. Renewal/replacement
NEW QUESTION # 77
What matrix helps to define how to manage stakeholders?
Answer:
Explanation:
Stakeholders are individuals or organizations who are directly affected by a decision for example, community, shareholders, employees, suppliers, distributors, customers etc. stakeholders can be internal (employers, staffs), connected (such as suppliers, shareholders, financers and customers) external (Government, pressure groups, and community).
The matrix that helps define how to manage stakeholders is mendelow's stakeholders manage-ment matrix. This matrix is based on the theory that the level of management stakeholders require depends on the level of their power and interest within the project or organization The matrix groups stakeholders in to four quadrants according to their power and interest and ad-vice how to manage them.
1) Low power - Low interest (minimum effort)
2) Low power - High interest (keep inform)
3) High power - Low interest (keep satisfied)
4) High power - high interest (manage closely)
NEW QUESTION # 78
What are advantages and disadvantages of the two types of specifications?
Answer:
Explanation:
Ones the need is understood, the procurement professional develops the specifications while working together with stakeholders and colleagues to ensure that the final design is fit for purposes that it meets the generated need.
Specification can be focus on performance or conformance.
Performance specification states what the product or service must do or how it should perform but leave the supplier the freedom to achieve this, however they wish.
Performance specification brings the following advantages; it allows supplier innovation, promote competition in the market place, shorter document, quick to prepare. The disadvantage of perfor-mance specification is that buyers may not know exactly what they will be getting.
Conformance specification gives clear instructions to the supplier about what is required and how it should be achieved. Examples of conformance specifications are chemical formulae, recipes and technical drawings. Conformance specification specifies which standards a requirement must meet or exceed. The advantage of using it is; buyers know exactly what they will get. It has the following disadvantages; the buyer bears the risk, it does not encourage supplier to innovate, take longer and complex documentation.
NEW QUESTION # 79
Which theory relates to the 3Ps
Answer:
Explanation:
Trying to measure how sustainable an organization was use to be challenging undertaking. However, during the 1990s, a concept brought up by American John Elkington change the way sustainability was measured. This framework is known as the triple bottom line (TBL) and measures sustainability in relation to organizational performance and investment against the 3Ps (1) Profits (2) People (3) Planet. For example; Profit: A packaging manufacturer reinventing its profits in a State- of-the-art recycling machinery for it wasted cardboard.
People: A large privately owned call centre donate its end of life computers to a local youth clubs and social groups to help gain internet cases.
NEW QUESTION # 80
What are the ILO and ETI?
Answer:
Explanation:
ILO stands for International Labour Organization- It is a United Nations agency whose mandate is to advance justice and promote decent work by setting international labor standard.
ETI is Ethical Trading Initiative: It is a leading alliance of companies, trade unions and NGOs that promote respect for workers right around the globe. Its vision is a world where all workers are free from exploitation and discrimination and enjoys condition of freedom, security and equity.
NEW QUESTION # 81
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