Procurement - ANSWER the process of obtaining something, either tangible or intangible.
the process starts by indentifying a need and is complete once the goods or services that meet that need are delivered
Purchasing - ANSWER the act of physically ordering and buying something
Supply - ANSW...
L4M1 CIPS QUESTIONS &
ANSWERS(LATEST UPDATE
2024)CORRECT 100%
Procurement - ANSWER the process of obtaining something, either tangible or intangible.
the process starts by indentifying a need and is complete once the goods or services that meet that need
are delivered
Purchasing - ANSWER the act of physically ordering and buying something
Supply - ANSWER the infrastructure that ensures products or services get from the supplier to the
customer
Types of Costs - ANSWER money, time, material, effort and opportunity
fixed costs - ANSWER do not change with the output of the organisation. paid regardless of performance
Variable - ANSWER change with the output of the business. relates to number of goods produced/sold,
or number of services supplied
Direct Costs - ANSWER costs associated directly with a job/contract
Indirect Costs - ANSWER not directly associated with a job/contract. overheads.
capital purchases - ANSWER one-off purchases. evaluate suppliers, prepare specification, review quality
and standards, buy Vs lease, consider total life cost
, Research and Development - ANSWER use existing relationships with suppliers to source prototypes or
new materials for trials to ensure value for money is achieved
Stock Procurement types (3) - ANSWER raw materials (primary), components (secondary) and finished
goods (retail)
Primary Sector of economy - ANSWER the part of the economy that draws raw materials from the
natural environment
Indirect procurement - ANSWER intangible goods and services that a business needs to continue
functioning
Features of CapEx (7) - ANSWER - paid as lump sum or bank loan
- high value assets
- charged to capital account
- last a long period of time
- depreciate over time
- Cross functional / require team approach / consult with stakeholders
- less frequent than OpEx
OpEx (Operational Expenditure) - ANSWER ongoing expense to a business, costs of ensuring effective day
to day business
Features of OpEx (5) - ANSWER - paid monthly or annually
- low to medium value
- accounted for in the current month or year (pre-set budget)
- charged to profit and loss account
- more frequent than CapEx
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