CIPS L4M1 Pre course Study Guide Exam Questions and Verified for Accuracy Answers 2024/2025
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Course
CIPS
Institution
CIPS
CIPS L4M1 Pre course Study Guide Exam Questions and Verified for Accuracy Answers 2024/2025
Direct costs - correct answer Costs that can be specifically identified with a particular project or activity.
Indirect costs - correct answer costs that are the result of a firm's general operations a...
CIPS L4M1 Pre course Study Guide Exam
Questions and Verified for Accuracy Answers
2024/2025
Direct costs - correct answer Costs that can be specifically
identified with a particular project or activity.
Indirect costs - correct answer costs that are the result of a
firm's general operations and are not directly tied to any specific
cost object
fixed costs - correct answer costs that do not vary with
production or sales level
Variable costs - correct answer costs that change as output
changes, eg packaging, logistics, exchange rate.
Stock - correct answer purchases made to replenish existing
stores such as components.
Non-stock item - correct answer Material for direct
consumption and not put away in inventory
Capital Expenses - correct answer High cost, long lifespan
items that are usually recorded in the balance sheet and whose
cost is depreciated over time, machinery, tools and computers
,Operational Expenses - correct answer Low value, more
routine purchases associated with the day to day operation of the
business.
The five rights of procurement - correct answer Quantity,
Quality, Time, Place, Price
Conformance specification - correct answer details exactly
what the product or service will consist of
Performance specification - correct answer outlines what the
product or service is to do or achieve to allow the supplier more
input.
FCA - correct answer Free Carrier (destination)
CPT - correct answer Carriage Paid To (destination)
CIP - correct answer Carriage and Insurance Paid to
(destination)
DAT - correct answer Delivered at Terminal
Total cost of ownership (TCO) - correct answer relates to the
costs associated with the entire life of the product and is often
used when procuring assets rather than regularly sourced items.
,Total Cost of Acquisition (TCA) - correct answer the quality of
the product, cost of carriage and insurance, lead time.
Net Price - correct answer Excludes taxes
Gross Price - correct answer Includes taxes
Supply Chain - correct answer a system of organisations,
people and activities involved in getting a product or service to
the consumer
Upstream - correct answer getting the raw material needed
for production
Downstream - correct answer processing the raw materials
into the finished product
Supply Chain Network - correct answer includes all other
parties involved in the process based around five areas, external
suppliers, manufacturers, distribution/wholesale centres,
logistics and consumer demand.
Materials Management - correct answer covers handling,
storage, inspection and issuing of raw materials, components and
finished goods.
, Step 2: Market/commodity and options - correct answer
researching the best means to satisfy the need, (make or buy
decision)
Stage 3: Develop a strategy - correct answer which type of
suppliers to approach (local, national or global), evaluation of the
competition (porters five forces), whether an ITT or an RFQ are
more appropriate.
Differences between ITT and RFQ - correct answer Invite
bids/invite quotations
Formal/Informal
Pre-evaluated/Not pre-evaluated
Complex products or services/standard or regular products or
services
high value/low value
Stage 4: Pre-procurement, market test and market engagement -
correct answer involves seeking information or feedback on
the proposed need from internal and external stakeholders.
Stage 5: Develop documentation - correct answer
documentation (ITT or RFQ) should include information suchs as,
description and specification, quantity, delivery details, SLA,
terms and conditions.
Stage 6: Supplier selection to participate in ITT/RFQ negotiation
- correct answer optional step relating to the decision about
which suppliers are to receive the ITT or RFQ. Buyers may
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