Free Procurement and Supply Environments Exam L3M1 Exam Practice Test

Which of the following are ways of classifying organisations? (select all that apply)

• Activity
• Size
• Primary objective
• Structure and ownership

An arrangement between a buyer and a supplier in which they agree to apportion benefits (such a reduced costs, or increased outputs) arising from particularly sound contract performance may be called:

• Painshare
• Stocks and shares
• Fair share
• Gainshare

Which of the following is least risky from the buyer’s viewpoint?

• Payment on delivery
• Payment of 50% at time of order; with balance to be paid 90 days after delivery
• Payment in full at time of order
• Payment 60 days after delivery

Thinking of Michael Porter’s Industry Structure Analysis (commonly referred to as Five Forces Analysis), which of the following are seen as threats (select all that apply):

• Substitutes
• Buyers
• New entrants
• Suppliers

Which one of the following is a commercial document issued by a seller stating what the cost would be of supplying certain goods or services, normally in response to an enquiry by the buyer?

• Request for quotation
• Supplier quotation
• Pre-qualification QUESTION NO : naire
• Commercial invoice

Think carefully.There is low consumer demand; production capacity is unused; prices are stable or are falling; busi- ness profits are low; unemployment is high; and business confidence is low. Is this:

• Recovery
• Recession
• Boom
• Depression

Under a contract with a price adjustment clause, which of the following would commonly be grounds for price adjustment (depending on the precise contract terms)?

• Quality problems brought about by supplier’s haste to complete the contract to aid their cashflow
• Substantially escalating materials costs
• Exchange rate fluctuations
• Desire by shareholders to have increased profits

Continuously gathering and analysing intelligence from sources such as professional, industry and trade journals, websites, conferences and exhibitions, published reports and online databases is called:

• Industrial espionage
• Purchasing research
• Data analysis
• Environmental scanning

Which of the following would often be subject to health and safety legislation?

• The need for appropriate firefighting equipment in a factory
• The manual lifting of heavy objects
• Floors, passages and stairs should be properly constructed, maintained and kept clear
• Smoking cigarettes inside offices, factories and other buildings

Which of the following could be described as an organisation?

• A local authority / local government
• A self-employed tutor of online education
• The University of Phoenix, Arizona
• A business such as Ethiopian Airlines