L3M2 Ethical Procurement and Supply Question and Answers

Explanation

This actually happened and the banking authorities in both the UK and the US fined the bank heavily.

Closing the bank down would be too Draconian a step; imprisoning the Chief Executive could hap-pen and others in the banking sector have been imprisoned for wrongdoing - a famous case of 'The NatWest Three' saw three managers of a UK bank extradited and imprisoned in the US.

Explanation

True lead time.

You may wish to argue regarding the QUESTION NO: of consumption, but my textbook tells me this is how it is. A true lead time could also be from recognition of the need through to delivery into the user's hands, I would suggest. For example, are we to say that a requirement for a fire extinguisher is un-fulfilled as it hangs on a hook next to the requisitioner for three years?

Explanation

Both Philip Crosby and Deming (alongside Juran) are legendary quality management thinkers and writers.

Both Phil Collins and Bing Crosby are famous singers; Bill Cosby is an American comedian; and J Edgar Hoover was the legendary Head of the FBI in the USA.

Explanation

Whilst alerting senior managers to wrongdoing within the organisation may be whistling in the wind, requiring one to wet one's whistle afterwards, the term for this increasingly common practice in organisations is 'whistleblowing'.

Explanation

Value engineering, like value analysis, but at the design stage, seeks to create at least as great an output, but with fewer components / inputs.

Explanation

All aspects of an acquisition may be impacted by the use of competition - normally favourably - but the one we are most likely to see immediate impact on is 'price'.

Explanation

It's the 'materials usage budget'.

This budget would help monitor whether the usage of materials was in line with forecast (budget), or whether there was a variance.

Explanation

Expediting - a task, which in an ideal world would not normally need to exist - is seeking to ensure delivery is made in line with contract and / or organisational needs.

It has nothing to do with permission to spend, auditing, or preparing for an expedition.

Explanation

Suppliers entertain to retain or generate business - there is a cost to this, which is recovered from customers - the antithesis of value for money. Late bids are sometimes related to inflated prices and instances of malpractice. A late bid is extremely unlikely to increase value for money in the long term and is a serious breach of organisational procedure.

Explanation

The Plan-Do-Check-Act cycle, attributed to Deming, stresses the need for action in improving quali-ty. Plan Do Check and Assess would have been close to the correct answer, but not quite close enough.

The other responses shown here are simply made up to fit the letters.

Explanation

A performance specification concentrates on the outputs of whatever it is you're buying.

Explanation

Once a supplier is contracted, monitoring performance is vendor rating.

Prior to a supplier being contracted, attempting to understand what their performance would be like is called 'supplier appraisal'.

Explanation

The correct answer is ISO 9000 - this was based originally on the British Standard BS 5750.

ISO 14,001 is an environmental management standard.

ISO 19,000 is a management systems standard.

Explanation

The variance is adverse - more was spent than budgeted - this is not favourable.

Explanation

The correct answers to the QUESTION NO: are: 'unimaginable' and 'permeable'. 'Permeable' makes no sense here; and it is possible to imagine both physical products and services.

The other four answers are distinguishing features of services, which result in services being more challenging to buy.

Explanation

Commitment to Quality.

You will need to know the 10 C's for various exams at Advanced Certificate, CIPS Diploma, and possibly beyond...

Explanation

Output per unit of input resource.

Efficiency is, in a sense, seeking to get as much out of a system, while putting in as little as possible.

Explanation

Anytime, up to bid receipt closing date, would be acceptable normal practice.

Late bids should never be accepted.

Explanation

Quality, quantity, price, place, time. You will need to memorise these.

Note that for CIPS purposes, none of: goods (product or service), manner (ethics) or supplier, is in-cluded in this list. For the sake of ease, perhaps best to just go along with CIPS' view.

Explanation

Buyers should work hard to ensure that their terms and conditions apply to the contract between buyer and seller.

They should seek to win 'the battle of the forms'.

Explanation

Revenue.

Added value is really measured through the customer's eyes. I have a choice of six coffee shops from which to buy my morning coffee. One has an attractive mix of cleanliness, tasty coffee, effi-cient and friendly service - more than the others. This appealing all-round mix 'adds value' as far as I am concerned and I give it daily repeat business, visiting the others only occasionally. That added value offering generates the repeat business, and helps make the coffee shop more profitable.

Explanation

As less has been spent than budgeted, the variance is favourable.

Explanation

The others may be stakeholders, but the answer is 'stakeholders' - those who have a legitimate inter-est in what is going on.