CIPS AT A SHOT

SAMPLE QUESTIONS AND

ANSWER
DEFINING BUSINESS NEEEDS
LEVEL 4 DIPLOMA-OBJECTIVE RESPONSE FOR NEW SYLLABUS

PEKENE T.N.
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1. In which three ways can standardization be implemented?
(a Process , product and part
(b Value, cost, component
(c process, procurement and parts
(d Part, purchase and component

2. What are the tools for variety Reduction?

(a Key performance indicator and measurement
(b Quality and process
(c Standardization and specification
(d Quality and product

(3 What is a market?
(a A place where goods are bought and sold
(b A place where procurement is exchange for supply
(c A place people meet to exchange commodities
(d A place where goods and services are carried out

(4 A request from a buying organization, inviting suppliers to formally quote on a large value
project is called?
(a Requisition
(b Procurement process
(c Invitation to treat
(d Tendering process
(5 An industry is formed to service a market
(True or False)

(6 Industries made up of segments which are groups of organization that share common--------
(a Products and services, (c Shareholders,
(b characteristics, (d Stakeholders

(7 All of these are true about ‘MARKET’ except

(a Is a place buyers meet sellers to trade product and services
(b A place where goods are bought and sold
(c It facilitate trade in products and service between buyers and sellers .
(d It is an industry with common goods.

(8 Industries are usually classified into three main groups which includes all except.
(a Primary activities (Extracting, such as mining)
(b Intermediate activities (Rent leasing)
(c Screening activities (Manufacturing)
(d Tertiary Activities (Service)

(9 Who suggest that there are three generic strategies for competing in an industry?
(a Micheal Porter, (b Mendelow

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 (c Monte Carlo (d Ray vey.

(10 The three generic strategies for competing in an industry include all except.
(a Cost Leadership (b Forceful Entrant
(c Differentiation (d Narrow niche segment

(11 An organization that is not clear about which of these three strategies (Cost Leadership,
differentiation and focus) to use is described as---
(a Novice (b Stuck in the middle
(c Directionless (d Baseless

(12 A strategy used by business in order to go into a competitive advantage by having the lowest
cost of operation within their particular industry is called?
(a Low price (b Cost saving
(c Least cost (d Cost leadership.

(13 Differentiation is when-----

(a A product or a brand stand out as being unique to customers when compared with
its competitors.
(b A company tries to offer the products and service from competitors
(c A product is segmented based on the individual components so to be able analyze
the various market’
(d A market is broken down to categories

(14 Competition between companies, usually within the same industry is called?
(a Rivalry (b Competition
(c Challenges contest (d Challenge

(15 A group of services that provide specific but different values for their buyers is called?
(a Industry (b Buyers industry
(c Category (d Segment.

(16 Which one among all is not part of the variables considered in different segment of the
industry?
(a Product or service segment (b Buyer segment
(c Geographical segments (d Suppliers segment

(17 __ can be measured either by individual order size or by annual purchase value.
(a Financial strength (b Buyers strategy
(c Buyers size (d Buyers weight

(18 The ability of an individual or a company to influence one another is called?

A) Bargaining Power c) Influencing power
B) Bargaining Ability d) Ability to Influence

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(19 What is the term used in describing the manner in which customers purchases goods or
services?
(a Order pattern (b Sourcing
(c Procurement (d Buying

(20 When products are sold directly to the consumer rather than through retailers is said to be:
(a Direct selling (b Direct marketing
(c Direct procurement (d Direct buying

(21 The following questions except one will help find other factors that can create new segment.
(a Can the technologies or products designs deliver buyers needs in a better way?
(b Can the product or service be enhanced to provide better value?
(c Can the product be marketed
(d Are there other bundles of products or services and ancillary?

(22 Why are segments important in the analysis of the market?

(a To organize the market
(b To group the market
(d To enter the market
(d To shape and manage supply and procurement market

(23 How many sub-divisions can be found in the standard industry classification (SIC),
(a 20 or more (b about 100
(c less than 15 (d 2

(24 Goods which is as a result of changed conditions, and many replace each other in the market
is called?
(a Alternative (b Substitute
(C Replacement (d Competitors

(25 The global construction market is estimate to be worth-----,typically accounts for---- % of a

country’s GDP
(a is trillion and 40 (b 20 trillion and20
(c 7.5 trillion and 10 (d 3 trillion and 15

(26 The construction industry is expected to grow to ------ by 2021

(a $10 trillion (b $ 13 trillion
(c $ is trillion (d $15 trillion

(27 The construction industry account for between ------ and ------of the world carbon emission
(a 10% and 16% (b 5% and 10%
(c 25% and 40% (c 50% and 60%

(28 When analyzing a market, the structure of that market is determined by the threat of new
entrants and the availability of the substitute product and services (True or False)

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(29 Drivers of the fashion industry are expected to be as follows except?
(a containing uncertainty in the industry in terms of demand
(b The need to reduce the time from the design to product shipment
(c Materials used in making cloths
(d Consumers being in control by sharing information

(30 The financial services market consist of businesses that does the following except
(a Engaging in creation of financial assets
(b Liquidation of financial assets
(c Change of ownership of financial assets
(d Change of revenue.

(31 The three main segments in the financial industry include all except:
(a Financial services (excluding pension funding and assurance
(b Insurance, re-insurance and pension funding
(c Ancillary activities
(d Banking segments

(32 When analyzing markets, the relative bargaining power of buyers and supplier determines----
(a Who gets the biggest share of the available profit
(b Who is to find the price
(c Who is to set the market factors
(d Who is more qualified

(33 The standard industry classification (SIC) has ----- main sub division for Agriculture
(a 6 (b 22 (c 5 (d 13
(34 Which among the others is not one of the SIC for Agriculture
(a Agriculture production-crops
(b Agriculture production-live stock
(c Farming and planting
(d Fishing, hunting and trapping

(35 Which is one of the Purdue University centers for food and Agricultural Business identified
drivers of change of Agriculture sector?
(a The Government policies
(b The limited availability of land and water needed for crop production
(c Lack of machines and equipment
(d The need for enough foods to go around.

(36 The service market includes the following except?

(a Information and communication

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 (b Professional, scientific and technical activities
(c Construction work
(d Administrative and support services

(37 for new entrant, start-up cost are generally low in service industry (True, False)

(38 Competition in service industry is often intense as there are many supplier of a particular
service and switching is------
(a Low (b High (c expensive (d scarce

(39 ------ Are the examples of professionals who work primarily in the service market except
(a Lawyers
(b Architect
(c Construction contractors
(d Management consultants

(40 Supply positioning is one way to decide which market needs a level of understanding. The
technique produces----- matrix, based on the importance buyer spend category and the
complexity or commercial risk involve
(a Two-by-four (b two-by-two
(c Four-by-four (d Four-by-two

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S/N ANSWER PAGE
1 A 150
2 C
3 A 61
4 D 62
5 TRUE 62
6 B 62
7 D 63
8 C 63
9 A 63
10 B 63
11 B 63
12 D 63-65
13 A 63-65
14 A 63-65
15 D 63-65
16 D 63-65
17 C 63-65
18 A 63-65
19 A 63-65
20 B 67
21 C 68
22 D 68-74
23 A 74
24 B 74
25 C 76
26 D 76
27 C 77
28 TRUE 78
29 C 78
30 D 78
31 D 78
32 A 80
33 C 80
34 C 80
35 B 81
36 C 81
37 TRUE 81
38 A 82-83
39 C 82-83
40 B 82-83

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(41 Understanding the market and managing them is most important for items in the -----
quadrant
(a Critical (b Leverage (c Tactical (d Strategic

(42 An industry is a set of organization whose purpose is to satisfy the needs of a group of buyers
who are collectively known as the
(a Procurers (b Purchasers (c Sources of vendors (d market

(43 Professor Porter created frame work for analyzing and understanding of an industry has how
many competitive forces
(a 4 (b 5 (c 7 (d 2

(44 Porters Competitive forces include the following except

(a Bargaining power of supplies
(b Bargaining power of buyers
(c Threat of new entrant
(d Threat of losing capital of business diary tail

(45 Where is “rivalry” positioned in Michael Porter’s framework of competitive forces

(a The top (b The right (c the center (d The left

(46 Market analysis involves gaining an understanding of how attractive an industry is to the
businesses in the industry and a key way to do that is to use---
(a Porters four forces model
(b Porter’s five forces model
(c 80/20 rule to attract
(d Value engineering

(47 If a market allows all organization within it to make profits then it is likely to attract--------
(a New entrant (b Losses of Value (c Challenges (d Losses

(48 In porters forces frame work what rightly oppose the threat of substitute products of
services
(a Buyers power
(b suppliers power
(c Threats of new entrants
(d bargaining power

(49 Factors that determine the intensity or degree of rivaling between organization competing in
an industry include the following except
(a Low bargaining power (b High fixed cost

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 (c Slow industry growth (d High exit barriers

(50 Stages in product life cycle are as follows

(a Decline, growth, maturity and introduction
(b Introduction, decline, growth and maturity
(c Introduction, maturity, growth and decline
(d Introduction, growth, maturity and decline

(51 People who like to be the first to try a new idea and goods and services are called
(a Thinktanks (b Creators (c innovators (d Thinkers

(52 ‘Skinning a price’ is -----?

(a Proofing the price
(b Due diligence
(c Contesting the price of a supplier
(d Where organization charges the highest price

(53 A group of consumers who are the first after the innovators to buy or use a new product or
technology are called
(a laggards
(b Early adopters
(c Middle majority
(d Innovators
(55 A group of consumers who buy or use new product or technology after it is used successfully
by innovators are called
(a Laggards
(b Early adopters
(c Middle majority
(d Innovators
(56 The last group of consumers who buys or use a new product or technology is called
(a Laggerds (b Early adopters (c Middle majority (d Innovators

(57 Suppliers power is strong in the following condition except

(a There are no substitutes
(b There are substitutes
(c There are significant switching cost
(d The industry is not very important to the seller

(58) One important role of having substitute products and services is ……

(a for some product to live the market
(b for more product to enter the market
(c increased the price that can be charged
(d to limit the price that can be charged

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(59 The value that a product or service provides in meeting a buyer’s needs compared to its
purchased price is called?
(a Cost- to –profit ration
(b Cost-to-price ration
(c cost-to-value-ration
(d value-to-price-ration

(60 All of the costs involved for the buying organization in moving from one product or service to
another or from one supplier to another is called?
(a Cost benefit analysis
(b Opportunity cost
(c switching cost
(d Alternating cost
(61 Barriers to new entrant include the following except
(a Value recognition
(b Economics of scale
(c Product differentiation
(d Brand identity

(62 Companies will use a substitute product and service if the economics of doing so are
favorable. this depends on three things which includes all except
(a The relationships between the value the organization gets from the products and the
price it had to pay?
(b How costly the change will be
(c Buyers and suppliers knowledge
(d The inclination of the buyer to make change

(63 Cost are generally split into two; those that are used in the manufacturing of product or
delivery of service (direct cost) and those that are the cost of support activities (True or False)

(64 The following include primary activities except

(a Impound logistics (b Outbound logistic
(c Operator (d Products

(65 The line that goes approximately through the middle of the data points with an equal
numbers of data points above and below it in a break-even-chart is called?
(a line of best fit (b Breakeven point
(c Breakeven line (d Profit margin

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(66 If a company currently operating above its breakeven point then it may be more willing to
discuss
(a price reduction (b Price increase
(c Profit (d its strategy

(67 an organization Is expressly calling off an item from an existing contract, what can be used to
achieve that?
(a Straight re-buy (b Purchasing card (c invitation (d New purchase

(68 The six themes of the RAQSCI model are Regulatory Availability, Quality, Service
Requirements, cost and innovation; why is the order of the six themes important?
(a Because it’s a way to identify business needs.
(b Because it makes the business needs clear.
(c As it focus attention on potential trade-offs that may have to be made.
(d Because it talks about the profitability of the business needs

(69 The capability of a supplier is important to a buyer because it is possible for the buyer to
generate option through it that may substantially increase value for modified re-buy. The
following are part of the important supplier capabilities except
(a Specialist skills (b World class process
(c Negotiating power (d Specific capital equipment

(70 A closed problem might include the following except

(a The price of a key raw material suddenly increase and makes a product less
profitable.
(b An employee is under-performing and not achieving the expected result
(c There are emerging monopoly in a key market and competition needs to be
stimulated
(d There are usually high level of invoice errors

(71 In trying acquiring a printer, an unexplainable problem occurred in the procurement

processes. As a procurement professional what advice would you rather give your department
(a Use 5 Rights of procurement
(b Use Carter’s 5 forces
(c Use 5 “whys”
(d Use Kraljic Matrix

(72 -------- is a technique that can be used for defining closed problems
(a Kepner- Tregoe Approach (b Kraljic Matrix
(c NASA Approach (d Carter’s 5 forces

(73 One simple way to generate options is through a checklist for addressing the underlying
issues. Checklists with what acronym would you rather use?
(a RACI (b SCAMPER (c STEEPLE (d RAQSCI

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(74 A buying organization is having conflict in defining roles and responsibility. As a procurement
manager, how would you rather resolve that?
(a The use of STEEPLE (b The use of SCAMPER
(d The use of RACI (e The use of RAQSCI

(75 What is marginal profit?

(a Sales revenue- variable cost (b Variable cost- sales
revenue (c Sales revenue/variable cost
(d Variable cost/sales revenue

(76 What is the breakeven point? If fixed cost=10,000, sales revenue=100, variable cost =80
(a Fixed cost-Marginal profit (9,980)
(b Fixed cost/Marginal profit(500)
(c Marginal profit-fixed cost (-9,980)
(d Marginal profit/fixed cost (N 0.002)

(77 An organization has just finished with price analysis and still wants to adjust price for
inflation and deflation, what should they do next?
(a Do cost analysis (b Do cost engineering
(c Do Supply position (d Use price index

(78 The process of using indices by choosing a base year with the value of low and
calculating for either the percentage decrease or increase is called?
(a Target costing (b Normalization
(c Purchas price (d Price indexing

(79 The three main sources of prices comparator includes all except
(a Prices that have been paid in the past
(b Published prices
(c Purchase prices
(d Pricing formula
(80 Total cost of ownership (TCO) for IT Purchase should include
(1 Development cost (2 Implementation cost 3 Operating cost (4 End-
of- life cost
Which among the above listed costs can be further broken down to customization, integration and
training cost?
(a Development cost (b Implementation cost
(c Operating cost (d End- of –life cost

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S/N ANSWER PAGE
41. D 84-85
42. D 84-85
43. B 84-85
44. D 84-85
45. C 84-85
46. B 84-85
47. A 84-85
48. C 84-85
49. B 84-85
50. D 89
51. C 89
52. D 89
53. B 91
54.
55. C 91
56. A 91
57. B 92-93
58. D
59. D
60. C
61. A
62. C
63. TRUE
64. D
65. A
66. A
67. B 3
68. C 5
69. C 10
70. C 11
71. C 12
72. A 13
73. B 17
74. C
75. A 29
76. B
77. D 35
78. B 35
79. C 36
80. B 37

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(81 What model tells you which variable has the biggest impact on the result, enabling you to
focus on this item to try to get a more accurate value?

(a Planning Model (b Discussion support model

(c Optimization models (d Simulation models

(82 Which among the following is not part of the potential sources of issues management?
(a External Environment
(b Organizational performance
(c Internal environment
(d cross functional environment

(83 Which is not among the trends that can help you decide if an objective is strategic or not?
(a Cross-functional Trends (b External Trend
(c Internal Trends (d Performance Trends

(84 How would you go about developing hybrid strategy?

(a Compare two strategies and pick the best
(b List the criteria the strategies need to address, together with any data that
measures the success of the current way of doing things in meeting those criteria
(c Analyze each strategies and combine the two weak ones
(d Analyze each strategies and combine the best

(85 What is datum?

(a Is listing the criteria an hybrid strategies need to address together with any data that
measures the success of the current way of doing things.
(b Is an hybrid strategies.
(c It is the combination of 2 strategies
(d Is data analysis
(86 which of the following is the most cost effective form of Benchmarking?
(a Internal Bench marking
(b Competitive Benchmarking
(c Functional Benchmarking
(d Generic Benchmarking

(87 Which of the following type of Benchmarking has the benefit to foster innovation?
(a Internal Bench marking
(b Competitive Benchmarking
( c Functional Benchmarking
(d Generic Benchmarking

(88 A common way to see how managing a budget should work is to use a cycle of
activities called?

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 (a A purchase price planning
(b Plan-do-Review cycle
(c Cost engineering
(d Cost analysis

(89 One disadvantages of not applying zero-based budgets is that -------

(a Innovation is productive
(b Innovation becomes stifled
(c Is not justifiable
(d Is a realistic Budget

(90 Labor variance can be further analyzed into

(1 Wage rate variances (2 Quantity variances
(3 labor efficiency variances (4 Overhead variances
(5 volume variance (6 Expenditure variance

Choose all that apply

(a 1 and 2 only
(b 1 and 3 only
(c 5 only
(d 6 only

(91 The significant test asked the question-----

(a What is the buyer strategy?
(b What is the suppliers power and strategy?
(c What impact will this factor have on a competitive Advantage?
(d Is the market lucrative?

(92 Segmentation matrix is used to identify ------

(a Segments (b Buyers power

(c Suppliers power (d Rivalry.

(93 Significant test use---------- in the segmentation matrix

(a Only those factors that do not have the same degree of input
(b All factors identified
(c No externally identified factors
(d Only those factors that have major impact on the competitive advantage

(94 ------- is where a business charges the highest price that it thinks the market will bear initially
until product recognition brings in other buyers and the price drops.
(a Skimming a price (b Premium pricing
(c significant testing (d Initial pricing strategy

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(95 ------- is negotiating lower price by having understanding of the cost build up of the items the
organization brings, so to reduce the cost/price without reducing the quality.

(a Bargaining strategy (b Bargaining power

(c Cost engineering (d Evidence-Based Negotiation

(96 One process for collecting and analyzing the data and information needed in any field is
called with the acronym
(a KNOW-IT (b NOW-IT (c OWN-IT (d WON-IT

97) What specification that is often produced by a National body, such as the British standards
institution (BSC) in the UK
(a) Technical specification
(b) Performance specification
(c) Conformance specification
(d) Conformance and performance specification

98) …………..in the starting point for writing specification

(a) Needs identification
(b) Business requirement definition (BRD)
(c) Market research
(d) Cross functional team

99) ……… is a useful tool for establishing requirement

(a) Star-burst method
(b) RAQSCI
(c) SMART
(d) Needs identification

100) What kind of specification’s provide suppliers with the greatest scope for using their skills
and experience to produce products and deliver services that fully meets the end user’s
needs and for reducing or eliminating any unnecessary cost. It can be difficult to measure.
(a) Output specification
(b) Outcome specification
(c) Technical specification
(d) Conformance specification

101) …….. is a detailed description of the specific task or services a contractor must perform
under the terms of a contract. It can also define any materials or other items needed to
complete the project or service.
(a) Technical specification
(b) Conformance specification
(c) Statement of work
(d) Outcome specification

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102) However, information gathered from the internet should be checked and tested thoroughly
to ensure it is reliable and accurate. A useful acronym for this check is…
(a) STEEPLE S-Source of info…
(b) RAQSCI A-Audience
(c) SMART M-Methodology
(d) SAMOA A-Accuracy
103. Which of the following is not one of the five (5) main types of acceptance testing.
(a) Alpha and beta testing
(b) Contract acceptance testing and regulation acceptance testing.
(c) Routine/periodic testing
(d) Operational acceptance testing and black box testing.

104. Beta testing takes place on the customer’s premises and involves staffs using the product
in a real-life environment. For this reason, beta tests are sometimes called------
(a) operational test
(b) field testing
(c) routine test
(d) customer’s test
105. Black box testing is most commonly used in testing…………….
(a) product
(b) services
(c) works
(d) softwares

106. The network of relationships between people who work in a particular environment is
called…
(a) value channel
(b) social capital

(c) value chain

(d) communication channel

107. In it broadest definition…………… is the sum of the knowledge, experience and skills of the
workforce and the total value people put on their health and wellbeing.

(a) value of workforce

(b) value of human resource

(c) social capital

(d) wealth of knowledge

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108. which one of the following is not part of the three factors that determine the importance
of a risk?

(a) The impact of the risk

(b) The impact of the risk that is eliminated

(c) The likelihood of the risk being detected

(d) The livelihood of the risk being eliminated

109. The four ways to mitigate risk, include the following except

(a) Estimate

(b) Tolerate, treat

(c) transfer

(d) Terminate

110. What is the purpose of project initiation documentation?

(a) It is the detail plan on how procurement will be carried out on the project

(b) It sets out the scope of the project and is the teams mandate from senior
management

(c) It is the execution plan of the project from senior management that suppliers must
follow.

(d) It brings balance between procurement and senior management.

111. Standardization in product manufacturing can occur at three (3) of the following levels
except.

(a) The buyer’s/suppliers knowledge

(b) Individual parts and components

(c) The end products they are used in

(d) The process used in making them.

112. According to Dr. David M. Anderson this benefit of standardization include the following
except?

(a) Cost reduction

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 (b) Quality and flexibility

(c) Measurable

(d) Responsiveness

113. Things to consider in process standardization includes all except?

(a) Job shops, flexible manufacturing system

(a) Mixed lines, production cells

(c) Dedicated lines

(d) Operation lines

114. …………is a method for producing goods that is readily adaptable to change in the product
being manufactured or the quantity been produced.
(a) Job shops
(b) Flexible manufacturing system (FM)
(c) Mixed lines
(d) Production calls, Dedicated lines

115. …………… are production lines in which small quantities of different products are made with
quick changeover in set-up between productive runs. This further increase efficiency and
reduces the amount of inventory need to meet demand.
(a) Job shops
(b) Flexible manufacturing system (FM)
(c) Mixed lines
(d) Production calls, Dedicated lines

116. Production cells, FMS and mixed lines are often referred to as ----------production as
products are made in small quantities at a time compared to the one-off nature of job
shops
(a) Flexible
(b) Batch
(c) Maximum
(d) Optimum

117. One way to go about standardization in a service company is to use on concept called?
(a) Lead
(b) STEEPLE
(C) SMART
(d) LEAN

118. What is little’s law?

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 (a) The relationship between lead Time and the drivers of lead time
(b) The relationship that shows how little things causes difference in a system
(c) How time is considered in procurement
(d) The minimum time it takes to complete the procurement cycle.

119. Assume the amount of work in process is 580 and the average completion rate is 6 per day,
what is the lead time?
(a) 20days
(b) 97days
(c) 31days
(d) 40days

120. How may waste does lean identify?

(a) 7
(b) 9
(c) 10
(d) 11

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S/N ANSWER PAGE
81. D 39
82. D 41
83. A 42
84. B 44
85. A
86. A 50
87. D 51
88. B 52
89. B 58
90. B 59
91. C 68
92. A 68
93. D 68
94. A 90
95. D 104
96. C 106
97. A
98. B
99. A
100.
101. C 124
102. D) SAMOA 126
(S-Source of information. A-Audience.
M-Methodology. O-Objectivity. A-
Accuracy)
103. C 134
104. B
105. D 135
106. B 137
107. C
108. B 144
109. A 144-145
110. B 149
111. A 150
112. C
113. D 151
114. B
115. C
116. B
117. D
118. A
119. B
120. A 155

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121. Lean concept is used to reduce
(a) The lean time
(b) The procurement cycle
(c) The lead time
(d) Reduce average completion rate

122) By reducing the amount of work in process or by increasing the average completion rate,
what are you doing
(a) Calculating lead time
(b) Stabilizing lead time
(c) Increasing lead time
(d) Reducing lead time

123. If the value-added time is 28days and the total lead time is 7days. What is the process
efficiency?
(a) 38
(b) 4
(c) 35
(d) 222

134. What is the number 8 waste called?

It is the waste that is added to the 7 waste of lean to make a useful acronym called DWNTIMES
(a) Talent (not using talent)
(b) Defect
(c) Waiting
(d) Over Production

125. What is the graphical representation that shows how the time required to provide a
service reduces the more times it is delivered by some person or group?
(a) Economics of scale
(b) Scale of preference
(c) Diminishing
(d) Learning curve

126. The graph with straight line that shows the relationship between cumulative units
produced and the resulting number of hours need to produce each unit is called.
(a) Economics of scale
(b) Learning curve
(c) logarithmic scale
(d) Diminishing

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127. One way to reduce the number of parts in a product so that standardization can be
achieved is to use …………
(a) Zero-based approach
(b) Evaluation approach
(c) Learning curve approach
(d) Logarithmic approach

128. An easier way to remove everything in a cluttered store room and only put back in the
store room the things that are really required is called what?
This approach is a common way to identify how to simplify the parts structure in a range
of products.
(a) Zero-based approach
(b) Evaluation approach
(c) Learning curve approach
(d) Logarithmical

129. Value can be defined as the relationship between the benefits something brings and its….
(a) risk
(b) cost
(c) price
(d) Worth

130. A common way to identify cost is through a process called target costing. The following
except which one are the four steps to this?
(a) Decide on the selling price the market will accept
(b) Decide the minimum profit level that is acceptable
(c) Position your supplier in the tragic matrix to locate the strategic ones.
(d) Take the profit from the selling price to arrive at the target cost. Also start project
to identify ways to reduce the actual cost to the target level.

131. …….. is the way to link customer requirements to the function of a product and services
and then evaluate their relative importance and cost.
(a) Functional
(b) Quality function Deployment (QFD)
(c) Cost benefit
(d) Analysis Engineering

132. A tool for facilitating a team-based approach that converts customer expectations into a
number of potential solution and then evaluates them to choose the best one is called?
(a) Functional requirement
(b) Quality function deployment (QFD)
(c) Pugh Analysis
(d) Analysis Engineering

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133. An alternative to using a quality function deployment (QFD) analysis is ……..
(a) Functional requirement
(b) Quality function deployment (QFD)
(c) Pugh Analysis
(d) Analysis Engineering

134. ………………. Is an essential way to compare multiple and different options against a base-
line and answer the question: which solution are better and which are worse?
(a) Functional requirement
(b) Quality analysis
(c) Pugh Analysis
(d) Analysis Engineering

135. Who said “every act of creation is first of all an act of destruction
(a) Pablo Picasso
(b) Mendelo
(c) Ray Carter
(d) Thomas Killman

136. A useful Mnenonic for a way of evaluating option is

(a) SMART
(b) ORAPAPA
(c) STEEPLE
(d) PESTLE

137. What is the difference between value engineering and value analysis?
(a) Value engineering applies to an old product or service while value analysis applies
to a new product or services
(b) Value engineering is done without the supplier while value
analysis in done with the supplier
(c) Value Engineering applies to a new product or service while value analysis applies
to existing product or services
(d) Value engineering is more expensive than value analysis

138. All the following are part of the procurement cycle except
(a) business case
(b) analysis of quotation
(c) monitoring review and maintain performance
(d) award the contract.

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 139. The best time in procurement cycle to add value is?
(a) need identification
(b) specification
(c) develop contract term
(d) appraise suppliers

140. In need identification, which of the following document is applicable?

(a) requisition note
(b) specification
(c) request for quotation
(d) service level agreement

141. Which of the following does not need it amendment of document when repeating
the transactions?
(a) modified re-buy
(b) new buy
(c) critical buy
(d) straight re-buy

142. Which of the following is not a procurement category; thick all that apply
(a) commodities
(b) maintenance repair and operating
(c) production material
(d) services

143. Which two of the following requires a collaborative relationship in their

procurement?
(a) routine and strategic items
(b) bottleneck and leverage
(c) strategic and bottleneck items (d) all the above

144. The following are criteria for business case except

(a) all apply
(b) cost minimization
(c)increased sales (d) profitability

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 145. The cost that remains rigid even production level has changed and the one that is
not traceable to the final product are called …………….?

146. When the total fixed cost estimate has been allocated to each unit of output as a
fixed cost per unit, the approach is called
(a) variable cost approach
(b) absorption costing
(c) marginal absorption
(d) profit

147. Which of the following is not a component of lifecycle costing?

(a) finance cost
(b) residual
(c) training
(d) all of the above

148. The difference between an incremental budget and zero budget is that
(a) incremental budget is fixed but zero budget is flexible
(b) zero budget ignore previous information and start from the scratch but incremental
does not (c) options A and B are correct
(d) both recognize existing budget.

149. All the following can cause variations in budget except?

(a) discounts
(b) skills of negotiator
(c) substitutes
(d) none of the above

150. Which of the following is not a cash outflow in procurement budget?

(a) purchase
(b) salaries
(c) value added tax
(d) all apply

151. The following are the roles of specification except?

(a) KPI
(b) definition of item
(c) communicate the requirement
(d) evaluate purposes

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 152. The type of specification used for products when the supplier does not make inputs
is called?
(a) performance specification
(b) output based specification
(c) technical or design
(d) all of the above.

153. The three aspects of sustainable specification considered all of the following
except?
(a) Supply chain management
(b) Profit
(c) Planet
(d) People

154. One of the ways of carrying out contractual performance measurement is through
the use of
(a) KPI
(b) SMART
(c) Quantitative
(d) Qualitative

155. All are the types of benchmarking except?

(a) Generic
(b) Functional
(c) competitive
(d) Collaborative

156. When a benchmarking process only considers similar areas of business in the same
industry, it is called
(a) Internal
(b) Functional
(c) Competitive
(d) All of the above

157. KIP is used for products while SLA is for?

(a) Commodities
(b) Materials
(c) Intangibles
(d) Tangible product

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S/N ANSWER PAGE
121 C
122 D
123 B
124 A 156
125 D 158
126 C
127 A 159
128 A 159
129 B 160
130 C 161
131 B 164
132 C
133 C
134 C 165
135 A 167
136 B
137 C 171
138 A
139 A
140 A
141 D
142 A
143 C
144 A
145 A
146 B
147 D
148 B
149 D
150 D
151 A
152 D
153 A
154 A
155 D
156 A
157 C
158
159
160

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