Question 1

Which of the following are potential advantages of adopting centralised procurement system? Select TWO that apply

Options :

A : Inefficient use of procurement skills

B : Economies of scale available

C : Less bureaucratic environment

D : More scope for personal responsibility

E : Less administrative work

Answer: A,B

Question 2

Achieving the 'five rights of procurement' is one of the key objectives of procurement managers. Which of the following are not considered one of the 5 rights? Select TWO.

Options :

A : time

B : ethics

C : environment

D : quantity

E : quality

Answer: B,C

Question 3

A buyer of bakery products sees wheat shortages due to poor harvests but demand remains high. How does this affect negotiation?

Options :

A : Buyer is in a strong position to reduce prices

B : Buyer will find it difficult to negotiate lower prices

C : Prices will not be affected by shortages as demand is high

D : Bakery produce will be lower priced as less wheat is available

Answer: B

Question 4

Single sourcing is only used by buyers where the total requirement is too small to justify splitting orders among more suppliers. Is this statement correct?

Options :

A : No, because single sourcing should only be used where there is just one supplier in the market

B : Yes, because many suppliers tend to increase stock variety and stock proliferation

C : No, because single sourcing may also be used when a requirement demands expensive set-up costs

D : Yes, because single sourcing works well within a volatile supply environment

Answer: C

Question 5

Which of the following are examples of credit rating agencies? Select TWO that apply:

Options :

A : Standard Chartered PLC

B : Barclays PLC

C : Moody-s Investors Service

D : The Goldman Sachs Group, Inc.

E : Standard & Poor-s Financial Services LLC

Answer: A,C

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