L4M8 Exam Dumps - CIPS Level 4 Diploma in Procurement and Supply Questions and Answers

When an organization want to purchase an asset, it considers the depreciation and deterioration in the whole life of the asset and how it will be manage.

Depreciation is the reduction in value of a tangible and a fixed asset over time. The purpose of calculating the depreciation of the asset is to give the organization a fair and current view of what the asset is worth at a particular time. Depreciation is a way of converting the cost of an asset into an expense over a period of time. Depreciation is a permanent feature listed against an asset throughout its life time and it based on wear and tear, reduction in performance and reduction in value.

Deterioration is the process of something becoming lower in quality or performance. The longer the asset can last without deteriorating the better value the asset represents.

Trade war is an economic conflict where countries make it difficult for global trading to happen. Trade wars can make importing products to a country very expensive. A recent example is the US-China trade war; prices were raised on us-built vehicles exported to China. This affected consumer the most as there was an upshot of price.

14001 set out as international standards for an environmental management system.

Working cross-functionally is the involvement of all departments involved in an organization to contribute knowledge, skills and innovation towards adding value of achieving the organization’s strategic goal. All functions may include; procurement, maintenance, marketing, finance, human resources working together in procurement activity to come up with the best strategy or selecting the supplier that best suit the organization.

When working cross functionally, members of the organization gives support by believing in the end goal, assist during difficult time, help troubleshoot any issue, providing the required resources and sharing information.

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Tuckman’s team development model depicts from where a team is formed to the various stages they might experience before the end where the objective is achieved and these includes.

1) Forming: here they are just being put together

2) Storming: conflict and competition begin to arise

3) Norming: here agreement and consensus is reached as roles and responsibility is clear.

4) Perform: They start carrying out the roles and responsibility

5) Adjourning: Task is complete and they are discharged

Specification is a detailed description of what is required or needed. Due to certain reasons, needs sometimes increase in importance or lose their essence, therefore speci-fications need to adapt and develop to reflect the changing requirements of the con-sumer and also to comply with regulations and legislatures as this are amended.

Standard, regulations and legislation are continually evolving and new updated versions of existing guideline, as well as completely new initiatives one being released.

Contract terms are the right and duties agreed between parties with which are then documented in contract. Terms can be either implied or expression.

Implied terms are always present in a contract and are set by national laws; like the sales of goods act, whereas express terms are negotiated and created, for example; time is of the essence. When the procurement professional is setting key performance indicators, where which the supplier’s performance will be monitored and managed, the KPI is expected to be SMART. The SMART is an acronym that is used to set KPI and specification. It means:

Specific

Measurable

Achievable

Relevant

Time bound

Benchmarking is the process of comparing a function, process or performance with another which is best-in-class. Benchmarking is either internal or external. External benchmarking has three types; 1) Competition benchmarking, 2) Functional 3) Generic

Company Toyota with the Porsche a competition in the same industry and by suggesting that drives will find the cars performances comparable with that of Porsche Cayman sports car, suggest think it is an external competitive benchmark.

Modern slavery is against ethical and responsible sourcing. Modern slavery is one of the areas to understudy for procurement professionals to carry out ethical and responsible sourcing and this is recognized in five ways.

1. Human trafficking: The process of seeking, recruiting, transporting and exploiting individuals to work against their will. Often human trafficking includes violence, deception, and coercion.

2. Bonded labour (debt bondage): This is an individual’s promise to provide service through ex-ploitation as repayment, or part thereof, of a dept or other obligation.

3. Forced labour: Work that people are forced to do with the treat of punishment if it is not carried out.

4. Children labour: The exploitative and illegal employment of children.

5. Domestic slavery: Individuals exploited through working in private households for little or no money in return for living accommodation.

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Whole life asset management is the process of evaluating the total price and all associated costs of a product to make an informed decision as to which option will provide the organization with the best value for money option: To achieve this the organization works at the following eight elements.

1. Identify need/objectives/risk: The first stage of the whole life asset management is the same as the first stage in the CIPS procurement and supply cycle: identify the need prior to any asset being procured; the need could be competition in the marketplace, raised/reduced demands or financial concern. Once this need has been identified, the objectives of the new assets need to be set, and this may include being more energy efficient, reducing cost or saving money.

Risk also needs to be explored. When investing in a new asset there are factors to be considered that may or may not be advantageous to the investment. These include; downtime, lost sale/revenue or associated cost.

2. Procurement: Procurement professional would have to source and arrange supply of the asset.

3. Construction: ones the supply has being arranged, then the designing and the manufacturing of the asset begins.

4. Commissioning

5. Deterioration/maintenance

6. Condition performance monitoring

7. Decommissioning

8. Renewal/replacement