Introducing Questions 2020

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INTRODUCING PROCUREMENT AND SUPPLY - 2020

CHAPTER 1 REVISION

1. Which of the terms below is not directly associated with procurement?


a. Purchasing
b. Supply chain
c. Materials management
d. Human resources

2. What type of purchase is an asset usually associated with?


a. A capital purchase
b. An operational purchase
c. A bargain purchase
d. D. An online purchase

3. A service organisation belongs to which sector of the economy?


a. Primary sector
b. Secondary sector
c. Tertiary sector
d. Quaternary sector

4. Value for money is about considering:


a. Just the price
b. All associated costs
c. Only quality
d. Some of the overheads

5. A supply chain involves which of the parties listed below?


a. Customers, suppliers and consumers
b. Customers but not suppliers
c. Suppliers but not consumers
d. Customers and suppliers not consumers

6. Procurement can be defined as:


a. High level planning usually related to long term goals
b. Adopts environmentally responsible supply chain
c. Act of obtaining something whether tangible or intangible such as products and services
d. Act of obtaining only tangible and not intangible services
7. Procurement does the following except?
a. Identifies the materials and services that need to be purchased and also selects the best
suppliers in the market
b. Helps to generate effective development of new products and protects the organisations
cost structure and maintains the correct quality/value balance
c. Monitors supply market trends, negotiates effectively in order to work with suppliers who
will seek mutual benefit through economically superior performance
d. Adopts environmentally responsible supply chain
e. Paying employees salaries and recruitment for procurement officers

8. The following are the main processes that take place during procurement except which one?
a. Manage the contract and review, identify the need
b. Develop the specification and set terms, and research and evaluate suppliers
c. Send out RFQ or ITT document and evaluate responses and award contract
d. Respond to complaints about the CEO

9. Under which stage or process of procurement does the following fall under? “A requisition
would be raised, either in paper form or electronically and given to the procurement team to
action once it was understood. This where the procurement function reacts to the need that
is generated by end users.”
a. Development stage
b. Specification stage
c. Research and evaluate
d. Identification of needs

10. What are some of the factors or information that goes into a specification during drafting?
a. Description or drawings if it is something technical
b. Colour and packaging
c. Delivery and quality
d. Name of the director of the company
e. (a), (b) and (c) above

11. Identify the two types of specification:


a. Performance (outcome-focused) and conformance specification
b. Output based and input based (services)
c. Technical specification and specific specification
d. Both (b) and (c)

12. Researching and evaluating of the suppliers can be carried out by various means. Mention
them
a. On the internet
b. Through existing relationships
c. At trade shows
d. Data base from sister companies
e. All of the above
13. Evaluating suppliers before sending out the enquiry means looking into a wide range factors;
all these factors apply except?
a. Capacity and environmentally policy
b. Financial stability and location
c. Reputation and capabilities
d. Political affiliation and the party you voted

14. The definition best describes what? “An invitation to suppliers to bid on specific products or
services of low value amount.”
a. Invitation to tender
b. Request for information
c. Expression of interest
d. Request for quotation

15. The processes concerned with acquiring goods and services, including payment of invoices
– it is part of the wider procurement process. The definition best fits what?
a. Supply chain
b. Materials management
c. Procurement
d. Purchasing

16. Purchasing is part of procurement and includes all the activities that are needed to do the
following:
a. Follow up an order, evaluate the process and the supplier
b. Control, execute an order and place an order
c. Agree the terms and the appropriate contract type and negotiate with suppliers
d. Select the best supplier possible and define the specifications of the products and/or
services
e. All of the above

17. Purchasing is concerned with what aspects that are needed to buy materials and services
and it is part of the procurement process?
a. Operational and tactical aspects
b. Clerical and operational aspects
c. Strategic and technical
d. Technical and operational aspects

18. Procurement has a ______________, which includes the shorter term activities that
contribute towards creating value in the long term. Fill in the missing word.
a. Operational focus
b. Day to day running
c. Long-term focus
d. Tactical focus
19. How best can you define buying in procurement context?
a. Imaginary act of obtaining goods and services
b. Practical way of evaluation of tenders
c. Analysis and assessment of suppliers
d. The physical act of placing the orders to make a purchase. The research might have been
already been carried out

20. The act of physically getting something from the supplier to the customer and it often involves
many organizations. All aspects of supplying a product or service are collectively known as
the supply chain. The above sentence best describes what?
a. Distribution
b. Contract management
c. Materials management
d. Supply chain

21. Encompasses all those organizations and activities associated with the flow and
transformation of goods from the raw materials stage through to the end user, as well as the
associated information flow. According to Handfield and Nicols (2002) this is________?
a. Distribution
b. Contract management
c. Materials management
d. Supply chain

22. This is part of procurement and involves making sure that organizations such as
manufacturers always have the materials or components that they need to make the goods.
It is also linked to the supply chain, as this process is integral to getting what is needed from
the raw form to the factory. What is this that is described above?
a. Logistics
b. Supply chain
c. Buying
d. Materials management

23. This process involves moving materials or products from one supply chain participants to
another. It is part of the procurement and the process requires management by both the
buying organization and supplying organisation. This is known as what?
a. Logistics
b. Supply chain
c. Distribution
d. Materials management

24. Who is responsible for carrying out the function of following the issue of a purchase order
or contract from receipt of order by supplier, through delivery, dealing with delivery problems?
a. Procurement specialist
b. Expeditor
c. Quality control
d. Stores person or clerk of works
25. Buyers are often responsible for managing the contracts that they have created. What are
some the activities that are included under contract management?
a. Monitoring supplier performance
b. Monitoring quality and prices
c. Holding meetings with suppliers to gain regular feedback and address issues before they
become a problem
d. All the above
e. Only (a) and (b) above

26. Based on the Kraljic matrix of different supplier types, name different ways in which suppliers
can be classified:
a. Leverage and strategic suppliers
b. Routine and bottleneck suppliers
c. Exploit, core, development and nuisance
d. Both (a) and (b) above

27. Critical suppliers and those who are responsible for core products can be found under which
quadrant of the Kraljic matrix?
a. Development
b. Routine
c. Bottleneck
d. Strategic suppliers

28. Suppliers who holds monopoly in the marketplace and sell low-value items best fit in which
quadrant of the Kraljic?
a. Development
b. Routine
c. Bottleneck suppliers
d. Strategic suppliers

29. Procurement can be broken down into different categories of goods and services. These
categories include all mentioned except which one?
a. Capital and revenue purchases
b. Products and services, direct and indirect
c. Outsourcing and insourcing
d. Engineering and construction

30. The procurement of something of high value to the business falls under which category of
procurement such machinery or construction of office block?
a. Services
b. Products
c. Outsourcing
d. Capital and revenue purchases
31. A procurement specialist has purchased laptops, office furniture and printers for their new
office. Under which category does this procurement fall under?
a. Outsourcing
b. Direct procurement
c. Services
d. Products

32. A procurement analyst has bought goods and services that are needed for their construction
office that is based in CBD for its daily running such as maintenance of printers and company
laptops or utility bills. This type of procurement fits well with which category of procurement?
a. Services
b. Products
c. Indirect procurement
d. Direct procurement

33. Your company has won a tender to construct the road between Gumare and Shakawe but
because you need to empower the local community, you gave them the duty and
responsibility of constructing small bridges and drainage systems along the road. What is this
known as that you as the owner of the company has done?
a. In-sourcing
b. Outsourcing
c. Youth empowerment
d. Sub-contracting

34. Botswana Accountancy College has employed some workers to wash the clothes and sheets
for its students who are staying on campus. But during the semester, BAC realised that they
are using so much money and decide to contract a youth owned company to do the laundry
on their behalf. What is this known as that BAC did?
a. In-sourcing
b. Outsourcing
c. Youth empowerment
d. Sub-contracting

35. Typical processes or services that organisations frequently outsource include the following:
a. Catering and cleaning
b. IT support and social media
c. Security services and laundry
d. All of the above
e. Only (a) and (c)

36. Identify which sector of the economy does not match with its associated and common goal?
a. Primary – raw materials
b. Secondary – manufacturing/production
c. Tertiary – services
d. Stock exchange – construction
37. In which sector of the economy does production and manufacturing process, where a service
is delivered in industries such as communications and market fit in well?
a. Primary
b. Secondary
c. Government
d. Tertiary sector

38. What is the first stage of the production and manufacturing process such farming and the
extraction of raw materials called?
a. Government
b. Tertiary sector
c. Secondary sector
d. Primary sector

39. What is the second stage of the production and manufacturing process where manufacturing
industries is found?
a. Government
b. Tertiary sector
c. Secondary sector
d. Primary sector

40. How best can you define an economy?


a. Where different industries do not meet and make decisions
b. The state of money flow, manufacturing, distribution, availability and consumption, or
scarcity, of goods and services, energy, labour or other resources at country level
c. Production and manufacturing process where goods are delivered
d. Both (a) and (c)

41. Budgets can be set for each department in an organisation and this can be tracked to ensure
overspend is avoided. Which of the following examples of budgets cannot be set within an
organisation?
a. Capital or revenue purchases and outsourced services
b. Marketing, production and overheads
c. Stationery, salaries and corporate hospitality
d. Taxes, bribery and fraudulent activities

42. Despite the advantages that procurement professionals bring to an organization, what are
some of the costs that are not managed procurement department?
a. Capital and revenue purchases
b. Outsourcing
c. Salaries and recruitment
d. All of the above
e. Only (a) and (b)
43. Mention some of the responsibilities of the procurement and supply professionals
a. Recruitment and salaries of the organization
b. Responding to the needs of customers and supplier evaluation and selection
c. Negotiation of effective terms and conditions; managing supplier relationships and
ensuring sustainability within the supply chain
d. Achieving good value for money and keeping within budget by monitoring it and taking
any remedial action
e. All of the above
f. Only (b), (c) and (d)

44. According to your understanding, where does the procurement process start?
a. Specification of items
b. Research and evaluation
c. Contract management
d. Needs identification

45. What is the main objective of the procurement department?


a. Expenditure of the organisation
b. Researching the suppliers
c. Ensure that needs are met and that their customers and stakeholders are satisfied
d. To teach the public about procurement

46. What are some of the challenges that might be faced by an organization if they select any
suppliers without any thorough supplier evaluation and selection?
a. Inferior quality products
b. Failed deliveries
c. Unethical behaviour
d. Non-sustainable strategies
e. All of the above

47. Why is important for procurement professional to negotiate with suppliers and discuss the
terms before the contract is signed?
a. Making a contract takes so much time and you do not want to be bothered
b. Delivery is not important
c. Contractual terms cannot be changed once the contract has been agreed
d. Prices are not urgent in contracts

48. What do you call the contractual terms that are agreed between two parties and written into
a contract?
a. Contract of expert
b. Implied terms
c. Express terms
d. Experiential terms
49. Contractual terms that exist even if they are not stated in the contract i.e. the law of the land
is known as what?
a. Contract of expert
b. Implied terms
c. Express terms
d. Experiential term

50. What type of relationship to do expect from a strategic partner?


a. Working closely with their supplier
b. Sharing ideas and be open and honest
c. Trust is a key feature
d. Secrecy and doing thing behind your supplier
e. (a), (b) and (c) above

51. How best can you define sustainability?


a. Taking full responsibilities of your action
b. Damaging the environment and not caring about pollution
c. Supporting future ecological balance by not harming the environment or depleting natural
resources
d. Not using recycled materials but indiscriminate cutting down of trees

52. Budgets are produced at the beginning of each financial year or period as a tool for decision
making. Identify the three basic aspects that make up a budget:
a. Business plan income, business plan expenditure and predicted profit
b. Business plan expenditure, income, balance sheet
c. Predicted profit and loss account, income and tax
d. Government levies, tax and procedure

53. What do we call all the aspects associated with sourcing and getting supply of a product and
service?
a. Total cost of ownership
b. Total cost of analysis
c. Total cost of acquisition
d. Tender price

54. Outline some of the factors to consider when achieving value for money:
a. Product/service price, currency/exchange rates and maintenance costs
b. Warranty, transport costs and environmental factors
c. Supplier reputation, order quantities/inventory, packaging and payment terms
d. Rebates, quality and service levels
e. All of the above

55. Identify the types of specifications you have learnt about:


a. Performance and conformance specification
b. Input and specific specification
c. Output and generic specification
d. Technical and construction specification
56. In what ways can payment terms add value to a contract?
a. If two suppliers are not identical you choose the one who is more cheaper
b. If two suppliers provide a quotation and their offers are identical except for the payment
terms, value for money could be gained by accepting the longer payment terms
c. If supplier are difficult to deal with and pay after six (6) months
d. Both (a) and (c)

57. What are rebates in procurement language?


a. An amount not paid back after paying taxes
b. An amount paid back on top of any discounts that have previously been agreed
c. When an organization makes profits and they give back to the community
d. An amount held back after paying government levies

58. Mention some of the subjects that could be included in a CSR policy?
a. Environment, social and ethics
b. Environmental, sustainability and process
c. Ethics, procedures and policies
d. Sustainability, pollution control and guidelines

59. The person with overall responsibility for procurement and supply within an organization is
known as what?
a. Buyer
b. Procurement specialist
c. Chief executive officer
d. Chief procurement officer
60. Which of the following relates to physical distribution in procurement and supply?
a. The use of transport, warehousing, materials handling and inventory management
b. The exchange and provision of documentation to and from users and suppliers
c. The locations of buyers and suppliers in a supply chain network
d. The ability of purchasing staff to undertake supplier visits and audits

61. Which of the following describes contract management?


a. The approval of all terms and conditions before contract signature
b. The process designed to ensure parties to a contract meet their obligation
c. The appointment of staff to respond to contract questions as part of a tender
d. The review of at least three supplier quotes to obtain the best contract prices

62. Which of the following can be defined as “the network of organisations involved in the creation
and delivery of products and services to the end users”?
a. The customer delivery matrix
b. The logistics systems
c. The supply chain
d. The distribution strategy

63. Which of the following can be defined as “the activities required in acquiring products, from
identifying need to post-delivery stage”?
a. The requisition system
b. The purchase cycle
c. The acquisition process
d. The supply network
64. Which of the following statements is correct?
a. By understanding equipment, the cost of spare parts and cost of holding parts is total cost of
ownership
b. Obtaining multiple supplier quotes prior to placing an order is known as value analysis
c. Cost transparency involves a buyer revealing a supplier’s prices to other suppliers
d. Outsourcing means the transfer of a contract to a new supplier at the end of the contract period

65. Which of the following does form part of the activities under the procurement and supply director?
a. Sourcing and supply research
b. Procurement administration and materials management
c. Taxation and auditing
d. Both (a) and (b)

66. Which of the listed below is not part of the internal stakeholders of a company
a. Employees
b. Managers
c. Owners
d. Society

67. The below listed are external stakeholders of a company except?


a. Owners
b. Suppliers and society
c. Government, creditors and shareholders
d. Customers

68. Sourcing from overseas suppliers can be beneficial for an organization because?
a. Offer high prices
b. Bring lower prices
c. Offer improved quality
d. Provide access to products not available in an organisation
e. (b), (c) and (d) above

69. Outline the disadvantages of having a global supply chain:


a. Restrictions with legal systems
b. Slows down own country production
c. Languages/times differences
d. Environmental issues – air freight
e. All of the above

70. Which of the following is a measure of the efficiency of operating a procurement function?
a. The impact on supplier profitability
b. The quality of supplier relationships
c. The achievement of objectives within budget
d. The speed of transactional processing

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