Exa m-S tand ard Questions

ar1d Solutions

In this chapter we present a collection of exam-standard questions covering all of t he

assessment criteria (ACs) in the exam syllabus. You should attempt as many of these as you
can in exam condition s.

we also provide sample solutions and tutor comments to help you mark your own attempts
and to help you identify additiona l points that you may not have thought of.
Finally, we provide 'examine r feedback'. This is our attempt to see into the mind of an
examiner and estimate what his/her response might be to the sample solutions. Our aim is t o
get you thinking in the exam room about what you need to do to impress the exam iner- and
what NOT to do so as to avoid dropping marks. (DISCLAIMER: No actual examiners were used
in this process!)

Juest1ons

Question 1

AC1.1 Describe the categories of spen d th a t a n organisation may purchase

. . ace organisation which assembles parts for the landi~ g

(a) Rex works for a first-tier aer_o~p E ui ment Manufacturers) such as Airbus and Boeing .
gear on behalf of OEMs (Ongina I q bpt en the stock and non-stock procurements t hat
'b th difference e we
Identify and descn e e swer with examples. {10 marks)
Rex may need to buy. Illustrate your an nt purchasing and supply. (7 marks)
(b) . . between procureme ,
Explain the difference . enditure (CAPEX) and operatio nal
(c) Describe the difference between cap1tak 1 Jexp
expenditure (OPEX) pure h ase s · (8 mars

~i4ii@!f~ttl
. procuremen t and supply
Ar • Analyse the different sources of added value m
ment . (10 marks) .
(a) Outline th e FIVE rights of procu re . d tages o f using key performan ce 1nd 1cato rs
d TWO d1sa van
(b) Explai n THREE advantages an
(KP ls) . (15 m arks)
(¾{!?% - &J
ly chain managem ent
AC 1:~ Compare the concepts of procurem ent and supP

(a) Defi ne wha t is meant by the t erm 'supply chain'. (5 marks)

2
(b) Descri be FOUR ways in which an MRP system can help procurem ent. ( 0 marks)

Ques~on 4

AC 1.4 Differentiate the stakeholders that a procurement or supply chain fun ction may have

Eric has started a new role as a buyer for a retail organisat ion. The organisat ion has rece ntly
been in the local media, amid claims that the packaging the company uses comes from
sources which are not sustainable.
Identify FIVE examples of external or connected stakeholders who might have an interest in
the organisation and describe how they can be mapped to a stakehold er management too /
and managed. (25 marks)

Question 5

AC 2.1 Explain the key aspects of the procurement cycle

Carol works for an organisation in the primary sector whose main activity is mining precious
metals in a developin g nation. The majority of people employed where Carol works are
focused on the mining activity and there are very few senior managers in the business. Carol
needs to conduct a sourcing process to purchase a capital asset for the business. This is for a
piece of equipme nt she has never bought before.
Explain FIVE stages of the procurem ent cycle she should follow for this type of purchase, with
examples. (25 marks)

Question 6

AC 2.2 Analyse the key stages of a sourcing process

(a ) Explain the differences between a 'collabora tive' and 'distribut ive' approach to
relationships . (10 marks)
(b) Identify FIVE stages of the sourcing process and outline how each stage can add value.
(15 marks)

u•P&hMlitt
AC 2.3 Explain how electronic systems can be used at different stages of the sourcing process

(a) Describe THREE types of e-procure ment. (9 marks)

(b) An organisati~n i: considerin~ investme nt into electronic data interchange (EDI)
technolog y with its key suppliers . Explain the advantages of an EDI system. (16 marks)
 . .
/\C 2 4 Analyse the relationship between the achiw etnent of
outc ome s achieving compliance with processe s and

. . .
Explain FIVE reasons that ma g d_eem ed unsuitable for selection and
the con seq uen ces to the b ~ resu lt in_
a s_upp_l ier bein
cted. (25 marks)
uying organisation 1f the suppl ier was sele

Questio
-
n 9 -- -

tion
AC 3.1 ce of a procurement or supp ly chain func
Explain key aspe cts of corp orat e governan
view to
been meeting with new suppliers with a
(a) ~uki_ is a purc has ing manager and has is
of the key account managers for a supplier
issuing RFQs for a high-value contract. One d use in
with . Wha t are the four methods Suki coul
an old frien d Suki used to go to school
of interest? {16 marks)
the assessment of this pote ntia l conflict
in a code of ethics. (9 marks)
(b) Iden tify and explain THREE elements

Question 1.0

l policies and procedures on procurement

AC 3.2 Ana lyse the impa ct of organisationa
ks)
can inpu t to the sourcing process. {16 mar
(a) Des crib e how FOUR internal functions
. {9
tages of procurement policies and manuals
(b) Out line the advantages and disadvan
mar ks)

Question 11
or supply chain function
the diffe rent structures of a procurement
AC 3.3 Examine n
of structuring procurement and supply chai
Iden tify and explain FIVE diffe rent ways
func tion s. (25 marks)

Question 12
ly chain function
T tems that can be used by a procurement or supp
com mon I sys
AC 3.4 Explain the
ks)
. h t ms 'MRP'' 'ERP' and 'P2P'. (9 mar . .
(a) Explain t e er sed com mun icati ons .
t es and FOUR disadvantages of using IT-ba
d
(b) Out line FOUR a van ag
(16 mar ks)

. Q11._~~on 13 ~·
anom ic and industrial sectors . .
Classify differen t ec marks)
Ar. 4.1 · the public ' private and third sectors. (16
'b four differences in ary secondary and terti ary indu stries. (9
marks)
(a ) Descri e difference between prim ,
. t he
{b) Exp Ia1n
 ,• I\_ 1 1,

au.~~"n 14 ◄
AC 4.2 Analyse the impact of the public sector on procurement or
supply chain roles
(a) Describe THREE objectives of public sector organisations . (9
marks )
(b ) Explain FOUR ways in which regulation might impac t on pu blic
sector procurement. (l
6
marks)

Question 15

AC 4.3 Examine the impact of the private sector on procur ement

or supply chain roles
(a) Explain THREE objectives of a private sector organisation. {15 marks
)
(b) Explain the import ance of branding in private sector organisations.
{10 marks)

Question 16

AC 4.4 Examine the impact of the not-for-profit or third sector on procur

ement and supply chain roles
Peter works for a well-k nown charity who provide aid to disast er-hit nation
s. When an
incide nt occurs, he must work with local stakeholders to under stand the
need, buy or source
what is required and make sure that it is delivered in the most enviro
nment ally friendly but
efficie nt way possible. Wh~n he isn 1 t dealing with critical incide nts, he
has to work with the
marke ting depar tment on campaigns and make sure there is enoug h
new stock for sale in the
shops.
Alena works for a conso rtium which operates on behalf of some local
universities. She spends
a lot of time getting to know her stakeholders as her role covers six univer
sities and she must
meet the needs of each individual site. She is worrie d she isn 1 t always
getting the best prices
as, despite there being six universities to buy for, spend in some areas
is quite low.
(a) Explain TWO objectives of each of the organisations. (12 marks)
(b) Explain the role of the Charities Commission in the UK. {13 marks
)
(a) stock procu reme nt is the purch asing of raw mate rials,
comp onen ts or fin ishe d goods . Raw
materia ls are produ ced in the prima ry secto r, comp onen
ts are produ ced in the secon dary
secto r and fin ished goods are produ ced by a manu factu
ring or produ cti on organ isatio n , also
part of t he secon dary sector.
Th ese item s w ill be held in stock until req uired by the
organ isatio n and ultim ately t he end
consume r. Purcha si ng for stock must be mana ged caref
ully to ensur e an app ropr iat e balan ce
betwe en cost effect i ve ness and stock ava il abilit y w hen
requi red . Au to mate d syst ems ca n be
used to track stock (t ra ckin g of stock , how long items have
been held in stoc k for ) to all ow fo r
bette r purcha sing decisi ons an d to ensur e resources (finan
ce , time ) are not waste d .
Leaving spaces and underlinin g key points is a great idea so that
the examiner can easily pick
out the key sections of your answer.
This section gives lots of detai l and has a great use of examples
which rela te back to the
scenario in th e question.
This section would attra ct 5 out of 5 possible mark s.
Non -stock procu reme nt
Wh il st not stored in an organis ation , non -stock items are
usua lly re quire d to supp ort
organisational activities . Type s of non -stock pro curem ent
includ e tang ible (can be seen)
and intangi bl e (cann ot be seen) purch ase s. Ta ngible purch
ases may in clude a capita l item
for a produ ction organ isa tio n, for example a new ma chine
. This w ill be a one-o ff purchase.
Inta ngibl e purchases incl ude telep hone system s, cl ea ning
servi ces and intern et servi ces .
This section is good and gives a limited amount of detail without
the use of examples. The
candidate should add in examples such as a machine for the produ
ction line and details abou t
the sorts of services it is anticipated that Rex may buy. This sectio
n would attract a total of
3/5 marks.
Exam iner feedback : 8/10 marks for Part (a).
(b) Procurement is a strategic funct ion of the business. A strate
gic funct ion means there is
high- level planning including setting the direc tion of the
procu reme nt funct ion and long-
term objectives . It encompasses several elements includ
ing added value, qua lity, waste
management, pu rchasing, supply, logistics and cost.
Purchasing is the act of physically order ing and buying some
th ing. It is one of the ma in
components in the role of a buyer. Purchas ing will come
from the ident ificati on of a
requi reme nt within the organi sation or demand from a
cust ome r.
Once purchasing has taken place , supply is t he infrastru
cture which ensures that produ cts
or services get from the supplier to customers . Th is w il l
include exped iting the del iveries to
ensure goods are received when expected .
Clear underlining and use of spaces means the exam in er can pick
out where each facto r
is explained. This is a comment that could be made again and again
. We will refrain from
repeating it, but bear it in mind whenever you compose an answ
er to an exam question.
Each answer includes a good level of detai l fo r the marks on offer.
The structure makes it clear what parts of the question the candi
date is addressing .
Exam iner feedb ack: 7/7 marks for Part (b)
 . f ·ts da -to-da runn in .
h b siness and is or I
(c) OPEX is the o erational ex enditu re fort e u materials, insu rances, tran sport and
Examples of operational expenditure inclu d_e rent, raw and pai d m on thly o r annuall y. Th is
. . n ongoing expense
sala ries . Operations expenditure 1s a .
II IO w to medium va1ue. f
type of expenditure is usua Y t the purchase of assets or an
b ·ness and relates o . I E I .
CAPEX is capital expenditure fort he . us1 wand become more profitab e. xamp es might
organisation . These assets help a busi ness gr~ The value of a capital asset reduces
t 0 f new service
vans.
in clude a new machine or a ee fl
over time which is known as depreciation .
, I I illustrate th e differences.
Each answer includes an example to c ear y . I 15/ 7 marks. In or der to attract
. . d r attracting a tota o
Examiner feedback : This is a goo answe le the candidate here could discuss
Id b /'ttle more depth For examp·n each ,
7/7 marks, theres h ou ea 1 • k 1 case or where each might fall
the different relationship approaches that may be ta en 'd d
on the Kraljic Matrix based on the answers which have been prov, e .

Solutfgn 2
(a) Ri ght quantity
· n· I nning of production and the
The right quantity must be delivered to ensure the con nua ru
avoidance of understocking or overstocking warehouses . If not, customer orders can be left
unfulfilled .
Right quality
The right quality is important to meet the needs of the customer and any relevant standards
or specifications. For example, a conformance specification would detail exactly what the
product should consist of.
Right place
A failure to deliver goods to the correct location can add costs on re-sending another product
out, or it might result in a stockout and customers could take their business elsewhere.
Right time
It is important that the organisation receives the goods when they are required. The buyer
may have to source more costly replacements, and relationships between organisation and
customer or buyer and supplier could be impacted .
Right price
The right pri_ce is an important part of purchasing goods and services. Price is not just the
del'iver y cos t s, t ax et c. Ensure
. pnce
purchase . but currency exchange
. . .costs (if applicable) ,
quotations include the full pnce inclusive of delivery and oth er ch arges.
The candidate has clearly picked up on the command word 1outli , h. . level
of description can be provided. ne. r, is means a lighter

The section gives lots of detail and has a good use of

marks. '.J an example which would attract full

Examiner feedback : 10/10 marks for Part {a).

(b) A key performance indicator is a metric used t o monitor •
. perfor f
procurement, t his usually refers to the perf mance . In the context o
. ormance of suppli
(measure d in terms of quality) or quantitativ ( . ers. 1t can be qualitative
e measured in terms of numbers) .
Good introduction t No k fi .
what they t lk·. mar s or this section but I can already tell that this cond1dot E r r,c,· ;,:.
are a mg about!
1 Im proved su pp lier moti vation
If a supplier understand h
s ow t h ey are being
. measured,
th e positive feedoac:,_ or ·.J ~;-
performance can motiv t th .
a e em to improve for t he next ti.me. For example, 1f a '.,upo e. . ,.~ :
told about
. their fanta sti' c d e1·1very performa
nce the n they would be encouraged :c -:..r:.'i:- r '-''=
to deliver.
2 Im proved communication
o·1scus 5 .,on of KPls between
parties encourage s revi ew meetin gs to happen, a- o E- ~ ~ ✓ · =:.
both
communications are discussing meaningful top ics such as cost, delivery, qu ality p, s :>::: ,. e.;._-::
both parties as each knows what is expected and so is more li ke ly to get it .
3 Improved relationships
Because of improved communication and a motivated supp lier, relatio nshi ps should de .:e- c:;
positively as the relationship is being managed and nurtured rath er t han being !eh to !Tlcr cE'=
itself. For example, the supplier feels valued through measureme nt.
4 Common goal
Both parties will be working towards a common goal, as the KPls will be set by t he ouyer -
line with their organisation's objectives. As the supplier wil l be aiming to achi eve th ese r>o:-
parties will be aligned.
5 Reduction in quality
Suppliers may focus purely on the metrics in the KPI. For examp le, a ru sh to meet a d el ve~ ,
date or lead time stipulated in the KPI may impact the product qua lity.

6 Stifling
There can be a risk of too many KPls, resulting in suppliers fai ling to und ersta nd prioriti es.
A KPI of a rapid turnaround time alongside a KPI of zero defects may be confusing and
potentially unachievable for the supplier.

7 Impact on relationship
KPls should be discussed in a positive nature with suppliers. If they are blamed all t he t:1,e
w it hout jointly working to improve scores which do not meet the ta rget, t he supplier ma 1
beco me demotivated, impacting the relationship and service levels
The structure is great, it's clear what section is addressing what part of the question.
Each advantage/disad vantage will be awarded a maximum of 3 marks. A great f ormar ro use
is to make a point, explain it in more detail and provide an example. Th is really is a w1rfl1rtJ
formula to prove to the examiner you have full understanding.
Examiner f eedback: This is a great answer attracting a total of 15/ 15 m arks. However
there were only 15 m arks available, and the candidate has pro vided m ore advantages a nd
disadvantages than the question requires. T~e examiner wi~I mark the first three oavonr.1ges
d the first two disadvantages as the question asks and will then stop. Anythin g ot her tf:or
ahn_ . time used in the exam which would be better spent making sure that the rest of rhc
texam
paper is answered well. I hope t h1s. can d I"date h as time
.
JS JS
to answer the other quesnons
 . . and activi ti es assoc iated w ith the flow and
The supply cha in encompa sse s all orga nisatw ns thro ugh t o the end user as wel l a th e
(a) h ate ri als stage, ' s
.
transf ormat ion of goods from t e raw m
associ ate d inform atio n flows
. . le and acti vitie s involv ed in gettin g a prod
d f ·t k ff . uct
A supply chain is a system of orga ni sation s, peop 1 t0
m anage o r wo r e ectively.
or service from the source to the co nsume r, and has to be
- 0th defi·nitions can be used which explain wh at
Th ere are two definit ions here as gwda nce. er
a supply chain is in full.
isation this migh t
A better answer would include some examples, eg in a manufacturing organ
include a factory, a steel mill etc.
A light example
Examiner feedba ck: Both are in depth definitions worth 3/5 m arks each.
would increase this to 5/ 5.
a m anufa cturin g enviro nment. It
(b) An MRP system is a mater ials and produ ction syst em use d in
has three main obj ecti ves which ca n help pro cure ment.
d are availa ble. Wh en sales orders
Firstly, it pla ns to ensure t hat the µnrb ,rnd rnntl'r ialc, nPede
ate ri als. Actua l requir ement s
are received , deman d is gen erated in th e form of a bill of m
and what is sti ll neede d to be
are then ba sed on the compo nents and raw materi als in stock
ent can create minim um and
purcha sed in order to fulfil the req ui remen t. Here Procu rem
onent s which have a long lead
maxim um stock levels, which is helpfu l particu larly for comp
comp onent s are comin g from the
time and wh ere sec urity of supply is critical. For examp le, if
levels to act as a buffer.
Far East, Procu remen t may decide to increa se minim um stock
and sch edule delive ries based
The second way MRP helps is to est abli sh when t o pla ce orders
uled for when the items are
on a suppli er lead time and cycle time. Deliveries can be sched
ed (which can also run the
requir ed rather than having costs tied up in stock not yet requir
manu al work involv ed in having
risk of redun dant stock). An MRP system can also remov e the
costly raising multip le orders .
to calculate how many times to order. For example, it can be
can be group ed on one
If there are multip le parts comin g from the same suppli er, these
purchase order saving transa ctiona l costs.
would gain the
The first two paragraphs are detailed with a clear example to illustrate and
full 5/5 marks.
low as possib le. It only pushes
An MRP syst~m canals ~ help by kee pi ng invent ory value as
levels, lead times and sales
deman ? out into a requir emen t based on establ ished stock
orders in the system. This allows procu remen t to ensure th ere ·1s a goo d b a Iance b etween
. .
uts h' h Id h It
oversto~king and understocking, poten tially leadin g to stocko w IC wou a
produ ction .
. . . • I rt
An MRP system enables an effective mater ials manag- e ment process. This 1s a cntica pa
f th I h · hen
o e supp y c am to ensure produ cts are made and d e I"1vere d to the end custom er w
expected.

The final two sections are good and would tt

consider more depth to the answ t . a ract 315 marks each. The candidate could th
example, for e
third paragraph, how does the sy:;e ; ~~:;h e full allocation of marks . For for?
. how much buffer stock to aim
Examiner feedback : 16/20 marks for Part (b).
A stakeholde r can be deti d . . . . ..
an orga . ti ne as any 1nd1v1dua l or group of in d1v1 dua ls t hat have an interest in
ni sa o n. St akeholders may be intern al {emp loyees, managers, direct ors) or externa l
( pressure groups Gover
, nme nt or t h e loca l communit y)
Th is i~ a detailed introduction which sets the scene on what a stakeholder is. In a 25-mark
question, marks may be reserved fo r a clear defini tion.
To map _and manage stake holders, an appropriate model wh ich ca n be used is Mendelow's
power/interest matrix. This al lows stakeholders to be plotted on to a grid based on the power
they have and t heir influence on an organisation .

This paragraph identifies understanding of the model relative to the question being asked
which can then be discussed.
Customers

Customers will be interested in the retail organisation, as customers are becoming

increasingly aware ofthe challenges in protecting the environment. Their influence is
important, and they would be described as high power. The packaging issue could reduce
a customer's brand loyalty, or if there are competitors they could go elsewhere . Protecting
volume of sales is critical, therefore customers would need to be kept satisfied, potentially by
the organisation releasing a statement on what their intentions are to change their current
practices.
This answer identifies a stakeholder, identifies their interest and influence, where they sit
on the matrix and how the retail organisation can manage this effectively. Unfortunately,
the candidate doesn't quite have the model right although the context is great. 4/5 for this
section .
Sh areholders
As t his has appeared in the media, shareholders may well be aware of the situation already.
Th eir interest will now be high, and as they are a funding source their influence is high also.
Sh areholders in this scenario would be a key player, and as a result they would expect to
know what actions Procurement intend to take to find alternative supplies of packaging.
This section is good, but would each individual shareholder have high power? The candidate
needs to give a little more context to justify their answer. 4/5
Suppliers
The current supplier would have a strong interest as they could potentially lose the bu.siness.
. • fl en ce is as a current supply partner, which may not be as strong if the buyer intends
T h e1r in u d. f . f h . I . h
kaging The buyer will nee ,n ormation rom t em in re ation tot e
to re-source th e Pac ·
f the packaging and whether they intend to switch to sustainable sources. If they are
source o ch ange their sourcing strategy an d em b race more susta,na
· bl e practices,
· t hen
not prepare d to
. b sin ess as the buyer goes elsewhere. At the moment, they are a key player.
they w1 11 1ose u
Pressure groups
. t ressure groups will keep an eye on the media and news reports. Their power
Env1ronmen aI P ·d I bb · t th · · h · · t
may be low but coul d increase if they ~ec1 e tho .o Y a~a1~s e odrg{an,sa~on . T e1r ,dnteres
h' h w hen someth ing relati ve tot e1r cause 1s 1mpacte sustainability an
change~ to ,g t ) The organ isation sh ould aim to keep th em informed , in a similar way to
t he env,ronmen .
h a co mmu nicati on pro gramme.
custo mers t hroug
Employee ~
Em pl oyees will be aware of the iss ue, and som e m rly allio be c.o n-, um Pr; of th,.. p< ';d ,,r-.
because it is in the retail industry. As th e priority is sales protec.t10 n and pot£,, L , il / ,,.
sourcin g, min imal effo rt will be requ ired at th i~ stage . It rna•1 be an e:rna il c.omrnu r c:; r, ,;,
info rmation updated on an intranet or a compa ny-wide meEting to ~jtab li:ih th r: 1', '.• ,. ·. '
being ma naged and reso lve d and for th em not to spear to anyone outs id~ thC: orr,~ r, 1·,.; i: r_,
,

about thi s.
Very well explained but employees are internal stakeholders and so this doe s not oddrP:·. ~r <,
question . Perhaps the candidate could have discussed regulators or th e government ,n ~t':'J rJ -
Examiner feedback : 18/25 this candidate clearly knows the model and can de5cribe a rangr:
of different stakeholders. Care should be taken when reading the question as the last E/ arr Pr:
didn't address what the question was asking for and attracted O marks even though tht
candidate clearly knew lots about the subject matter.

Understand the need

The first stage would be understa ndin g an d identi fying of a need. The need can be identih"::c
by an internal customer, such as a requ est from a departm ent, or an external cu sto mer. Th:
need identified could be for a product or a se rvice.
A need is usually generate d verbally or by electron ic means . Any need sh oul d deta il a
descripti on of what is required, the quantity, delive ry ti me an d place and the qu ality. The
quality requirem ents should be detailed as a sp ecificatio n .
This stage may take a significant amount of time due to clarifica ti ons between the buyer c: nG
requesto r to ensure there is clear understa nding of the req ui rem ents.
This example gives five stages early in the procurement cycle, but for this type of question an;
five of the stages could be explained. This section gives a good amount of detail without the
use of examples. The candidate should add in an example in relation to a capital asset. This
section would attract a total of 4/5 marks.
M arket/com modity
Once the need has been understood, this stage involves the buyer research ing whether
making or buying the product will be the best solution. In order to make the right decision fc'
the business, the buyer will have to review the market versus their in-house capab il ities.
For example, purchasing a complex asset when the buying organisa tion does not have the ·r-
house capabilities would be the least risky option for the business, as they wou ld be sourcing
from suppliers who have prior experience for such a high value item .
This section gives lots of detail and has a great use of examples which relates back to the
scenario in the question of a capital asset. This section would attract 5 out of 5 possible
marks.
Develo p st rategy/p lan
When the deci sion to either make or buy ha s be en mad e, a plan o r st rategy shou ld be
developed, fo r exampl e:
• Loc al/Gl obal
• ITT/RF Q/ Negoti ation
 · · d ,.; / · · ·
This section could be gre at b ut the candidate has used bullet pomts mstea o, exp ammg m
.
t they are talking about but limited marks are
detm/ what th ey mean. I can see they know wha
awarded for this approach. 2/S marks
Pre- procurement and market engagem ent
wit h
and consider mar ket engagem ent. Enga ging
The nex t stage is to conduc t market tests to, in
liers, market pricing and trends in relati on
th~ mar ket means understanding the supp stage,
aking with suppliers wil l be criti cal at th is
t his case, the capital asset acquisition . Spe quir ed.
e and subject mat ter expe rts wou ld be re
due to the item being pote ntia lly high valu
whe re that
l ift truck, it will be useful to understand
If the capital asset is for example, a fork may be
item is in the mat urity or decline stage, it
part icul ar mod el is in its lifecycle. It the er
pective but may be prone to requ iring high
beneficial from a neg otia tion and cost pers
parts after purchase.
levels of mai nten anc e and replacement
5/5 great work, good structure, good use of
examples and well explained.
Develop doc ume ntat ion
ared . In
e mar ket eng age men t has been con ducted, doc ume ntat ion will need to be prep
Onc delivery
ion will include the detailed specification,
rela tion to the capital asset, documentat eme nt (SLA )
s and conditions and a service level agre
details, requ irem ent date, quantity, term ired afte r
icularly if additional services will be requ
if requ ired . The SLA will be required part
ing.
purchase inclu ding maintenance and train
ess is fa ir
same documentation to ensure the proc
All suppliers should be provided with the res the
iving the same doc ume ntat ion also ensu
to all and transparent. All suppliers rece
ipment.
responses are quo tatio ns for the same equ
ples and well explained.
5/5 great work, good structure, good use of exam
with most stages relating back to the example
Examiner feedback: This is an excellent answer
21/2 5 marks.
of a capital asset purchase, attracting a total of

Solution 6
t in the
with the aim of achieving win- win and trus
(a) A collaborative style is working together
tegic suppliers.
relationship. It is suited to long-term, stra
rma tion is shared and the need for open
In a collaborative relationship style, info -ter m
ies are aware of the requ irem ent for a long
com mun icat ion is understood. Both part onn is
wor k and common goals. For examp le, Foxc
relationship, and as a result focus on team
one of Apple's key assembly suppliers.
has been given. This demonstrates
A defin ition has been provided and an example ld
4/5 possible marks, a little more detail wou
understanding of theory in practical application.
r commitm ent to Foxconn or why are they
be needed for 5/5. How do Apple demonstrate thei
so importa nt to Apple?
focuses
ts to win at the exp ense of the othe r and
A dist ribu tive style is whe re one pa rty wan
short -t erm , qu ic k- win so urcing .
on t heir own goals . This can be suit ed to
and
ti o~ is typically with held from each part y,
In a dist rib utive relati onship style, info rma between
. Little effo rt or comm unication is given
rel atio nsh ips are usu ally fo r th e sho rt term y on
lose si tu ation , as each part y is focu sed onl
bot h part ies and t his ofte n resul ts in a win-
t heir own inte rest s.
 e items ar
. r of whi ch the re are ma ny and th e
e wit h supp ,ers . t)
A dis trib utiv e styl e may be suit abl
·
sta tion ery or cleaning equ ipm en
rou tine to source (for example mp les her e. This sec tion would
. . 0 f exa
t,on and rele van t use 'l
There is a goo d level of descnp
attr act a tota l of 5/5 marks . 'th IO ts of exa mp les inc lud ed.
The candid Ot e
'l
ellent ans wer Wt
Examiner feedback: This is an exc
wo uld be aw ard ed 9/1 0 marks.
(b) Su pplier selection uita ble supplie rs. Unsuita ble
· supplie • 1 nti·fies uns
• to ·issu·ing t h e RFQ/ITT ·de . . . . . . .
rs prio r icuhltie s. This
Evaluating unq ual ifie d or in fina.nci.al diff
f k
. Id be th ose w h o are une thi' cal , r •
I
supp 1ers cou bid din g or t e wo
ure s tha t sup plie rs who are com pet ent and sustainable are
ens

Issue RFQ/ITT ses from suitable

/ITT to a ran ge of sup plie rs increases the num ber of respon
Issuing the RFQ eiv ing the most
and in doi ng so increas es the com pet itio n wit h a vie w to rec
suppliers, dur ing the process for
t-ef fec tive res pon se. It also ens ures an aud it trai l is ma inta ine d
cos
g justification purposes.
traceability and decision-makin
Bid /ten der /qu ota tion evaluation
st cost-effective
eva lua tion and com par ison of supplier offers ensures the mo
Detailed ase pric e, del ive ry costs,
account all relevant costs (purch
solution is selected, taking into ctio nal team,
ran tee s etc). The eva lua tion can also be don e as a cross fun
packaging, gua ue by ens urin g a
g all asp ects incl udi ng qua lity are considered. This will add val
ensurin req uire me nts .
ds or services tha t me et all the
supplier is selected to supply goo
Contract award
. This saves tim e and
t awa rd allo ws cor e term s to be agreed between bot h parties
Contrac neg otia ting , requesting
ing each tim e (cost of sourcing,
resource compared to spot buy tion s and there is
and agr eein g term s). Bot h par ties are also aware of the ir obl iga
quotations
understanding.
ent
Contract and supplier managem
al procurement
sup plie r ma nag em ent dev elop s relationships, wh ich tran sac tion
Contract and ing org ani sat ion add value
. The supplier can help the buy
or spot buying would not achieve of the supplier
uct ion idea s and inn ova tion . It also increases the like liho od
th~ough cost red con trac t in place.
abo ve and bey ond , becaus e of having a well managed lon g-te rm
going
ers pic k out key sections.
which makes it easier for examin
Each stage is clearly underlined
goo d level of depth
bac k: This is an exc elle nt ans wer wit h all stages pro vid ing a
Examine~feed k
attr act ing a tota l of 15/ 15 m ar s.
and detail for three marks each,

'*ffl®M:ta
(a) E-catalogues
h
ilable online ran e ·
A buyer can purchase from ava ma de bes gpo~ ufsing downlo_ada_ble catalogues thro
ug
supplier webs ites . Catalogues can be .
e or an organisation
. . . wou ld be a
describes, which
This ~ection identifies and brie fly iHo I I' . wa rde d 2/3 marks. The
candid ate could discuss some add
•
1 unc tion a 1ity such as checking sto ck in rea
l time for
itio nal ma rk. no
an add
 l -or dcrrng_
. .
This is the placi ng of an orde r ing the purchase orde r via email.
. onlr ne or can be _b y send
Buye rs can liaise wit h su
pa rameters on their websites, which
re d uces mave rick bu in pplre rs to ~et up orderr~g
nd in val ue or outside
t he agre ed f _Y g a requires approval rf ord ers are above a certa
range o item s.
. .
This section gives a good am ount of detai.l with an exam ple. This section would attract a total
of m arks .
313
[-req ui~it ion ing
. .
Th is is
·
· elect ronic
th e place me nt of a requ ·1s1tro n ally. An int erna l user has a need and inputs
th e re qu irem ent o nto the system This is the n sent to procu rement (usually once autho rised)
ceab ility of people's requests and purchases,
and co nver ted into a purchase orde r. It all ows tra
d to cont rol depa rtme nta l sp ending.
and can he lp fu nctio ns to comp ly w ith bud gets an
ct level of detai l before th e requisition ca n
Syst em s norm all y requ ire users t o in put th e corre
be auth ori se d, wh ich can save tim e.
ples. Th is section would attra ct a to tal of
Th is s ectio n gives a good amo unt of detail with exam
be needed - which is fine as long as
3/ 3 marks. The cand ida te has writt en m ore than would
th ey have e nou gh tim e to comp lete the pape r!
Exam iner f eedb a ck : 8/ 9 marks fo r Part {a)..
ro nica lly. Thi s type of exch ange removes
(b) EDI is the exchange of data between co mpan ies el ect
s exchanged unde r EDI incl ude pu rchase
the need fo r pape r an d peopl e. Common docu ment
orders, deliv ery note s, draw ings and invoices.
it is used fo r.
This para grap h gives a go od defin ition of EDI and what
with a manual process. All documents
Firstl y, t ransacti on s w ou ld be much fa ster compared
t requirements from the buying
can be se nt elect ronica lly, w hich can help with urgen
o rgan isati on.
d depth shou ld be included for higher
This is O good identified bene fit, but an example or adde
d reduce the risk of poten tial stockouts.
mark s. Fo r exam ple, quicker processing of orders woul
r and people in between each stage:
Ther e w ould be cost savin gs in t he reduction of pape
orders, receipt of paper invoices. Often
for exam p le, the print ing and send ing of purchase
o~ders or the orde r never being re~eived.
docu men ts ca n beco me lost, resulting !n del~ys of
this may also present the oppo rtuni ty to
In shor tenin g order processing and delivery times
stock
redu ce inven tory, resultin g in less capital tied up in
ft en result in an im proved rel ationsh ip, as both parties can focus on their core
. . b . sent tot h err . system .in rea I ti' me. It aIso
It can o
. . . know i ng th at t he info rmat10n rs eing · d h . h . f orma ti' on at t he ng . ht
b h
acti vities t withi n th e relationship as ot parties nee t e ng tin
impr oves t ru S
ti me.
• data im prove
quali ty !.!.CC- ment throu gh greater •accuracy. Usually errors can occur
It can resu It In ~ ~-~~ ..l.-!-!. '-=' - = ' - ~~ •
errors.
. 'bl han dwrit ing ' lost documentation and re-keying
from 1lleg1 e d be good fo r the candidate to write a
s aren 't evenly balanced here. It woul d h . ,
The advantag e t some of the adva ntag es to f ully a dress t e comm and word 'Exp/a m .
little more a b ou
. ~ dback: 11/1 6 m arks fo r Part (b) .
Exo m mer ; ee
 ( 1·,,

111UtttM,i:f t }
Unsustainabl e (financially)
A supplier could be unsustainable in two ways. Firstly, the supplier co_uld be uns~stainable
financially. The consequences of this could be an unfulfilled contract if_ th e supplier does not
have the cashflow to purchase the raw materials needed, or the sup~l,er coul? b~ on stop for
non-payment of their own suppliers. This could then impact the buying organisation in two
ways: potentially paying more for materials, or potential loss of customer orders if there was
no additional source of supply.
This section gives a good amount of detail with a range of consequences for the buying
organisation. This would attract 5/5 marks.
Unsustainable (environmentally or ethically)
A supplier could be unsustainable in terms of their sourcing practices. For example, they
could be sourcing from uncertified sources, or from suppliers which have poor working
conditions for their employees. The buying organisation could be drawn into a legal case
for buying these goods. For example, Foxconn is a supplier of Apple and were heavily in the
media for their poor working conditions in China.
This section gives a good amount of detail with a range of consequences for the buying
organisation. This would attract 5/5 marks.
Environmental pollution
A supplier could be disposing of their waste in a harmful way, or not attempting to reduce
their waste or manage it in a way that protects the environment. The consequence of this is
damage to the buying organisation's reputation through association.
This section gives a good level of detail but additional depth or an example would be required.
This would achieve 3/5 marks.
Lack of quality processes
An organisation may not have ISO or other relevant standards, nor may they have any
quality processes to be followed by employees. This will result in an unrepeatable process
and the consequences may be poor quality products or services being supplied. This would
also increase the buying organisation's costs by the need to inspect 100% of the supplier's
output, and to pay for reworks. There is also a risk of the product passing through to the end
consumer, resulting in a poor reputation and the potential loss of orders
This section gives a good level of detail and example: 5/5.
Cultural differences
This can occur when sourcing internationally: different countries have different legal systems
and practices. This could make a contract void. In addition, language barriers and customs
coul~ result in misinterpretation and misunderstanding of what the buying organisation
requires.
This section gives a good level of detail but additional depth or an example would be required,
This would achieve 3/5 marks.
Examiner feedback : This is a distinction level answer, attracting a total of 21 ; 2s marks.
UMi®tB
(a) A confl ict of interest is a ·t .
loyalties. A f s, uation w~ere someon e wit hin an organ isation has opposing
. . use u I approach t o such issues is the 4Ds: di sclose 1 dista nce delei;ate and
d 1sassoc1 ate. ,

Disclose

Suki would
. . be doing the rig
· ht t h·mg b d' . the potentia
y 1sclos1ng . l conflict
. of .interest
. If th e
potential risk was not disclosed, so m eo ne could fi nd out much further down th e lin e. If thi s
w~s the case, and the contract had be en aw arded to that particu lar supplier, th en peop le
might perceive unethical behavio ur.

Whilst disclosing the potential confl ict w ill not remedy th e problem, it is a fi rst im porta nt
step .
Distance

Suki has direct input into th is new co ntract and has a high level of authority as purchasing
manager. There may be a way to maintain distan ce by allocating t he respon sibilit y t o an other
person who could work with that particular sup plie r.
As it is a new contact and a new supplier a fresh rela ti onship could be st arted with another
procurement team member. As it is a high-value cont ract, Suki w oul d sti ll nee d t o be ke pt
informed .
These first two sections give lots of detail and have a great use of examples which relate back
to the scenario in the question. The first two sections would attract 4 out of 4 possible marks
for each section.
Delegate
Suki might be unable to distance herself due to the high-value contract, but t here is the
option to delegate tasks to a colleague who has no conflicts of interest.
Again, good but needs more detail to attract 4 marks. What sort of tasks could Suki delegate ?
2 marks
Disassociate
If the conflict of interest is seen as certain, and the business views this as critical, the ris k
may be too high and Suki may have to disassociate herself entirely. This is to ensure comp let e
objectivity is maintained throughout the process.
However, in th is case, Suki hasn 1 t seen this person since school and many years ha ve passed .
In add ition , it is a new supplier and would still have to go through the same objective
evaluatio n as all other bidders, as well as providing the correct documentatio n t o ensure t hey
are a w ell qua lified and sustainable suppl ier.
Again good: this section is very well related to the context of the question. 4 marks
Exam iner fee dback: 14/16 m arks.
(b) A co de of eth ics ca n help procu rement operate in a~ acce ptab_le wa y and also develops t he
kn ow ledge and aw areness in t heir t eams and th e w ide r organi sation.

Values
defi ne an o rganisati on's behavi our, mora ls and beliefs. It exp lains that t he orga nisation
Va l
_ ues . Iu det h
d to w o rk t ransp are nt ly. Comm on aspects inc e prom otio. n o f h onesty,
respect,
t'1t en s
fa irn ess and ,ntegrity.
 Prin ciples
s m_ay incl ~de customer
tion is goin g to mee t its values . Thi
Principles explain how an organisa nd con tinu o us improvem ent
ain sta ndards such as ISO, a
satisfaction mon itor ing, mee ting cert
.
beh avio ur with in the organisation
Rep ortin g
s. o_rgan isat ions sh ould
indi vidu al can rep ort any con c~rn
This sets out the process of how an con fide nce abo ut
loyees sho uld be able to spe ak in
have an ope n-do or poli cy and emp num ber, and som e
ous opti on, or a con fide ntia l pho ne
concerns. Ofte n ther e is an ano nym ous ly.
re you can raise a con cern ano nym
organisations have onli ne portals whe
for the marks on offer.
Each answer includes a good level of detail note
attracting a total of 9/9 marks. You might
Examiner feedback: This is a perfect answer level of
what they have written has provided the
that the candidate hasn't written much but
er will be looking for in your assessment.
detail and kinds of examples that the examin

Solution 10
can guid e procurement
s and mar keti ng pers onn el are aware of wha t customers wan t, and
(a) Sale cure men t to plan
forecast sales volumes to allo w pro
on cus tom er requirements, and can experiencing a
ring and inve ntor y leve ls to sup port this. For example, if sales are
the ir orde to hold off ordering
product, proc urem ent may choose
dow ntur n in inte rest on a particular pers onn el set
to the risk of overstocking. Finance
the com pon ents for these parts, due men t in term s of who
limits. They can liaise with pro cure
budgets, pay men t terms and cred it process, particularly
ship here is needed in the sou rcin g
is being paid when. A close relation can assess a
to non -pay men t for goods. Finance
if a buying organisation is on stop due to procurement.
detail and provide a goo d exp lana tion
supplier's financial performance in are acceptable.
an reso urce s ens ure staf f are trea ted ethically and wor king con ditio ns
Hum wth may mean
on resource requ irem ents . Sales gro
Human resources assist proc urem ent tion is key to
proc urem ent function.The design func
add ition al employees required in the t are essential parts
proc urem ent on und erst and ing wha
creating specifications and can help ge for ideas on cost
proc urem ent may be able to challen
of the specification and wha t areas her innovative idea s.
also collaborate with suppliers to furt
reduction. Research and design can
rd
graphs so that the examiner can easily awa
This answer would benefit by division into para
the candidate the marks they deserve.
some
acting a total of 13/16 marks. Inclusion of
Examiner feedback: This is a great answer attr
marks for this candidate.
examples in all sections would increase the
should undertake their
ted from procedures on how buyers
(b) Procurement manuals can be crea cs, sustainability,
ly include info rma tion on quality, ethi
roles. Procurement policies common
transparency and supplier appraisal.
Advantages
vities
• Provides guidance on operational acti
the business
staf f leave, and new emp loye es join
• Allows continuity, particularly when
• Retains contro l
• Treats all su ppliers similarly
bers from sou rcing or buying
• Prevents non procurement team mem
• Promote s ethical behaviour
 Disadvant age s

• Can remove innovati on d

• M ay t . h ue to the need fo r compli ance wit h proced ures
res nett e sup plier bas e due to strict criter ia
• Buyers may lose their in dividua lity
• Makes all relatio nships very formal
The command word 'outi'me , does not reqwre .
. t d . . full explanations or detail. However an
,n ro uctton IS still a good idea fo r setting the scene and dem onstrating understanding.
Examiner
. feedback ·· Th is· is· a goo d out/m . a clear split between advan tages and
. e with
disadvantages, attracting a total of 9/9 marks.

Solution ll

Central ised

A centralised structure is where th e orga nisation's procurement activities are carrie d out by
one team or department.
It can promote economies of scale as the ordering is completed from one point, and ma kes
efficient use of resources as fewer people will be required to undertake t he ordering fo r th e
business .
However, it can result in a reduction in expertise, particularly at a local level, an d usual ly has
longer processes due to robust policies and procedures. Del iveries may al so take longer as
they may be delivered to a central hub first before being despatched to local sit es.
This is a good structure. There is no introduction but the candidate has identified and
explained the answer as required by the question. They have chosen to try and attract
maximum marks by considering the advantages and disadvantages of centralisation. 5/5
Devolved
A devolved structure is where activities are carried out at local levels, and individuals have
responsibility for their own procurement.
It can improve reactivity with faster, direct communication which can resolve problems more
qu ickly. It can also support local economies through the use of local suppliers. It can also
create specialist knowledge at particular sites.
Buying may not be as effective because smaller orders will be placed, rather than aggregating
demand . Individually there may be quick wins on negotiations, but it would not add value.
There is an increased risk of fraud due to the multiple procurement activities taking place
with no central control point.
Again, great answer 5/5.
Hybrid
A hybrid structu re is a mix of devolved and centralised . The strategic activities (procurement
research, polici es and procedure creation, high-value spend, organi sational negotiati on) can
be don e centrally and this allows focus.
The devolved functi on can undertake the operational activities, including emergency
procu rement, low-value items or it ems sourced locally as advocated in a CSR policy.
A significant requirement here is to ensure that th e right activities are pl aced at the right
level. For example, det erminin g polici es at t he local level wou ld resu lt in taki ng only the local
needs into accou nt.
 Again, great ans wer 5/ 5. This section shows real understanding of hyb~id structures leavin g
th e examiner in no doubt that this candidate kn ows what they are talking about!
Conso rtiu m
A consorti um is whe re a group of similar organisatio ns co lla bo rate for mutual benefit.
Advantages of consortium st ruct ures include eco nomi es of sca le due to the sheer vol ume
of orders, additional negotiation skills and access t o best pra ctice from participating
organisations.
However, joining a consortium may result in reduced control due to allowing others to
participate, it may also result in internal conflict due to potentially using suppli ers people
have different perceptions about. It may also increase supplier lead times due to th e sheer
volume of orders, which may result in additional conflict on who receives deliveries fi rst.
Another great section, a little bit less detail here. A good example would be to include the
public sector who benefit massively from consortium buying. 4/5
Outsourced
Outsourcing procurement can still fit into a hybrid structure: some of an organisation's
procurement activity is conducted within the business, and some activity occurs by
outsourcing.
For multinational companies, it may enable them to focus on their core activities. For smaller
companies, it may give them access to procurement skills needed to negotiate the best deals.
A disadvantage for outsourcing is that there is a lack of control, as well as potential
redundancies. There may be an impact on current supplier relationships, and the right
aspects need to be outsourced.
What exactly would be outsourced here? Some examples of the activities would be good here.
4/5 for this section.
Examiner feedback: 22/25 marks.

Solution 12

(a) MRP
Materials requirements planning is a production, planning and inventory control system
used to manage a manufacturing process. Once a requirement has been identified, a bill of
materials is created.
MRP takes into account what is already in stock and what isn't, combined with lead times to
provide details to the procurement team on what needs ordering.

ERP
Enterprise resource planning is an IT system that co-ordinates and integrates organisation·
w ide business processes. It holds all information relevant to the organisation and incl udes
f unction s such as Finance, Human Resources, Production, Quality and Project Management.
Examples of ERP packages include Oracle and SAP.

P2P
- rd f
P2P (purchase to pay) in cludes all the stages in t he pro cure ment process from the awa ,~er
con t ract onwards, through to receipt of the goods and t he eventual payment of the supP 55.
once the good s are received . It aims to speed up processes and reduce errors in the proce
 All sections pro vide enou h d .
. g epth and deta, I for the allocation of 3 out of 3 marks.
Examiner fee db ack: 9/ 9 marks
(b} Advantages

• Speed s up proc es se s d
ue t o rea I-tim
. e .infor mation
. bei ng
exc ha nged ac ross vari ous
platforms
• Rece~pt of m essages can be trac ked wh ich promotes transpa re ncy
• No di sto rte d co m mu nication
• Aid s in t ra ce ability and audit tra il
This section is a little brief and would attract 6/8 m arks in total.
Disad vantage s

• Relation ships may suffer, for example by the use of ema ils rath er than pick ing up the
telephone
• Could result in job losses, impacting the local economy in wh ich the organ isa ti on
operates
• IT support for systems is still required, and can result in serious delays if they fa il
• Emails can be open to interpretation , particularly in relation to 'tone of voice'
The disadvantag es all have a brief explanation, attracting 8 out of the possible 8 marks
Examiner feedback : 14/16 marks.

Solution 13
(a ) Private sector organ isations range in size from one-person businesses to mu ltinationa ls.
Examples include supermarkets, online retailers (Amazon) or service providers (accounta nt,
plumber) .
Public sector organisations are government organisations to service a public need. These
include hosp itals, schools and the armed forces .
Third sector organisations consist of voluntary or not-for-profit organisations . Examp les
include charities, voluntary and professional associations (CIPS).

Own ershi p
Pu blic sector organ isations are owned by the Government, whereas private sector
orga nisati ons are ow ned by private investors and th ird sector organisations are own ed by
trustees.
Why would it matter to procurement who owned them? Discussion ab out why this makes a
difference would be great here.
Fund ing
Fundi ng for privat e sect or co mes from investme nts, loans, and sale of goods and services.
Funding fo r publ ic sector organisati ons co mes from taxes and levies, allocated ann uall y from
the Governme nt bu dget . Fun ding for the third sector comes from subscriptions, donations,
legaci es etc.
What ;5 the impact of the fun din g sources ? Does it affect th e requiremen r fo r tra nsparency?
could any exam ples be added here?
 nw µ n v..i tt: :-ect or obj ec ti vl' b t o p ro vi de good s ci nd servi ces t o m a ke a p rofi t and grow. The
public st>c t o r ,i irn ,; tL) µ r ovr ci e t he ge neral p ub lic w it h se rvi ces requi re d . The t hird se cto r airn s
tL1 p,omot e sor1dl ,rnci enviro nm enta l an d cult ural obj ectives (for examp le supp o rting the
home les~ ).
Em p lo yee bt> IH:~fi ts
Em p loye e berwfi t s in th e publi c secto r are typ ically j o b security, benefits su ch as childca re
\ ourh tl rs ,in d pen sion. The pri vci t e se cto r includ es a co mpetitive sa lary, bonuses and pe nsi on.
In t he t hird secto r, t he m ain em ployee ben efit is h elp ing th e cause the organisation was set
up fo r.
E, omincrfecdbad: 12/ 16 ma rks.
(b) Prim ary sect o r

The pri rnnr y se ct o r is th e first st age of prod uction and m anufactu r ing and involves the
acq uisition and ext rac tion of raw m at er ials. Ind ust r ies in clude oil , coal mining, fishing and
metal e>..t rcirti o n .

S~condary sect o r

The seco nd ary se ct o r convert s ra w m at erials into a finished product. Operations include
as sembly, con st ructio n an d ma nufacturing. Examples include the manufacture of vehicles or
t he co nst r uction of ho uses o r ro ads.

Tertia ry secto r
The tertiary se ct o r is th e se ctor that provides services, which support the primary and
secon dary sect o rs. Th is ca n include retail, education and financial services.

Ea ch answer includes a good level of detail for the marks on offer with clear examples for
each sector.
Exam iner fe edback : 9/9 m arks.

(t1tt<lJ,t,f
(a)
'* g
To deliver essenti al serv ices. not provided by the private sector, to an acceptable level or
qu alit y. Examp les in clude education, healthcare and housing.

To encou rage n ation al an d co m m un ity develo pment. by developing education and skilling,
an d by stimulating eco no m ic activ ity.

To pursue so cio-eco n omi c goa ls, such as support for small and minority-owned businesses
and t he pursuit of sust ai nable development

Sections 2 and 3 could include an example for th e full marks on offer - such as gra nts f or
educational purposes and SM Es .
Exam iner f eedback: 7/9 marks.
lb) Ens ure s t hat p roc ureme nt exerci ses are comp li ant wit h public pol icies an d procedu res .
Ho weve r, su ch pol icies and pro ce dures m ay exclu d e cert ain su pp li e rs. There is also a high
req uirement for accou ntabi lity, so aud it t rail s mu st be m aintained
To en sure that bo ught in ma t er ials. go ods and se rv ices com ply w ith defi ned pub li c st ~
,rnd spe cification s. Howe ver, t hi s m a y stin e innovatio n and creati v ity as user re qu irements
urn change ove r t im e.
 Proc urement in t .he p u bl'ic secto r m ust be based on va lue for mone y, beca use it is taxpa yers'
. .
mon ey th at 1s being used • Howev er, .1t 1 . .
s impo rt ant t o be aw are that 1f some thing cost s more
·t
1 t otal cost.
may 1ast a lot longer. It is impo rtant to look at t he
ti ves can be ti me con~ uming and proc~ss
C~m plian ce w ith publ ic secto r procu reme nt direc
an urgen t procureme nt requi re ment if it
dn ven . Th erefo re, it can be diffic ult to un dert ake
put off due t o th e comp lex require ment s
does~'t m eet sel ect criter ia . Su ppl iers may also be
and time take n.
ples should be included where
Each answ er includes a good level of detail. However, exam
as the need fo r more housing.
possible. For example, user requirements can change such
a total of 8/16 marks.
Examiner feedback : This is a pass level attempt attracHng

(a) Make a profi t

r organ isatio n s. Th e profit abilit y is linked to
Maki ng a profi t is the main fo cus of private secto
e of incom e. The mone y that leaves the
the organ isatio n's sales, which is th eir prin cipa l sourc
of procu rement's remit is to keep cost s
business is know n as costs, and an impo rta nt part
unde r contr ol .
isation to an swer t o its shareholders
Maki ng a profi t is critic al for the private sector organ
ess, so it can grow sustainably. Profitable
and prote ct the reput ation and healt h of the busin
the business or pay dividends to the
organ isatio ns can then invest the money back into
business owne rs.
Incre as e market share
of the market that an organisation has in
Incre asing mark et share is increasing the percentage
(orders) or the mone tary value of sales.
an indus try. This can be throu gh the volume of sales
of mobile devices compared with
For example, in 2017 Apple had over 49% market share
Samsung's share of just unde r 30%
et share in order to grow. The threa t
Private secto r organisations seek to obtain more mark
et share if our brands are a first choice for
from comp etitor s can be reduced with greater mark
customers. This is also likely to increase profit .
Increase share holde r value
to shareholders, who invest capital
Private sector organisations are usually accountable
to influence decisions, can buy more
into the business. They own shares and have the right
value of a share reflects how well the
shares, and can vote in company decision making. The
it pays an amou nt to its shareholders in
comp any is performing. If a company performs well,
the form of a dividend.
offer, with a real-life example
This section gives a good level of detail relative to the marks on
of an organisation's market share.
Exam iner feedback: 15/15 marks.
of the organisation in a positive way, which
(b) The objective of a brand is to reflect the values
e.
enco urages cu stomers to purchase the product or servic
A bran d shou ld tell the consumer what the produ
ct is, what it can do and why th e produ ct is
and colours which consumers can easily
the desi red choice. Stro ng brands have key straplines
ident i fy (for exa mple Coke is a red and white logo) .
 . d I pan association w ith that produ ct in th
Crea ting a brand means consumers can eve O . . . e form
of brand loyalty and more awareness of it. Without a bra nd ' th e· ite~ is a comm od ity and is
valued at its net worth . For example, water is a resource, but Evian is a brand .
Effective branding can increase awareness, profitability and loyalty, increasi ng a private sector
organisation's strength in the market.
Some organisations rebrand their products to keep in line with new con sumer tastes or
perhaps to engage a different age group of consumers .
This answer details what the objective of a brand is, some examples and its benefits. This
answer has a good level of detail which gets across the candidate's level of understanding on
branding.
For the additional marks on offer, the candidate could add a brief discussion about the role of
branding in specifications.
Examiner feedback: This is a distinction level answer attracting a total of 8/10 marks.

Solution 16

(a ) Objectives of the charity:

Raise awareness of a cause
This ~ims to b_ring awareness of the charity's activities to the front of people's minds through
media ca~~a,gns and people engagement. This aims to encourage people to donate to the
cause or Join the campaign.
E~am~les include _campaigns over national holiday periods, which highlight eo le in difficult
situations at key times. p p
Ensure support continuity
Maintaining support for the charity and its cause can be a cha II .•
aware of the donations which will be com in . . enge as charities are not
volatility of funding the way the f d gin, which can make planning difficult. Due to the
made can impact o~ people . un s are spent has to be carefully planned, as the decisions

For example, a media campaign which would ain f · · ·

additional places for shelter for the h gf un~ing may be at the expense of providing
. . ome Iess or a period of time.
ObJectives of the consortium:
Attracti ng more members
In attracting more members, the buying rou c .
members due to the increase in buy· g P an negotiate even better prices for its
mg power as well a · · 5orne
ch arge a nominal subscription fee. ' s gaming slightly more in fees as
Share best practice
Buying groups can share best practi ce ·t.
industries. In sharing best practi as ' is usually formed of organisations in similar
. ce, each organisati · h
Iearning and potentially implem t on can increase its knowledge throug
en processes and practi I
This section is an excellen t an . ces earnt.
. swer, with a clear exp /an ti
Examiner feedback: 1211 2 marks. a on and re!Pvant examples.
 ~ l· I ' l r u ;_ r'

mmission. It holds a list of all registered

(b) In the UK, charities are regulated by the Charities Co
charities which can be viewed by the genera l pu blic.
its main aim is to ensure fa irness
The Charities Commission reports to the Government, and
and good cond uct of all registered charities . This includes;
• Protecting charities from abuse or poor management
• Encouraging greater transparency and accountability
annual activi t y. Failure t o do so can
All registered charities must provide a summary of their
resul t in the chari ty being removed from the register.
ways if a chari ty acts unet hically,
The Charities Commission has the powe r to act in various
including:
• Restricting the charity's operations
• Suspending a trustee
• Appo inting a new manager
• Freezing the bank account
a repo rt on its investigation and
For example, in 2019, the Charities Commission produced
.
findin gs with the charity Oxfam, due to allegations from 2010
ities Com missi on its power
This answ er is very detailed and outlines the objectives of the Char
and a relev ant example.
Examiner feedback: 13/13 marks.