Question 1

British Steel needs to source a set of instruments that will improve quality of steel. Without these instrument British Steel will loss control of the temperature the bucket freezes up, or if it is too hot it leaks out of the casting process, damaging the machine. There is limited supply on the market and quality varies greatly. Which of the following will be the most appropriate managing approach to procure these items?

Options :

A : Seek continuity of supply

B : Form partnership with supplier

C : Leverage market competition to drive down cost

D : Bundle these instruments into larger contract

Answer: B

Question 2

After assessing objectives, costs and benefits of generated options, which of the following are the other criteria that management team might use to evaluate a new business case?

1. Plan for implementation

2. Identify objectives

3. Develop strategies

4. Assess potential risk

Options :

A : 2 and 3 only

B : 1 and 4 only

C : 2 and 4 only

D : 1 and 3 only

Answer: B

Question 3

Buyers in the same industry with the same understanding of relative value and price may still make different decisions about whether to switch. Which of the following factors may prompt a buying organization to incline toward substitute products?

1. There is potential for backward integration

2. Access to financial resources

3. The switching cost is high

4. The substitute fits organisation's strategy

Options :

A : 1 and 4 only

B : 3 and 4 only

C : 1 and 2 only

D : 2 and 4 only

E :

Answer: D

Question 4

What are the three components needed to calculate the break-even point?

Options :

A : Variable costs, gross profit margin, and sales revenue

B : Fixed costs, contribution margin, and sales volume

C : Variable costs, contribution margin, and fixed costs

D : Fixed costs, variable costs, and selling price

Answer: D

Question 5

Which of the following are most likely to negatively affect the suppliers’ bargaining power in a specific market? Select TWO that apply:

Options :

A : There are almost no threats of backward integration

B : Buyers incur high cost when they change their suppliers

C : There are no differences among suppliers' products

D : Many suppliers are intent on integrating buyers into their business

E : Substitute products are readily available in the market

Answer: C,E