Question 1

The use of Incoterms will eliminate all risks involved in international trade transactions. Is this statement true?

Options :

A : No, they can reduce risks but will not eliminate them

B : No, they will only provide assurance about the quality of goods

C : Yes, they are popular because all risks are avoided

D : Yes, they eliminate all the risks of buying from an overseas supplier

Answer: A

Question 2

A procurement manager of a medium-sized company has suggested to their executive board that implementing an ISO environmental standard would improve procurement practices and reduce environmental and social impacts. However, some colleagues are concerned about the potential complexity and supplier resistance. Should the company go ahead with the recommendation?

Options :

A : Yes, as it would align with, and help to achieve, sustainability goals

B : No, ISO standards are too complex for staff and suppliers to understand and follow

C : No, because ISO standards are only relevant to large organisations

D : Yes, implementation would guarantee that the company is compliant with all environmental laws

Answer: A

Question 3

What are some signs that a supplier has insufficient capacity? Select TWO that apply:

Options :

A : Decrease in the unit price

B : Decrease in percentage of faulty product

C : The financial position is strong

D : Decrease in percentage of in-full delivery

E : Increase in the late delivery time

Answer: D,E

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

Curly Cake Incorporated makes lots of different types of confectionary items. Although they are most famous for their cakes, they also have a smaller line of cereal bars and biscuits. Which of the following would be the most appropriate items for Curly Cake Incorporated to outsource? Select TWO

Options :

A : cakes

B : cereal bars and biscuits

C : cleaning

D : facilities management

Answer: C,D