Question 1

Which of the following are most likely to be costs associated with outsourcing?1. Contract performance management cost2. Production workers' wages3. Overheads4. Procurement professional salary

Options :

A : 1 and 2 only

B : 2 and 4 only

C : 1 and 4 only

D : 2 and 3 only

Answer: C

Question 2

Organisations which do not take action to prevent bribery practices in their supply chains are exposed to which of the following?

Options :

A : More suppliers

B : Higher costs

C : Reputational damage

D : Poor credit rating

Answer: C

Question 3

A public hospital opens a restricted tendering process to source healthcare equipment from external suppliers. After receiving bids from shortlisted suppliers, the hospital's procurement team starts to develop tender and evaluation criteria so that they can assess the bids. Is this action appropriate?

Options :

A : No, because assessment criteria should have been decided from the very first step of tendering process

B : Yes, because the procurement team has gather enough information to evaluate suppliers

C : Yes, because assessment criteria will help the procurement team to get the most economically advantageous tender

D : No, because assessment criteria are already thoroughly indicated in directives and statutes

Answer: A

Question 4

Price is the only award criterion which helps the buying organization achieve "Value for Money" in every purchases. Is that statement correct?

Options :

A : Yes, because the price will determine whether or not the supplier is competent to satisfy the order

B : No, because "Value for Money" might includes other criteria in stead of only price aspect

C : Yes, because lowest production cost is the only goal of every businesses

D : No, the price is the most crucial criterion in sourcing strategic items

Answer: B

Question 5

Which of the following are reasons why a global organisation opts to use transfer pricing arrangements? Select TWO that apply:

Options :

A : Improving local economy

B : No risk of tax evasion

C : Leveraging local sourcing better

D : Simply internal accounting procedure

E : Reduction in international tax expense

Answer: A,D