CIPS L3M1 Practice Exam Questions & Answers

1.1 Define the different types and functions of the private sector; Definitions and different types of private sector organisations - sole traders, partnerships, registered companies, incorporated and unincorporated companies, SME, multinational corporations; The size and scope of the private sector in different economies; Functions of private sector organisations such as profit, growth, market share, share price, other financial measures, corporate and social responsibility; 1.2 Describe the role and scope of procurement and supply in the private sector; Sole trade, partnerships, registered companies, incorporated and unincorporated companies; Small and medium sized organisations (SMEs); Multinational organisations; The roles of procurement and supply in the private sector; 1.3 Describe the role and scope of procurement and supply in the public sector; Defining the public sector; Central and local government; The functions of public sector organisations; The roles of procurement and supply in the public sector; Commissioning and procurement; Achieving budget savings and other sources of added value; Providing access to services; Regulating organisations and individuals; 1.4 Describe the role and scope of procurement and supply in the not-for-profit and third sector; Defining the not-for-profit and third sector; Public accountability for the not-for-profit and third sector; Define the role of procurement and supply in the not-for-profit and third sector

Sample questions from this domain above Q5Q6

2.1 Explain how pricing arrangements are used in commercial agreements to ensure effective price and cost management; Pricing schedules; Fixed pricing arrangements; Cost plus and cost reimbursable pricing arrangements; Indexation and price adjustment formulae; Incentivised gain share pricing; Payment terms; The use of open book costing and adjustments

Sample questions from this domain above Q1Q3

3.1 Identify the impact of the external environment on procurement and supply; The use of environmental scanning; The use of PEST (political, economic, social and technological) criteria or STEEPLED (social, technological, economic, environmental, political, legislation, ethical and demographic) criteria that impacts on organisations’ external environment; The five forces model; Competitive market forces; Demand and supply; Market factors; Product life cycles; 3.2 Describe how the implications of economic criteria impact on procurement and supply; Macro-economic criteria such as interest rates, inflation, exchange rates, level of economic activity (GDP/ GNP) that impacts on organisations; Micro-economic criteria such as demand and supply that impacts on organisations; 3.3 Describe how the implications of political and legislative criteria that impact on procurement and supply; Political criteria such as stability and instability that impacts on organisations, different economic sectors and on countries; Legislation that impacts on organisations such as on standards, health and safety, environmental standards and employment law; 3.4 Describe how the implications of environmental and ethical criteria impact on procurement and supply; Environmental criteria such as natural risks, waste emissions, pollution and energy efficiency that impact on organisations; Ethical and social criteria such as ethical codes, employment rights, community benefits, working conditions and standards that impact on organisations; 3.5 Describe how the implications of social criteria impact on procurement and supply; Changing societal preferences, tastes and fashions, demographics, labour and fair-trade standards and how these can impact on organisations; Corporate social responsibility

Sample question from this domain above Q4

4.1 Describe the types of documentation used in procurement and supply; Requisitions; Orders; Delivery notes; Invoices; Other documents typically used in procurement and supply; 4.2 Explain how documented policies and procedures are used within procurement and supply; The responsibilities for procurement; Regulations relating to competition; Levels of delegated authority; Responsibilities for the stages of the sourcing process; Responsibilities for ensuring invoice clearance and payment; Responsibilities for ensuring that requisitions, orders and invoices are clear and correct and clarify requirements for stakeholders; Corporate governance

Sample questions from this domain above Q2Q7