Online Access Free L4M4 Practice Test

A buyer might opt to do an 'Invitation to Tender' (ITT) rather than a 'Request for Quotation' (RFQ) process because ...

• A.Time is of the essence and decisions need to be made quickly without additional stakeholder involvement
• B.The contract will be low value and there are many suppliers, therefore a simpler approach is required
• C.The supplier market is an oligopoly where a few large suppliers dominate the market
• D.The nature of the goods or services being purchased are complex and high value

A buyer of bakery and cereal products is tracking wheat prices. Severe weather causes crop failure in a major wheat-producing country, creating global shortage while demand remains high. How can this research help the buyer?

• A.The price for wheat-based produce will not be affected by the global shortages as demand is still high
• B.The buyer will be in a strong bargaining position to reduce the price of wheat-based food items
• C.The buyer will find it difficult to negotiate a lower price for products containing wheat-based ingredients
• D.Bakery produce is likely to be at a lower price as there is less availability of wheat flour in the market

When assessing the financial performance of a potential supplier, it is important to understand how much gross profit they are making. The gross profit margin ratio uses which of the following pieces of information from the profit and loss (statement of financial performance)? Select TWO that apply.

• A.Cost of goods sold
• B.Income from sales
• C.Current liabilities
• D.Total current assets
• E.Value of equity capital

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?

• A.No, ISO standards are too complex for staff and suppliers to understand and follow
• B.Yes, as it would align with, and help to achieve, sustainability goals
• C.Yes, implementation would guarantee that the company is compliant with all environmental laws
• D.No, because ISO standards are only relevant to large organisations

Which documents are used to allow the movement of goods?
Export or import license
Non-disclosure agreement
Customs declaration
Conflict of interest declaration

• A.2 and 3 only
• B.1 and 3 only
• C.2 and 4 only
• D.1 and 4 only