The services industry does not have a specific SIC code because it is highly diverse, spanning multiple activities that do not fit neatly into a single classification.
[Ref: CIPS L5M6 Study Guide, p.88 - SIC classification limitations]

In the automobile industry, the most logical method for structuring categories is by part. Large manufacturing organisations, such as Ford or Toyota, procure thousands of parts and materials from hundreds of suppliers. To manage this complexity effectively, they segment procurement responsibilities into categories such as engines, tyres, glass, electronics, or body frames. This allows Category Managers to develop deep expertise in their assigned areas, improving supplier relationships and value delivery.
Other approaches are less effective:
* Alphabetical categorisation is impractical and arbitrary, providing no strategic value.
* By spend creates imbalances, as high-value categories would attract disproportionate workload and risk, leaving others underrepresented.
* By supplier could lead to inefficiency and over-fragmentation, as suppliers often provide multiple types of products.
The study guide stresses that categorisation must allow procurement teams to be efficient, balanced, and capable of strategic focus. By organising categories by part, managers can align more closely with engineering and production needs, ensuring better cross-functional collaboration.
[Ref: CIPS L5M6 Study Guide, p.3 - Defining categories in Category Management]

Price acceptance is the least transparent approach because the buyer simply accepts the supplier's quoted price without investigating its basis or fairness. There is no visibility into the supplier's cost structure, margins, or pricing methodology.
By contrast:
* Price management involves actively managing pricing discussions.
* Cost down involves collaborative efforts to reduce costs after production.
* Cost out involves eliminating costs before production through design.
[Ref: CIPS L5M6 Study Guide, p.81 - Costing methods]

This is an exploitable customer, according to the Supplier Preferencing Model. Suppliers may attempt to increase profit margins with customers they perceive as less important but who have fewer alternatives and can afford to pay more.
Reference: CIPS L5M6 Study Guide, p.99

The correct answer is ignoring stakeholders' feelings may result in rework or a poor result. In category management, implementing change-whether new sourcing strategies, supplier consolidation, or digital tools-affects multiple stakeholders. People often resist change, either passively or actively. CIPS highlights a model where typically 20% embrace change, 60% accept it cautiously, and 20% actively oppose it.
If stakeholders' concerns are ignored, resistance can derail projects, leading to delays, poor adoption, or the need for costly rework. For example, if end-users are not engaged in developing specifications, the final product may not meet needs, requiring adjustments later.
Options A and B overstate the issue; not everyone resists change, but enough stakeholders may to cause disruption. Option D is incorrect because change can also bring risks and negative consequences if poorly managed.
Effective change management in procurement requires communication, stakeholder engagement, and addressing emotional as well as technical challenges.
[Ref: CIPS L5M6 Study Guide, p.68 - Managing the human side of change]