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NEW QUESTION 41
A competitive advantage can be gained by doing what?

• A. Engaging in market research
• B. Completing formal tenders for all buying requirements
• C. Increasing your prices
• D. Building better relationships with primary stakeholders

Answer: D

Explanation:
The correct answer is 'Building better relationships with primary stakeholders'. This is a direct quote from the start of chapter 2.2: 'building better relationships with primary stakeholders such as employees, customers, suppliers and communities could lead to increased shareholder wealth by developing a competitive advantage'. The other three options wouldn't give you a competitive advantage; increasing prices would do the opposite, engaging in market research won't give you a competitive advantage unless you do something with that research such as implement a change to your business, and completing formal tenders for everything would be a waste of time and resources- there's no need to tender for low value, low risk items. See p.80

NEW QUESTION 42
A garden centre has recently purchased some lollypop sticks to use as plant labels. The staff have written the name of the plant on the lollypop stick and put it next to the plant. This helps them identify which plant is which. However, after a couple of weeks, the lollypop sticks have become mouldy and the writing has faded. Staff are now struggling to identity their plants. The Manager of the garden centre is considering returning the lollypop sticks and asking for a full refund as they were not fit for purpose. Can the Manager do this?

• A. Yes- so long as the manager kept the receipt
• B. No- the manager cannot prove that the product is faulty
• C. No- as this was not the lollypop sticks intended purpose
• D. Yes- the lollypop sticks have gone mouldy- this is unacceptable

Answer: C

Explanation:
The correct answer is 'no- as this was not the lollypop sticks intended purpose'. When deciding if something is fit for purpose, you must consider its intended and common purpose. In this case it would be for making lollypops. As the garden centre is using them for something other than their intended purpose, they can't complain if it doesn't work. Fit for purpose is discussed on p.65 p.s. there's a Question: like this in the real exam - it's just not lollypop sticks ; )

NEW QUESTION 43
Pablo has run an open- competition to secure a new contract for a supplier of paper for his Birthday Card making company. He has received 10 submissions from various suppliers and needs to put a team together to evaluate the bids. What type of team should Pablo consider?

• A. A team of procurement experts
• B. A team composed of internal and external stakeholders
• C. A cross-functional team
• D. A team composed of internal stakeholders

Answer: C

Explanation:
Pablo should use a 'cross-functional team'. CIPS love 'cross-functional teams' and refer to them frequently throughout the study guide. A cross-functional team is people from different departments who come together for a purpose, such as to evaluate a tender. The benefit of using a cross-functional team is that you get people with different experiences and knowledge. So in this example a Cross-Functional team could compose of people from various departments such as procurement, logistics, manufacturing and legal. P.76

NEW QUESTION 44
Which of the following documents can be used at the selection stage of a tender process to ensure that short listed bidders meet the requirements of the buying organisation? Select TWO.

• A. Request for Quotation
• B. Invitation to Tender
• C. Request for Information
• D. Pre-Qualification Questionnaire

Answer: C,D

Explanation:
Request for Information and Pre-Qualification Questionnaire can be used for short-listing suppliers. Request for Quotation is used when the only variable is price and you would like suppliers to submit a price for you. Invitation to Tender would be the next stage after RFI / PPQ- this is sent out to those suppliers who have passed selection, and details the second stage of the competition. See p.75 for more details.

NEW QUESTION 45
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