Question 1

Which of the following are limitations of ratio analysis? Select TWO that apply:

Options :

A : Ratios are only about financial situation

B : Same ratios are incomparable between companies in the same sector

C : Ratios use historic data

D : Ratios take inflation into account

E : Operational changes always emerge when calculating ratios

Answer: A,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

John plans to conduct market research to source the new items. Which of the following is an example of the secondary data that John can use to evaluate the market?

Options :

A : Johns collects the information in a website of the suppliers who specializes in producing the new items

B : Johns collects the information of the market in the trade journals

C : John reviews the historical catalogue of his previous suppliers

D : John joins the trade fair to ask the supplier representatives for more information about the new items

Answer: B

Question 4

Achieving the 'five rights of procurement' is one of the key objectives of procurement managers. Which of the following are not considered one of the 5 rights? Select TWO.

Options :

A : time

B : ethics

C : environment

D : quantity

E : quality

Answer: B,C

Question 5

Why is it important, when awarding high-value contracts, for a buyer to conduct a financial assessment of a supplier?

Options :

A :

The buyer must ensure continuity of supply because financial problems of a supplier could affect the supply

B :

Financial assessments provide a holistic view of a company's capability, including quality and delivery performance

C :

A supplier who is highly profitable will be charging prices higher than the average market rate

D :

If a supplier has a high credit score, this means it pays its own suppliers late, which could result in stock outs

Answer: A

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