Question 1

A bread manufacturer requires flour to be delivered to the manufacturing plant on a daily basis. It is important for the bread manufacturer that the quality of the flour meets certain criteria or it cannot be used, and this will impact on the number of loaves that can be produced per day. The manager of the bread manufacturer stated in the contract a qualative target for amount of defects which ties the price they pay to an agreed level of performance. What form of supplier incentive is this?

Options :

A : gain-share pricing

B : consumption based pricing

C : shared risk-reward

D : incentive based pricing

Answer: D

Question 2

Mohammed has recently been hired as the new CEO of ABC Ltd, a large manufacturing organisation. The organisation has struggled in recent years due to the highly competitive nature of the marketplace and Mohammed has been brought in to radically change the organisation’s approach to procurement and supply chain management.

Traditionally the organisation has dictated its requirements to suppliers with stringent penalty clauses for non-compliance. Mohammed is keen to change this approach and leverage the knowledge of suppliers to ABC’s advantage.

XYZ is the main supplier to ABC Ltd and Mohammed has set up a meeting to discuss the relationship and contract currently in place. He wishes the relationship to be win-win and wishes to share ideas on potential efficiencies that can be gained for both organisations. He will propose a new mechanism for monitoring the performance of the contract based on four key parameters; cost, customer satisfaction, innovation and operational processes.

XYZ provides raw materials such as iron and steel and Mohammed is keen to gain an understanding of the environmental impact of the extraction, transportation and usage of these materials, the findings of which will impact the company’s mission statement, which will be re-written next year.

In terms of other suppliers, where spend is minimal and risk is low, Mohammed plans to introduce Standard Operating Procedures for the procurement of supplies and is looking into various tools which will save the procurement team time and money.

What type of analysis will Mohammed complete following his meeting with XYZ Ltd?

Options :

A : stakeholder analysis

B : market analysis

C : life-cycle analysis

D : financial analysis

Answer: C

Question 3

An organisation which presents an ordinary product as environmentally friendly is conducting what?

Options :

A : non-compliance

B : lack of traceability

C : blacklisting

D : greenwashing

Answer: D

Question 4

Retro Rolls Ltd is a car manufacturing organisation. Cars are produced by having several teams complete work on a specific area of the car, and then pass this over to the next team to complete their part. As a rule, no product is allowed to be sent to the next team where there is a defect or an incorrect quantity. What type of system is in place?

Options :

A : Kaizen

B : Kanban

C : JIT

D : TQM

Answer: B

Question 5

The cost of switching and the scarcity of resources affects which of the following relationship-influencing Key Performance Indicators?

Options :

A : transparency

B : co-operation

C : trust

D : power

Answer: D

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