D2 CIPS March 2019 PDF

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D2/March 2019

Diploma in procurement and supply

Business needs in procurement


and supply

Date Monday 11 March 2019


Time Start 14:00 End 17:00 Duration 3 hours

QUESTION PAPER
INSTRUCTIONS FOR CANDIDATES
This examination has FOUR compulsory questions worth 25 marks each.
1. Do not open this question paper until instructed by the invigilator.
2. All answers must be written in the answer booklet provided.
3. All rough work and notes should be written in the answer booklet.

QP04
QUESTIONS

You are advised to spend 45 minutes on each question.

Q1 (a) Define the term ‘total life cycle costing’. (5 marks)

(b) Describe FIVE costs that should be considered when calculating the life cycle cost of an item,
apart from the purchase price of the item. (20 marks)

Q2 (a) Describe THREE circumstances in which a conformance-based specification could be used.


(15 marks)

(b) Explain ONE possible advantage and ONE possible disadvantage of involving suppliers in
producing a specification. (10 marks)

Q3 (a) Explain the following types of pricing arrangement and their use:

(i) Cost plus fixed fee. (5 marks)

(ii) Cost plus incentive fee. (5 marks)

(iii)
Cost plus award fee. (5 marks)

(b) Explain what is meant by an indemnity clause and provide an example of how such a clause
may be used. (10 marks)

Q4 (a) Alternative sourcing options must first be evaluated before making a business case to
outsource processes or services. The considerations of these alternative sourcing options may
be included as part of the business case.

Describe THREE such alternative sourcing options that could be evaluated when making an
outsourcing decision. (15 marks)

(b) Discuss TWO options for a purchaser if a contract for outsourced services breaks down.
(10 marks)

END OF QUESTION PAPER

Page 3 of 8 D2 Exam Questions March 2019


PLEASE RETURN TO:
CIPS ASSESSMENT MANAGEMENT CENTRE
c/o LINNEY ACTIVATE, A2 GOODS IN
BELLAMY ROAD, MANSFIELD
NOTTINGHAMSHIRE NG18 4LN
UNITED KINGDOM
TEL: +44(0) 845 880 1188
FAX: +44(0) 845 880 1187
www.cips.org

Page 8 of 8 D2 Exam Questions March 2019

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