Cipp Exam Questions
Cipp Exam Questions
Cipp Exam Questions
2. Procurement is the process of acquiring ……………… works, and ……………… covering both
acquisitions from third parties and from in house providers.
a. goods and services
b. services and operations
c. operations and goods
d. None of the above
3. Purchase of goods and services for resale in the industrial market is characteristics of which
type of organization?
a. Industrial Producer
b. Intermediate
c. Public Sector
d. Institutions
4. Purchase of goods and services for institutions that buy independently on their own behalf
is characteristics of which type of organization?
a. Industrial Producer
b. Intermediate
c. Public Sector
d. Institutions
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8. Advance procurement planning is informal process.
a. True
b. False
11. ………………….. is the process of integrating purchasing and accounts payable systems to
create greater efficiencies.
a. Source to Pay
b. Procure to Pay
c. Performance Analysis
d. None of the above
12. Final Step in procure to pay process is focused on handling the Purchase Order for payment,
sending the payment , and entering the amount into accounting systems.
a. True
b. False
14. In Procure to Pay method Purchase Orders are sent through an approval to ensure
……………… and …………….. of specification
a. Legitimacy and Accuracy
b. Legitimacy and Correctness
c. Accuracy and Correctness
d. None of the above
15. In Procure to Pay method three way match is done between the purchase order , the vendor
invoice , and the good receipt.
a. True
b. False
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16. Receipt, inspection, and acceptance of goods is a …………….. process in purchasing.
a. Pre-Award
b. Post-Award
c. A&B
d. None of the above
17. Digitalizing P2P can help organizations to reduce manual paperwork and spreadsheets.
a. True
b. False
18. P2P doesn’t help in streamlining the process, optimizing spend and improving compliance
a. True
b. False
20. Vendor Management is a structured program to manage suppliers and improve their impact
on the buyer’s business.
a. True
b. False
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24. JIT is a concept which includes
a. Making a plan from time to time
b. Getting the items just when they are needed for production
c. Creating purchase orders just before delivery
d. All of the above
28. When sole source materials for which cost cannot be established & prices are known to be
competitive the buying team should consider issuing.
a. VMI ( Vendor Managed Inventory )
b. Un- priced Purchase orders
c. Blanket Purchase Order
d. Two-step Bidding
29. Which of the following contemplates a high degree of cooperation between the buyer and
supplier facilitating a reduction in inventory for both the buyer and supplier
a. P-cards
b. Blanket Purchase Orders
c. Standing orders
d. Systems Contracts
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31. The PO should have provision for order cancellation if buyer is not happy of the goods
provided after use
a. True
b. False
32. Oral ordering is useful in situations where other simplified methods, such as calls against
blanket purchase agreements are not practical
a. True
b. False
33. The formal purchase system that contemplates high degree of cooperation between the
buyer & supplier facilitating decrease in inventory for both buyer & supplier is called:
a. JIT
b. Systems Contracts
c. GAP analysis
d. Blanket Purchase Agreement
34. Issuance of Blanket Purchase agreement is most common when the material is available
with many suppliers. This method of procurement is adopted when stocks are required on
_________ basis:
a. Definite Quantity- Indefinite Delivery
b. Definite Quantity- Definite Delivery
c. Indefinite Quantity-Definite Delivery
d. Indefinite Quantity- Indefinite Delivery
35. The buyer is not obligated to place any orders and the supplier is not obligated to accept
any orders when using:
a. System Contracts
b. JIT Contracts
c. Blanket Purchase Agreements
d. Purchase Order Drafts
36. The buyer who established the blanket agreement may place orders & if so designed, mostly
& terminate the blanket.
a. True
b. False
37. Main factors which are usually considered for supplier evaluations are:
a. Price- Quality- Quantity
b. Products – Quality- Negotiations
c. Packaging – Defects- Service
d. Price - Quality – Delivery
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39. Cross -functional teams may lead to comprising experty as people spend less time within
their own functions
a. True
b. False
40. Cross functional teams cannot achieve their desired goals if they are given enough decision-
making power and company resources to make things happen.
a. True
b. False
41. A tool that makes sourcing faster, easier & more effective without disrupting the paper less
procurement process is called:
a. Competitive Bidding
b. Reverse-Auction
c. Use of Standing orders
d. E-Commerce
42. Reverse Auction makes sourcing faster, easier and more effective.
a. True
b. False
45. E- Catalogues is
a. A web page that provides information on products and services offered and sold by vendor
and supports online ordering and payment capabilities.
b. A web page that provides information on only services offered and sold by vendor and
supports online ordering and payment capabilities.
c. A web page that provides information on only products offered and sold by vendor and
supports online ordering and payment capabilities.
d. None of the above
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47. Reverse auctions are used for spot buying.
a. True
b. False
50. The technique based on agreed standards which facilitates business transactions in
standardized electronic form in an automated manner directly from a computer application
in one organization to an application in another.
a. Electronic Data Interchange (EDI)
b. E- Payment
c. Reverse Auction
d. None of the above
52. The two general methods of sourcing types are known as:
a. Single or Partnered
b. Spot & Systematic
c. Internal & External
d. Local & Global
53. When switching from domestic to global sourcing it is not important to develop preliminary
sourcing information at a macro level:
a. True
b. False
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54. Which of the following combination, refers to domestic sourcing:
a. JIT – Lower costs – One currency
b. Lower cost –Two currencies- Long lead times
c. Two languages – Direct deal – Inventory needed
d. One set of laws – Direct deal – Higher cost of business
55. When sole source materials for which cost cannot be established & prices are known to be
competitive the buying team should consider issuing:
a. VMI (Vendor Managed Inventory)
b. Un- priced Purchase orders
c. Blanket Purchase Order
d. Two-step Bidding
57. Woman owned business enterprises and small disadvantaged business are also known as:
a. HUB’s
b. SME’s
c. WBE
d. Traders
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62. Which of the following would you prefer when the need is short-term ?
a. Lease
b. Purchase
c. Both A and B
d. None of the above
63. Feasibility, need, component analysis & break even analysis are the steps in:
a. Purchasing analysis
b. Make or Buy analysis
c. Lease or Purchase analysis
d. All of A, B and C
64. In a manufacturing process, the Fixed Costs are AED 100,000 and Variable Costs are AED 300
per unit. The Sale Price of each unit is AED 400. The breakeven quantity is:
a. 10,000
b. 1000
c. 5000
d. None of the above
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70. In categorical method a grade of plus, minus and neutral is used .
a. True
b. False
71. Firm with large database usually used the ……………. Supplier performance evaluation
technique
a. Categorical Method
b. Weighted Point Method
c. Cost Ratio Method
d. AHP Process
72. The cost that changes when production output changes is ……………….
a. Variable Cost
b. Fixed Cost
c. Direct & Indirect Cost
d. None of the above
75. Which of the following permits the organization to request technical (and other) proposals,
from which the level of quality can be inferred
a. Request for Quotation
b. Best Value
c. Request for information
d. None of the above
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78. In Alternate Dispute Resolution, a judgment can be imposed by
a. Mediator
b. Arbitrator
c. Conciliator
d. Consultant
79. In a distributive negotiation, the buyer’s resistance point (maximum) is 1000$ lower than
the seller’s resistance point (minimum). The situation can be best described as:
a. Negative ZOPA
b. Neutral ZOPA
c. Positive ZOPA
d. None of the above
81. Negotiation that sets to divide up a fixed amount of resources; a win‐lose situation is called:
a. Collective Bargaining
b. Integrative Bargaining
c. Distributive Bargaining
d. Restrictive Bargaining
82. The type of lease that is generally considerably less than the assets useful life is referred as:
a. Financial Lease
b. Dry Lease
c. Operating Lease
d. Leveraged Lease
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87. Land cost and total cost of ownership is same.
a. True
b. False
88. _____are costs classified as how they behave when output changes:
a. Average Costs
b. Variable Costs
c. Fixed Costs
d. Total Costs
89. In distributive negotiation their (seller)minimum resistance point and your (buyer) maximum
resistance point are called:
a. Manipulating actual Costs
b. Better Alternate to a Negotiated Agreement
c. Walk Away Positions
d. Win-lose
91. The two primary kinds of hedging adopted by purchasing personnel are:
a. Forward and Futures
b. Past and present
c. Both A & B
d. None of the above
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95. Which of the following Supplier Rating Systems has the greatest potential for long term
improvements:
a. Cost Ratio Model
b. Weighted Average Method
c. Categorical Method
d. None of the above
96. Barter, Buy-back and Offset are all different types of:
a. Negotiation styles
b. Blanket Purchase Agreements
c. Counter-trade
d. System contracts
101. More suppliers increase reliability of supply and therefore single sourcing should never be
used:
a. True
b. False
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102. A shift from Transactional purchasing to strategic Procurement would:
a. Increase the value creation to the enterprise
b. Decrease the value creation to the enterprise
c. Has no connection with value to the enterprise
d. None of the above
103. Getting the opponent to change a negative settlement range to positive by moving
resistance point is one of the strategies used in:
a. Integrative negotiation
b. Distributive bargaining
c. Both A & B
d. None of the above
107. When the owner of the asset sells the asset to a second party and then leases it back
from the contracting firm, then it is known as:
a. A sale and leaseback lease
b. Master Lease
c. Dry Lease
d. A leveraged Lease
108. The common mistakes in global sourcing include all the following EXCEPT
a. Involving intermediaries and interpreter
b. Focusing search in the wrong countries
c. Using domestic terms and condition
d. Using exclusively domestic currency
109. The tendering method where only pre-qualified suppliers are invited to bid, is known as:
a. Open Tendering
b. Close Tendering
c. Negotiated Tendering
d. None of the above
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110. Negotiation is not needed if the lowest quotation appears to be reasonably priced
a. True
b. False
112. Suppliers who have completed the screening process and are identified for future
procurement needs are
a. Partnered Supplier
b. Preferred Supplier
c. Pre-qualified Supplier
d. Primary Supllier
115. Which one of the following strategies is not included in Distributive negotiation:
a. Integrating
b. Dominating
c. Avoiding
d. Obliging
116. The process of delegating some non-core activities to an external provider on a contractual
basis, is known as
a. Contracting
b. Delegating
c. Partnering
d. Outsourcing
117. Which of the following gives more confidence and power to a party during negotiation?
a. ZOPA
b. WAP
c. BATNA
d. None of the above
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118. An Arm’s Length relationship implies
a. Strong Partnership
b. Weak Partnership
c. Joint Venture
d. All of the above
119. In International trade where buyer & seller have to at least partially exchange goods for
goods is referred as
a. International Business
b. Counter Trade
c. Off Trade
d. Barter
120. A procurement strategy that includes process of research , identifying & contracting viable
suppliers based abroad is called
a. Supply Sourcing rating
b. Supplier source evaluation
c. International sourcing
d. Domestic sourcing
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