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NEW QUESTION 44
A purchase order can become a contract between supplier and purchaser if it is…?
- A. Issued by the buyer
- B. Received by the supplier
- C. Accepted by the supplier
- D. Edited by the supplier
Answer: C
Explanation:
A purchase order is a document sent from a buyer to a seller, with a request to order a product. The purchase order often has its number, description and quantity of the goods, unit prices and total price, name of issuer, time of delivery, standard terms and conditions, etc. It is effectively an offer to supplier. The purchase order will become a formal contract if supplier accepted it by written notice or by performance (such as deliver the goods to the buyer’s premise).
Reference:
LO 1, AC 1.2
NEW QUESTION 45
Since services are intangible, so KPIs for services must be qualitative in all circumstances. Is this statement correct?
- A. Yes, the only measure mattered to supply of services is end-users’ satisfaction
- B. Yes, quantitative KPIs are limited to timeliness of supply of goods, defective rates and in-full quantities, which are applied to monitor supplier of physical goods
- C. No, some KPIs for services are measurable by means of outcome, time and space performed
- D. No, KPIs for services must always be quantitative so that they can be measured easily
Answer: C
Explanation:
KPIs are used to monitor supplier’s performance. They can be qualitative or quantitative. Of course, service providers can be monitored by quantitative KPIs regarding the outcome achieved (such as uptime in IT contracts), timeliness of deliveries (such as in construction contracts)…
Reference:
LO 2, AC 2.2
NEW QUESTION 46
What is the purpose of using key performance indicators in procurement and supply?
- A. To qualify which supplier is suitable
- B. To validate the supplier’s bid or tender
- C. To monitor supplier’s performance
- D. To ease the termination process
Answer: C
Explanation:
Procurement teams use key performance indicators (KPIs) to ensure vendors comply with (and hopefully exceed) the obligations outlined in a contract. They help us better understand suppliers’ performance, measure their output over a long period of time, and identify areas where improvement is needed.
Put simply, it’s good business sense to make sure you’re actually getting what you’ve paid for. This might be as straightforward as confirming a product or service is delivered on time, which means the KPIs you need to use will be minimal and basic.
Reference:
– Supplier KPIs | 7 Performance Indicators You Should Be Measuring – Una
– CIPS study guide page 101-102
LO 2, AC 2.2
NEW QUESTION 47
If service level agreement is used as a schedule that makes up the contract, it will be most likely to be a part of…?
- A. Specifications
- B. Performance management framework
- C. Pricing arrangement
- D. Exclusion of liabilities
Answer: B
Explanation:
If a service level agreement is used as a schedule to a contract, it will generally have the following contents:
– Service definitions. If the service information is provided by the specification, SLA should only refer to the specification to avoid any inconsistencies.
– Details on how to measure KPIs, who will measure KPIs
– Minimum requirements or targets
– Remedies if the minimum requirements are not met
…
Since SLA often lists out the KPI targets, consequences for not meeting the KPI targets and remedies to situation of poor performance, it is a part of performance management.
Reference:
LO 2, AC 2.2
NEW QUESTION 48
……
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