[Jun-2024] Updated and Accurate L3M3 Questions & Answers for passing the exam Quickly
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NEW QUESTION # 12
Goods or services which must be used together are called:
- A. Complements
- B. Compliments
- C. Condiments
- D. Substitutes
Answer: A
Explanation:
The items are complementary. Complements.
For example, a Tesla car and a Tesla charging point.
NEW QUESTION # 13
Which of the following are external factors in supplier decision-making? Choose two.
- A. Market conditions, determining demand and supply
- B. The selling firm's financial position
- C. Customer perceptions of value
- D. How badly the seller needs the business
Answer: A,C
Explanation:
Market conditions, determining demand and supply, and customer perceptions of value are external factors. One could argue that customer perceptions of value can be altered by the selling company, but in the short-term this is clearly external.
NEW QUESTION # 14
Which of the following statements is untrue? Select two.
- A. In most cases, a framework arrangement is not itself a contract.
- B. The framework arrangement establishes the basic terms and conditions that will apply to subsequent orders
- C. There is an obligation to buy under a framework arrangement
- D. A framework arrangement cannot be used for consultancy services, although it can be used for construction work.
Answer: C,D
Explanation:
There is no obligation to buy under a framework arrangement; and a framework can be used for consultancy services.
NEW QUESTION # 15
Which one of the following is not an 'E' from STEEPLE?
- A. Environmental
- B. Ethical
- C. Epistemological
- D. Economic
Answer: C
Explanation:
Even if you don't know what 'Epistemological' means, you should know it's the odd one out.
It relates to the philosophical study of knowledge.
NEW QUESTION # 16
Which of the following is unlikely to be regarded as a conformance specification?
- A. A statement of outputs
- B. A chemical formula
- C. Drawings
- D. A brand name
Answer: A
Explanation:
Outputs link to the concept of a performance (or 'output') specification, not a conformance specifi-cation.
NEW QUESTION # 17
Which two of the following constitute part of a common risk assessment or risk evaluation formula?
- A. Contingency
- B. Prevention
- C. Likelihood
- D. Impact
Answer: C,D
Explanation:
What is the likelihood of an event occurring?
What will be the impact of that event occurring?
This is the basis of almost all modern risk management.
CIPS has good content at Advanced Diploma level on the subject of Risk Management, and I have prepared tests for the two subjects in this area. :) Sadgrove's book on business risk, in my view, is excellent; and NN Taleb's work (eg 'Antifragile') on risk, although difficult is, in my opinion, fascinating.
NEW QUESTION # 18
Which STEEPLE factor deals with issues of waste management, pollution and recycling?
- A. Technological
- B. Socio-cultural
- C. Ethical
- D. Environmental
Answer: D
Explanation:
The answer is 'environmental'.
NEW QUESTION # 19
A 'cause and effect' or 'fishbone' diagram is also commonly known as:
- A. A Fukushima diagram
- B. An Ishiguro diagram
- C. An Ishikawa diagram
- D. A Murakami diagram
Answer: C
Explanation:
The answer is an Ishikawa Diagram.
Can be used in addressing quality problems, problems of under-performance, etc.
The other Japanese-sounding names shown as possible answers are spurious - two are novelists, and Fukushima was a serious environmental radioactive leak at a nuclear power station on the coast of Japan.
NEW QUESTION # 20
Where all does not go well on a contract and there are significant increased costs of implementation, a contract clause may exist whereby both buyer and contractor share the unanticipated additional costs using a pre-agreed formul a. What is the expression which describes such an arrangement?
- A. Gainshare
- B. Penalty clause
- C. Painshare
- D. Rightful share
Answer: C
Explanation:
The contract clause may refer to or include both gainshare and painshare elements. If all goes well, gains to be shared; if things go badly, pain to be shared. The ratio does need to be 5050 - the parties can discuss / negotiate as they wish / agree.
One is actively discouraged from talking about penalties, which contain a notion of punishment, de-spite the rather odd fact that your syllabus contains the term 'penalty clauses'.
NEW QUESTION # 21
According to Lysons and Farrington, two authors recommended by CIPS, which of the following are cost-based pricing models, as opposed to market-driven pricing models? Choose two.
- A. Promotional pricing
- B. Rate of return pricing
- C. Penetration pricing
- D. Marginal pricing
Answer: B,D
Explanation:
Both penetration pricing and promotional pricing begin with the market price. Marginal pricing and rate of return pricing both look at the costs of doing something, and base their calculations on cost. These last two are therefore cost-based approaches to pricing.
NEW QUESTION # 22
'PTN' stands for:
- A. Pre-tender negotiation
- B. Post-tender negotiation
- C. Procurement tender notice
- D. Procurement technical network
Answer: B
Explanation:
Post-tender negotiation.
In my opinion, potentially a very rewarding activity where the rules permit.
NEW QUESTION # 23
In this course, the acronym 'CPA' stands for:
- A. Cost price adjustment
- B. Critical path analysis
- C. Contract price adjustment
- D. Certified price assessor
Answer: C
Explanation:
Contract price adjustment.
A contract may contain a contract price adjustment clause if the parties feel that costs may move significantly over the contract period. For example, in respect of commodities, metals, currencies or even sometimes, labour. Normally reference would be made to an index or indices which would help determine the direction and extent of adjustment in a minimally controversial way. An example of a widely-used index / formula in the UK is the BEAMA formula.
NEW QUESTION # 24
Which of the following are internal factors in supplier decision-making? Choose two.
- A. Cost of production
- B. Extent of competition in the marketplace
- C. Shareholder and managerial expectations of profit
- D. Customer perceptions of value
Answer: A,C
Explanation:
Cost of production, and shareholder and managerial expectations of profit, are both internal factors in decision-making. Although shareholders may be outside the firm, management will condition shareholders' expectations. Customer perception of value and the extent of marketplace competition are significantly outwith the control of the company.
NEW QUESTION # 25
How many 'Whys'?
- A. Three
- B. Four
- C. Five
- D. Six
Answer: C
Explanation:
'Five-Why Analysis' or 'Why-Why Analysis' is an approach to trying to determine the cause of an event. It can be used to link to / in conjunction with an Ishikawa diagram. The principle is that one repeatedly (as often as necessary, not necessarily limited to five) asks 'why?', and eventually an un-derlying reason will emerge, which if addressed effectively, will successfully resolve the problem. This is something which can often be observed naturally in small children. 'Why, Daddy?'. 'But why, Daddy?. Etc. (Or Mummy)
NEW QUESTION # 26
Contribution is equivalent to:
- A. Selling price minus fixed costs
- B. Selling price minus variable costs
- C. Selling price minus total costs
- D. Selling price
Answer: B
Explanation:
Selling price minus variable costs = contribution., or more accurately 'contribution towards fixed costs and making a profit'. I find this longer term for 'fixed costs' to be quite helpful in clarifying exactly what we are talking about here.
NEW QUESTION # 27
'Because they are set up for a specified duration, XXX contracts are subject to expiry rather than completion, unless they are renewed or extended.'
- A. Term
- B. Spot
- C. Framework
- D. Call-off
Answer: A
Explanation:
Term contracts are set up for a period of time, or a 'term'.
The other answer options shown here are the subject of other questions within this test.
NEW QUESTION # 28
Which STEEPLE factor deals with issues of foreign exchange rates, inflation, consumer spending, labour costs and unemployment levels?
- A. Environmental
- B. Economic
- C. Political
- D. Socio-cultural
Answer: B
Explanation:
Economic.
I think foreign exchange at least couldn't fit into any other STEEPLE factor, so that's a clincher and it has to be 'economic'.
NEW QUESTION # 29
The expression 'consideration' means:
- A. Being nice to people, in the expectation that they in turn will be nice
- B. Being over 18 and being of sound mind
- C. Taking time to think about the gravity of the contract you may be about to be entering into
- D. Some form of valuable exchange
Answer: D
Explanation:
Consideration is one of the essential elements of a contract in English law, and it essentially means the exchange of something of value for something else of value, typically goods or services for money.
Normally it is the price to be paid in exchange for goods or services.
NEW QUESTION # 30
Transfer of the rights and obligations of a contract onto a third party, is called:
- A. Assignation
- B. Acceptance
- C. Assignment
- D. Association
Answer: C
Explanation:
Essentially the contract is now between two different parties because one party has assigned the contract to someone else.
It's always a good idea to check whether this is permitted under a contract, otherwise you might finish up doing business with someone you didn't plan to do business with.
NEW QUESTION # 31
Periodic progress reports may be required by a contract manager. Part of this could include reporting actual progress against planned progress. In many cases, achievement of planned stages would result in (part-) payment(s) being released to the contractor. Which one of the following terms might be the most appropriate title for a plan underpinning this approach, to ensure value for money, and payment linked to actual progress?
- A. Roadmap or road sign plan
- B. Stage or staged plan
- C. Milestone / gateway plan
- D. Part-payment plan
Answer: C
Explanation:
Milestone plan.
This is difficult, and if you opted for 'staged', that is understandable. 'Milestone' or 'gateway' are terms often used to describe a situation in which a particular point must be reached on a project, pri-or to release of funds. By this means, a close linkage can be made between outputs achieved and payments made. The idea of stages goes towards this, and 'progress payments' ie payment based on alleged progress or simply time, have been shown in many cases, to be ineffective in achieving value for money.
NEW QUESTION # 32
Johnson, Scholes and Whittington suggested three key criteria for options which can be used in the evaluation of a business case. Which word was not one of these three key criteria?
- A. Transferability
- B. Acceptability
- C. Suitability
- D. Feasibility
Answer: A
Explanation:
'Is it acceptable, feasible and suitable?' are the tests.
NEW QUESTION # 33
Tolerate, transfer, terminate or ...?
- A. Try
- B. Test
- C. Treat
- D. Take
Answer: C
Explanation:
This is about risk, and the answer is 'treat'.
Risk management strategies can be classified into 'the 4 T's', which you need to know for your ex-am.
Treating the risk is essentially seeking to minimise the likelihood or impact of the risk. An example might be to carefully monitor key suppliers' ongoing financial performance to minimise the likeli-hood of their going into liquidation during the course of a contract with us. Etc.
NEW QUESTION # 34
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