AD2
Centres of Learning in:
 England
 Scotland
 Wales
EXAM QUESTIONS
Managing Risks in Procurement and Supply
ABA Procurement
51 Ivy Road
Norwich, NR5 8BF
Tel: +44 1603 251754
[email protected]
www.aba-procurement.com
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Case studies for questions are available in the resources section at aba-procurement.com
CIPS Exam Sample Questions – Learning Objective 1
Exam
Question 1
Q1: July
2013
Analyse FIVE operational risks for the supermarkets as a consequence of
horse meat entering their supply chain. (25)
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Q1:
Analyse the main risks for GCRS, both internal and external, that should be
November included in the feasibility study produced by Innovative Solutions (25)
2013
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Q1:
January
2014
Analyse the potential consequences for GAFs supply chain of THREE of the
operational risks identified in the case study (25)
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Q1: March
2014
A) Outline THREE reasons for retailers to incorporate Corporate Social
Responsibility (CSR) across their global supply chains (15)
B) Discuss the types of potential corruption risks for retailers across
their global garment supply chains (10)
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Q1: May
2014
Discuss THREE different types of supply chain fraud and suggest TWO
preventative measures to address fraud in supply chains (25)
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Q1: July
2014
Discuss the potential Corporate Social Responsibly (CSR) issues that Supra
should now consider in relation to its increased international activity (25)
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Q1:
Analyse the operational risks for Kiwi-Rail that resulted from the purchase of
November the Locomotives from China based Dalian Locomotive and Rolling Stock Co
2014
Ltd. (25)
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Q1:
January
2015
A) In the event of an emergency in its area, NDA is likely to incur both
direct and indirect (consequential) losses.
Explain the difference between direct and indirect (consequential)
losses (10)
B) Discuss THREE examples of loss that NDA might suffer as the result of
a major emergency situation occurring.
For each example, outline the potential impact and any measures
that might be appropriate to mitigate the loss. (15)
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Q1: March The City Councils requirement to develop and procure an on-line journey
2015
planner service is complex with a number of important risks that require
addressing.
Analyse the FOUR operational risks identified in the case study
including the possible implications of each risk for the City Council. (25)
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Q1: May
2015
A) Analyse FOUR possible fraud risks for SCS that may result from its
decision to outsource to a supplier in a low cost country. (16)
B) Suggest THREE ways in which SCS could work with the supplier in
order to minimise the risk of fraud. (9)
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Q1: July
2015
A) Explain the main reason why there has been fraudulent activity in the
food supply chain. (5)
B) Outline FIVE main methods of ensuring that fraudulent activity does
not occur in the food supply chain. (20)
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3
Case studies for questions are available in the resources section at aba-procurement.com
Q1:
November
2015
A) Analyse FOUR possible areas where the risk of information theft
across the supply chain could pose a threat to Davies Engineering (16)
B) Outline THREE prevention measures which may help reduce the risk
of information theft at Davies Engineering (9)
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Q1:
January
2016
Analyse FIVE factors that may have contributed to the contract failure of
TfL’s previous contractual
arrangement with Bombardier to renew the underground signalling and train
control system. (25)
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Q1: March (a) Explain how poor performance by the selected installation and
commissioning contractor to
2016
AET in the new local market, might present risks for AET’s reputation for
corporate
social responsibility. (13)
(b) Outline the main features of THREE standards or codes of practice related
to sustainable
procurement that AET might apply in order to reduce the risk to its
reputation. (12)
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Q1: May
2016
Using the STEEPLE framework, analyse the main external business
environment risks that GTC PC Division might need to consider. (25)
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Q1: July
2016
(a) Describe ONE financial risk that SMC might face by entering into a
contract with ZE and discuss how it might be managed. (10)
(b) Explain the approaches that SMC might use to manage the risk of quality
failure in the case of the engines delivered by ZE. (15)
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Q1:
(a) Explain the potential direct and indirect losses that ACM might face as a
November result of PG’s failure to deliver glass. (10)
2016
(b) Analyse THREE potential operational risks to ACM should PG outsource
production of glass to a new plant in Eastern Europe. (15)
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CIPS Exam Sample Questions – Learning Objective 2
Exam
Question 2
Q2: July
2013
The horsemeat scandal now poses supermarket retailer with a significant
task of renewing their risk management systems. This will require effective
project management.
Discuss FIVE key principles or success factors that the supermarkets should
consider for effective project management of this significant task. (25)
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Q2:
November
2013
A) Outline THREE different contract strategies available to GCRS for this
IT project, and discuss the likely allocation of project risks between
GCRS and the contractor, for each identified strategy. (15)
B) Suggest how ‘Innovative Solutions’ could be incentivised within a
contractual relationship to achieve successful project outcomes (10)
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Q2:
January
2014
The management of GAF has decided to implement a series of projects to
improve its operations, as stated in the case study. Before these projects can
begin GAF needs to develop a robust approach to project management
planning.
Outline the main sections and typical content areas of a project plan, from
start to completion that could be used by GAF. (25)
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Q2: March Explain the project planning tools and techniques that could be used by
2014
Garment Retailers – to reduce potential global supply chain risk (25)
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Q2: May
2014
The case study indicates that to address the increasing risk of fraud one
response that some larger organisations have adopted is set up specific
projects.
Explain how an organisation could apply each of the main stages of a project
life cycle model, when using a project based approach, to address the risks
posed by fraud. (25)
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Q2: July
2014
Evaluate the contribution that effective project planning could have made to
managing risk within Supra’s Enterprise Resource Planning (ERP) project (25)
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Q2:
Explain how an analysis of the balance cost, quality and time in 2009 might
November have helped Kiwi-Rail to mitigate the risks of this project. (25)
2014
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Q2:
January
2015
Discuss FIVE features of effective project management that NDA should take
into account in order to ensure that the overall project is successful and that
the risks are mitigated (25)
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Q2: March
2015
A) Analyse how the use of a robust project planning approach could
contribute to the improved management of risks in the development
and procurement of the journey planner system (15)
B) Outline FIVE key activities that would need to be sequenced within
the overall project plan. (10)
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Case studies for questions are available in the resources section at aba-procurement.com
Q2: May
2015
The project to outsource low value transactions and invoice processing to a
third party organisation will require a formal project plan if Keeling is to gain
the support of the board of management.
Explain the main elements of the formal project plan that would be required
to set up and control this project. (25)
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Q2: July
2015
Explain the main stages of a project lifecycle model that Tesco should
consider when planning and managing the project to overhaul its food
supply chain. (25)
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Q2:
November
2015
A) For the project outlined in the case study, analyse the balance
between the objectives of cost, quality and time. (15)
B) Outline the potential advantages and disadvantages for Davies
Engineering of outsourcing the development of the new risk
management system to a specialist external contractor (10)
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Q2:
January
2016
Suggest FIVE aspects of project management and control that TfL should
address with its new
contractor (Thales) in order to mitigate risks in the resignalling project. (25)
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Q2: March (a) Discuss how AET might use effective project planning when managing
risks in its supply chains.
2016
(15)
(b) Produce a Gantt chart based on the key project activity dates in the case
study. (10)
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Q2: May
2016
The case states that a shift from functional departments to a more process
management approach would take a long time to implement and that
a project approach would be desirable.
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Explain FIVE performance review mechanisms that Craig might establish as a
key part of managing the project. (25)
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Q2: July
Discuss FIVE project management risks that Thomas might encounter when
undertaking the cross-functional project between SMC and ZE before
2016
the contract for engines is awarded. (25)
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Q2:
(a) ACM’s project to source suitable alternative providers and sources of
glass is clearly complex. Analyse how the interrelationship between the
November
three key project management objectives of cost, quality and time may
2016
impact on the success or failure of ACM’s sourcing project. (15)
(b) Discuss, for any TWO stages of a project lifecycle model, the activities
that might be undertaken by ACM. (10)
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CIPS Exam Sample Questions – Learning Objective 3
Exam
Question 3
Q3: July
2013
Propose a business continuity plan that might be used to manage ONE of the
operational risks identified in your answer to Question1 (25)
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Q3:
There are many potential risks for GCRS throughout this project
November
Outline a contingency or continuity planning process and suggest how this
2013
could be applied to overcome these risks. (25)
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Q3:
January
2014
Discuss the benefits to GAF, and each of its key stakeholder groups, of using
an independent third party audit. (25)
Revision Notes
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Q3: March From the case study, senior representatives from the United Nations and the
2014
Ethical Trading Initiative have cast doubt on the use of third party supply
chain audits.
Analyse the role and potential disadvantages of using third party auditors
within the global garments sector (25)
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Q3: May
2014
A) Explain THREE different contractual provisions that a procurement
function could use to manage the risk of fraud in the supply chain
(15)
B) Discuss the key stages in business continuity planning in the context
of risk management (10)
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Q3: July
2014
Explain the issues that Supra might need to address through its contractual
arrangements in order to manage supply chain risk when dealing with the
new South American suppliers (25)
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Q3:
Explain TWO contractual aspects that Kiwi-Rail might have included in its
November contract with Dalian Locomotive and Rolling Stock Co Ltd in order to
2014
minimise the potential risks associated with the supply of the locomotives
(25)
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Q3:
January
2015
A) Samir has established that some of the suppliers did not have
adequate insurance protection.
Discuss FOUR benefits for NDA of ensuring that all external suppliers
have appropriate insurance policies in place to protect against risk.
(16)
B) Explain how an indemnity clause in contracts with external suppliers
would provide protection to NDA and reduce its liability for expensive
compensation payments. (9)
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Revision Notes
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Q3: March Discuss the benefits to the City Council of outsourcing, to an independent
2015
third party specialist consulting company, the provision of technical advice
and the preparation of the final technical specifications for the new journey
planner system. (25)
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Q3: May
2015
Explain the main elements that should be included in a business continuity
plan to be used by SCS in the event that the outsourced service fails to
perform for any reason. (25)
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Q3: July
2015
Despite careful planning and processes to reduce risks in a complex supply
chain such as for food, there is always the possibility of other serious
problems arising. Organisations need to prepare contingency plans to allow
them to address these supply chain risks.
Outline the main stages of a contingency plan that an organisation may
develop to reduce its supply chain risk. (25)
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Q3:
November
2015
A) The supply chain risks identified at Davies Engineering could be
managed by ensuring effective contract terms and provisions with its
supplies.
Examine THREE contractual provisions that would be incorporated into
supplier agreements by Davies Engineering to reduce risks. (15)
B) Explain how Davies Engineering might use insurance to mitigate the
risks identified in the case study. (10)
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10
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Q3:
January
2016
Outline FIVE contract provisions that TfL might incorporate into its new
contract with Thales in order
to mitigate the risks experienced in the previous contract with Bombardier.
(25)
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Q3: March Examine THREE risk management services that the local risk management
consultancy in the new
2016
market might provide to AET. (25)
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Q3: May
2016
(a) Outline a typical risk factor that GTC PC Division might consider, as part
of managing its complex global supply chain, in each of the
following categories:
(i) compliance risks
(ii) legal risks
(iii) reputational risks. (15 marks)
(b) The case states that GTC PC Division is considering the use of a force
majeure clause in future contracts.
Explain the meaning of a force majeure clause and the circumstances where
it might be triggered. (10 marks)
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Q3: July
2016
(a) Explain FOUR stages of a contingency planning process that Thomas
should go through, when preparing the ‘contingency plan’
required by SMC’s board of directors. (16)
(b) Discuss THREE benefits to SMC of having a contingency plan in place. (9)
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Q3:
The case study states that ACM’s standard purchase orders lack detailed
clauses for managing risks. Outline FIVE key contractual
November
provisions that could be included to make ACM’s purchase order
2016
terms and conditions more robust, drawing on appropriate
material from the case study. (25)
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CIPS Exam Sample Questions – Learning Objective 4
11
Case studies for questions are available in the resources section at aba-procurement.com
Exam
Question 4
Q4: July
2013
The case study indicates there is a ‘massive failure’ of supermarket retailers
to monitor and mitigate risks with their meat suppliers. One mechanism that
might help is the use of a risk register.
A) Explain the main sections that would be included in a risk register (9)
B) Discuss how the supermarkets might engage a range of key
stakeholder in undertaking risk assessments (16)
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Q4:
November
2013
A) Discuss FOUR potential risks that could be included in the risk register
to be presented to the board of management at GCRS. (16)
B) Discuss the use of a probability / impact matrix to manage THREE of
the risks identified in your answer to Q4A (9)
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Q4:
January
2014
Explain a rang risk assessment techniques that could be used by GAF
to evaluate the risks present in its supply chain (25)
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Q4: March The complexity of garment retailers global supply chains, as outlined in the
2014
case study, poses potential risks for procurement managers and their
organisations
Identify the groups of stakeholders in the global garment supply chain and
analyse their potential contribution in establishing an effective risk
management strategy to protect against such risks (25)
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Q4: May
2014
The case study implies that better purchasing organisations purchasing
organisations prepare for fraud through early risk assessment
Propose a range of risk assessment tools or techniques that could be used to
reduce the risk of supply chain fraud. (25)
12
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Revision Notes
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Q4: July
2014
Evaluate how business continuity planning might be used to mitigate risk for
Supra’s supply chain operations (25)
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Q4:
Explain a risk management process that could be applied by Kiwi-Rail to
November reduce future risks within its supply chain (25)
2014
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Q4:
January
2015
The case study states that a recent audit was critical of the lack of robust
plans to assess and manage risks at NDA.
Propose FIVE methodologies that the NDA team might use to assess the
probability and impact of risks facing NDA (25)
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Q4: March Propose and apply TWO risk assessment tools or techniques that could be
2015
used to assess the vulnerabilities or risks for the Council (25)
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Q4: May
2015
A) Propose TWO suitable risk assessment mechanisms that could be
applied by SCS when planning its outsourcing project (16)
B) Examine the role of international standards in the management of
risk (9)
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Q4: July
2015
A) It is suggested by David Read, Chief Executive of Prestige Purchasing,
that suppliers should be profiled on the basis of both risk and impact.
Explain how such a profile can be developed. (10)
B) In developing a risk management strategy, retailers in the food
supply chain will need to involve suppliers and engage them in the
13
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risk management process.
Outline THREE ways in which this engagement can be achieved. (15)
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Q4:
November
2015
The customer has offered to allow Ian Shotton access to its own risk
management system, including detailed processes and templates.
Outline how each of the following may be used within a risk
management system:
i)
Risk probability and impact assessments (matrices)
ii)
Risk registers
iii)
Vulnerability assessments
iv)
Decision tree analysis
v)
Probability theory (or statistical evidence for risk probability)
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Q4:
January
2016
A) Explain why it is important for TfL to develop a risk management culture
when considering
major infrastructure projects. (10)
B) Suggest the main elements that TfL might include in its risk management
strategy in order to
reduce its supply chain vulnerability. (15)
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Q4: March Explain a typical risk management process, using examples of potential risks
for AET to support your answer. (25)
2016
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Q4: May
2016
(a) Explain why GTC PC Division should do a vulnerability assessment of its
supply chain risks, and which areas of vulnerability the
assessment might identify. (17)
(b) Discuss the FOUR stages of a typical vulnerability assessment that GTC PC
Division would apply to its complex supply chain. (8)
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Q4: July
2016
(a) Explain how systems to assess vulnerabilities and risks will help to
manage risks in SMC’s supply chain. (10)
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(b) Suggest THREE ways in which SMC’s procurement function can contribute
to the mitigation of supply chain risk. (15)
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Q4:
ACM should develop a business continuity plan to protect itself in the event
that PG defaults on its contractual obligations and fails to supply.
November
Explain the typical stages which might feature in ACM’s business
2016
continuity planning process. (25)
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15
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16
Case studies for questions are available in the resources section at aba-procurement.com
17
Case studies for questions are available in the resources section at aba-procurement.com