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Level 3 Advanced Certificate in Procurement
and Supply
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AC3 -Procurement and supply
workflow
EXAM EXEMPLAR QUESTIONS
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AC3 Exam Exemplar Questions Mar2013
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20 ICAT
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QUESTIONS AND ANSWERS
QUESTIONS
Q1 M. Stevens Ltd
Purchase Requisition
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All sections must be completed
WS278-342
Requisition Date
25th April 2016
Quantity
Description / Specification/ Part
Number
(Please provide full details)
Total Cost
8
Best quality Laptop
Computers and spare
parts.
Approx. 500 dollars
Total Requisition Value
To be confirmed
User Department:
Information Technology Department - Production Department – Marketing Department
Budget Code
249746-12
Delivery Date Required
Very Urgent
Delivery address / point
To the personal office of Mrs M. Stevens
Prepared by:
M. Stevens
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Authorised by:
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Requisition Reference
This is not a purchase order
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Fig 1.1 Purchase requisition
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AC3 Exam Exemplar Questions Mar2013
Q1 (a)
The purchase requisition shown in Fig 1.1 has been received recently. Suggest and explain FIVE areas that may require further investigation or challenge before the
purchase requisition document can be processed and considered for purchasing. (10 marks)
Explanation (1 mark each)
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Area (1 mark each)
AC3 Exam Exemplar Questions Mar2013
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Marking scheme Q1 (a):
One mark for each area that should be investigated. One mark for an explanation as to why this
area should be investigated/challenged:
(10 marks)
Area (1 mark each)
Approximate rather than accurate cost included
• Requisition Date
Incorrect date (impossible as far into the future)
• Department to be charged
• Delivery Date
• Delivery Point / Unethical
behaviour
• Authorisation
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• Cost / Price
Explanation (1 mark each)
Multiple user departments make budget allocations
difficult
Delivery date of “very urgent” is not useful and is
imprecise.
Delivery point to the requisition signatory is potentially
conflict of interest/ lack of separation of roles.
Finally the requisition is not authorised, the section for
signature is blank.
Other valid areas that are identified and explained will be accepted.
Learning outcome: 1.0
CIPS course book reference: Pages 1, 2, 6, 8 and 9
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AC3 Exam Exemplar Questions Mar2013
Q1 (b) The purchase requisition shown in Fig 1.1 has been received recently. Marking scheme Q1 (b):
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Suggest THREE items that could be included in a conformance specification for these laptop
computers. (3 marks)
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Examples included in a conformance specification could include the following:
•
Manufacturer
•
Colour
•
Screen size
•
Keyboard design
•
Number of connections (USB, etc.)
•
Operating system
•
Any items that refer to the design and physical features of the machines may be included.
(3 marks)
Learning outcome: 1.0
CIPS course book reference: Pages 1, 2, 6, 8 and 9
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AC3 Exam Exemplar Questions Mar2013
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Q1 (c)
The purchase requisition shown in Fig 1.1 has been received recently. Marking scheme Q1 (c):
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Suggest THREE items that could be included in a performance specification for these laptop
computers. (3 marks)
Examples included in a performance specification could include the following:
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Operating efficiency and outputs
•
Ambient operating conditions requirements
•
Speed to perform certain benchmark tasks
•
Battery life
•
Screen clarity
•
Any items that refer to the operation and performance of the machines may be included.
(3 marks)
Learning outcome: 1.0
CIPS course book reference: Pages 1, 2, 6, 8 and 9
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AC3 Exam Exemplar Questions Mar2013
Q1 (d) The purchase requisition shown in Fig 1.1 has been received recently. Outline THREE areas that could be included in a related service level agreement (SLA) with the
laptop supplier and explain why they are important for the buyer. (9 marks)
Reason it is important for the buyer (2 marks each)
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SLA area (1 mark each)
AC3 Exam Exemplar Questions Mar2013
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Marking scheme Q1 (d):
SLA area (1 mark each)
Reason it is important for the buyer (2 marks each)
The buyer will know what period machines will be
covered within the original contract SLA.
• Repairs turnaround
Turnaround will determine what down time there
may be for the buyer when machines are not working
correctly.
• Maintenance arrangements
• Replacement machine
arrangements
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• Warranty terms and replacement
policy
The buyer needs to know what is covered; parts
and labour, replacement machines, on-site / off site
repairs.
The buyer will need to estimate how many machines
will need to be available, while others are being
repaired.
• Back-up arrangements on data
• Call-out times and costs
This will allow the buyer to plan how archives for data
will be used and how often, for back-up.
The buyer will need to know this to budget for the
future. Are these costs included or an extra to the
original contract?
Other valid areas identified and explained for the SLA will be accepted.
Areas that could be included in a service level agreement with the laptop supplier include
anything that relates to providing a service in relation to the items:
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1 mark for each SLA area identified and up to 2 marks for a suitable explanation.
Learning outcome: 1.0
CIPS course book reference: Pages 1, 2, 6, 8 and 9
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AC3 Exam Exemplar Questions Mar2013
(9 marks)
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Q2
Fig 2.1 Purchase order
The tax rate is correct for this purchase order
AC3 Exam Exemplar Questions Mar2013
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The tasks that follow use the purchase order prepared by the buyer working for Easton House Farms
Ltd (shown in Fig 2.1). The purchase order is yet to be sent to the supplier.
Items required are:
250 kilos of Soil Treatment, product code 6C-34256, unit price $16.50 per 10 kilo pack
40 litres of Concrete Cleaner, product code 4C-12798, unit price $4.50 per 1 litre pack
17 metres Reinforced Tube, product code 1C-36985, unit price $3.50 per metre
Suggest SEVEN additional pieces of information that are currently missing from the purchase
order and explain why each is important for the buyer to specify.
(21 marks)
Potential consequence for the buyer if this additional
piece of information is not specified on the
purchase order
(2 marks each)
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Additional piece of information
(1 mark each)
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Q2 (a)
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AC3 Exam Exemplar Questions Mar2013
Marking scheme Q2 (a):
There are likely to be differences of opinion on additional information required according to
experience, organisation practice and ‘sector’ of candidates.
One mark to be awarded for each appropriate piece of additional information.
(7 marks)
Additional piece of information
(1 mark each)
Currency indicator ($)
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Up to two marks can be given if an explanation is provided as to what the potential
consequence for the buyer would be if this additional piece of information was not specified on
the purchase order.
(14 marks)
Potential consequence for the buyer if this additional
piece of information is not specified on the purchase
order (2 marks each)
May be invoiced the incorrect amount, or may miss
requirement for currency
Purchase order date
Absence makes tracking difficult or may cause
confusion when referring to multiple orders
Contact detail for buyer
Absence may mean delays in enquiries being
addressed to the buyer
Note regarding terms and conditions Absence may result in supplier believing their terms
arrangements
will apply
Absence may leave confusion regarding risk and
responsibilities
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Incoterm applicable
Packing instructions
Absence will leave decision in the hands of the supplier
Delivery days and times possible
Absence may mean delays in receipt or inability to
deliver
Payment terms
Absence leaves confusion regarding when payment
will be made
Name of buyer
Absence may mean delays in enquiries being
addressed to the buyer
Line number
Allows for easy reference when discussing PO
internally or externally
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Counter signature
Absence results in more time looking up cost code
later
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Cost code information (less likely)
May delay payment where two signatures or spend
limit applies
Postcode/ZIP code/postal zone ref
May delay post, delivery, use of mapping software
Clearer unit /quantity/descriptions
Makes mistakes less likely from supplier, (warehouse
picking)
Reference to specifications
Absence leaves potential for ‘standard’ product where
specific required
AC3 Exam Exemplar Questions Mar2013
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Likely additions include:
Credit will be given for alternative appropriate detail, note that comments relating to signatures from
supplier will not receive credit as the PO has not yet been sent. Note that many consequences could
be answered by ‘supplier will need to contact buyer for clarification’ this is regarded as non-specific
and worth one mark.
Learning outcome: 2.0
CIPS course book reference: Page 34-35, sections 2.1-2.10
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AC3 Exam Exemplar Questions Mar2013
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Q2 (b) Explain TWO reasons why an ‘order acknowledgement’ form has been provided by Easton
House Farms Ltd.
(4 marks)
Marking scheme Q2 (b):
Candidate answers may be from the following ‘most likely’ suggestions. Note that ‘partly true’
answers relating to efficiency may also gain part or full credit.
•
•
•
•
•
As part of contract formation – achieving acceptance is often required as part of legal
requirements
As a means of gaining or encouraging the anticipated delivery date from the supplier
To save time/effort on the part of the supplier when acknowledging the order
To help the buying organisation – the order confirmation is in ‘standard form’ and
contains the PO number
The buyer and seller have agreed this procedure.
Credit will be given for alternative appropriate reasons, note that comments relating to the
purchase order detail are not appropriate.
(4 marks)
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Learning outcome: 2.0
CIPS course book reference: Page 34-35, sections 2.1-2.10
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AC3 Exam Exemplar Questions Mar2013
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Complete Fig 3.2 to identify whether each of the statements that describe the Delphi
forecasting technique are true (T) or false (F). (5 marks)
True (T)/
false (F)
Statement
(i)
This is a qualitative
method
(ii)
It uses previous
history to make
predictions
(iii)
It is a subjective
approach to
forecasting based
on a systematic
approach to reaching
agreement among a
group of forecasters
(iv)
The forecasters
do not initially
communicate with
each other
(v)
A single report is
signed-off following
initial agreement
Statement
Or
This is a quantitative
method
Or
It uses the judgement
of experts to make
predictions
Or
It is an objective
approach to
forecasting using
rules and formulas in
agreement among a
group of forecasters
Or
The forecasters
are in constant
collaboration with
each other
Or
The various reports
are adjusted until
opinion is reached
Fig 3.2
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True (T)/
false (F)
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Item
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Q3 (a)
AC3 Exam Exemplar Questions Mar2013
Marking scheme Q3 (a):
Statement
True (T)/
false (F)
(i)
This is a qualitative
method
True
(ii)
It uses previous
history to make
predictions
(iii)
It is a subjective
approach to
forecasting based
on a systematic
approach to reaching
agreement among a
group of forecasters
(iv)
The forecasters
do not initially
communicate with
each other
True
(v)
A single report is
signed-off following
initial agreement
False
Statement
True (T)/
false (F)
This is a quantitative
method
False
Or
It uses the judgement
of experts to make
predictions
True
Or
It is an objective
approach to
forecasting using
rules and formulas in
agreement among a
group of forecasters
False
Or
The forecasters
are in constant
collaboration with
each other
False
The various reports
are adjusted until
opinion is reached
True
Or
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Item
False
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True
Or
Fig 3.2
CIPS course book reference: Page 43
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(5 marks)
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1 mark for indicating the correct true for each statement. Learning outcome: 3.0
AC3 Exam Exemplar Questions Mar2013
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Q3 (b) Calculate the values for (i) to (v) in Fig 3.3. Cost of product (£)
Selling price (£)
170
200
(i)
20
100
Profit margin (%)
(ii)
(iii)
(v)
(iv)
33
25
Mark-up (%)
Profit margin (%)
Fig 3.3
Mark-up (%)
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450
(5 marks)
Marking scheme Q3 (b):
Cost of product (£)
Selling price (£)
170
200
450
(v)
(iii)
75
540
100
(i)
17.6
(ii)
15
20
(iv)
16.7
33
25
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Fig 3.3
One mark for each correct answer Learning outcome: 3.0
CIPS course book reference: Page 58
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AC3 Exam Exemplar Questions Mar2013
(5 marks)
Q3 (c)
Complete the labels (i) to (iv) for Fig 3.4 – Y Limited - breakeven analysis. (5 marks)
(c)
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(b)
(d)
(a)
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(e)
Fig 3.4 Y Limited - breakeven analysis
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AC3 Exam Exemplar Questions Mar2013
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Marking scheme Q3 (c):
Y-Limited Breakeven analysis
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(c) Sales Revenue
(b) Profit
(a) Margin of Safety
(d) Total Costs
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(e) Fixed Costs
Fig 3.4 Y Limited - breakeven analysis
1 mark for each correct label Learning outcome: 3.0
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CIPS course book reference: Page 55
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AC3 Exam Exemplar Questions Mar2013
(5 marks)
Q3 (d)From Fig 3.4 complete Fig 3.5 to identify whether each of the statements that describe whole
life costing are true (T) or false (F). (5 marks)
True (T)/
false (F)
Statement
(i)
It is not an exact
science
(ii)
Cost estimates are
objective
(iii)
It enables true
budgeting over the
life of the asset
(iv)
It promotes
cross-functional
communication
on cost and asset
management
(v)
It is based on
production output
Statement
Or
True (T)/
false (F)
It is an exact science
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Item
Or
Cost estimates are
subjective
Or
It enables realistic
budgeting over the
life of the asset
Or
The finance
department
determine the
forecasted budget for
the whole life costing
Or
It is based on sales
forecasts
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Fig 3.5
AC3 Exam Exemplar Questions Mar2013
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Marking scheme Q3 (d):
Item
Statement
True (T)/
false (F)
(i)
It is not an exact
science
True
(ii)
Cost estimates are
objective
False
Or
Cost estimates are
subjective
True
(iii)
It enables true
budgeting over the
life of the asset
False
Or
It enables realistic
budgeting over the
life of the asset
True
(iv)
It promotes
cross-functional
communication
on cost and asset
management
True
Or
The finance
department
determine the
forecasted budget for
the whole life costing
False
(v)
It is based on
production output
False
Or
It is based on sales
forecasts
True
True (T)/
false (F)
It is an exact science
False
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Or
Statement
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Fig 3.5
1 mark for indicating the correct true for each statement Learning outcome: 3.0
CIPS course book reference: Page 60
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AC3 Exam Exemplar Questions Mar2013
(5 marks)
Classify the following FIVE headings into the correct balance sheet category by writing each
under the appropriate heading in Fig 3.6. (5 marks)
(i)
(ii)
(iii)
(iv)
(v)
Retained profits
5% secured loan
Stock
Trade creditors
Debtors
Current assets
Long-term liabilities
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Q3 (e)
Current liabilities
Capial and reserves
Marking scheme Q3 (e):
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Fig 3.6 Balance sheet categories
(5 marks)
One mark for each answer placed in the correct box. Up to five marks in total.
Retained profits
5% secured loan
Stock
Trade creditors
Debtors
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(i)
(ii)
(iii)
(iv)
(v)
Current assets
Stock
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Debtors
Current liabilities
Trade creditors
Long-term liabilities
Capial and reserves
5% secured loan
Retained profits
Fig 3.6 Balance sheet categories
AC3 Exam Exemplar Questions Mar2013
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QUESTION 4:
Q4 (a)
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In your role as an administrator, in a purchasing and supply department, write an email using
the
template Fig
to inform
preferred
supplier
listan
that
there
will
changes to
Q4 (a) In your rolefollowing
as an administrator,
in a4.1
purchasing
andthe
supply
department,
write
email
using
thebefollowing
current
purchasing
procedures,
within
month. to current purchasing procedures,
template Fig 4.1
to inform
the preferred
suppliereffective
list that there
willone
be changes
(4
marks)
effective within one month.
(4 marks)
Fig 4.1
Fig 4.1
Q4 (b) Describe THREE reasons the communication of these
new processes to suppliers may not be effective.
(6 marks)
Marking scheme Q4 (a):
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1 mark for including each of the following up to 4 marks:
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Heading
•
Name of sender
•
Clear and informative content to message
•
Date
•
Attachment.
Learning outcome: 4.0
CIPS course book reference: Chapter 10, Page 101-102 and 105
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AC3 Exam Exemplar Questions Mar2013
(4 marks)
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Q4 (b) Describe THREE reasons the communication of these new processes to suppliers may not be
effective.
(6 marks)
Marking scheme Q4 (b):
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Suggested answers could include:
•
•
•
•
•
•
•
Email could be seen as an impersonal form of communication for long term suppliers and
affect on-going relationships
The tone and language used may not be appropriate
The use of jargon may affect the clarity of the message
There may be no way of checking that the message has been understood
There may be no indication of ways for suppliers to feedback or ask questions
How will the company know that the suppliers have read the information
Any other barriers that relate to email communication.
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(6 marks)
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2 marks per barrier described
Learning outcome: 4.0
CIPS course book reference: Chapter 10, Page 101-102 and 105
AC3 Exam Exemplar Questions Mar2013
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Q4 (c)
Tick box A or box B as appropriate:
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You are preparing for a presentation to the department on customer service using the following
headings:
A = What is the value to the organisation in delivering good customer service?
B = How can the organisation achieve good customer service?
Identify the correct statements for each heading by selecting the correct index letter A or B in
Fig 4.2
(5 marks)
A
EXAMPLE: It helps gather feedback on customer experiences
B
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Staff training and development on understanding customer needs
Job satisfaction will increase amongst staff
Enhances the credibility of the organisation’s brand
Methods for gathering feedback on customer experiences need to be
implemented
It is a mechanism for retaining customers
Marking scheme Q4 (c):
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Fig 4.2
1 mark for each correct statement under the correct heading
Suggested correct order: B,A,A,B,A
Learning outcome: 4.0
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CIPS course book reference: Chapter 9, Pages 87-90
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AC3 Exam Exemplar Questions Mar2013
(5 marks)
Q4 (d) In the following table Fig 4.3 identify a feature of an e-catalogue and explain how it will solve
the customer complaint about using the organisation’s paper catalogue.
(10 marks)
Customer complaint
Feature of
e-catalogue
(1 mark each)
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The products took
too long to find in
the catalogue
Explanation of how feature will solve
customer’s complaint
(1 mark each)
The products did not
match the catalogue
description
It was not possible
to compare products
easily
The ordering process
was time consuming
There was no
information on
the availability of
products
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Fig 4.3
AC3 Exam Exemplar Questions Mar2013
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Marking scheme Q4 (d):
One mark for each ‘e’ feature correctly identified.
One mark for an explanation of how the feature will solve the customer’s complaint.
Suggested answers include:
Explanation of how feature will solve
customer’s complaint
(1 mark each)
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Customer complaint
Feature of
e-catalogue
(1 mark each)
The products took
too long to find in
the catalogue
Search and refined
search features
Search time is reduced as product selection
options can be filtered to show most relevant
choices
The products did not
match the catalogue
description
Video, 360 degree
images, additional
product information
on size, colours, etc.
The use of both visual and written descriptions
allow customers to make a more accurate
selection
It was not possible
to compare products Comparison tool
easily
A number of products and their features can
be compared reducing the risk of ordering the
wrong product.
This allows the customer to see the total
The ordering process Shopping cart, review
amount spent and ‘go to checkout’ quickly
was time consuming feature
delivering a faster ordering process
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‘Out of stock’, ‘back
Avoids disappointment and enables the
in stock soon’ notices customer to reselect an alternative product
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There was no
information on
the availability of
products
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AC3 Exam Exemplar Questions Mar2013
(10 marks)