CIPS Exam L4M2 Topic 1 Question 40 Discussion

Actual exam question for CIPS's L4M2 exam

Question #: 40
Topic #: 1

[All L4M2 Questions]

SET Group are a start-up company trying to estimate the direct costs of materials for a project. The organisation has limited procurement records available. Would using general industry averages as a benchmark provide an accurate estimation of the project costs?

AYes, industry benchmarks are always kept up to date to consider real-time market conditions

BNo, the organisation will not have access to industry benchmarks as they are a new organisation

CNo, industry benchmarks do not consider specific specifications, quality requirements, or real-time market conditions

DYes, cost predictions do not need to be accurate as they are just an initial guess

Show Suggested Answer

Suggested Answer: B

Those items make up small portion of spend and the supply risk is low. So it is tactical item according to Kraljic portfolio matrix. Procurement should bundle these items into larger contracts, simplify procurement process.

LO 2, AC 2.1

by Cammy at Jul 15, 2024, 01:49 AM

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22 days ago

I think using industry averages could be helpful.

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