OPERATIONS QUESTIONS

1. The National Health Service in the UK is an example of an organisation in which sector?

A. Public C. Third
B. Private D. Primary.
2. Survival, growth and make profit are examples of what
A. KPLS C. Service level agreement
B. Objectives D. Mission statement
3. Which of the following is not a type of internal stakeholders?
A. CEO C. Media.
B. Finance department. ` D. Design team
4. What does B2B stand for?
A. Business to business C. Back to basics
B. Business to bank D. Back to business
5. What do credit rating score help your organisation do?
A. Upset business. C. Evaluate supplies
B. Sell supplier data D. Pay suppliers debts
6. CRS policies evaluate
A. Corporate social responsibility C. Corporate secret responsibility
B. Corporate stationary responsibility D. Corporate secondary responsibility
7. Identify what type of purchasing is used by one off or immediate requirement and frequently used with in
domestic purchase.
A. Fixed C. Target
B. Variable D. Spot
8. Identify what ITT could stand for. More than one option may apply
A. Invitation to tempt C. Invitation to trick
B. Invitation to tender D. Invitation to treat
9. Identify which of the 3 elements must be present for a contract to be valid
A. Intention, consideration, agreement C. Interrogation, consideration, agreement
B. Intention, contemplation, agreement D. Interrogation, contemplation, agreement
10. Today, which of the following are likely to be interested in an organization’s approaches to sustainability
care for the environment and ethical practices?
A. All stakeholders C. Connected stakeholders
B. Internal stakeholders D. Secondary stakeholders
11. Which two components make up a contract
A. Offer and other C. Offer and acceptance
B. Offer and refund D. Offer and consideration

KCM 1
 12. Direct cost are
A. Not directly attributable to the product or service
B. Directly attributable to product or service
C. Not required to be managed
D. Not as important as indirect cost
13. acceptance ,rejection ,revocation time and counter offer are ways that an offer can be
A. Agreed C. Received
B. Tendered D. Terminated
14. The charity ‘Oxfam’ is an organisation in which sector?
A. The private sector C. The financial sector
B. The voluntary sector D. The public sector.
15. A charity is a type of organisation in which sector?
A. The private sector C. The voluntary sector
B. The public sector D. The financial sector
16. The private sector includes which of the following organisations?
A. Humanitarian organisations
B. Central government departments and local authorities
C. Banks, insurance companies and management consultancies
D. Department for works and pensions
17. A sole trader
A. Employs many persons, has unlimited liability and needs to have its accounts audited
B. Employs one person, has limited liability and needs to have its accounts audited
C. Employs many persons, has unlimited liability and does not need to have its accounts audited
D. Employs one person, has limited liability and does not need to have its accounts audited
18. Which of the following is a characteristic of an organisation in the private sector?
A. Organisations are owned by the government on behalf of the state
B. The primary purpose is achieving defined service levels to the public
C. The primary purpose is the achievement of commercial objectives with the main aim of maximizing
profits
D. There is little or no competition
19. Which of the following is an area of focus for the procurement and supply function of a private sector
organisation?
A. Contributing to profit C. Making donations
B. Generating taxes D. Supporting the government
20. Private sector organisations are owned by which group?
A. Stakeholders C. Customers
B. Creditors D. Shareholders

KCM 2
 21. The public sector includes which of the following organisation?
A. Banks, insurance companies and data warehouses
B. Management consultancies and data warehouses
C. Central government departments and local authorities
D. Sports clubs, churches and charities
22. The main types of organizational sector are…..
A. first, second and third sector C. first, private and public sector
B. private, public and third sector D. primary, agricultural and fishing
23. Absolute centralization of authority is only feasible in….
A. matrix organisations C. public sector organisations
B. democratic organisations D. very small organisations
24. Which of the following is a characteristic of an organisation in the public sector?
A. Organisations are owned by the their investors and controlled by directors or managers on their behalf
B. The primary purpose is achieving defined objectives for charitable purpose or to represent the interest
of a group of people
C. There is little or no competition
D. The primary purpose is the achievement of commercial objectives with the main aim of maximizing
profits
25. Which of the following is not a purpose or objective of third sector organisations?
A. Raising awareness of a cause or issue
B. Political lobbying and advocacy on behalf of a group
C. Maximizing profits for the owners of the organisation and contribute to their wealth
D. Providing material aid and services to the public or specific beneficiaries
26. Third sector organisations derive their finance from which of the following sources?
A. Borrowing C. Shares
B. Donations D. Investors
27. Family under the Maslow’s hierarchy of needs theory is under which of the following stages?
A. Safety C. Love/Belonging
B. Self-actualization D. Physiological
28. What should organisations seek to do with stakeholders who have high interest and high power?
A. Keep satisfied. C. Invest maximum effort.
B. Keep informed. D. Invest minimal effort.
29. One advantage of operating as a partnership would include:
A. Limited liability for all partners
B. Being able to raise capital through share issues
C. Greater power than a sole trader for decision making
D. Access to a larger amount of initial capital

KCM 3
 30. What is 'limited liability?'
A. Limited liability refers to how much the directors have to contribute in the event of the company
becoming insolvent.
B. Limited liability refers to the ability of a member to limit his liability.
C. Limited liability refers to the directors' ability to limit their liability for acts of negligence, fraud etc.
D. Limited liability refers to the ability of a company to limit its liability.
31. Which ONE of the following statements is not true?
A. Sole proprietors are not permitted to take on employees.
B. Sole proprietors can be subject to certain provisions in the Companies Act 2006.
C. Sole proprietors are personally liable for the debts and liabilities of the sole proprietorship.
D. The sole proprietor owns all the assets of the business and is entitled to all of the profits that the business
generates.
32. One disadvantage of operating as a partnership would include:
A. Being able to raise capital through share issues.
B. Access to a larger amount of initial capital.
C. Greater chances of conflicts when making decisions
D. Limited liability for all partners.
33. An advantage of operating as a limited company rather than a partnership would not include:
A. All owners benefit from limited liability.
B. Those who run the company may have different objectives from those who own the company.
C. Firm is not constrained by retirement of partners.
D. Potential access to greater capital resources.
34. An inexperienced individual training on the job to develop the skill required is referred to as which of the
following?
A. Managing director C. Operatives
B. Team leaders D. Apprentices
35. A private limited company (Ltd)
A. May not offer its shares for sale to the public, has limited liability and needs to have its accounts audited
B. May offer its shares for sale to the public, has limited liability and does not need to have its accounts
audited
C. May not offer its shares for sale to the public, has limited liability and does not need to have its accounts
audited
D. May offer its shares for sale to the public, has unlimited liability and does not need to have its accounts
audited
36. A partner who is entitled to a share of the profits from a partnership is known as:
A. A salaried partner. C. A managing partner.
B. An equity partner. D. A limited liability partner

KCM 4
 37. An organisation running a business has the following attributes: the assets belong to the organisation, it can
create a floating charge over its assets, change in membership does not alter its existence, and members cannot
transfer their interests to others. What type of organisation is it?
A. A private limited company C. A limited liability partnership
B. A general partnerships D. A public limited company
38. Which of the following is not true regarding a partnership?
A. A partnership is a voluntary association.
B. Partnerships pay income taxes.
C. Partnerships have limited life.
D. Partners in general partnerships have unlimited liability.
39. A partnership
A. Is formed by two or more persons
B. Is a separate legal entity
C. Does not entitle all partners to share in the running of the business
D. Is obliged to make accounting information available to the public
40. Which is NOT a condition of a limited partnership?
A. Limited partners are expected to have an active role in management.
B. A limited partner's liability will be limited to his/her investment.
C. One partner of the limited partnership must be a general partner.
D. Limited partnerships will have more than one class of partner.
41. Which of the following is a responsibility of a senior manager in an organisation?
A. Responsible for planning and directing the work of a team or individual
B. They provide guidelines to other staff and are the first area of escalation should there be a problem
C. Responsible for strategy and decision making within an organisation.
D. Responsible of day to day operations within a department and ensuring that work is done
42. Association of 2 or more persons to carry on a business for purpose of earning profit is known as
A. Partnership C. Insurance
B. Legal entity D. None of above
43. Services cannot be separated from the provider of the service. Which of the following describes this?
A. Inseparability C. Intangibility
B. Lack of ownership D. Perishability
44. What is the output of a manufacturing company?
A. High-quality services C. Tangible products to sell to customers
B. Public accountability and audits D. A well-educated workforce
45. A characteristic of services that distinguishes it from goods is which of the following?
A. Little customer contact C. Labour intensive
B. Capital intensive D. Long lead times

KCM 5
 46. An implied term in a contract is….
A. Clearly stated and recognized in the contract between the supplier and buyer
B. An example of common law
C. A term that should be viewed in isolation
D. A vital term that can result in termination of a contract if breached
47. A public limited company (plc)
A. Employs many persons, has unlimited liability and needs to have its accounts audited
B. Employs many persons, has unlimited liability and does not need to have its accounts audited
C. May offer its shares for sale to the public, has limited liability and does not need to have its accounts
audited
D. May offer its shares for sale to the public, has limited liability and needs to have its accounts audited
48. The outputs of a university are …..
A. Mainly goods but with some services C. Goods
B. Mainly services but with some goods D. Services
49. In Maslow's hierarchy of needs, which is the highest level of need?
A. Esteem C. Safety.
B. Social D. None of the above
50. The output of any organisation may be…
A. Goods, services or a mixture of the two C. Gifts, trades, wants and needs
B. Time, money or a mixture of the two D. Labour, land, services or goods
51. Which of the following characteristics of services is defined as ‘services cannot be stored?
A. Perishability C. Variability
B. Intangibility D. Complexity
52. Features of a business organisation include……
A. Voluntary and charitable activities, social networking, informality
B. Division of labour, planning, control
C. Unstructured power, unshared goals, illegality
D. Membership, subscriptions, graduation ceremonies, information technology
53. Which of the following is a characteristic of primary industry?
A. It transforms materials into components C. It is only involved in delivering services
B. It has no choice about its location D. It does not make a profit
54. Which of the following hygiene factors are in Herzberg's theories?
A. Work itself. C. Company policy and administration.
B. Responsibility. D. Recognition and interpersonal relations
55. When all of the physiological needs are met, people tend to become concerned with?
A. Social (love/belonging) needs C. Self-actualization needs
B. Safety needs D. Esteem needs

KCM 6
 56. Which of the following staff is responsible for reporting to the CEO, and lead and specialise in specific areas
in an organisation?
A. Managers C. Directors
B. Senior managers D. Operatives
57. The quality of goods is easily assessed than for services. Which of the following explains quality of services
being difficult to assess?
A. Complexity C. Inseparability
B. Variability D. Perishability
58. Which of the following is a description of a lump sum pricing arrangement?
A. A price that is quoted by a supplier which does not change for the whole duration of a contract
B. A pricing arrangement where the supplier and buyer agree a final price for the order at the beginning of
the contract
C. Pricing arrangements which enables the prices to change throughout the duration of the agreement
D. A maximum price for a supplier that is agreed by a buyer and set to be used for the contract.
59. An express term in a contract is….
A. Clearly stated and recognized in the contract between the supplier and buyer
B. An example of common law
C. A term that should be viewed in isolation
D. A vital term that can result in termination of a contract if breached
60. Which of the following explains the use of ‘key performance indicators’?
A. Price market research information compared to chosen supplier price to ensure value for money
B. Explanations of delivery times and days that have been agreed between the buyer and supplier
C. Performance measurements included in a contract to check that requirements have been met
D. Quality related dimensions and testing methods to be check by the supplier before supply
61. Which is the correct order of needs according to Maslow's hierarchy?
A. Physiological, safety, belongingness, esteem, self-actualization
B. Safety, physiological, love, self-actualization, esteem
C. Physiological, safety, self-actualization, respect, belongingness
D. Love, self-actualization, respect, physiological, safety
62. Madeline always feels like she is never included in group activities or social events. She has become
depressed and lonely. According to Maslow, which category of needs has not been fulfilled?
A. Social (love/belonging) needs C. Self-actualization needs
B. Physiological needs D. Esteem needs
63. Organisation’s objectives are often evaluated against the SMARTER framework. Which of the following is
represented by the ‘S’ in SMARTER?
A. Service C. Specific
B. Social D. Supplier

KCM 7
 64. In Maslow's hierarchy of needs, food, water, sleep, and to an extent, sex, are considered _____ motives.
A. Safety C. Self-actualization
B. Physiological D. Belongingness
65. What should organisations seek to do with stakeholders who have high interest and low power?
A. Invest maximum effort. C. Keep satisfied.
B. Keep informed. D. Invest minimal effort
66. Under the Herzberg theory when an organisation have high hygiene factors and low motivation factors which
of the following can happen?
A. Work is basically just seen as a means to receive money
B. Employees are motivated but are complaining
C. Employees are unmotivated and complain a lot
D. The job is exciting but the salary and work conditions are not
67. Informal organisations include which of the following?
A. Banks, building societies and government departments
B. Hospitals, schools and nurses
C. Manufacturers, retail, the internet and purchasing departments
D. Social networks, ‘the grapevine’ and social groups
68. Which of the following is a description of a variable pricing arrangement?
A. A price that is quoted by a supplier which does not change for the whole duration of a contract
B. A pricing arrangement where the supplier and buyer agree a final price for the order at the beginning of
the contract
C. Pricing arrangements which enables the prices to change throughout the duration of the agreement
D. A maximum price for a supplier that is agreed by a buyer and set to be used for the contract.
69. In which of the following situations is the creation of contract specific key performance indicators justified?
A. For a product which has a specification provided by a supplier
B. Where routine low-value purchases are required on a regular basis
C. Where the buyer has no experience of the products to be purchased
D. For a complex, high value, new-buy contract
70. An organisation’s finance department, logistic function, marketing team and procuremnt department are all
what?
A. Internal stakeholders C. Functional stakeholders
B. Business stakeholders D. Department stakeholders
71. Which of the following is a characteristic of an external stakeholder?
A. It has no direct contractual dealings with the organisation
B. It has no interest in the activities and dealings of the organisation
C. It is not impacted upon by the organisation or its activities
D. It has no dependency whatsoever on the organisation

KCM 8
 72. The letter M in the acronomy ‘SMART’ when applied to objectives stands for….
A. Measurable C. Manageable
B. Major D. Must
73. Which of the following is not a type of external stakeholder?
A. Customers. C. Suppliers.
B. Employees. D. Government
74. Which of the following is an external measure of an organisation’s performance?
A. Cost of labour C. Market share
B. Labour turnover D. Staff satisfaction
75. Which of the following could be a source of information on levels of approval for procurement documents?
A. HR employment files C. Minutes of board meetings
B. Organisation’s annual accounts D. Finance manuals
76. Which of the following describes the content of an organisation’s mission statement?
A. An organisation’s basic purpose, business area and key values
B. The specific targets that the org need to pursue
C. The strategic plans that apply to the whole organisation over three years
D. The detailed departmental activities to be carried out in the next year
77. Which of the following is a benefit of periodic audits?
A. They take less time than other types of audits
B. They facilitate comparison, checks and balances
C. They ensure that procedures are the best available
D. They incur less cost
78. Which of the following is a characteristic of an organisation’s mission statement?
A. It states the organisation’s short term targets
B. It is a very general statement of entity culture
C. It includes details of profit margins to be met
D. It is stated in quantifiable terms
79. Which of the following is a description of a fixed pricing arrangement?
A. A price that is quoted by a supplier which does not change for the whole duration of a contract
B. A pricing arrangement where the supplier and buyer agree a final price for the order at the beginning
of the contract
C. Pricing arrangements which enables the prices to change throughout the duration of the agreement
D. A maximum price for a supplier that is agreed by a buyer and set to be used for the contract.
80. Which of the following is required in order to ensure all plans are coordinated and consistency in the
organisation?
A. Horizontal alignment C. External agreement
B. Social networks and groups D. Informal authority structure

KCM 9
 81. A performance specification includes….
A. Details of the use of the product by the buyer on receipt
B. Drawings showing the construction of the product
C. The chemical composition of the product and its components
D. A list of standards to which the product’s design relates
82. Which of the following variables may not influence structural choices and organisational development?
A. Strategic objective or mission of the organisation C. Number of workers in the organisation
B. Culture and management style used by the organisation D. Geographical dispersion
83. Which of the following is not a purpose of formal organisation structure?
A. Define work roles and relationships
B. Define work tasks and responsibilities
C. Encouraging grapevine and gossiping to channel information flow in the organisation
D. To encourage and support commitment, involvement and satisfaction of people who work the
organisation
84. Splitting an organisation into semi-independent strategic business units (SBUs) is called what?
A. Long division C. Distributive management
B. Divisionalisation D. Wide span of control
85. What would be a measure of performance for a purchasing function whose role is primarily commercial?
A. Lead times C. Strategic alignment
B. Error rates D. Cost savings
86. Which of the following describes ‘vertical alignment’ of objectives?
A. All efforts of different divisions ‘dovetail’ with each other
B. All personnel in the organisation have objectives
C. The organisation presents a coherent face to the world
D. All sub-units contribute to the overall corporate mission
87. Which type of specification could take the form of a recipe for a chemical formula?
A. Performance C. Operational
B. Conformance D. Quality
88. Under the Herzberg theory, low hygiene factors and low motivation factors causes which of the following in
an organisation?
A. There are few complaints but no motivation
B. Employees are unmotivated and complain a lot
C. The job is exciting but the salary and work conditions are not
D. Employees are highly motivated and there are few complaints
89. Which department of an organisation has the main role of understanding the needs and wants of customers?
A. Finance C. IT and Engineering
B. Humana resource D. Sales and Marketing

KCM 10
 90. Which of the following is a role for the Human Resource Management (or personnel) function in an
organisation?
A. Training and recruiting C. Checking and processing invoices
B. Sorting problems with office telephones D. Analysis of manufacturing costs
91. What is the main responsibility of production department?
A. Understanding the needs and wants of customers C. Converting inputs into finished products
B. Attends to the day to day duties of the organisation D. Recruiting and training workers
92. The type of pricing arrangements which enables the prices to change throughout the duration of the agreement
is called which of the following?
A. Variable pricing C. Fixed pricing
B. Lump-sum pricing D. Cost reimbursable pricing
93. The prompt delivery of components is likely to be a key objective of which department?
A. Finance C. Production
B. Design D. Human resources
94. Which of the following is the basic determinant of whether a contract exists?
A. The contract is in writing.
B. There is an offer and an acceptance.
C. A document of agreement has been signed by both parties.
D. There is an offer and invitation to treat.
95. How might a policy of spot buying assist a buying organisation’s supplier diversity policies?
A. By aggregation of demand into larger amount of work.
B. By limiting the award of contracts to only pre-qualified suppliers
C. By making more contracts available to small and medium sized enterprises.
D. By assisting with the development of preferred supplier lists
96. Under the Herzberg theory high hygiene factors and high motivation factors results in which of the following
in an organisation?
A. Employees are highly motivated and there are few complaints
B. The job is exciting but the salary and work conditions are not
C. Employees are motivated but are complaining
D. Employees are unmotivated and complain a lot
97. Which of the following describes a pricing arrangement where the supplier and buyer agree a final price for
the order at the beginning of the contract?
A. Lump sum pricing C. Fixed pricing
B. Schedule or rates D. Cost reimbursable pricing
98. Term contracts…….
A. Last forever C. Are never reviewed or renewed
B. Last for a defined period of time D. Are always reviewed and renewed

KCM 11
 99. Which of the following is an example of a ‘conformance specification’?
A. A specification stating the required levels of achievement for the product or service
B. A specification containing key performance indicators
C. A specification that is used only for service contracts
D. A specification which includes requirements to meet stated industry or international standards
100. A spot purchase is also known as what?
A. Call-off purchase C. Stripe purchase
B. Repeat purchase D. One-off purchase
101. Which of the following terms describes an agreement where a supplier agrees to provide an estimated
quantity of items over an agreed period at an agreed price?
A. Blanket order C. Major works order
B. Spot order D. Fixed price order.
102. Which of the following best describes the nature of a spot purchase?
A. An order that covers the continuous supply of an item for a fixed time period.
B. An order for an item that is sent by e-mail to a supplier rather than transmitted on a purchase order.
C. An order for the supply of a finite quantity of an item to be delivered at a stated, specific time.
D. An order written on an ordinary letter rather than on the usual purchase order document.
103. Which of the following best describes the purpose of a contract?
A. The issue of a purchase order and receipt of an acknowledgement from the supplier.
B. An arrangement for the ongoing supply of an item at the agreed times.
C. A legally binding agreement between a buyer and seller
D. The completion of negotiations between a buyer and supplier.
104. In which of the following circumstances might a mini competition be held under a framework agreement?
A. Where there are many sellers.
B. Where there are many buyers.
C. When the framework agreement is awarded to multiple suppliers.
D. When the framework agreement is awarded to a single suppliers.
105. Which of the following describes a price that is quoted by a supplier which does not change for the whole
duration of a contract?
A. Fixed pricing C. Lump sum pricing
B. Cost-plus arrangements D. Variable pricing
106. Under the Herzberg theory which of the following describes low hygiene factors and high motivation factors
in an organisation?
A. Employees are unmotivated and complain a lot
B. Employees are highly motivated and there are few complaints
C. Employees are motivated but are complaining
D. There are few complaints but no motivation

KCM 12
 107. An office relocation will involve many of which type of purchase?
A. Framework C. Tender
B. Repeat D. One-off
108. A brief selection process between capable providers under an existing framework agreement defines what?
A. Micro-competition C. A pre-qualification
B. A tendering exercise D. A mini-competition
109. When needs are unpredictable and may not last for much longer, the right type of contracts to use is a………..
A. Framework contract C. Term contract
B. Call-off contract D. Panel contract
110. Framework agreements are also called what?
A. Evergreen contracts C. Panel contracts
B. One-off contracts D. Renewable contracts
111. The award of an individual supply contract under a framework agreement is called what?
A. A pre-qualification C. An ITT
B. A call-off D. A call-on
112. Blanket ordering is appropriate for which of the following types of purchase?
A. Items of high value, bought only, such as snow ploughs
B. Items of low value, bought regularly, such as office stationery
C. Items of high value, bought from a strategic partner, such as IT services
D. Items of low value, bought only rarely, such a replacement fastening.
113. Which of the following is the advantage of using the internet in business processes?
A. Difficulty in verifying source credibility
B. Access to customer feedback, reports and ratings
C. Excess volume of information
D. Information may be unreliable or out dated
114. A buyer is unable to draw up a detailed specification upon which to base pricing schedules. The buyer he
may agree to ……
A. A schedule of milestones and completion dates
B. An incentivized contract
C. A fixed and firm price
D. A schedule of rates or charges
115. Which of the following under the Herzberg theory describes a situation where work is basically seen as a
means to receive money?
A. High hygiene factors and low motivation factors
B. Low Hygiene factors and low motivation factors
C. High Hygiene factors and High motivation Low
D. Hygiene factors and High motivation factors

KCM 13
 116. If handled properly, blanket orders carry what benefit to a supplier?
A. No need to send invoices to the buyer
B. The assurance of a good sales volume for a defined period
C. Warehousing is not required because all items on the agreement are held at the buyer’s premises
D. All call-off is made by use of e-purchasing
117. Rates of discount, time to pay, and cost reimbursement, could all form part of what?
A. A mini- competition C. A negotiation on delivery dates
B. A negotiation on pricing D. A delivery schedule
118. An agreement under which a supplier agrees to provide an estimated quantity over an agreed future period
of time is called a what?
A. A blanket order C. A repeat order
B. A regular Order D. A sheet order
119. Which of the following is the reason for cost variation in a contract?
A. Exchange rates fluctuations.
B. Increase in competition in the supply market.
C. Increase in the quantity of commodity supplied by the organization.
D. The use of a firm fixed price.
120. Which of the following defines a ‘fixed price contract’?
A. contract where the price has been quoted in writing by the supplier
B. A contract where the price may be varied using an agreed formula
C. A contract where the price is the same as for previous orders
D. A contract where the price cannot be varied between the purchaser and seller.
121. Which of the following is an example of a target costing method?
A. Cost reimbursable pricing arrangements C. Cost plus incentive fee.
B. Cost plus fixed fee D. Firm fixed price arrangements.
122. In a partnership, liability is _______________ and __________ partner can be held liable for the business’
entire debt.
A. limited; neither C. unlimited; each
B. limited; each D. unlimited; neither
123. Which of the following is a disadvantage of using the internet in business processes?
A. Low cost and fact method of information search
B. Information is frequently updated
C. Facilitates for direct contact (e.g. via e-mails)
D. Difficulty in verifying source credibility
124. Name one of the reports offered by a credit rating agency:
A. Comprehensive insight report C. Order book analysis.
B. Cash flow forecast. D. Environmental audit.

KCM 14
 125. When employees are unmotivated and complains a lot, which of the following under the Herzberg theory
will be happening in an organisation?
A. High hygiene factors and low motivation factors
B. Low Hygiene factors and low motivation factors
C. High Hygiene factors and High motivation
D. Low Hygiene factors and High motivation factors
126. Which of the following explains the term ‘variable cost’?
A. An agreed price from a supplier for a fixed period as part of a call-off contract
B. A cost that automatically change by increasing or decreasing with volumes produces
C. A cost which is not linked to the rate of inflation or currency value
D. A price from a supplier which only varies if specific amounts or values are exceeded
127. Which of the following best describe one of the main advantages for the buyer of fixed price method of
contract pricing?
A. Prices are monitored by reference to independently-published indices.
B. It is particularly useful for contracts for goods whose prices fluctuate overtime.
C. It can be used when the exact nature of the work to be done is not known at the outset.
D. The supplier would bear any risk of the contract being under-priced.
128. Contracts that include ‘risk and rewards’ arrangements are called…..
A. Term contract C. Target contracts
B. Variance contracts D. Incentivised contracts
129. Which method of pricing carries the highest risk for the supplier and the lowest risk for buyers?
A. Cost-plus C. Market price
B. Target cost incentive D. Firm place
130. A high credit score will indicate…..
A. the supplier is very profitable
B. the experience and qualifications of the directors
C. the supplier has a wide customer base
D. a low risk supplier capable of paying their bills
131. What is an advantage of using a credit rating agency on existing or potential suppliers?
A. It will ensure that your suppliers will always be financially stable
B. They continuously monitor supplier status and risk
C. The credit rating agency will clarify any issues raised with your supplier
D. It will save conducting any other appraisal of suitability of supplier
132. Terms of payment and credit or methods of payment under negotiations and agreements on price describes
which of the following?
A. Payment terms C. Pricing arrangements
B. Reimbursement terms D. Discount terms

KCM 15
 133. Which of the following describes a ‘pre-qualified supplier’ in a competitive bidding process?
A. A supplier whose capabilities have already been appraised by the buyer’s organisation
B. A supplier with which the buyer’s organisation has previously done business
C. A supplier that has expressed an interest in doing business with the buyer’s organisation
D. A potential supplier that has a good reputation for supplying high quality products
134. What is a credit rating score?
A. The score is a numerical indicator of the average payment time
B. The score indicates the strength of their quality management systems
C. The score indicates the likelihood of the customer going out of business
D. The score indicates only the strength of the company’s balance sheet
135. Which of the following under the Herzberg theory describes a situation where employees are highly
motivated and there are only few complaints?
A. High hygiene factors and low motivation factors
B. Low Hygiene factors and low motivation factors
C. High Hygiene factors and High motivation Low
D. Hygiene factors and High motivation factors
136. Which of the following explains the accounting term ‘fixed cost’?
A. An agreed price from a supplier for a fixed period as part of a call-off contract
B. A cost that does not automatically increase or decrease with volumes produces
C. A cost which is not linked to the rate of inflation or currency value
D. A price from a supplier which only varies if specific amounts or values are exceeded
137. Which of the following describes how search results are displayed?
A. Local organizations first.
B. Largest organization first-by turnover.
C. Most suitable and capable organizations first.
D. By other criteria dependent upon the search engine.
138. What is a benefit of obtaining credit scores?
A. It enables the credit rating company to collect debts
B. It helps us understand the risk of business failure
C. It ensures that the business is not going to fail
D. It eliminates the need to understand the risks of poor payment
139. Which of the following is not a way of classifying organisations involved in procuring goods and services?
A. Structure and ownership C. Primary objectives
B. Profits D. Size
140. Which of the following is a characteristic of services?
A. Tangible C. Short lead time
B. Long lead time D. Capital intensive

KCM 16
 141. Which of the following is a socio-cultural factor influencing organization under STEEPLE framework?
A. Rate of inflations, tax policy and level of unemployment.
B. Structure of population, increase of global population and level of education.
C. Regulatory and law determinants that can negatively or positively affect decisions of management of
company.
D. Environmental protection legislation, pollution, waste management and energy saving technologies
142. HR ,Customer service and procurement are typical examples of what in an organisation
A. Employer C. functions
B. shareholders D. partnership
143. In which of the following situations will a buyer need to undertake enquiries with a range of potential
suppliers?
A. Where the item is new and is high value
B. Where a ‘call-off contract’ is in operation
C. Where a ‘blanket order’ is in operation
D. Where a system of vendor managed inventory is in use
144. The letters A and R in ‘SMART’ when applied to objectives stands for….
A. Alignment and Reasonable objectives C. Attainable and Relevant objectives
B. Authority and Reduced objectives D. Allocation and Resourceful objectives
145. Which of the following is not a characteristic of a product?
A. Tangible C. Short lead time
B. Long lead time D. Capital intensive
146. Under the Herzberg theory when the job is exciting but the salary and work conditions are not which of the
following will be happening in an organisation?
A. High hygiene factors and low motivation factors
B. Low Hygiene factors and low motivation factors
C. High Hygiene factors and High motivation
D. Low Hygiene factors and High motivation factors
147. Which of the following explain services as being difficult to store?
A. Complexity C. Inseparability
B. Variability D. Perishability
148. The differences in the actual costs used and the budgeted costs that were set by an organisation is referred to
as which of the following?
A. Cost variation C. Actual difference
B. Cost deviation D. Budget variance
149. Which of the following is a disadvantage of partnership
A. Ease of formation C. Owners share responsibility
B. Limited liability D. Possibility of personality conflict

KCM 17
 150. Which of the following way would be used to identify new suppliers?
A. Through the use of search engines.
B. Asking customers
C. Waiting for them to contact the buying organization.
D. Sourcing the market.
151. What kind of a business is best described by these situations? I am the only owner of my business. I take all
the risks of doing business. I keep all the profits
A. Sole trader C. Corporation
B. Partnership D. Corporative
152. Company policy describes which of the following factors under the Herzberg theory?
A. Innovation C. Motivation
B. Hygiene D. Productivity
153. In team development, the stage at which members start to assert themselves and test out roles is known as
which of the following?
A. Preforming C. Forming
B. Storming D. Norming
154. Which of the following types of culture as described in the Charles Handy model makes rapid decisions and
controls the organizational direction?
A. Power culture C. Role culture
B. Task culture D. Person culture
155. Pricing arrangement under negotiations and agreements on price describes which of the following?
A. Whether and how the supplier will be able to increase his prices within the contract period.
B. The amount to be charged for the products
C. Discounts available for the purchase
D. Terms of payment and credit or methods of payment
156. A policy written within an organisation which is regulated internally and contains information on how an
organisation will be a responsible part of the community both locally and globally and outlines charities that he
organisation supports, ways in which they are helping to protect the environment and promises they have made
to help the local community is referred to a s which of the following?
A. Corporate Social Responsibility policy C. Environmental Policy
B. Equal opportunity policy D. Health and safety policy
157. Using the STEEPLE framework, which of the following describes the technological factors influencing
organisations when doing their work?
A. Rate of inflations, tax policy and level of unemployment.
B. Structure of population, increase of global population and level of education.
C. Absorptive capacity for innovation, globalization and increase demand for new products.
D. Environmental protection legislation, pollution, waste management and energy saving technologies

KCM 18
 158. Which ownership type has unlimited liability
A. Sole trader C. Franchises
B. Corporation D. Public limited company
159. The parts of a contract that make clear whether and how the supplier will be able to seek to increase their
charges are….
A. The IPR clauses C. The pricing arrangements
B. The costing schedules D. The works schedules
160. Clear, quantitative measures of actual achievement against the most important areas of required performance
are known as:
A. KPIs C. SRMs
B. SLAs D. MAMs
161. An arrangement whereby the supplier is guaranteed to cover its costs, in addition to earning an agreed level
of profit, is a…..
A. Profit plus arrangement C. Contract price arrangement.
B. Cost plus arrangement D. Revenue fixed arrangement
162. A greater share of specification risk is borne by the supplier when the buyer uses a ……..
A. Conformance specification C. Compliant specification
B. Performance specification D. Technical specification.
163. Which of the following is described as a price which appears fair and reasonable?
A. Supplier’s right price C. Buyer’s right price
B. Trading right price D. Domestic right price
164. The last stage of tendering process for most bidders will be……
A. Specification C. Pre-qualification
B. Evaluation D. Incentivisation
165. Which of the following give purchasers online access to groups of suppliers via a purpose-built database,
usually hosted by a third party organisation?
A. Supplier websites C. E-tendering systems
B. E-catalogues systems D. Supplier database systems
166. Using the STEEPLE framework, which of the following describes the economic factors influencing
organisations when doing their work?
A. Rate of inflations, tax policy and level of unemployment.
B. Structure of population, increase of global population and level of education.
C. Regulatory and law determinants that can negatively or positively affect decisions of management of
company.
D. Environmental protection legislation, pollution, waste management and energy saving technologies

KCM 19
 167. The type of culture as described in the Charles Handy model which usually creates a functional structure,
where individuals know their job, report to their superiors and operations are predictable is known as which of
the following?
A. Power culture C. Role culture
B. Task culture D. Person culture
168. Fixed and firm prices in a contract….
A. Can sometimes vary C. Must always vary
B. Can never vary D. Vary once
169. An agreement under which a buyer commits to a supplier to purchase a definite quantity but spread over an
agreed future period of time is called what?
A. An ever green contract C. A one-off contract
B. A call –off contract D. An all-off contract.
170. Which of the following is not a motivation factor under the Herzberg theory?
A. Challenging work C. Working conditions
B. Involvement D. Recognition
171. According to the stages of team development, at which stage does the team start to settle down and agree
how to share work?
A. Storming C. Performing
B. Norming D. Forming
172. Which of the following factors is an esteem factor stage under the Maslow’s hierarchy of needs theory?
A. Security C. Health
B. Confidence D. Sleep
173. Where power is derived from membership in teams that have the expertise to execute a task, the type of
culture as described in the Charles Handy model is which of the following?
A. Power culture C. Role culture
B. Task culture D. Person culture
174. In what ways does selective tendering differ from open tendering?
A. In selective tendering, potential suppliers are neither pre-qualified nor short listed.
B. In selective tendering, all potential suppliers are invited to submit tenders.
C. In open tendering, potential suppliers are prequalified and short listed.
D. In selected tendering, potential suppliers are prequalified and short listed.
175. If a fixed price is set, but provision for variation in the event of specific contingencies occurring, then this is
called what?
A. Firm Price with Contract Price Adjustment (FPCPA)
B. Firm Price with Consolidated Price Adjustment (FPCPA)
C. Fixed Price with Contract Price Adjustment (FPCPA)
D. Fair Price with Contract Price Adjustment (FPCPA)

KCM 20
 176. A price which the market will bear describes which of the following?
A. Supplier’s right price C. Buyer’s right price
B. Trading right price D. Domestic right price
177. What information on a company website demostratwes their policy towards ethical trading?
A. Corporate social responsibility initiatives C. Company overview
B. Financial reports D. Details about new products and services
178. In a typical tender process, which of the following is sent from a buying organisation to potential suppliers
before bids are prepared?
A. Tender purchase order C. Invitation to tender
B. Request for tender information D. Tender analysis table
179. An agreement between two parties, intended to be legally binding, is a definition of what?
A. An agreement C. An informal arrangement
B. A contract D. A memorandum of understanding
180. A problem with obtaining credit ratings for international suppliers is that
A. They take too long to compile and are therefore not reliable.
B. Accounting standards are not the same.
C. Credit ratings agencies only cover small number of countries.
D. Credit ratings are difficult to understand.
181. The right price for the purchaser or buyer is described by which of the following?
A. A price which the market will bear.
B. A price which appears fair and reasonable
C. A price which allows the seller to win business
D. A price which allows the supplier to cover costs
182. Which of the following is true of the information found on a customer website?
A. It is aimed at a very narrow range of potential visitors.
B. It will not be necessary to drill down to find more detailed information.
C. It is aimed at a very wide range of potential visitors.
D. It will have been verified by a search engine such as Google.
183. Which of the following two factors are described under the Herzberg theory?
A. Motivation and hygiene factors C. Hygiene and productivity factors
B. Motivation and creativity factors D. Hygiene and expansion factors
184. According to the stages of team development, at which stage does the group focuses on executing its tasks?
A. Storming C. Performing
B. Norming D. Forming
185. Which financial accounting statement would have information about assets and liabilities?
A. Ratio analysis C. The profit and loss account.
B. Cash flow statement D. The balance sheet.

KCM 21
 186. Which of the following makes it more important to perform credit checks when dealing with international
companies?
A. To ensure supplier has technical capability
B. Extended lead times
C. Company reporting may be unreliable
D. Use of fixed price contracts
187. Market regulations, trade agreements, tariffs or restrictions describes which type of factors
influencing organization under STEEPLE framework?
A. Political C. Legal
B. Ethical D. Environmental
188. Which of the following types of culture as described in the Charles Handy model makes each individual to
be seen as valuable as and more important than the organization itself.?
A. Power culture C. Role culture
B. Task culture D. Person culture
189. In team development the stage at which members try to find out about each other and how the group is going
to work, its purpose, composition and leadership.
A. Storming C. Performing
B. Norming D. Forming
190. Which of the following describes the right price for the supplier to charge for his goods and services?
A. A price which reflects sound purchasing practices
B. A price which the market will bear.
C. A price which appears fair and reasonable
D. A price which gives the purchaser a cost or quality advantage
191. At which of the following stages is it ‘best practice’ to first issue detailed specifications to a supplier in a
tender process?
A. When sending the invitation to tender documents
B. When placing the order with the successful bidder
C. When requested by a supplier that is bidding
D. At request of the existing supplier, prior to advertising a tender
192. Which of the following incoterms is used where goods are picked up or collected at the seller’s factory
A. EXW (EX-Works) C. CIF (Cost, Insurance and Freight)
B. FOB (Free On Board) D. DAT (Delivered at Terminal)
193. Which of the following factors is not part of self-actualization stage under the Maslow’s hierarchy of needs
theory?
A. Creativity C. Problem solving
B. Food D. Acceptance of facts

KCM 22
 194. Herzberg theory can be used to explain which of the following in an organisation?
A. Expansion C. Motivation
B. Productivity D. Innovation
195. Ethical factors under the STEEPLE framework includes which of the following?
A. Morality and behavior which governs what is good and bad for company, employees and society as a
whole.
B. Rate of inflations, tax policy and level of unemployment.
C. Structure of population, increase of global population and level of education.
D. Regulatory and law determinants that can negatively or positively affect decisions
of management of company
196. Which of the following is defined as how things are done and describe the interrelationship of shared beliefs,
behavior and assumptions that are acquired over time by members of an organisation?
A. Culture C. Motivation
B. Ethics D. Marketing
197. RFQ stands for:
A. Request for quotation C. Request for quantity
B. Request for quality D. Request for query
198. Which of the following is a criterion used to appraise potential suppliers?
A. Centralized purchasing C. Contract documentation
B. Cost-plus pricing D. Cultural compatibility
199. The value of a commodity or service measured in monetary terms is a definition of which of the following?
A. Price C. Cost
B. Variance D. Deviation
200. In which of the following incoterms is the seller responsible for arranging transportation but will be acting at
the risk and the expense of the buyer?
A. FCA (Free Carrier). C. CPT (Carriage Paid To)
B. CFR (Cost and Freight) D. EXW (EX-Works)

KCM 23