CIPS L4M2 Exam Dumps

Detailed

Acceptance testing verifies that the supplied product meets the buyer's specification before it is formally accepted. This type of testing typically occurs during delivery or installation phases. Reference: CIPS Level 4, Quality Assurance in Procurement.

Explanation

Industry rivalry---or rivalry among existing firms---is one of Porter's five forces used to deter-mine the intensity of competition in an industry. Other factors in this competitive analysis are:

- Barriers to entry

- Bargaining power of buyers

- Bargaining power of suppliers

- Threat of substitutes

Industry rivalry usually takes the form of jockeying for position using various tactics (for example, price competition, advertising battles, product introductions). This rivalry tends to increase in intensity when companies either feel competitive pressure or see an opportunity to improve their position.

In most industries, one company's competitive moves will have a noticeable impact on the competition, who will then retaliate to counter those efforts. Companies are mutually dependent, so the pattern of action and reaction may harm all companies and the industry.

Some types of competition (for example, price competition) are very unstable and negatively influence industry profitability. Other tactics (for example, advertising battles) may positively influence the industry, as they increase demand or enhance product differentiation.

Reference

Porter, M. (1998). Competitive Strategy. New York: Free Press. pp. 17-23.

CIPS study guide page 86-87

LO 2, AC 2.2

Explanation

Value analysis is a systematic review of the production, purchasing and product design processes to reduce overall product costs. This can be accomplished through a variety of activities, including the following:

- Designing products to use lower-tolerance parts that are less expensive

- Switching to lower-cost components

- Standardizing parts across product platforms in order to achieve volume discounts

- Altering production processes to minimize the amount of production cycle time, thereby reducing labor costs

- Introducing automation to strip labor costs out of the production process

- Altering product packaging to lower its cost while still protecting the product

The process is not a wholesale attack on costs. Costs are only reduced when the result will not im-pact the perceived level of quality experienced by customers, or the level of customer satisfaction.

LO 3, AC 3.4

The purpose of this QUESTIO N NO: is to test the student's ability to identify the problems and translate those problems to actionable requirements before communicating with the suppliers. The scenario suggests that Synergy Ltd's customer services team is using Excel spreadsheets, they lack a centralised customer database. This leads to problems in communications with customers.

A CRM system can solve the communication problem. But a QUESTIO N NO: arises: If a CRM system is employed, how will the previous data be imported? If the CRM system can support bulk import from Excel tables, it will save a lot of time.

LO 1, AC 1.1