Under general legal principles of contract formation, which of the following will always automatically result in the termination of an offer? 1. Negotiation 2. Rejection 3. Failure conditionality 4. Non-disclosure
Correct Answer: D
There are a number of ways for an offer to be terminated. They are events that may occur after an offer has been made which bring it to an end so that it can no longer be accepted. An offer is terminated in the following circumstances: 1. Revocation 2. Rejection 3. Lapse of time 4. Conditional Offer (or Failure of Conditionality) 5. Operation of law 6. Death 7. Acceptance 8. Illegality Reference: - How Is an Offer Terminated? - CIPS study guide page 31-32 LO 1, AC 1.2
Question 2
Which of the following documents are likely to have legal standing? Select TWO that apply:
Correct Answer: A,C
A quotation and a tender are both firm offers which have legal standing to the offeror. Tenders are more detailed than quotations and will include quality aspects as well as prices. LO 1, AC 1.1 & AC 1.2
Question 3
Which of the following should be applied when measuring frequency of on-time deliveries during a contract period?
Correct Answer: B
Number of on-time deliveries can be quantified, then numerical measures can be applied. Frequency of on-time deliveries is measured as on-time deliveries as a percentage of total no. of deliveries for period. LO 2, AC 2.2
Question 4
You are to do the KPIs and targets for international supplier and the following was done 1. Delivery in an hour 2. Return orders in an hour Is that a good thing or not?
Correct Answer: C
KPIs and the targets for supplier should be SMART: - Specific: What exactly do you want to achieve? - Measurable: How will you identify that you have achieved your goal? - Achievable: Is your goal really attainable? - Relevant: Is it relevant to you or, in other words, does it align with where you want to be? - Time-bound (or timely): When will you deliver your goal, and what are the key milestones? The two KPIs (Delivery in one hour, Return orders in one hour) are not realistic and achievable for international suppliers. Therefore, you should not put such high targets for supplier. Reference: - What Are SMART KPIs? (Spoiler: They Don't Really Exist!) - CIPS study guide page 107-108 LO 2, AC 2.2
Question 5
Which of the following are likely to be advantages of using invitation to tender? Select TWO that apply:
Correct Answer: C,E
Advantages of using invitation to tender may be as below: No Nepotism: Tenders or bids are evaluated on the basis of certain predetermined criteria, such as price, quality and value for money. In other words, the firm offering the highest quality product or service at the lowest price point would win the contract. As most tender documents are opened and evaluated in a public process, I think that there remains little room for nepotism or favoritism of any kind. Value for Money: From the perspective of the client, tenders offer the greatest value for the amount of money spent. This is due to the fact that the client can choose from a wide pool of potential suppliers to select the ones that can produce the highest quality product or service at the lowest price point. This allows the company, establishment or organization to save money without having to compromise on quality. Therefore, despite being quite time consuming, tendering is, in my opinion, a profitable long-term process from an organization's point of view. Encourages Competition: The process of tendering helps promote a competitive market. This is because a number of potential contractors, firms or suppliers get a chance to bid for every project. And because selection depends on quality and price, every bidder tries to reduce operational inefficiencies and redundancies as much as possible in order to lower expenses and improve quality. This entire process encourages healthy competition in the market and prevents complacency and laziness, which in turn provides a boost to innovation and new ideas. Easier Entry: The system of tendering makes it easier and simpler for new firms to enter the market or even a particular industry. This is due to the fact that contracts under this system are awarded on the basis of predetermined, objective criteria. As a result, even a firm that is a new entrant to the market, having no connections or contacts in the industry, can win a prestigious and lucrative contract by providing the highest value for the client's money. This process therefore helps new firms to quickly get a foothold in the market or industry, thus significantly lowering the traditional barriers to entry. Reference: - Characteristics and Benefits of the Tendering Process - CIPS study guide page 6-8 LO 1, AC 1.1
