Which of the following indicates the ratio between profit and costs?

• A.Gearing
• B.Margin
• C.Mark-up
• D.Liquidity

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Which of the following statement is true about insurance?

• A.An insurance policy can be mechanism of substance to back up indemnity
• B.The supplier must always pay the insurance premium for goods-in-transit
• C.An insurance policy transfers the legal liabilities from the insured to the insurer
• D.Professional indemnity insurance provides the insured business with financial protection against the liabilities caused by or arising out of the products supplied

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When should liquidated damages clauses be written into a contract?

• A.When the innocent party wants to punish the breaching party.
• B.When the breaching party wants to exclude all its liabilities
• C.When the court approves the damages amount before the contract is executed.
• D.When the loss to the innocent party will be either too uncertain or too difficult to calculate.

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Which of the following are most likely to be substantive elements of the specification of a truck? Select TWO that apply:

• A.Guarantee
• B.Foreword
• C.Expected lifespan
• D.Ethics
• E.Abbreviation

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Blakenall District Hospital (BDH) is a large hospital that is a major part of the government's health service. Purchasing staff are in the habit of placing many long-term contracts with suppliers and sub-contractors. Whilst these contracts are usually carried out successfully, prices are often paid that are well over budget. The purchasing manager is concerned to find that, in some cases, members of staff are forcing suppliers to accept fixed price contracts. The policy has caused several problems such as some suppliers refusing to deal with BDH and a few going out of business mid-way through performing a contract with BDH. This is due to fluctuating market prices of materials. The procurement manager suggests supplier to adopt variable pricing arrangement with price index. Is this a right course of action?

• A.No, variable pricing would only benefit the suppliers
• B.Yes, this type of arrangement would provide absolute certainty when budgeting
• C.Yes, this pricing arrangement would reimburse the fluctuation of material prices
• D.No, price adjustment should be applied to short-term supply contract only (3-month duration or less)

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