See the answer in explanation. Explanation: After a need in an organization has been identified/understood, defined, justified and authorized, the next stages are to understand how commodity prices are reacting, which suppliers are available and their strength. The make or buy decision can be reached with knowledge from this; the procurement professional can consider the organization external environment, strength, weakness opportunity and threat to develop strategy /plan of how to achieve the procurement. 'STEEPLE' is an effective way to evaluate the external environment. It helps buyers to assess factors that could affect the need in hand and helps them to develop the plan accordingly. 'STEEPLE' is an acronym which stands for, Social, Technology, Economic, Environment, Political, Legal, Ethical 'SWOT' helps the organization to analyze its strength and within the organization and the oppor-tunity and threats outside the organization. 'SWOT' is an acronym which stands for, strength, weakness, opportunity and threats.
Question 92
What is PQQ and what does it include?
Correct Answer:
See the answer in explanation. Explanation: Pre-qualification questionnaire (PQQ) is often standard forms that buyers send to po-tential suppliers. The purpose is to ensure that these potential suppliers could, if they win the contract, supply the product or service to the standard required. PQQ includes requesting details from the potential suppliers on the following information 1. Company Details 2. Environment policies 3. Trading history 4. Ethical policies 5. Financial information 6. Health and safety policies 7. Quality standards 8. References 9. Insurance.
Question 93
Describe three benefits of working cross-functionally
Correct Answer:
Working cross-functionally is the involvement of all departments involved in an organization to contribute knowledge, skills and innovation towards adding value of achieving the organization's strategic goal. All functions may include; procurement, maintenance, marketing, finance, human resources working together in procurement activity to come up with the best strategy or selecting the supplier that best suit the organization. When working cross functionally, members of the organization gives support by believing in the end goal, assist during difficult time, help troubleshoot any issue, providing the required resources and sharing information. * Refer to the question column for response
Question 94
Explain why risk should be evaluated prior to the disposal of any assets.
Correct Answer:
Disposal of an asset is the final stage in the decommissioning process of a fixed asset. When a fixed asset reaches the end of its useful or cost effective life time within an organization, the decision is made as to whether it should be removed from the premises or disposed off. The process of disposing an asset cannot be without its risk, for example there could be pollution in the community, waste or hazardous materials that could affect the underground water or humans around. These risks should be identified, evaluated to come up with a response strategy on how to avoid or mitigate them causing damage to human, property, business and the environment. * Refer to the question column for response
Question 95
Why is it important to keep ethical codes of practice up to date?
Correct Answer:
A code of ethics is a set of morals and principle set out by an organization to state what it deems to be acceptable conduct and behavior An ethical code of practice is a continually changing and developing document with society changing and different suppliers coming to market, the document has to remain current Suppliers should continually monitor their codes of ethics to ensure that; 1. They are looking after the interest of the supply chain 2. That potential customers can be reassured that they are conforming to the required regulation, e.g. ISO 14001. Ethical code of conduct should be constantly monitored and updated in accordance with the changes organization faces. This include 1) Define (2) prevent (3) detect (4) reprove (5) evaluate. * Refer to the question column for response