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CIPS
CIPS Level 6 Professional Diploma in Procurement and Supply
L6M5
Strategic Programme Leadership Questions and Answers

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Questions # 1:

Jane works at a manufacturing organisation based in Europe. The organisation has recently decided to open a new factory in a South-East Asian country and Jane is to head up the project to launch the new factory. She has decided to fly out to the new site ahead of opening to do some research into the local culture and assess how the differences in culture may impact upon the company as a whole. The CFO of Jane's company thinks that this is a bad idea and a waste of money. Should Jane go?

Options:

yes – understanding the local culture will be important in incorporating the new site into the company

yes – Jane should take advantage of the free trip to learn the language

no – it is racist to assume that the culture is different

no – the CFO is correct that this would be a waste of money because Jane does not speak the local language

Answer

Explanation

Understanding the local culture is crucial for integrating the new factory and ensuring the project's success.

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Questions # 2:

What is the purpose of a Project Audit?

Answer Options:

Options:

To ensure the budget is managed effectively

To assess project requirements

To present findings to senior leadership

To review financial and performance status after completion

Answer

Explanation

A Project Audit (p.141) occurs post-completion to assess:

Financial health

Performance evaluation

Lessons learned

It is not a planning tool (Option B), nor is it for active budget management (A) or solely for senior leadership (C). [P.141]

Questions # 3:

Jake is running a tender exercise to find a new supplier for his manufacturing organisation. He is seeking fixed pricing for goods over the next 2 years. Which of the following are advantages of using fixed pricing? Select all that apply.

Options:

fixed pricing means bidders will provide a lower quote

fixed pricing makes forecasting easier

fixed pricing simplifies the bidding process

fixed pricing means Jake will benefit from decreases in price if the supplier's costs reduce

fixed pricing is likely to lead to less tensions between the two parties in the long run

Answer

B, C, E

Explanation

Fixed pricing makes forecasting easier, simplifies the bidding process, and can reduce tensions between the parties. It typically does not lead to lower quotes or share cost savings with the buyer.

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Questions # 4:

Which of the following processes for managing change is the most passive?

Options:

coercion

bribery

persuasion

education

Answer

Explanation

Education is considered passive as it involves simply providing information rather than enforcing change.

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Questions # 5:

Glitter Kitten Ltd CEO applies the Payback Analysis for expansion.

Investment: £50m

Annual returns: £10m

Q: What is the payback period?

Answer Options:

Options:

1 year

5 years

10 years

50 years

Answer

Explanation

Payback period formula:Investment (£50m) ÷ Annual inflow (£10m) = 5 years. [P.1.4]

Questions # 6:

At what stage in a program’s lifecycle is an Investment Appraisal conducted?

Answer Options:

Options:

Before contracting – to ensure the program is viable

At the initiation stage – to decide which contractor to hire

During the project – to ensure that money is being well spent and the program will be delivered to schedule

After completion – to assess whether money was invested wisely

Answer

Explanation

Investment Appraisal is performed before a program is approved (p.69). It evaluates whether the project is financially viable and likely to provide a return on investment. Option B relates to procurement, and Options C and D are post-implementation assessments. [P.69]

Questions # 7:

Salvador Ltd is a manufacturer of batteries for domestic appliances and hand tools. The company recently expanded due to excellent sales and introduced new machinery for producing solar-powered batteries.

They contracted Sunshine Ltd to build and install the machinery.

The contract specified that the machine must produce 5 batteries per hour, but currently, it is producing only 4 batteries per hour.

Salvador Ltd has agreed to work with Sunshine Ltd to resolve the issue within one month before liquidated damages apply.

Q: What stage is the project at?

Answer Options:

Options:

Mechanical completion

Performance testing

Provisional acceptance

Commercial operation

Answer

Explanation

This is provisional acceptance (p.11). Salvador Ltd has accepted the machinery provisionally while Sunshine Ltd works on increasing capacity within the agreed timeframe. It is not at mechanical completion because further adjustments are needed. It is also not at performance testing since the machinery is not being tested at full capacity. Commercial operation would indicate that the project is fully completed, which it is not. [P.10-11]

Questions # 8:

Robyn has created a contract for a construction project and has used "The Red Book."

Q: Which professional organization is responsible for creating this contract?

Answer Options:

Options:

JCT

NEC

CIPS

FIDIC

Answer

Explanation

The Red Book is part of the FIDIC "Rainbow Suite" of contracts (p.40). FIDIC contracts are categorized by color, each serving a specific purpose in construction and engineering projects. [P.40]