Multiple choice questions 1, 2 and 3 are based on the following scenario: Jill is a purchasing manager at ABC Enterprises and her son Adam has just been appointed in the IT department of another organisation that does not compete with ABC Enterprises in any way. Adams employer is looking to partner with a new software vendor, and to help Adam impress his bosses, Jill shares some key insights with him into the functional and technical capabilities of some vendors that have previously presented to ABC Enterprises in reply to open RFIs (Request for information). QUESTION 1 Considering Jills position as a purchasing professional, how can her ethical behaviour in this scenario be described? [1] Jill acted unethically by initially requesting information from a supplier with the intention of not using such information for purchasing decision-making. [2] Jill did not act unethically, since Adams employer does not compete with ABC Enterprises. [3] Jill acted unethically, since information on vendors obtained from written quotations, tenders and sales presentations should be treated confidentially. [4] Jill did not act unethically, since the software vendors should be grateful that she is sharing their information which could lead to an unexpected sales.

QUESTION 2 Which one of the following reflects Jills misconception regarding ethical behaviour? [1] It is my calling in life to help my son to make a good impression. [2] As a purchasing professional, I have a responsibility to act ethically. [3] I should use information from vendors for its intended purpose. [4] I know that gifts from suppliers should not be accepted. QUESTION 3 According to the King Reports, who bears the main responsibility for creating and maintaining an environment where the unethical behaviour seen in the scenario is reduced and eventually eliminated? [1] The board of directors has sole responsibility for the development and implementation of ethical strategies and policies. [2] Ethical conduct start and stop with top management. [3] Employees and supervisors need to drive a bottom-up approach to establish an ethical culture. [4] Government should craft a framework for ethical conduct and continually monitor, reprimand and punish unethical behaviour.

QUESTION 4 Your organisation is looking to import a new type of product parts, used for assembly in its final products, from the United States. Management is concerned about the volatility in the USDZAR exchange, which makes it difficult to accurately do unit production costing and product pricing. Management is considering two options. Option A is to import a generic, standardised version of the part from Supplier A. Option B is to import a customisable version of the part from Supplier B. Neither suppliers are willing to agree to a fixed-ZAR based contract, and each order will be in USD with the exchange rate fixed at time of order placement. Considering the concerns around volatile exchange rates outlined above, which one of the below statements are most correct? [1] Customised items are more readily available in the market and would allow the organisation to eventually diversify its sources of supply and negotiate more favourable exchange rate terms. [2] Standardisation will allow larger quantities to be ordered at a time, which affords the organisation the flexibility to wait out highly volatile periods and only conclude orders when the currency exchange is favourable. [3] Standardised items are generally lower-priced, which will enable the organisation to reduce its risk exposure to fluctuating exchange rates. [4] Customised items typically require lower inspection costs, since errors and quality discrepancies are less; these cost savings can be used to hedge against exchange rate fluctuations.

QUESTION 5 ZZs Fashion, a small online clothing retailer operating only in Gauteng, is considering buying a new forklift to boost productivity in their distribution facility. The owner indicated that, if the payback period for the forklift is less than 4 years, ZZs credit provider will supply credit for the purchase. If the payback period is calculated as: Payback = machine cost / Y then Y represents [1] net cash flow after operating costs, depreciation and interest charges have been deducted. [2] net cash flow before depreciation deductions. [3] net cash flow after operating costs, excluding interest charges on the capital loan. [4] annual interest repayment, excluding other operating expenses. QUESTION 6 A large property developer, such as Atterbury, funds its developments by borrowing from large banks. They find that they have limited options since only a handful of banks operate in South Africa. However, Atterbury also finds that they can negotiate for a better rate by playing the banks off against each other. What market situation is described? [1] Perfect competition [2] Pure competition [3] Monopoly [4] Oligopoly

QUESTION 7 Logistics management is often confused with supply chain management, since practitioners do not seem to know that logistics management [1] is the more strategic version of supply chain management. [2] involves the sourcing and management of suppliers as critical role-players in the supply chain. [3] refers to managing the movement and storage of goods as part of supply chain management. [4] is a broader concept, which includes supplier management, purchasing management and supply chain management.

QUESTION 8 What is the main difference between a supply chain and a value chain? [1] A supply chain is focused on the supply activity, whereas the value chain is focused on value-adding activities. [2] A supply chain has different upstream and downstream linkages, whereas the value chain has only downstream linkages. [3] A supply chain consists of the value-adding activities of a network of organisations, whereas a value chain consists of the value-adding activities of a specific organisation [4] A supply chain focuses its activities on satisfying the final consumers need, whereas a value chain coordinates the supply chain activities of different supply chain role-players.

QUESTION 9 In a typical supply chain, an upstream linkage will be on the side of the supply chain. [1] supplier [2] end consumer [3] focal firm [4] outbound QUESTION 10 Which one of the following tools can be used in the critical projects quadrant of the purchasing matrix to support strategic cost management? [1] Landed price [2] Open books [3] Target cost analysis [4] Life cycle costing