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CIPS Category Management Sample Questions (Q85-Q90):

NEW QUESTION # 85
At which stage in the Procurement Cycle can most value be added?

A. Negotiate and award contract
B. Supplier selection
C. Specify requirements
D. Review

Answer: D

Explanation:
CIPS highlights that the review stage of the Procurement Cycle offers the greatest opportunity to add value.
This is because it involves assessing whether objectives have been met, identifying lessons learned, and capturing continuous improvement opportunities. While specifying requirements and supplier selection are critical, the review stage ensures that outcomes are measured against expectations and future strategies are refined. For example, reviewing contract performance may reveal contract leakage or highlight areas where better supplier engagement could drive innovation. This feedback loop transforms procurement from a transactional process into a learning system. By institutionalising review mechanisms, organisations improve their resilience and ensure that procurement strategies evolve with business needs and market changes.
Reference: CIPS L5M6 Study Guide, p.42

NEW QUESTION # 86
Claudio wants to limit risks from supplier financial instability. Which two actions are most effective?

A. Have contingency plans in place
B. Use fewer suppliers
C. Contract smaller businesses and start-ups
D. Limit spend with one supplier to 30% of external spend

Answer: A,D

Explanation:
The most effective approaches are:
* Limiting dependence on one supplier [B]: CIPS suggests no more than 30% of spend should be concentrated with a single supplier. This reduces exposure if that supplier becomes insolvent or fails to deliver.
* Having contingency plans [D]: Preparing alternative suppliers, safety stock, or emergency logistics ensures continuity in case of failure.
Options A and C are poor practices:
* Using fewer suppliers [A]: Increases dependency, making the business more vulnerable.
* Using small start-ups exclusively [C]: Increases risk because these firms often lack financial stability.
These strategies align with broader supply risk management principles, which focus on diversification, resilience, and proactive planning. Effective category managers must balance efficiency with risk reduction, ensuring supply continuity without over-consolidating.
[Ref: CIPS L5M6 Study Guide, p.57 - Supplier risk mitigation strategies]

NEW QUESTION # 87
Volatile inflation rates are a risk that can affect any business. Which STEEPLED factor would this fall under?

A. Socio-Cultural
B. Political
C. Economic
D. Ethical

Answer: C

Explanation:
Inflation is directly linked to the Economic factor within STEEPLED. It affects costs, purchasing power, and business profitability.
[Ref: CIPS L5M6 Study Guide, p.109 - STEEPLED analysis factors]

NEW QUESTION # 88
According to studies completed by Reeves, Moose and Venema in 2014, which of the following was proven to be true with regards to the BCG matrix?

A. There is a higher correlation between share leaders and profit leaders nowadays than in the past
B. There is a longer time between innovation and adoption nowadays than in the past
C. Companies nowadays have more 'cash cow' items than in the past
D. Products move through the four quadrants faster nowadays than in the past

Answer: D

Explanation:
Reeves, Moose and Venema (2014) established that products move through the four quadrants of the BCG matrix more quickly in the modern business environment compared to the past. This is a reflection of faster innovation cycles, market saturation, and increased competition. The other three statements are the opposite of what their research proved.
Reference: CIPS L5M6 Study Guide, p.120

NEW QUESTION # 89
"Survival of the fittest" is a concept in supplier relationships. Which of the following does it describe?

A. High focus on pricing, high focus on relationships
B. Low focus on pricing, high focus on relationships
C. Low focus on pricing, low focus on relationships
D. High focus on pricing, low focus on relationships

Answer: D

Explanation:
Survival of the fittest in supplier management means driving competition by focusing heavily on price reduction, with minimal emphasis on building long-term relationships. This approach treats suppliers as interchangeable, encouraging them to compete aggressively for contracts.
It can yield short-term cost savings but risks damaging supplier collaboration, innovation, and resilience. It is suitable for commodities or non-strategic items where price is the dominant factor.
Other approaches differ:
* Trust-based or partnership models balance price with collaboration.
* No-cost modelling focuses on process transparency.
* Strategic alliances prioritise innovation and value creation.
Category Managers must carefully choose when to apply "survival of the fittest" as it may undermine long- term supplier stability if used indiscriminately.
[Ref: CIPS L5M6 Study Guide, p.160 - Supplier relationship models]

NEW QUESTION # 90
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