L3M2 Exam Questions & Answers

Zero defects - a quality concept, recognising the significant cost of re-work - remedying problems created earlier in the process. It is therefore desirable to strive for 'zero defects', thus avoiding error correction, re-work, etc. An important idea within JIT, Lean, etc.

It is probably often improvisation, but the correct answer is mobilisation: getting ready to undertake the task at hand.

It could be as simple as booking a team of consultants into a hotel room; it could be as complex as leasing bulldozers from the US, hiring cranes from China, and buying cement from Nigeria.

Make, do or buy decision.

Historically 'make or buy'. Now up dated to take account of services procurement ie 'should we do it ourselves?'

CIPS is keenly interested in procurement ethics, and you can find a wealth of information on the CIPS website as well as other CIPS publications, such as Supply Management magazine.

CIPS members are also encouraged to undertake the ethical training and test, also available online via the CIPS website.

The principle of economies of scale is that cost will decrease as the scale / volume of operations in-creases. Remember that 'cost' is not the same as 'price'.

See also 'learning curve' or 'experience curve'. A clear mathematical ratio between volumes and cost per unit can be calculated / determined. The concept of the learning curve originated within the air-craft manufacturing sector in the United States, where engineers drew up precise cost benefits as the quantity of aircraft manufactured increased - as experience was gained.

These ideas can be very useful when negotiating price for large volumes, especially for new or be-spoke goods or services - the supplier's costs may decrease significantly as volumes or experience increase(s).