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L5M6 Study Materials Review - L5M6 New Study Plan
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CIPS L5M6 Exam Syllabus Topics:
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CIPS Category Management Sample Questions (Q71-Q76):
NEW QUESTION # 71
Analytics data can be used in Category Management forecasting. Which of the following would be a form of Analytics Data?
- A. Data models and predictions e.g. trends for the future
- B. Expertise data e.g. estimated lead times
- C. Data from the past e.g. historical trends
- D. Known data e.g. manufacturing capacity
Answer: A
Explanation:
Analytics data refers to data models and predictions, often generated through statistical methods or advanced software, that provide insights into future trends. Unlike historical data, which looks at past performance, or known data, which describes current realities, analytics projects what is likely to happen in the future. For example, predictive analytics can identify demand spikes based on past seasonal behaviour, consumer sentiment, or economic indicators. In category management, such predictive models are invaluable for anticipating supply shortages, managing risks, and planning procurement strategies. Analytics data allows procurement professionals to move from reactive decision-making to proactive and strategic management.
The integration of analytics into forecasting also supports better negotiation with suppliers, as buyers can demonstrate awareness of future trends and cost drivers. In today's fast-changing markets, reliance solely on historical data is insufficient-analytics data gives procurement a competitive edge.
Reference: CIPS L5M6 Study Guide, p.140
NEW QUESTION # 72
Jonah is a Procurement Specialist responsible for a sub-category of work which includes procuring skilled labour for construction. Sub-categories can also be known as what within a Category?
- A. Commodities
- B. Lots
- C. Divisions
- D. Sets
Answer: A
Explanation:
Within Category Management, sub-categories are often referred to as commodities. These are narrower groupings within a category that focus on specific goods or services. For example, within the Construction category, commodities might include raw materials, subcontracted labour, or specialist equipment hire.
Recognising commodities helps procurement apply tailored strategies that address their specific market dynamics and risk profiles. It also provides clarity when developing category plans, as different commodities may require different sourcing and supplier management approaches. By managing at both category and commodity levels, organisations can strike a balance between broad strategic alignment and detailed tactical execution.
Reference: CIPS L5M6 Study Guide, p.52
NEW QUESTION # 73
Workshops, safety facilities, and design engineers are indirect costs associated with which industry?
- A. Retail
- B. Services
- C. Construction
- D. Agriculture
Answer: C
Explanation:
In construction, indirect costs include items like workshops, safety facilities, and design engineers. These are necessary for operations but not directly tied to a single output.
[Ref: CIPS L5M6 Study Guide, p.90 - Indirect cost examples by industry]
NEW QUESTION # 74
Why would a company use a Technology Roadmap?
- A. To decide between two different software providers
- B. To help decide which technology to invest in the future
- C. To assist in marking a tender for IT equipment
- D. To mitigate risks of cyber-attacks
Answer: B
Explanation:
A Technology Roadmap is a planning tool used to align technological investments with business strategy. It enables organisations to evaluate current capabilities, identify emerging challenges, and plan for future technology adoption. The purpose is not just to decide between existing options but to forecast which innovations will be most valuable over time.
For instance, a company may use a roadmap to determine whether to invest in automation, artificial intelligence, or renewable energy solutions, based on expected business growth and industry trends. This ensures resources are allocated to technologies that offer long-term competitiveness.
Other options are less accurate:
* Option A oversimplifies; technology roadmaps are not for one-off decisions.
* Option B is incorrect as tenders require specifications, not long-term roadmaps.
* Option D relates to risk management, not strategic technology planning.
Therefore, the roadmap helps businesses stay adaptive and forward-thinking, ensuring that investments made today remain relevant tomorrow.
[Ref: CIPS L5M6 Study Guide, pp.126-127 - Technology Roadmaps in category management]
NEW QUESTION # 75
Caleb is completing a risk assessment on his supply chain using a matrix categorising risks on a scale of 1-5.
He identifies one risk with a score of 2. Which category of risk would this fall into?
- A. Main
- B. Major
- C. Moderate
- D. Minor
Answer: D
Explanation:
Risk assessments in procurement often use a likelihood × severity matrix. Risks are scored on scales from 1-
5, and the scores are multiplied. A score of 2 indicates a minor risk with low impact and/or low probability.
For comparison, risks with scores in the upper range (e.g., 20-25) are considered major risks that demand immediate mitigation. Minor risks, although not ignored, are often monitored rather than heavily resourced.
This structured approach ensures procurement teams focus resources on the most significant threats while still maintaining oversight of low-level risks. By categorising risks this way, category managers create clarity for decision-makers and align procurement risk management with enterprise-wide frameworks.
Reference: CIPS L5M6 Study Guide, p.56
NEW QUESTION # 76
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