CIPS L4M1 PAST EXAMs QUESTIONS AND ANSWERS WITH ACCURATE SOLUTIONS
O1. Outline FIVE ways in which improving the quality of a product can
add value for an organization.
✔✔Improved quality can add value by reducing the need for appraisal
and prevention activities, which will save time and money.
Improved quality will mean that the risk of failure is reduced. This
should lead to a reduction in losses incurred due to poor quality products
reaching the consumer.
Improved quality will result in fewer goods being rejected or having to be
re-worked, which will reduce costs for the organisation.
Improved quality should improve brand image, resulting in more
customers, increased revenue and profits, which have the effect of adding
value.
Similarly, if an improvement in the quality of the product has improved
the brand image, customers are more likely to be loyal, resulting again in
higher revenue and profits.
Improved quality should mean that quality control measures can be
reduced, thereby saving costs
O2. Describe FOUR ways in which added value may be created for a
buying organisation through an effective sourcing process.
✔✔Suppliers are motivated and are prepared to work with the buying
organisation to reduce costs and add value.
Suppliers are likely to want to share innovative approaches to add value.
Suppliers are more likely to deliver products and services without
defects, which reduces the costs of rectification.
Suppliers may add value by sharing development costs and providing coinvestment.