Pass the CIPS Level 6 Professional Diploma in Procurement and Supply L6M5 Questions and answers with ValidTests

Giant Construction Company is working on five large-scale projects. Each project has a specific contract type and pricing mechanism.

Your task is to match the correct contract type and pricing mechanism to each project.

Project Descriptions

Project 1

Description: Giant is collaborating closely with the client to construct a hospital. The client has provided a cost estimate, and any savings will be shared between the parties. This contract is popular in the public sector due to its flexibility.

Project 2

Description: This suite of contracts is known as the "rainbow suite". It is rigid, meaning no changes can be made after signing. The price was fixed at the date of signing.

Project 3

Description: This international project involves the construction of wind turbines. The pricing mechanism calculates costs for each individual turbine.

Project 4

Description: The most popular form of contract in construction, utilizing a Contract Administrator to ensure timely information flow. Since the scope was not clearly defined, Giant is working with the client on a cost-sharing basis plus a small profit margin.

Project 5

Description: The project involves ICT services and software provision. Payments are linked to milestone completion during the project implementation phase.

XYZ is a large construction organization running five different projects. Each project has a specific type of contract and pricing mechanism.

Your task is to match the correct type of contract and pricing mechanism to each project.

Projects and Descriptions

Project 1

Description: Construction of an apartment block, where XYZ is responsible for both design and construction. Upon completion, ownership is transferred to the client.

Pricing Mechanism: Based on past experience of similar projects.

Project 2

Description: Facilities management for a 6-year period after construction. The budget is constantly adjusted due to industry volatility.

Pricing Mechanism: Budget changes continuously over time.

Project 3

Description: XYZ was involved from an early stage, but does not bear the design risk. The budget resets at the start of each new accounting period.

Pricing Mechanism: The budget is refreshed periodically.

Project 4

Description: XYZ is responsible for certain parts of the design and build, while another company handles other aspects. XYZ is paid upon milestone completion.

Pricing Mechanism: Payment is milestone-based.

Project 5

Description: Construction of a new toll bridge which will be operated by XYZ for the first 6 years post-construction. The pricing includes costs of raw materials, labor, and a profit margin.

Pricing Mechanism: Costs plus profit.

Below are descriptions of five companies in the UK. Each company has a unique organisational culture and a key Cultural Web Influence that shapes its structure and operations.

Your task is to match the correct type of organisational culture and cultural web influence to each company.

Company Descriptions

Company 1

Description: Authority is centred around the founder. There are strict financial systems and a reward/bonus scheme for meeting targets.

Company 2

Description: Employees operate independently and often bring in their own clients. There is a strong corporate identity and branding.

Company 3

Description: Strict hierarchy determines salary and job titles. The organisation is described as bureaucratic and follows stringent rules.

Company 4

Description: Employees work in small teams or individually on projects. There is a strong emphasis on weekly team meetings where tasks for the upcoming week are discussed.

Company 5

Description: Authority is held by senior leadership who make all decisions. There are few rules, and culture is reinforced by storytelling about past successes.

KCJ Ltd is a public sector organisation planning five projects for the next financial year. Each project has a distinct cost estimation method and source of power for the project leader.

Your task is to match the correct cost estimation method and source of power to each project.

Project Descriptions

Project 1

Description: Budget estimation is calculated using an algorithm.

Project Lead’s Power: Founder of the organisation.

Project 2

Description: The Head of R&D (PhD in Data Science) is using costing from similar past projects to determine the budget.

Project Lead’s Power: Expertise in Data Science.

Project 3

Description: The project is led by a key stakeholder and involves creating a Bill of Materials. Costs are worked out item by item.

Project Lead’s Power: Authority due to stakeholder influence.

Project 4

Description: The Project Leader has calculated the base cost, most likely cost, and worst-case scenario.

Project Lead’s Power: Has the authority to cancel the project at any time.

Project 5

Description: The project leader is a well-liked Board Member who has selected a team he is comfortable with. He determined the budget based on his own research.

Project Lead’s Power: Personal relationships with team members.

Petra is setting up a contract for a new construction project that must be robust with little flexibility. The contract stipulates that the client will bear the risk of unforeseen negative circumstances. Which type of contract is most suitable?

Which of the following statements about investment appraisal techniques are true? (Select all that apply.)

Answer Options:

Scenario (same as Question 16):

Fin Inc is working with the new client. What type of costing system is being used?

Which elements define an organization's culture? (Select all that apply.)

✔ Beliefs and assumptions

✔ Ways of interacting

✔ The physical environment

✔ Attitudes and customs

Scenario:

Fin Inc is a consultancy organisation in the private sector, founded 10 years ago by CEO Geoff Davies, who runs a tight ship. Many employees are scared of Geoff, and there are rumours that he fires people for refusing overtime. Fin Inc is working with a new client on a shopping centre project led by the well-liked CFO. The client wants a flexible, collaborative contract with transparent cost-sharing.

What type of organisational structure does Fin Inc have?

Skipped

An End-Of-Project Review may include the hiring of an external consultant to audit a project. This is particularly true in the Public Sector and for high-value/high-risk projects. The Auditor is likely to review the project's performance against what?