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NEW QUESTION 46
Which of the following are the fair and reasonable comparators in price analysis? Select TWO that apply:
- A. Strike price
- B. Competitive bidding
- C. Price indices
- D. Pricing formula
- E. Cost driver
Answer: C,D
Explanation:
Price Analysis is the process of deciding if the asking price for a product or service is fair and rea-sonable, without examining the specific cost and profit calculations the vendor used in arriving at the price. It is basically a process of comparing the price with known indicators of reasonableness. When adequate price competition does not exist, some other form of analysis is required. Some reasons that could affect adequate price competition are: specifications are not definitive, tolerances are restrictive, or production capacity limits those eligible to bid.
Examples of other forms of price analysis information include:
* Analysis of previous prices paid
* Comparison of vendor's price with the in-house estimate
* Comparison of quotations or published price lists from multiple vendors
* Comparisons with government agencies (such as GSA in the US) published prices A strike price is the set price at which a derivative contract can be bought or sold when it is exercised. For call options, the strike price is where the security can be bought by the option holder; for put options, the strike price is the price at which the security can be sold. Strike price is also known as the exercise price.
A cost driver is the direct cause of a cost and its effect is on the total cost incurred. For example, if you are to determine the amount of electricity consumed in a particular period, the number of units consumed determines the total bill for electricity. In such a scenario, the number of units of electricity consumed is a cost driver.
Reference:
LO 1, AC 1.2
NEW QUESTION 47
Which of the following are typical environmental considerations throughout the contract life cycle? Select the TWO that apply.
- A. Health and safety
- B. Waste management
- C. Modern slavery
- D. Inequality
- E. Pollution control
Answer: B,E
Explanation:
All procurement has some level of impact on the environment that needs to be minimised to ensure sustainable procurement practices.
The greatest opportunity to influence environmental outcomes is by selecting products and services with the least ongoing environmental impacts, such as use of water, electricity and fuel, waste/disposal management, and impact on human health over the life of the product or service.
Lifecycle stages that impact on the environment:
Most goods and services will have an element of environment impact in a number of areas. The five main impact areas are listed in the following table.
Source: Buying for Victoria
Reference:
LO 3, AC 3.2
NEW QUESTION 48
Apple's CPO is planning a budget for purchasing carbon-free aluminium next year. There are 27.4 tonnes of aluminum in stock, while Apple will need 200 tonnes for production next year and double inventory for production in the following year. How much aluminum will Apple need to purchase in next year?
- A. 282.2 tonnes
- B. 117.8 tonnes
- C. 227.4 tonnes
- D. 172.6 tonnes
Answer: C
Explanation:
The quantity of aluminium Apple needs to buy is calculated as follows:
Quantity needed for production + the inventory needed at the end of the year - inventory at start of the year That formula is quantified as: 200 + 54.8 - 27.4 = 227.4 Reference:
LO 2, AC 2.3
NEW QUESTION 49
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