Explanation

Competitive rivalry within an industry.

This can be quite an important point, and why I have such a dislike of the less formal title for the model - the model is about entire industries, not just about a single firm - this is commonly misun-derstood by students (and sadly, some tutors) - and the original Porter title - 'Industry Structure Analysis' - helps us understand that, I think. I find this tool of analysis to be very helpful in under-standing behaviour within sectors, despite criticism of the model and its age from some commenta-tors

The other answers shown are mere fictions.

Explanation

This is a description of a depression - the worst of all economic situations, which governments will do almost anything to avoid.

A recession is a decline in the performance of the economic factors mentioned (unemployment ris-es), and technically in the UK, a recession would be two successive quarters of decline (reducing economic activity / reducing GDP). A recovery is coming out of recession, and a boom is when the economy is in the opposite state to the depression shown in the question. Generally, an economy's behaviour is cyclical.

Explanation

A market with only one buyer is called a 'monopsony'.

There may be other QUESTION NO:s in this test about the other terms shown, so I shall hold back on expla-nation(s) here.

Explanation

It's climate change.

Interestingly I've seen writings from climate activists who say that the film provides clear evidence that human-made climate change will be disastrous for the human race; and I've seen writings from climate-change deniers saying that if things were that bad we'd have become extinct a while ago. You decide.

Explanation

Equilibrium price as demand and supply are perfectly balanced.

Equivalium is a made-up word. When I was studying for my MCIPS back in the 1980's it was a re-quirement to undertake a research study. My research was into the monopolistic supply of valium and librium to the UK's National Health Service by a Swiss company called Hofmann la Roche. That research endeared me neither to branded drugs, nor, possibly unfairly, to multinationals.

The likely choice of answers for people who don't know the correct answer is probably between 'equilibrium' and 'clearing'. Clearing would be a logical choice, but it's not the one your assessor re-quires.

Explanation

A competitive exercise is being referred to, in which the seller is under competitive pressure to try to win the business, yet not charge so much they don't win the business. This is commonly known as a 'tender', or 'tender exercise'; also 'competitive bidding' etc.

It is this desire to win profitable business, restricted by an upper limit on price because of competitor behaviour, that forces suppliers to be competitive with their prices. This tension between the bid-der's desire for profit; and the need to be realistic with price, explains why the competitive approach is so highly valued in procurement.

Explanation

All of these are ways of classifying organisations.

Examples: Retailers, SMEs, limited companies, etc

Explanation

Corporate Governance. Not to be confused with CSR.

Corporate identity relates to marketing and branding; corporate manslaughter is the concept of an organisation being criminally accountable for the deaths of humans through some lack of care. An example might be the deaths of rail company employees on the railway track, where the prosecution would attempt to show that it was the employers' fault.

Explanation

The base rate is often used as a basis for the calculation of other rates, some of which eg credit card repayment rates, bear no resemblance to the base rate. Some longer-term, perhaps more responsible, lending, uses changes in the base rate to determine a repayment rate for debt egmortgage rates. For credit card repayment rates and for late payments in business contracts there is often a considerable amount of freedom to agree relevant rates, but government is often encouraged to influence to try to ensure some level of sanity.

The answer which references procurement of a new 'instrument' is an attempt at humour, 'base' be-ing a type of guitar.

Explanation

This should be straightforward.

If unclear, check your notes / textbook.

Explanation

The 3 E's are economy, efficiency, effectiveness. The 3 E's are often seen as part of the role of pro-curement in an organisation.

Therefore all the other answers here should be selected, as they are not part of the 3 E's.

The 3 E's are often seen as part of the role of procurement in an organisation.

Explanation

Gross National Product; Gross Domestic Product.

Seen by some commentators as outdated measures, although it's difficult to know what they should / would be replaced by.

Explanation

To gain market share and to create shareholder value (increase the value of shares) are common aims of private sector organisations.

The other two answers are the antithesis of what firms usually want.

Explanation

It is important, for the reasons given in the three correct answers.

Explanation

Demographics now seen as being a part of STEEPLED.

The other terms shown have nothing to do with this topic and are simply fillers.

Explanation

'Retention' - from the word 'retain', meaning to 'keep in place', 'hold back', 'keep possession of' something (Concise Oxford Dictionary, fifth edition) . In this case, 5% of the contract price.

Explanation

In the not-for-profit sector, funding often comes from external sources or donors. The beneficiaries of the services are often beneficiaries of services because they don't have funds eg the homeless, the poor, the sick, etc

Thus in this sector, the 'paymaster' is often separated from the recipient of services provided, which has implications for the management of such organisations.

Which is the priority? The one providing funding; or the one receiving the services?

Explanation

The Act was introduced in 2010. Although this is a UK-centric QUESTION NO:, it is valid for several rea-sons. Firstly, the UK was one of the first countries to introduce such a wide-ranging Act; secondly the Act is so wide-ranging that all UK managers need to be familiar with it. People who live and work outside the UK may wish to familiarise themselves with the content of the Act to have an idea of what the impact of such legislation might be like.

Interestingly, in the UK, the Act has seldom been used 'in anger'.

Explanation

All of these.

Explanation

This is simply false. Partnerships are normally unincorporated profit-oriented organisations eg ac-countants, lawyers, many consultancies, some retailers, etc. One significant factor about partnerships is that individuals' capital is normally at risk, unlike in limited companies, where the risk is limited.

Explanation

A monopoly is a single supplier (or for some authorities where one supplier has control of the market eg 75% market share); a monopsony is a single buyer.

Perfect competition involves many suppliers and many buyers.

The clue here is the 'small number' of suppliers.

Explanation

Social and technological are part of STEEPLED: they were also part of PEST, the forerunner to STEEPLED.

The other two words shown as possible answers are included because they sound a bit like 'econom-ic' and 'demographic', which would also be correct answers, had they been included here.

Read the QUESTION NO: carefully.

Explanation

The vertical axis (the y-axis) of the product life cycle diagram could correctly show all three, and might commonly show losses and / or investment in the early stage(s).

Explanation

Payment of high salaries and large allowances, may, fairly obviously reduce the amount of profit which can be retained for capital growth. If money is being distributed in this way, it isn't being re-tained.

A profitable company has a choice: to pay dividends to a greater or lesser extent; or retain some of its profits to a greater or lesser extent in the form of retained capital - capital growth.

Increased sales and increased profit may result in increased capital growth, all other things being equal, depending on the firm's dividend policy.