Free CIPS L6M5 Exam Questions

Glitter Kitten Ltd is a leading manufacturer of cat food and is currently looking into expanding its operations into new markets. The CEO has committed to providing the funds for expansion and he has commissioned a financial appraisal of two different options. The Senior Leadership team are currently reviewing the Net Present Values of each option.

The CEO is getting frustrated with the length of time the Senior Leadership are taking in their appraisals so has done a quick analysis using the payback method. The second option, to expand into making dog food, produced the best results, which are based on an estimated total outflow of £50m and annual inflows of £10m.

The CEO is also looking into methods for improving current products. He has assembled a Project Team of researchers who is looking into their current range of cat food, taking particular notice of customer opinions and reviews. The goal is to, based on this research, investigate opportunities within the supply chain to enhance the quality of the product, as well as potentially reducing the costs of manufacturing.

Raw materials for Glitter Kitten’s most popular cat food will soon be provided by Paw Ltd who is a new supplier. The contract is still under negotiation and is expected to last for the next 3 years. The CEO is keen to have visibility over Paw Ltd’s costs and profit margin.

5. Which of the following pricing mechanisms is most suitable for use with Paw Ltd?

Below are descriptions of five companies located in the UK:

Company 1: This company has a highly centred authority around the founder. The culture is characterised by strict financial systems and a reward/ bonus scheme for meeting targets.

Company 2: People who work here see themselves as individuals and often bring in their own clients. There is strong branding and corporate identity including the use of a strict colour palette.

Company 3: A person’s salary and job title is decided by a strict hierarchy structure. The organisation is often described as bureaucratic and has stringent rules about who can do what.

Company 4: Employees often work individually or in small teams to complete projects as they arise. There is a strong emphasis on Monday Morning Meetings where each person/ team will describe what they are working on for the upcoming week.

Company 5: Authority is held by a small group of senior people who make all the decisions. There are few rules, and culture is reinforced by people talking about past successes.

For each company, select the type of culture at each as well as the most relevant cultural web influence. Note some answers may be used twice. Power (x2), Role (x2), Person, Task, Symbols, Organisation Structure, Control System, Stories, Ritual, Power Structure.

Which of the following will you put into box 1?

Giant Construction Company is working on 5 large scale projects. Below are details of each project.

Project 1: Giant is working closely with the client to construct a hospital. The client has provided an estimate of what they think the construction will cost, and any savings will be shared between the parties. This form of contract is popular in the public sector and is being used due to its flexibility.

Project 2: This suite of contracts is known collectively as ‘the rainbow suite’ and is very rigid, not allowing for changes later down the line. The price of the construction was set on the date the contract was signed.

Project 3: This project is for the construction of wind turbines and is an international project. The pricing mechanism accounts for the cost of construction of each individual turbine.

Project 4: This is the most popular form of contract used in the construction industry and uses a Contract Administrator role who is responsible for the timely flow of information to all parties. The scope of the project was not clearly defined at the onset, so Giant is working with the client by sharing their costs incurred plus a small profit margin.

Project 5: This project is for the provision of ICT services and software provision. Giant is paid when certain milestones are met in the implementation of the project.

For each project, select the type of contract and pricing mechanism being used. Complete the table below by listing the type of contract and pricing mechanism being used for each project; CIPS, FIDIC, IMechE, JCT, Joint Venture Contract, NEC, Bill of Quantities, Cost Reimbursable, Cost plus award fee, Fixed Lump Sum, Activity Based Pricing, Target Costing.

Which of the following will you put into box 4?

KCJ Ltd is a public sector organisation which is looking to run 5 projects over the next financial year. Below are details of each project:

Project 1: The budget estimate of this project is calculated using an algorithm. The project lead is the founder of the organisation.

Project 2: The project lead is the Head of Research and Development, who has a PHD in Data Science. He has taken costing and budget information from similar projects conducted previously to decide on a budget for Project 2.

Project 3: The project is being led by a key stakeholder and involves creating a Bill of Materials. Costs will be worked out for each item required to complete the project and totalled together.

Project 4: The Project Leader has worked out the base cost, most likely cost and worst-case scenario for the project. His power comes from his ability to pull the plug on this project at any time.

Project 5: This project is being led by a well-liked member of the Board of Directors. He has selected a team who he gets on well with and has decided the budget based on his own research.

For each project, select the cost estimation method used and the source of power of the Project Leader. Complete the table below, some answers may be used twice: bottom up, 3-point estimate, parametric, analogous, expert judgement, top-down, positional (x2), personal (x2), expert, negative

Which of the following will you put into box 4?

Under what circumstances can Specific Performance be used to compensate an innocent party for a contractual breach? Select All that apply