This Quiz provides the Practice exam for Procurement Management

5 Sample Questions

The project team is involved in a make-or-buy analysis. The members have decided it is best to buy the products needed instead of creating the products internally. They are evaluating the contract format to use to minimize their risk. This will likely mean shifting the risk to the seller. What type of contract will provide the seller with the most risk when entering into a contract?

  • A. Cost Plus Percentage Cost
  • B. Fixed Price
  • C. Time and Materials
  • D. Purchase Order

Your company is involved in an integrated circuit project in which the information and intellectual property associated with it are highly sensitive resulting in the only product in this market. The project will involve people from a variety of skill sets on the project. Given this, which of the following would make the most sense when planning the project?

  • A. Outsourcing to an offshore development facility so your local competitors won't know your intellectual property details
  • B. The company making the product internally
  • C. The company outsourcing and having the partner sign a non-disclosure agreement
  • D. Having only the creators of the idea work on the project to control who knows about the intellectual property

Your company is working with a staffing company for supplementing an internet developer for your newest project. The cost is $80 US per hour. The developer will work on the project until it is complete, then the contract will end. What type of contract is this?

  • A. Cost Plus Incentive Fee
  • B. Fixed Price
  • C. Time and Materials
  • D. Cost Plus

The retail chain is using a vendor to provide engineers for a security camera network design and implementation. Presently, the team is negotiating a contract that will help select the vendor. They are negotiating criteria that will reward the engineers for network performance. This is a new type of approach the company is utilizing. What best described this type of criteria?

  • A. Standard Terms
  • B. Special Provisions
  • C. Detailed Negotiations
  • D. Standard Conditions

You are in the process of purchasing 125 bed frames, mattresses, dressers and televisions for an upcoming project to remodel a hotel. What type of contract will you likely use?

  • A. Net 30
  • B. Purchase Order
  • C. Fixed Price
  • D. Cost Plus Percentage Cost