Certificate in Purchasing and Supply. Understanding the Purchasing Environment L3-01 LEVEL 3. Senior Assessor s Examination Report.

Transcription

1 Certificate in Purchasing and Supply Understanding the Purchasing Environment L3-01 LEVEL 3 Senior Assessor s Eamination Report May 2010 Series

2 Q1 (a) Q1 (b) Q1 (c) Outline FOUR legal requirements that Covaid must fulfil when putting its financial accounts into the public domain. Describe THREE reasons why it is important for companies like Covaid to publish its accounts. Discuss the ratios in Tables 1 and 2 and comment on the suitability of Covaid as a potential supplier. (4 marks) (12 marks) Part (a) The aim of this question was to test the candidates knowledge of the legal requirements surrounding financial accounts. One mark was gained for each appropriate requirement outlined. Part (b) The aim of this question was to test the candidates understanding of the importance of published accounts to a range of stakeholders. Up to three marks were gained for each reason described. Candidates were epected to identify various interested parties such as shareholders, suppliers or lenders and to eplain the benefits an understanding of the accounts could provide. Part (c) The aim of this question was to test the candidates ability to use ratio analysis as a means of assessing suppliers. Up to four marks were available for a discussion of each ratio and a further four marks were available for relevant comments made in contet. Part (a) This was well answered and most candidates showed a good understanding. Part (b) Answers to this question were generally good. Bettter answers linked the reasons for companies to publish its accounts to Covaid and the case study and discussed the relationship with Ecclesham Hospital and a range of other possible interested bodies. Good answers also discussed some ratios from the Balance Sheets and the Profit and Loss account which might have been significant Part (c) Candidates showed a good understanding of the ratios and better answers discussed the issues of the type of market and competition in analysing the changes. Candidates were rewarded for developing the analysis by pointing out other relevant information that may be needed further before a decision could be made and referenced to the purchasing departments requirements in vendor appraisal and sourcing. Eam Question Summary A number of confident answers were given, which showed a sound understanding of this area of the syllabus. In general there was a good understanding shown of the ratios and the scenario. L3-01/SA report/may10 2

3 Q2 (a) Q2 (b) Q2 (c) Eplain TWO possible consequences of a recession in the UK for EH s purchasing department. Describe THREE disadvantages for EH of purchasing goods in a market that is becoming increasingly oligopolistic. Outline FOUR areas of Employment Law that EH should be aware of when employing and recruiting staff for the purchasing department (8 marks) (9marks) (8marks) Part (a) The aim of this question was to test candidates knowledge of how economic factors affect purchasing. Candidates were epected to be able to apply knowledge of the effect of an economic recession on organisations, markets and consumers and to relate it to the scenario. Up to four marks were available for a discussion of each consequence. Part (b) The aim of this question was to test candidates understanding of oligopoly markets and to be able to apply it to the scenario. Up to three marks were allocated for a description of each advantage. Candidates were epected to discuss issues such as pricing, competition, choice and quality. Part (c) The aim of this question was to test candidates knowledge of Employment Law. Up to two marks were available for an outline of each area. Candidates were epected to understand the main areas of discrimination as well as other areas such as health and safety or working hours. There was no requirement to be able to quote the acts of parliament or regulations but a general understanding of the main areas was required. Part (a) Most candidates understood the implications of a recession and better answers linked its affects to the type of organisations in the case and understood the implications for public sector as well as private sector organisations. There were a number of different approaches to this question, with some answers assuming that governments would spend more in recession. Candidates gained marks if they eplained the reasons for this as there were a number of quite sophisticated eplanations. Part (b) Many answers discussed the generic disadvantages of oligopoly, whereas those candidates who discussed the purchasing at Ecclesham Hospital gained further marks. Part (c) There was a miture of responses to this question. Whilst a high number of answers outlined such areas as anti discrimination laws, equal opportunity laws and working time directives, a number of candidates gave answers which discussed ethics and codes of conduct with regard to dealing with suppliers and showed no understanding of the appropriate employment laws. Marks were available for those answers that outlined the situation when Ecclesham hospital might need to be aware of the different legislation e.g. from advertising for new recruites through to promotions. Some better answers linked this to the scenario and the diversity of the local population. L3-01/SA report/may10 3

4 Eam Question Summary There was a variety of acceptable answers given to this question. Candidates who scored high marks put their answers in contet of the case study and applied their suggestions to the purchasing contet. Many candidates were successful at this and related markets, government policy and employment laws to the scenario. Q3 (a) Describe THREE characteristics of a Public Limited Company. Q3 (b) Identify ONE eternal stakeholder group of a charity that you are familiar with and eplain the nature of its interest in that charity. Q3 (c) Eplain THREE reasons why small and medium enterprises (SMEs) are important for economic development. (7 marks) Analyse of the Question Part (a) The aim of this question to test the candidates knowledge of organisational structures. In particular they were epected to know the main features of a Public Limited Company. Up to three marks were available for each of the three descriptions. They were asked to discuss three characteristics which might, amongst others, have included the significance of shareholders, the stock echange, limited liability and directors. Part (b) The aim of this question was to test the candidates knowledge of stakeholders in the third sector. One mark was given for identifying an appropriate charity and one for identifying an appropriate stakeholder. Up to five marks were allocated for the eplanation. Candidates were epected to show an understanding of the relevance to charities of the different stakeholders. Part (c) The aim of this question was to test the candidates knowledge of SMEs and to see if they could apply this knowledge to economic development. Up to three marks were available for each reason eplained. Candidates were epected to discuss the contribution made to employment, training, innovation, especially in poorer regions. Part (a) Some good answers described the role of shareholders and the ability to buy and sell shares and the implications of this for a company. Issues such as raising finance and decision taking were also often raised. Many discussed the possibility of takeovers. Others analysed the implications of limited and liability. Some better answers introduced the concept of the divorce of ownership and control and eplained this in the contet of a PLC. However some of the poorer answers talked about public sector organisations and there is obviously some confusion still with respect to the two. Part (b) This was very well answered, with most answers identifying an appropriate charity and stakeholder and giving quite detailed descriptions on the stakeholder interests. L3-01/SA report/may10 4

5 Part (c) Many answers stated by giving appropriate definitions of SMEs. Better answers developed the main points to eplain for eample how the payment of national and local taation and rates contributed to the national and local economy. Marks were also awarded for answers which eplained the support and supplying of goods/services to larger organisations. Some good answers also discussed the advantages that small organisations might have compared to larger organisations in respect of fleibility and innovation Eam Question Summary A well answered question, where candidates were able to write a lot of relevant information. However there was some confusion between PLCs and Public sector organisations. Q4 (a) Q4 (b) Q4 (c) Outline FOUR ways that changes in technology have affected how purchasing departments operate in recent years. Eplain FOUR ways that transferring technology from the developed world might increase the rate of economic growth in developing countries. Eplain ONE reason why the rate of technological change in developing countries is often at a different pace than in developed countries. (8 marks) (12 marks) (5 marks) Part (a) The aim of this question was to test the candidates understanding of the different ways that technology has influenced purchasing. They were epected to discuss four different ways, which might have had positive or negative effects. Up to two marks was allocated for each way that was outlined. Part (b) The aim of this question was to test the candidates knowledge of technology transfer to developing countries. Candidates were epected to understand the process via which developing countries can access a range new technology, to understand the benefits and also to be able to eplain how this improved economic growth. Three marks were available for an eplanation of each way. Part (c) The aim of this question was to test the candidate s understanding of why the rate of technological can be different in countries which are at different stages of development. Answers could have included a lack of investment, government priorities, education and training. Part (a) This was perhaps the best answered question n on the paper. Many candidates scored full marks. Poorer answers described the effects of technology in general, whilst the better ones discussed then in relation to different aspects of purchasing. Some good answers discussed changes affecting customers and suppliers and how subsequent affects on purchasers. L3-01/SA report/may10 5

6 Part (b) In general this was answered well. Most candidates understood the benefits of technology transfer. The better answers then went on to eplain the process of economic development and discussed such factors as investment, imports, eports, changes from primary to secondary and tertiary sector economies. Some sophisticated answers talked about the multiplier process and linked this to investment and consumption and business spending Part (c) Overall, some good clear answers were provided. Better answers considered the role of multinationals and also highlighted the fact the rate of change is faster in many developing countries and cited the mobile phone as one eample. Eam Question Summary Most candidates showed an ecellent understanding of the technological developments on purchasing. A good percentage also showed an understanding of its importance in economic growth. More marks were awarded were candidates the different ways that technology could influence economic growth and the processes that are important. Q5 (a) Q5 (b) Q5 (c) Eplain THREE benefits to a purchasing organisation of having an environmental policy. Outline the impact of the Kyoto agreement on commercial operations. Describe FOUR ways in which a buyer can help to reduce environmental concerns. (4 marks) (12 marks) Part (a) The aim of this question was to test the candidates knowledge of the environmental factors affecting purchasing. They were asked to eplain three benefits and were epected to be aware of a range of benefits that could affect an organisation involved in purchasing. Up to three marks were allocated for each eplanation. Part (b) The aim of this question was to test the candidates knowledge of the Kyoto agreement and its subsequent affects on businesses. Candidates were asked to outline the affects and were epected to understand the basic features of the agreement. Part (c) The aim of this question was to test the candidates understanding of how buyers can contribute to reducing environmental concerns. They were epected to describe four ways that this could be achieved. These could cover a wide range from internal actions to dealing with suppliers or other stakeholders. Up to three marks were allocated for describing each way. Part (a) A range of answers were given here, but many of them included reducing costs, enhanced image and complying with legislation. Better answers eplained how the benefit came about and the consequences. Poorer answers often gave the information in brief bullet points without developing them. L3-01/SA report/may10 6

7 Part (b) This was usually well answered. Most answers understood the basic facts of the agreement and identified areas such as transport, production methods, material used etc as being important considerations for organisations. Part (c) There were some ecellent answers to this question. Most answers discussed environmental standards, working with suppliers and internal policies. Some better answers gave eamples from the candidates own organisation of how some of these suggestions have been put into practice. Better answers discussed the consequences of implementing the policies for the business and the environment. Eam Question Summary This was generally answered well and reflected the importance and relevance of these issues to most purchasing department. Many answers were developed and gave specific eamples of environmental polices. Q6 (a) Q6 (b) Q6 (c) Eplain how the political environment affects purchasing at national and international levels. Describe THREE ways that services provided by local government might affect purchasing organisations. Identify TWO different types of trade barrier and eplain the possible effects of each on a purchasing organisation. (6 marks) (10 marks) Part (a) The aim of this question was to test the candidate s knowledge of the effect that political factors have on purchasing. Up to three marks each were allocated for an eplanation of the national level and the international level. Candidates were epected to understand the difference between national issues such as laws and government policies affecting the country nationally and international issues such as international agreements on trade or political integration. Eamples could have been the European Union agreements, World Trade agreements or trade barriers and trading blocs. Part (b) The aim of this question was to test the candidates knowledge of local government and its influence on organisations. Answers were epected to include the provision of services, local government income and ependiture and the provision of roads and other infrastructure. These should have been related to business activity. Part (c) The aim of this question was to test the candidate s knowledge of the effects of trade barriers on purchasing. They were epected to discuss two types of barriers to trade and to eplain the various impacts on purchasing. Two marks were available for each sanction and three marks were allocated to an eplanation of the effects of each one. Part (a) Candidates understood the main affects and for si marks gave satisfactory answers. Better answers gave actual eamples such as Sale of Goods Act or Public Procurement legislation and related it to purchasing. Poorer answers made general L3-01/SA report/may10 7

8 comments about government passing laws or entering into trade agreements without giving any detail. Part (b) In general answers were satisfactory, with most candidates showing an understanding of the role of local government. Better answers discussed the issues of Public/ Private sector initiatives and talked about the effects od outsourcing on purchasing. Other good answers pointed out the role of local government in attracting businesses to their areas by giving grants and other benefits via such regional schemes as enterprise and commercial parks and providing better communication links for businesses. Part (c) Most answers mentioned tariffs and quotas and discussed the affects on price and costs. Better answer eplained how purchasers might deal with any negative consequences. Some good answers also mentioned non tariff barriers such as technical barriers and described the implications for purchasers. Eam Question Summary This was the least popular question on the paper and a number of the answers were quite poor, especially to part (c), where 10 Marks were allocated for a good discussion of two trade barriers. APPENDIX: Syllabus matri indicating the learning objectives of the syllabus unit content that each question is testing L3-01/SA report/may10 8

9 Question No. 1 2 Learning a b c a b c a b c a b c a b c a b c Objective 1 Understanding different purchasing contets Understanding the local, national, and international eternal factors impacting upon purchasing Understanding financial tools for analysing the eternal purchasing environment L3-01/SA report/may10 9