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UNDERSTANDING THE PURCHASING ENVIRONMENT: EXAM ANALYSIS Updated: July 2011 Here we analyse some of the latest exam sittings: what topics were set, where the key pitfalls and easy marks were, what the examiner said – and where you can find material for an answer, in your Course Book. The full text of past exams, marking schemes and Senior Assessors’ reports can be accessed by members at:

http://www.cips.org

CONTENTS May 2008 November 2008 May 2009 November 2009 May 2010 November 2010

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THE MAY 2008 EXAM Section A: case study and two compulsory questions (25 marks each) The UK food retailing industry is an oligopoly industry with major players such as Tesco.

Q1(a) Calculate and comment on trends in gross profit percentage and operating profit percentage Use the accounts information given. In this case, year-on-year ratios demonstrate improvements in performance. See Section 4 of Chapter 12 for the formulae and general implications.

9 marks

Q1(b) Calculate current ratio and comment on trend and significance Use the accounts information given. In this case liquidity is clearly inadequate. See Section 5 of Chapter 12 for the formula and general implications.

7 marks

Q1(c) Three reasons for PLCs to publish accurate financial info See Section 1 of Chapter 12.

9 marks

Comments: The examiner emphasises that you must get to grips with the calculation and interpretation of ratios for success in this exam…

Q2(a) Four features of an oligopoly industry This should be fairly straightforward. See Section 5 of Chapter 3 – but remember to highlight scenario examples of your points where possible.

8 marks

Q2(b) Two disadvantages and two advantages for a supplier dealing with an oligopoly customer See Section 5 of Chapter 3 – noting that it is the (supermarket) customer that is an oligopolist, not the (producer) supplier.

8 marks

Q2(c) Three environmental concerns for food retail firms See Section 1 of Chapter 9 for some general points, but consider the specific issues of a food retailer: water conservation, land use, fish stocks and climate (with related risks to food supplies); transport emissions; the need for packaging (for hygiene reasons) and resulting waste issues; and so on.

9 marks

Comments: Some candidates misread the case study material, and failed to identify supermarkets as the customer and farmers or producers as the suppliers – which led to poor answers on the nature of the oligopoly industry (few large retailers).

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Section B (two questions, 25 marks each)

Q3(a) Three internal and external stakeholders and nature of stake See Section 1 of Chapter 4.

12 marks

Q3(b) Three ways to encourage stakeholder co-operation See Section 4 of Chapter 4.

9 marks

Q3(c) Define ‘silent stakeholder’ with two examples See Section 2 of Chapter 4 (and don’t forget the examples.)

4 marks

Comments: This should have been a straightforward source of marks. Even if you didn’t know the term ‘silent stakeholders’, you could have earned the bulk of the marks available.

Q4(a) How increased interest rates affect purchasing See Section 2 of Chapter 6.

8 marks

Q4(b) How increase in value of pound sterling affects an importer The question merely states that the UK company ‘sources half of its inputs from the USA’ (ie it is an importer) – but the examiner’s report interprets this as asking candidates to apply their knowledge of exchange rate changes ‘to an organisation that imports and exports’. The question doesn’t in fact mention any exports: for all we know, the company could sell purely in a domestic market. See Section 5 of Chapter 6 on exchange rates.

8 marks

Q4(c) Three social factors in deciding to source internationally See Section 5 of Chapter 7 for a comprehensive list.

9 marks

Comments: The ambiguity in the question may have tripped you up on Q4(b): a useful reminder is to spend a moment at the beginning of your answer defining what you take the question to be about…

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Q5(a) Significance of the public sector in UK economy See Section 2 of Chapter 2.

8 marks

Q5(b) Four objectives of a not-for-profit organisation See Section 5 of Chapter 2.

8 marks

Q5(c) Three statutes impacting on purchasing For a full selection, browse through Chapter 10: you might like to draw on statutes from different ‘areas’ of the law, to demonstrate your knowledge.

9 marks

Comments: The only pitfall in this question was perhaps the potential to confuse ‘statutes’ (Acts of Parliament) with other types of law.

Q6(a) How changes in technology affect purchasing See Section 1 of Chapter 8, where a helpful summary is laid out for you.

9 marks

Q6(b) Three methods of technology transfer See Section 2 of Chapter 8.

9 marks

Q6(c) Explain public private partnership, with examples See Section 4 of Chapter 5 – and don’t forget the examples.

7 marks

Comments: Parts (b) and (c) are quite detailed areas of knowledge: this might have been an optional question to avoid if your revision wasn’t up to the task. General pitfalls Several questions asked specifically for examples of the points you were

making – and you lost significant marks if you failed to provide these. Easy marks There were good marks to be obtained from mainstream syllabus topics:

financial analysis; market structure; stakeholders; exchange rates; social factors in international sourcing; sectors of the economy; and purchasing technology.

What the examiner said The examiner was disappointed that a few candidates still did not know how to calculate ratios, or to explain their significance. You must work on this area if you are aware that it is a weakness: financial analysis often comes up in the compulsory questions.

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THE NOVEMBER 2008 EXAM Section A: case study and two compulsory questions (25 marks each) A restaurant chain is expanding into the area of corporate hospitality.

Q1(a) Calculate current and gearing ratios and comment on stability of the business See Section 5 of Chapter 12 for the calculation methods and implications.

10 marks

Q(b) Usefulness of current and gearing ratios to external stakeholders For general points, see Section 5 of Chapter 12, and also our Addition notes in the Upgrade section of the Bonus Pack. However, the question requires you to comment on the usefulness of the specific results you derived in part (a).

10 marks

Q1(c) Five documents submitted to Registrar of Companies for publication of accounts See Section 2 of Chapter 11 – and note that this doesn’t refer to incorporation (Memorandum and Articles etc).

5 marks

Comments: This was a challenging question on this topic area: a warning to practise as many financial analysis questions as you can in the run-up to the exam…

Q2(a) How purchasing is affected by specified social and macro-economic developments The question raises issues of: falling growth in GDP; falling interest rates; falling exchange rate; and increasing population – in the light of plans for international expansion (which will generally be made more expensive). See Sections 2 and 5 of Chapter 6, and Section 3 of Chapter 7 for points.

12 marks

Q2(b) Three ways new technology could benefit purchasing See Section 1 of Chapter 8 for some general ideas – but select your points in the light of plans to centralise the purchasing function and to expand internationally.

9 marks

Q2(c) Potential problems of new technology See Section 2 of Chapter 8.

4 marks

Comments: The main challenge here was to contextualise your answers to part (b) and (c), using examples from the case study.

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Section B (two questions, 25 marks each)

Q3(a) Example and objectives of a not-for-profit organisation See Section 5 of Chapter 2 for ideas. Try and focus on a particular NFP organisation with which you are familiar.

7 marks

Q3(b) Three types of public sector organisation See Section 4 of Chapter 2 – and note that you need to provide 2 marks’ worth of detail on each type.

6 marks

Q3(c) Two disadvantages and two advantages of being a public limited company (plc) See Section 3 of Chapter 2. Some candidates confused private limited companies (Ltd) with public limited companies (plc): you must get to grips with basic terminology for this paper!

12 marks

Comments: If you weren’t confident about PLCs, this would have been a good question to avoid – despite the 13 fairly easy marks available from parts (a) and (b).

Q4(a) Three sources of income for a local authority; four types of taxation by central government See Sections 2 and 4 of Chapter 5.

7 marks

Q4(b) Two benefits for a public sector partner of being in a public private partnership This is the most detailed question on PPPs set so far in this exam. See Section 4 of Chapter 5 – and also the notes in the Addition section of the Upgrade material.

10 marks

Q4(c) Roles of two international bodies See Section 5 of Chapter 5. Higher marks were awarded for the choice of bodies with significant impact on purchasing, such as the EU and WTO. (NATO and the UN, say, would have offered little opportunity to discuss issues such as standards, barriers to trade, trade agreements, regulations and directives.)

8 marks

Comments: An unusually detailed question on this syllabus area: a warning that you need to cover topics thoroughly, in depth.

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Q5(a) Three local environmental concerns in dealing with supplier See Section 1 of Chapter 9 – focusing on local issues, such as noise, traffic congestion, waste, recycling, and pollution.

9 marks

Q5(b) Two examples of damage to environment at global level See Sections 1 and 2 of Chapter 9 – focussing on global issues such as climate change or deforestation. You were expected to draw out the implications for purchasers and organisations.

8 marks

Q5(c) Two ways purchasing can reduce environmental concerns See Section 5 of Chapter 9.

8 marks

Comments: Extra marks were given for practical real-life examples in support of points.

Q6(a) Four features of perfectly competitive market See Section 2 of Chapter 3.

8 marks

Q6(b) Two benefits to a purchaser of buying in such a market See Section 2 of Chapter 3.

8 marks

Q6(c) Three features of oligopoly market See Section 5 of Chapter 3.

9 marks

Comments: A common area for exam questions: straightforward, if you’d done the work.

General pitfalls You had to read the questions carefully: external stakeholders (Q1(b));

documents for publication of accounts (Q1(c)); benefits of PPPs for the public sector partner (Q4(b); local and global factors (Q5(a) and (b)).

Easy marks There were good marks to be obtained from mainstream syllabus topics:

financial analysis; technology and purchasing; types of organisation in different sectors; environmental concerns; and market structure.

Most questions were focused on specific areas of the syllabus, rather than requiring you to draw on different topics: straightforward requirements.

What the examiner said The examiner was disappointed by candidates’ understanding of (and ability to calculate) basic financial ratios. Many candidates found it difficult to work out current assets and liabilities, long-term liabilities and shareholders’ funds from the data given. You need to practise as many past exam questions in this area as you can.

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THE MAY 2009 EXAM Section A: case study and two compulsory questions (25 marks each) A manufacturer of surfing equipment has quality problems with a recent purchase.

Q1(a) Comment on the company’s debtor days and creditor days and describe other relevant ratios See Section 6 of Chapter 12 for debtor and creditor days and their implications (notably, cashflow problems) – and Sections 4 and 5 for other relevant ratios, and how they provide a more developed understanding of the business’s financial position.

12 marks

Q1(b) Two ways company can seek competitive advantage See Section 4 of Chapter 3 – noting that the company operates in a ‘monopolistic competition’ market: competition would be based on differentiation and promotion (highlighting niche market, environmental and R & D issues in the case).

8 marks

Q1(c) Rights under Sale of Goods Act re defective goods purchased See Section 2 of Chapter 10 – focusing on implied terms as to satisfactory quality, and available remedies.

5 marks

Comments: This question ranged across several syllabus areas: you had to stay alert.

Q2(a) Four areas to include in an environmental policy See Section 5 of Chapter 9 for some general points – but specific areas were highlighted by the case: overseas supply chain issues; recycling and energy-saving at the organisation’s various sites; materials used; disposal of waste and so on.

8 marks

Q2(b) Four costs of implementing such a policy We have added notes in the Upgrade material to cover this question.

8 marks

Q2(c) Three benefits of such a policy See Section 4 of Chapter 9 – bearing in mind the type of customers and products the business is involved in.

9 marks

Comments: As ever, the challenge is to contextualise your answer to the scenario.

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Section B (two questions, 25 marks each)

Q3(a) Two examples of equal opportunities legislation and effects on employment of purchasing staff See Section 4 of Chapter 10.

10 marks

Q3(b) One EU directive that affects purchasing See Section 6 of Chapter 10 – remembering that you need to select one on which you can write 5 marks’ worth of detail.

5 marks

Q3(c) Five H & S duties of an employer See Table 10.3 of Chapter 10.

10 marks

Comments: Detailed legal provisions have not previously been tested for this paper: you will need to bear the possibility in mind for the future.

Q4(a) Two differences in private and public sector purchasing See Section 2 of Chapter 2.

8 marks

Q4(b) Three internal and three external stakeholders See Section 1 of Chapter 4.

12 marks

Q4(c) Five drawbacks of a sole supplier This is a bit ambiguous: a ‘sole supplier’ (the only supplier a buyer uses) is not necessarily the same as a monopoly supplier (the only supplier in a market) – but the examiner’s report indicates that this was a reference to monopoly (as appropriate to this syllabus). See Section 3 of Chapter 3.

5 marks

Comments: Even if you were a bit thrown by part (c), straightforward marks were available in parts (b) and (c): make these kinds of calculations when choosing questions.

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Q5(a) Three types of trade barrier See Section 4 of Chapter 6.

3 marks

Q5(b) Three reasons for trade barriers See Section 4 of Chapter 6 – and also our Additional notes in the Upgrade material, which give you 12 marks’ worth of detail.

12 marks

Q5(c) How a weakening domestic currency affects purchasing Exchange rate questions are tricky, if you haven’t got absolutely clear in your mind how the mechanism works, and therefore the various combinations of effects of rising or falling exchange rates on imports or exports. See Section 5 of Chapter 6.

10 marks

Comments: This was an unusually detailed question on this area of the syllabus: perhaps one to avoid, if you hadn’t covered trade barriers in depth.

Q6(a) Five examples of unethical purchasing See Section 4 of Chapter 7.

10 marks

Q6(b) The importance of acting ethically in purchasing See Section 4 of Chapter 7 – and the Addition notes in the Upgrade material.

5 marks

Q6(c) Two ways culture can affect international purchasing See Section 5 of Chapter 7.

10 marks

Comments: Don’t think of purchasing ethics as a ‘soft topic’ in the syllabus: you needed to find 15 marks’ worth of solid content for this question.

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General pitfalls Some questions also focused on detailed areas of the syllabus, such as trade

barriers or purchasing ethics. If you hadn’t covered these areas, you might have had some difficult question choices to make.

Some questions were quite subtle in their angle on the topic: like the reasons for trade barriers (Q5(b)) or the importance of acting ethically (Q6(b)).

Easy marks There were good marks to be obtained from mainstream syllabus topics:

financial analysis; environmental policy; private and public sector purchasing; stakeholders; exchange rates; purchasing ethics; and the impact of culture in international sourcing.

There were short-answer question parts (worth 3 or 5 marks, usually for basic points or definitions) for many questions, enabling you to get some straightforward marks under your belt.

What the examiner said The Answer Guidance has little new to add. Read the questions carefully. Contextualise your answers to purchasing and/or to the specific scenario given in the question. This should be pretty familiar advice by now.

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THE NOVEMBER 2009 EXAM Section A: case study and two compulsory questions (25 marks each) A report forecasts slowing supply and increasing demand for oil, and related trends in prices and alternative energy initiatives.

Q1(a) Four characteristics of oligopoly market See Section 5 of Chapter 3.

8 marks

Q1(b) Why oligopolies rarely compete on price; four competitive methods used. See Section 5 of Chapter 3.

9marks

Q1(c) Two disadvantages and two advantages of purchasing from a perfectly competitive market See Section 2 of Chapter 3.

8 marks

Comments: It was difficult to contextualise your answers, given the general nature of the case study: you needed to point out examples from the energy industry.

Q2(a) How monetary and fiscal policy used to avoid rising inflation and increasing unemployment See Sections 1 and 2 of Chapter 6 – and note the multiple requirements to this question: fiscal and monetary policy; how they can both cause and mitigate both unemployment and inflation. Marks were spread across all these areas.

12 marks

Q2(b) Two reasons for ‘mixed economy’ approach See Section 2 of Chapter 2.

6 marks

Q2(c) Reasons for varying UK oil prices This drew on concepts across the syllabus to account for varying prices: eg demand and supply factors; world market prices; decisions made by the OPEC cartel; government revenue from taxation; the UK’s status as a producer and beneficiary of crude oil; political and natural factors which might threaten oil rigs or pipelines etc. You answer was required in the format of an email to a colleague – for 2 of the 7 marks available.

7 marks

Comments: Part (c) was undoubtedly the most challenging of the question parts, despite only being worth 7 marks: you needed to manage your time carefully.

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Section B (two questions, 25 marks each)

Q3(a) Calculate gross profit and operating profit percentages and comment on year-on-year trends See Section 4 of Chapter 12 for methodology and implications (eg ability to keep down costs) – but note that you had to handle specific accounts data supplied.

9 marks

Q3(b) Calculate current and acid-test ratios and comment on year-on-year trends See Section 5 of Chapter 12 for methodology and implications (eg ability to settle current liabilites).

9 marks

Q3(c) Calculate gearing ratios and comment on year-on-year trends See Section 5 of Chapter 12 for methodology and implications (eg reduced cost of finance).

7 marks

Comments: If you aren’t confident in your knowledge or use of ratios, this was a question to avoid – but it’s worth getting to grips with, as such questions can earn you full marks.

Q4(a) Four internal and four external stakeholders (for an organisation with which you are familiar); nature of stake See Section 1 of Chapter 4 – but remember to focus on specific organisational examples, rather than stakeholders in general.

10 marks

Q4(b) How to promote co-operation between stakeholder groups See Section 4 of Chapter 4.

7 marks

Q4(c) Characteristics of not-for-profit organisation See Section 5 of Chapter 2 – noting that only 2 marks are available for your answer.

2 marks

Q4(d) Three objectives of NFP organisation See Section 5 of Chapter 2.

6 marks

Comments: A highly structured question puts pressure on your exam technique – but provides plenty of ‘easy’ marks (the first few marks of any question part).

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Q5(a) Four benefits of recent technology changes, with examples See Sections 1, 3 and 4 of Chapter 8 for ideas – and don’t forget to give examples.

10 marks

Q5(b) Four problems of technological change, with examples See Section 2 of Chapter 8.

10 marks

Q5(c) Define ‘e-procurement’ See Section 4 of Chapter 8.

5 marks

Comments: This should be a straightforward question, if you’ve covered the material.

Q6(a) Three reasons for competition legislation See Sections 3 and 5 of Chapter 3.

9 marks

Q6(b) Four principles on which ethical codes are based See our Addition notes in the Upgrade material – if you haven’t (as we strongly recommend) read the CIPS Code of Ethics: Honesty, Integrity, Accuracy and Confidentiality.

8 marks

Q6(c) Nature of a public private partnership See Section 4 of Chapter 5.

8 marks

Comments: Another question drawing on topics across the syllabus, which may have posed a difficult choice if you were weaker in some areas than in others.

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General pitfalls Some detailed technical terms were used, with potential for less well

prepared students to flounder. In Q2(b) for example, candidates who didn’t know what ‘mixed economy’ referred to (both a public and a private sector) discussed primary and secondary sectors, exports and imports and so on – and gained no marks.

There were unusually few 5-mark definition-type questions to get easy marks under your belt. You would have had to use good exam technique (eg adding your own brief definitions of terms) in order to make up this early ground.

Easy marks There were good marks to be obtained from mainstream syllabus topics

such as: market structure, stakeholders, NFP organisations, financial analysis and the impact of technology on purchasing.

Some of the topics examined should by now look very familiar: PPPs, stakeholders, technology, ratios, oligopoly. We don’t recommend question spotting, and of course it is important to read and answer the question set (which may vary in many ways, despite covering the same topic) – but the examiner clearly has ‘favourite’ exam topics, so there is a strong advantage for students who have worked through past papers.

What the examiner said In questions on changes in technology affecting purchasing, the examiner is looking for examples ‘such as e-auctions, e-procurement, databases, EPOS and other systems. Highly marked answers discussed such developments as CAD/CAM technology as well as other production-based or consumer-based technological developments, and their benefits for a purchasing department.’

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THE MAY 2010 EXAM Section A: case study and two compulsory questions (25 marks each) A hospital is facing issues of workforce diversity and the failure of a key supplier in an oligopolistic market. It is now appraising a new potential supplier, via its financial accounts.

Q1(a) Four legal requirements when publishing financial accounts See Section 2 of Chapter 11.

4 marks

Q1(b) Three reasons why it is important for companies to publish accounts See Section 1 of Chapter 11 – and remember to contextualise: think of the case study parties who would be interested in the supplier’s financial information, for example…

9 marks

Q1(c) Discuss financial ratios given, and comment on the suitability of the supplier See Sections 4 and 5 for implications of net profit percentage and quick or acid ratio: the case gives the supplier’s ratios against the industry averages, for comparison. You might also note that more information would be required for a selection decision.

12 marks

Comments: Part (a) poses the most detailed knowledge requirement of this question – but it is only worth 4 marks, so don’t panic.

Q2(a) Two possible consequences of UK recession for purchasing See Section 3 of Chapter 6 and the ‘In the News’ feature of the Upgrade material – but remember the scenario (presumably a public sector organisation): governments may spend more in a recession, to stimulate the economy.

8 marks

Q2(b) Three disadvantages of purchasing in an oligopoly market See Section 5 of Chapter 3.

9 marks

Q2(c) Four areas of employment law relevant to recruiting purchasing staff See Section 4 of Chapter 10 – and note the hint in the case study about the hospital’s diversity policy. Remember that ‘employment law’ is specifically about discrimination, equal opportunity, working hours, employment protection and so on.

8 marks

Comments: The main challenge here is contextualising your answers to parts (b) and (c), by using illustrative examples from the scenario to support your theoretical points.

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Section B (two questions, 25 marks each)

Q3(a) Three characteristics of a Public Limited Company Note: a ‘Public Limited Company’ is not the same as a ‘public sector organisation’. See Section 3 of Chapter 2.

9 marks

Q3(b) One external stakeholder of a charity (of your choice); nature of interest See Section 1 of Chapter 4 – remembering to focus on an external stakeholder of a named charity.

7 marks

Q3(c) Three reasons why SMEs are important for economic development See Section 3 of Chapter 2.

9 marks

Comments: This should have been straightforward if you read the questions carefully.

Q4(a) Four ways changes in technology have affected purchasing See Section 1 of Chapter 8 for some ideas.

8 marks

Q4(b) Four ways technology transfer can increase economic growth in developing countries See Section 2 of Chapter 8.

12 marks

Q4(c) One reason why the rate of technological change differs from developing to developed countries See Section 2 of Chapter 8.

5 marks

Comments: A challenging ‘technology’ question – and a reminder to study all syllabus topics.

Q5(a) Three benefits of having an environmental policy See Section 4 of Chapter 9.

9 marks

Q5(b) Impact of the Kyoto agreement on commercial operations See Section 3 of Chapter 9.

4 marks

Q5(c) Four ways a buyer can help reduce environmental concerns See Section 5 of Chapter 9.

12 marks

Comments: Even if you were not confident about Kyoto, there were 21 straightforward marks to be earned from parts (a) and (c): a useful calculation when choosing questions.

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Q6(a) How political environment affects purchasing at national and international levels See Sections 1, 3 and 5 of Chapter 5 for a range of ideas: cite examples of legislation and policy, rather than generalities.

6 marks

Q6(b) Three ways services provided by local government might affect purchasing organisations See Section 2 of Chapter 5. Think of the effect of services themselves in the widest sense (eg refuse management and recycling, roads and infrastructure, business parks, development grants) and also how they are provided (eg by outsourcing, PPPs or buying from private sector organisations).

9 marks

Q6(c) Two types of trade barrier, and effects on purchasing See Section 4 of Chapter 6. An effort to find 10 marks’ worth of comment, perhaps: branch out to explain how purchasers might deal with negative effects.

10 marks

Comments: Understandably, perhaps, the least popular question in the exam.

General pitfalls There were some highly specific, detailed and unusual ‘angles’ on

mainstream syllabus topics, challenging your powers of analysis as well as knowledge.

Easy marks There were good marks to be obtained from mainstream syllabus topics

such as: financial ratios, oligopoly market, PLCs and NFP organisations, technological change, environmental policy and practice, political environment and (the increasingly examined) trade barriers.

There were few 5-mark definition-type questions to get easy marks under your belt.

What the examiner said The examiner awards higher marks to candidates who use concrete examples to illustrate points, and also to answers which make an attempt to discuss the implications of questions in a rounded (but still relevant) way.

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THE NOVEMBER 2010 EXAM Section A: case study and two compulsory questions (25 marks each) A local borough council (public sector) has entered into a strategic public private partnership with a private sector organisation, to outsource a number of its back office functions.

Q1(a) Using data given, calculate gross profit margin and net profit percentage, and comment on year-on-year trends See Section 4 of Chapter 12 for the formula and general implications. The data refers to the outsource organisation. Gross profit percentage has increased, and net profit percentage fallen, focusing attention on the vastly increased expenses, including the transfer of employee contracts from the council.

10 marks

Q1(b) Three ways purchasing may help reduce cost of sales You might suggest cost reduction methods such as: streamlining structures; sourcing new suppliers; consolidating supply; negotiating harder on the basis of long-term larger orders – and so on.

9 marks

Q1(c) Using data given, calculate and comment on current ratio See Section 5 of Chapter 12 for the formula and general implications. The liquidity situation is positive, in relation to the company’s ability to pay off its short-term debts.

6 marks

Comments: The examiner awarded marks for correct use of ratios – even if the results of the calculations themselves were wrong. One lesson is: show your workings. Another is: don’t panic and focus on the ‘story’ told by the figures…

Q2(a) Identify two stakeholders of the council and outsource organisation, and explain the nature of their interest See Section 1 of Chapter 4. Try and select your stakeholders to show that you understand the difference between public and private sector contexts.

8 marks

Q2(b) How conflict of interest between stakeholder groups might be resolved See Section 4 of Chapter 4.

8 marks

Q2(c) Three reasons why governments encourage public private partnerships See Section 4 of Chapter 5 – and the notes in the Upgrade material. Note that the question does not just address the benefits to the partners, but the wider political and socio-economic benefits which governments might pursue.

9 marks

Comments: This was one of the highest-scoring questions with respect to stakeholders and conflict resolution – but candidates who failed to read the question carefully fell down on part (c), which was intended to focus on government policy (as a political factor).

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Section B (two questions, 25 marks each)

Q3(a) Two effects of a rise in interest rates for purchasing See Section 2 of Chapter 6.

8 marks

Q3(b) Three effects on US-based purchasing of a change in the dollar exchange rate See Section 5 of Chapter 6. There is a major potential pitfall in such questions: make sure you are clear about the implications of increases and decreases in rates for imports and exports…

9 marks

Q3(c) Two advantages of using Euros when buying within the EU. See Section 5 of Chapter 6. Focus on the use of a Single Currency…

8 marks

Comments: Note that you were explicitly expected to focus on the purchasing context, so you need to link consumer and business spending and international trade policies back to issues such as demand and supply, investment and employment, purchasing strategies and policies.

Q4(a) Three ways developments in technology may affect purchasing, with examples See Section 1 of Chapter 8 for overview coverage. Pick three areas across the scope of the topic (eg new products, processes, ICT systems, structures and relationships and so on) – and areas on which you can answer most strongly (with examples).

12 marks

Q4(b) Two ways technology transfer may increase the rate of economic development See Section 2 of Chapter 8. Note that you need to come up with 5 marks’ worth of discussion for each of the effects you identify (eg creating infrastructure, skilling, opportunities for international trade).

10 marks

Q4(c) One area of environmental concern for purchasing, covered by UK legislation See Section 3 of Chapter 9 for some ideas. Note that you just have to outline the area: detailed knowledge of the legislation is not required.

3 marks

Comments: ‘Candidates often answered with very short sentences or phrases, without developing the points made. Candidates are advised to explain the points in their answer, and it is advisable to consider points in the context of procurement’. Two useful pieces of advice for any question in this paper.

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Q5(a) Four features of a monopolistically competitive market See Section 4 of Chapter 3.

8 marks

Q5(b) Two ways purchasing operations are affected in a very competitive market See Section 2 of Chapter 3. Think about the purchaser’s power in such a market to source products, control quality and standards, negotiate prices and so on.

8 marks

Q5(c) Three ways monopolies can arise in B2B markets See Section 3 of Chapter 3. Note that the question focuses on how monopolies ‘arise’ – not on the features of monopolistic markets. We have added some brief notes to the Additions section of the Upgrade material.

9 marks

Comments: A deceptively difficult question: you had to read each question part carefully and think about the issues.

Q6(a) Explain three effects of demographic changes on purchasing, locally or internationally See Section 3 of Chapter 7. Focus on factors such as population size, age, migration or family structures – and how these affect purchasing activities (changes in markets, products and services, HR planning, organisational policies and practices). Note that the question says ‘locally OR internationally’: you need to discuss three demographic changes (for 4 marks each) – not six (for two marks each).

12 marks

Q6(b) Three ways culture might affect purchasing operations See Section 2 of Chapter 7. Try to address both local cultural factors and international cultural differences (eg working practices, language, communication styles) and their impact on purchasing (negotiation, supplier relationships, operations).

9 marks

Q6(c) Two examples of unethical behaviour by a purchasing officer See Section 4 of Chapter 7. Focus on the individual level of ethics: the question does not address broader areas of corporate ethics such as labour standards…

4 marks

Comments: The examiner says, ‘The effects of demographic changes on purchasing needed more consideration…’. If this is your weak area, focus your revision accordingly!

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General pitfalls There were some highly specific, detailed and unusual ‘angles’ on

mainstream syllabus topics, challenging your powers of analysis as well as knowledge. Examples include: how monopolies arise (Q5(c)), and effects of technology transfer on economic development (Q4(b)).

There were few 5-mark definition-type questions to get easy marks under your belt. Where there were short-answer type questions, you had to make sure you got the balance of your answer right, across the various question parts, in order to manage your time effectively.

Easy marks There were good marks to be obtained from mainstream syllabus topics

such as: financial ratios, different market structures; general effects on purchasing of technological developments, demographic changes and culture; and purchasing ethics.

Several question themes would be familiar from recent past papers. While we never recommend question spotting, there is a distinct advantage for students who regularly analyse and practise past papers.