Module: Managing Expenditures with Suppliers

QuestiOn 2: 50% of the total marks
You are required to select an example of a category of procurement of a product, service or works bought by
yourorganisation. CA ea“‘vC3 S EYV ices < 30‘“ *0?)
You are required to:
(a) Research the market of your chosen category and review its size, scope and extent of competition
(b) Summarise the demand and supply factors that impact on the chosen category of procurement
(c) Explain the current pricing mechanism applied to the category and assess the factors that impact on the
pricing of the category
Guidance
This section of your work should consist of approximately 1,500 words and should include a title, your
candidate number, contents page, executive summary, references and a bibliography. Any source materials
such as web sites, company reports, indices, market data, articles, journals or texts should be referred to in
your references or bibliography.
Syllabus Coverage
The following content from the Practitioner syllabus can be used to answer this assessment:
0 How markets can be defined in terms of size, scope and stages of development
0 The levels of industry competition such as perfect competition, imperfect competition, oligopoly,
duopoly and monopolies
o How demand and supply factors impact on organisations in the supply chain
0 The impact of market change can have on organisations
0 Analytical tools to explain the impact ofthe external environment on organisations in supply chains
0 How macro economic factors such as interest rates, inflation, exchange rates and the level of
economic activity (GDP/ GNP) impacts on organisations
0 The use of portfolio matrices to assess categories of expenditures and perceptions of the organisation
by suppliers
0 The main types of pricing arrangements in commercial agreements
o The breakdown between direct and indirect costs
0 Types of published data that can provide information on costs and prices
0 Published reports and indices on markets
0 The comparison of quoted prices to historical data
0 The link between costs, prices, margins and mark ups
o Negotiating improved prices/ Estimating whole life costs
Driving value and Managing Expenditures V2, Mar 2015 © CIPS 2014, Page 4 of 5