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CIPS L4M3 Exam - Topic 8 Question 12 Discussion

Which of the following is always an advantage of using fixed price arrangement in a contract for buying organisation?
A) Buyer can allocate budget with certainty
B) Buyer can harness falling market price
C) Supplier always receives a fixed margin
D) Suitable for contracts that last 5 years or more

CIPS L4M3 Exam - Topic 8 Question 12 Discussion

Actual exam question for CIPS's L4M3 exam
Question #: 12
Topic #: 8
[All L4M3 Questions]

Which of the following is always an advantage of using fixed price arrangement in a contract for buying organisation?

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Suggested Answer: A

Advantages of using fixed pricing arrangement are as below:

- Budget/income certainty - prices are fixed up front and should not change

- The impact of changes to the supplier's cost base is not fed through to the purchaser. If costs diminish, the supplier will benefit from this, and if costs rise, the purchaser will benefit


LO 3, AC 3.3

by Charlene at Feb 02, 2023, 06:03 PM

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Desmond
10 months ago
Is it really always an advantage? Sounds too good to be true.
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Phillip
10 months ago
Wow, I didn't know fixed prices were good for long contracts!
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Tawna
10 months ago
C seems off, suppliers can lose out if costs rise.
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Dortha
11 months ago
I disagree, fixed prices can be risky if market prices drop.
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Viva
11 months ago
A is definitely true, helps with budgeting!
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Florinda
11 months ago
I’m a bit confused about option D; I don’t think the duration of the contract is always a factor in fixed pricing.
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Garry
11 months ago
I think we had a practice question about fixed price contracts, and I recall that they provide budget certainty, which points to A.
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Georgiann
11 months ago
I'm not entirely sure, but I feel like option B could be a possibility too, since it mentions market prices.
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Bev
11 months ago
I remember studying that fixed price contracts help buyers manage their budgets better, so I think option A makes sense.
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Pearly
11 months ago
Process decision program chart (PDPC) sounds like the most relevant tool to analyze the material handling process and who should be involved. I'll focus on understanding how to apply PDPC in this type of scenario.
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Cristina
11 months ago
I'm pretty sure the answer is C, the Electronic Transactions Act. That makes the most sense to me in terms of establishing a basis for the "TrustSg" mark to build trust in e-commerce transactions.
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Pauline
11 months ago
Okay, I think I've got this. Based on the requirement for 99.9% service availability, the "Anti-DDoS Service Pro" option seems like the most suitable choice. I'll mark that one down.
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Emerson
11 months ago
Hmm, this is a good one. I think the key is to figure out why the critical APs aren't registering on the backup WLC. I'll need to look at the AP fallback and failover priority settings on both the failed WLC and the backup WLC.
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