CIPS Level 6 Professional Diploma in Procurement and Supply Changed L6M5 Questions

Open-Book Costing (p.2.1) ensures visibility into supplier costs and margins, which matches the CEO’s request.

Cost Reimbursable (B) covers unknown costs, but does not provide transparency.

Bottom-Up Pricing (C) estimates project costs from smaller parts.

Activity-Based Costing (D) assigns costs per activity, but does not guarantee supplier transparency. [P.2.1]

The main risks are ensuring that the specification is correct and that the requirements are accurately communicated to the contractor.

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Prince2 has a defined "Closing a Project" phase (p.136).

Monte Carlo (A) relates to risk analysis.

Critical Path (B) maps dependencies but does not specify closure.

MRP (C) is used for inventory planning. [P.136]

A Payback Analysis (p.72) calculates how long it takes for a project to recover its initial investment. It accounts for project duration but does not provide a rate of return (Option C). Discount factors (Option D) are used in Net Present Value (NPV) analysis, not Payback Analysis. [P.72]