2.3.2b Procurement, supplier relationships and logistics Quiz: Pearson Edexcel Business, Unit 8

The 20 questions

1. What term describes the process of finding, selecting and buying needed goods and services?

   • Recruitment
   • Liquidation
   • Marketing
   • Procurement

2. Which factor is most important when a business evaluates a new supplier?

   • Manager hobbies
   • Office paint colour
   • Reliability and cost
   • Staff dress code

3. A supplier is cheap but often delivers late. Which relationship factor is most affected?

   • Delivery reliability
   • Unit cost
   • Staff morale
   • Product design

4. What is a common customer reaction to poor logistics and late delivery of goods?

   • Buy more shares
   • Ignore the delay
   • Praise the firm
   • Switch to competitors

5. A business reputation falls after a supplier provides faulty components. Which procurement element failed?

   • Office location
   • Quality of inputs
   • Wage rates
   • Advertising budget

6. What term covers moving, storing and delivering goods from suppliers to customers?

   • Recruitment
   • Promotion
   • Logistics
   • Bookkeeping

7. A business pays £4,800 per year to a supplier that offers a 5% discount on orders above £20,000. A new order of £24,000 qualifies. What discount is received, in pounds?

   • £480
   • £960
   • £1,200
   • £2,400

8. Why might a business prefer a supplier located close to its factory?

   • Slower communication
   • More legal paperwork
   • Higher tax rates
   • Shorter transport times

9. Which practice defines a supplier relationship built on strong mutual trust?

   • Sharing vital information
   • Constant legal threats
   • Frequent supplier swaps
   • Hiding sales data

10. Which trade-off is a business likely to face when choosing a cheaper supplier?

    • Faster delivery times
    • Guaranteed zero defects
    • Lower quality goods
    • Free premium upgrades

11. Why must a business reorder stock before existing supplies reach zero?

    • To cover lead time
    • To prevent bulk buys
    • To lower item price
    • To reduce storage fees

12. Which arrangement is a clear example of a long-term supplier relationship?

    • Random spot buying
    • Daily market bidding
    • One-off cash purchase
    • Multi-year delivery contract

13. Which major cost category is directly impacted by transport and storage choices?

    • Labour costs
    • Marketing costs
    • Admin costs
    • Logistics costs

14. What is the most likely consequence of a business failing to deliver customer orders on time?

    • Higher tax bills
    • Damaged reputation
    • Increased borrowing
    • Lower wage costs

15. Why might a business choose a slightly more expensive supplier with guaranteed availability?

    • To lower transport costs
    • To increase profit margins
    • To prevent shortages
    • To reduce warehouse size

16. Which of these is a major supply chain risk that businesses must plan for?

    • Zero inflation
    • Supplier failure
    • Surplus demand
    • Guaranteed profits

17. What term describes a supplier's ability to provide goods when they are needed?

    • Availability
    • Productivity
    • Solvency
    • Liquidity

18. Which factor most strongly justifies choosing a slightly more expensive but highly reliable supplier?

    • Lower corporation tax
    • Reduced stoppage risk
    • Higher employee wages
    • Cheaper raw materials

19. What is the primary benefit of a business using multiple suppliers for the same input?

    • Spreading risk
    • Increasing tax
    • Lowering quality
    • Reducing sales

20. What is the main benefit of holding buffer stock during an unexpected surge in demand?

    • Lowering turnover
    • Reducing liquidity
    • Increasing taxation
    • Preventing stockouts

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