CIPS Exam L4M4 Topic 3 Question 17 Discussion

Actual exam question for CIPS's L4M4 exam

Question #: 17
Topic #: 3

Philip is a procurement manager at XYZ Company which imports raw materials from abroad. Sup-pliers provide quotes to Philip in their local currency. Is this the best way to reduce the risk to XYZ Company of currency fluctuations?

Ayes- this means the price won't go up or down

Byes- this puts the risk on the supplier

Cno- quoting in the supplier's currency increases the risk for the buyer

Dno- quoting in the supplier's currency does not affect the risk to the buying organisation

Show Suggested Answer

Suggested Answer: C

The correct answer is 'no- quoting in the supplier's currency increases the risk for the buyer'. This questions comes up in a variety of formats in the exam. Remember; if the price is in your own currency (most examples in the exam are given in ) there is less risk than if the prices are quoted in a foreign currency. This is because exchange rates fluctuate; if the price is in you always know what you're paying, if it's in another currency the price can change daily depending on if the exchange rate compared to has gone up or down.

by Tuyet at Aug 06, 2024, 05:35 AM

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4 months ago

I think option C is the correct answer. Quoting in the supplier's currency increases the risk for the buyer because they have to deal with currency fluctuations, which can impact the final cost.

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