L4M2 Summarised

Note
1. Understand how to devise a business case for requirements to be sourced
from external suppliers:
1.1 Analyse how business needs influence procurement decisions:
a. Different types of purchase:
 Straight re-buy:
 When to use straight re-buy (A purchase decision
resulting from an ongoing purchasing relationship
with a supplier)
 Typical scenarios that straight re-buy is adopted
(Utility, MRO, Raw Materials)
 Modified re-buy:
 When to use modified re-buy (When a buyer has
experience in purchasing a product in the past but is
interested in acquiring additional information
regarding alternative products and/or suppliers/New
Specification)
 Typical scenarios that modified re-buy is adopted
(Components, Service(Consulting), Semi finished
products)

 New purchase
 When to use new purchase (When the buyer identifies
a new requirement. (New Product, technology
change, changes in the legislation to offer a new
service)
 Typical scenarios that new purchase is adopted
(Capital items, Finished Products/ Resale products)

b. Ways to identify business needs: RASQCI

- Regulation (Covers any legal requirements or requirements of
regulatory bodies)
- Availability (Covers the continuing supply of goods and services
when required and is based on factors, such as capacity, financial
stability and risk.)
- Quality (this is the consistency, repeatability and how fit for propose
the procured goods and services are)
- Service requirements (Factors associated with the way services are
supplied for example flexibility, support and help desk.)
- Cost (Cost and price: target cost, total cost of ownership,
benchmarked prices that keeps up the improvements)
- Innovation, (Improvement customer experience)

Procurement role in developing business case

1. Objectives
This part describes why you are doing the project. The business
objective answers the following questions: - What is your goal? - What
is needed to overcome the problem? - How will the project support the
business strategy?
2. Option identification and selection
Identify the potential solutions to the problem and describe them in
enough detail for the reader to understand. For instance, if the business
case and proposed solution makes use of technology, make sure to
explain how the technology is used and define the terms used in a
glossary.
3. Benefits and limitations
The benefits and limitations section describes the financial and non-
financial benefits in turn. The purpose is to explain why you need a
project so that management team may consider different option. It
doesn’t replace purchase order. For instance, to:
- Improve quality
- Save costs through efficiencies
- Reduce working capital
- Generate revenue
- Remain competitive
- Improve customer service
- Align to corporate strategy
4. Risk management
This section answers the following questions:
- What risks are involved?
 - What are the consequences of a risk happening?
- What opportunities may emerge?
- What plans are in place to deal with the risks?
5. Implementation plan
The outline plan provides a summary of the main activities and overall
timescale ― project schedule ― for the project. Ideally, the project
should be divided into stages with key decisions preceding each stage.
Use this section to answer the following questions:
- What is required?
- How is it done?
- Who does what?
- When will things happen?
This outline plan lists the major deliverables and includes a brief project
description plus accountabilities for each activity.
c. Problem solving skills for procurement professionals:
 Types of problems:
 Closed problems (These appears when something
happen that should not have happened)- Must find the
solution. Shortage of key supply. Cyber Attack
 Open ended problems - (These are where something
is stopping the achievement of an objective or
blocking progress for SHORT TERM objectives),
There are not enough data for procurement analytics'
is an open-ended problem because it prevents
company to conduct procurement analytics (an
objective), The solution is known. Must implement
the solution. Workers not binding to rules. Large
logistic costs. Known solutions but only hurdles.
 Problem solving processes: 5 why,
d. Typical sessions of a business case: Executive summary; Long-
term strategy consideration; Business requirements; Price and cost
analysis; Market analysis; Supply analysis; Technical
developments, Vulnerability analysis; Sourcing objectives;
Implementation plan; Competitive advantages...

Problem solving process.

Define the problem, generate alternative solutions, evaluate and select an
alternative, implement and follow up on the solution
Step 1: Define the Problem

- What is the problem?

- How did you discover the problem?

- When did the problem start and how long has this problem been
going on?

- Is there enough data available to contain the problem and prevent it

from getting passed to the next process step? If yes, contain the
problem.

Step 2: Clarify the Problem

- What data is available or needed to help clarify, or fully understand

the problem?

- Is it a top priority to resolve the problem at this point in time?

- Are additional resources required to clarify the problem? If yes,

elevate the problem to your leader to help locate the right resources
and form a team.

- Consider a Lean Event (Do-it, Burst, RPI, Project).

- Ensure the problem is contained and does not get passed to the next
process step.

Step 3: Define the Goals

- What is your end goal or desired future state?

- What will you accomplish if you fix this problem?

- What is the desired timeline for solving this problem?

Step 4: Identify Root Cause of the Problem

- Identify possible causes of the problem.

- Prioritize possible root causes of the problem.

- What information or data is there to validate the root cause?

Step 5: Develop Action Plan

- Generate a list of actions required to address the root cause and

prevent problem from getting to others.

- Assign an owner and timeline to each action.

 - Status actions to ensure completion.

Step 6: Execute Action Plan

- Implement action plan to address the root cause.

- Verify actions are completed.

Step 7: Evaluate the Results

- Monitor and Collect Data.

- Did you meet your goals defined in step 3? If not, repeat the 8-Step
Process.

- Were there any unforeseen consequences?

- If problem is resolved, remove activities that were added previously

to contain the problem.

Step 8: Continuously Improve

- Look for additional opportunities to implement solution.

- Ensure problem will not come back and communicate lessons

learned.

- If needed, repeat the 8-Step Problem Solving Process to drive further

improvements.

1.2 Identify how costs and prices can be estimated for procurement
activities
a. Types of market data:
Primary data can answer specific questions that secondary data cannot
and can ensure the quality and reliability of the data collected.

 Primary data (field research): examples of these sources

  Secondary data (desk research): examples of these sources
b. Types of costs
 Direct and indirect costs: Cost involved in production and
other activities.
 Fixed and variable costs: Depreciation cost. Rent. Variable
cost varies with activity.
 Primary and secondary activities (Porter value chain): the
relationships between Porter’s value chain and direct,
indirect costs- Inbound and Outbound logistics, Operations,
Sales and Marketing, Services, /Technical development,
Infrastructure, HR, Maintenance.

 Primary activities (Direct Cost)

i) Marketing and sales

ii) Inbound & Outbound Logistics

iii) Operations – Component fabrication etc

iv) Service (Customer)

 Secondary activities (Indirect Cost)

i) Procurement
ii) Technology development
iii) Infrastructure – Finance etc
iv) HR management

Producing estimated costs and budgets

1. Data that can provide price and cost information

2. difference between direct and indirect cost
3. How to produce estimated costs and budgets
4. Approaches to total cost of ownership/whole life cycle costing
c. Break-even analysis: how to calculate break-even point
- Break-Even point (units) = Fixed Costs ÷ (Sales price per unit –
Variable costs per unit)
- Break-Even point (units) = Fixed Costs ÷ Contribution Costs

d. Purchase cost analysis: D ifferent methods of purchase cost

analysis
 - life cycle costing= Purchase price + acquisition cost + usage cost +
end-of-life cost

- Activity-based costing = (Cost per unit x annual number of units

sold = Annual consumption value)

- Target costing = Selling Price – Profit Margin).

- Cost-plus award fee contracts allow the contractor to be awarded a

fee usually for good performance. Based on subjective
evaluations

- Cost-plus fixed-fee contracts cover both direct and indirect costs,

in addition to a fixed fee.

- Cost-plus incentive fee contracts happen when the contractor is

given a fee if his or her performance meets or exceeds
expectations. Based on predetermined targets

- Cost-plus percent-of-cost contracts allow the amount of

reimbursement to rise if the contractor's costs rise.

- Value analysis.
e. Price analysis: how to carry out price analysis
 History price
 Published price - Competitive bidding.
 Pricing formula
Price indices and competitive bidding are the fair and reasonable
comparators in price analysis.
Price indices are relevant because they reflect the changes in prices over
time due to inflation or other factors. They are fair because they apply the
same adjustment to all technologies. They are reasonable because they are
based on official statistics or market data.
Competitive bidding is relevant because it reflects the actual prices that
buyers and sellers agree on in a competitive market. It is fair because it
allows all technologies to compete on equal terms. It is reasonable because
it is based on real transactions or offers.

f. Whole-life cycle costing models:

 Decision support model
 Simulation model
  Optimisation model
 overheads
 margins
 production costs
 operating costs
 energy consumption
 maintenance costs

1.3 Criteria that can be applied in the creation of a business case:

a. Objectives
b. Options
c. Cost and Benefit
d. Risk assessment - STEEPLED analysis track external risk. Risk
assessment is based on likelihood and impact
e. Implementation plan
f. Advantages and Disadvantages of benchmarking may be also
included:
 Internal benchmarking – Internal best service to other stores
& services
 Competitive benchmarking – Direct competitor vs
competitor comparison
 Functional benchmarking – Similar practice(functions) from
other industries
 Generic benchmarking – Comparison with unrelated
business.
1.4 Budget and cash flow
a. Purposes of budget: To control the expenditure and check against
the budget.

organisations to look at ways to reduce operating costs, allocate

budgets effectively and have sound cost management to survive and
grow the business. Cost management should not be limited to periods of
crisis but should be firmly embedded within your procurement function.

prioritise financial goals and anticipate expenses. Not only is it a major

part of project planning, but it ensures you have more cash available for
other initiatives and gives you a competitive advantage.
 b. The cash flow cycle: which can affect positively or negatively
cash flow of a business
c. Timing of cash flow:
 From revenue
 From direct and indirect expense
 From depreciation - Depreciation is found on the income
statement, balance sheet, and cash flow statement. It can
thus have a big impact on a company's financial
performance overall. Ultimately, depreciation does not
negatively affect the operating cash flow (OCF) of the
business.
 From bank loans and interests
 From dividends and other investment activities
d. How to calculate cash flow - Whole life costing, Activity based
costing, Cost to serve
e. Budget variance and how to deal with variances:
 Price variance: how to detect
 Quantity variance: how to detect
 Labour variance: factors that influence this variance. E.g
Overtime, Re-work, Differences in standard versus actual
rates.
 Overhead variance: factors that influence this variance.
Applied overhead – Budgeted overhead
f. Methods of budgeting:
zero-based budgeting (when your income minus your expenses equals zero. All
expense must be justified),
A rolling budget is flexible approach in which budget is continually updated to
add a new budget period as the most recent budget period is completed.
Thus, the rolling budget involves the incremental extension of the existing
budget model. By doing so, a business always has a budget that extends
one year into the future.
Think of continuous (rolling) budgets as waves rolling ashore on the beach.
A new wave comes in each time, replacing the one that was there before.
From a financial perspective, the wave is your budget, and the time
between waves is longer! These reporting time frames can be monthly,
quarterly, yearly, etc.
An incremental budget is a budget prepared using a previous period's budget or
actual performance as a basis with incremental amounts added for the new
budget period.
 Zero-based budgeting (ZBB) is a method of budgeting in which all expenses must
be justified for each new period. The process of zero-based budgeting starts
from a "zero base," and every function within an organization is analyzed for
its needs and costs. Budgets are then built around what is needed for the
upcoming period, regardless of whether each budget is higher or lower than
the previous one.
Activity-based budgeting (ABB) is a system that records, researches, and analyzes
activities that lead to costs for a company. Every activity in an organization
that incurs a cost is scrutinized for potential ways to create efficiencies.
Budgets are then developed based on these results.

Value Proposition Budgeting: Budgeting that prioritises spending based

on the expected return on investment (ROI) and value generation for the
business.

g. Positive and negative budget - A favorable budget variance refers to

positive variances or gains; an unfavorable budget variance describes
negative variance, indicating losses or shortfalls.
Variance = Actual spend - Budgeted spend

Dealing with variances

- Price Variance
- Quality Variance
- Labour Variance

2. Variance Identification: Quantify differences between budgeted and actual figures.

3. Root Cause Analysis: Investigate reasons behind variances to understand their
sources.
4. Impact Assessment: Evaluate how variances affect overall financial performance and
objectives.

Negotiations with suppliers/Find more cost effective alternatives.

5. Understand market management in procurement and supply
5.1 Different types of market:
a. Segment market
 Product
 Buyer
b. Manufacturing
 Characteristics – High Capital cost. Profitability low as
 previous manufactures capped the price. Easy to enter
Fierce competition.
 Disruptive technologies in this market- 3D printing,
robotics, cobots, virtual/augmented/mixed realties,
automation, RFID, asset tags. Switching cost can be high.
c. Construction – High Captial Cost.
 Characteristics – High entry barrier due to experience and
reputation. Substitution of sources readily available and
cheap. Skilled labour and sustainability is important.
 Disruptive technologies in this market - Autonomous
vehicles, modular construction, robotics, generative design,
drones, marketing technology, energy management, digital
reality
d. Retails
 Characteristics – Barrier to entry, High or low, Threat of
substitute is high. High buyer power as supply is from third
countries. Intense competition, Uncertainty in demands
 Disruptive technologies in this market – E-Commerce
e. Financial
 Characteristics – Entry overall low. Not much
differentiation between retail banks and customer has no
power. Reputation is important. Which of the following
specific markets engage in creation, liquidation and
change of ownership of stock?
Companies in the financial services industry manage money. For instance, a
financial advisor manages assets and offers advice on behalf of a client. The
advisor does not directly provide investments or any other product, rather,
they facilitate the movement of funds between savers and the issuers of
securities and other instruments. This service is a temporary task rather
than a tangible asset.
Financial goods, on the other hand, are not tasks. They are things. A mortgage
loan may seem like a service, but it's actually a product that lasts beyond
the initial provision. Stocks, bonds, loans, commodity assets, real estate, and
insurance policies are examples of financial goods.

 Disruptive technologies in this market – Blockchain,

algorithms, big data, blockchain, peer-to-peer lending and
crowdsourcing
 f. Agriculture
 Characteristics – Confidence in quality. Margins low and no
new entrants. Low bargaining power for farmers. Affected
by nature.
 Disruptive technologies in this market - Robotics, artificial
intelligence (AI), and internet of things (IoT) are all
technologies that have the potential to radically transform
the way we grow food
g. Services
 Characteristics – Low set up cost. Skill and experience as
barrier to entry. Staff recruitment and retention is key,
making bargaining power for them high. Unique Brand.
Low price sensitivity. Immediate service. Trust worthy E.g
Legal service.
 Disruptive technologies in this market - Cloud-Based
Storage · 2. Internet of Things · 3. Big Data · 4. Artificial
Intelligence.

FMCG - Fast-moving consumer goods are products that sell quickly at relatively
low cost. These goods are also called consumer packaged goods.

5.2 Michael Porter's five forces of competition: questions may state some
description of a market and ask students to detect which force influence
the market the most.
a. Rivalry among competitors
b. Bargaining power of suppliers: factors that increase or decrease
the power of suppliers.
c. Bargaining power of buyers: factors that increase or decrease the
power of buyers
d. Threat of substitute
e. Threat of new entrants
5.3 How to collate sources of information
a. Sources of information: company annual reports, market data,
technical data, RFI, plan visits, discount lists.
b. Prepare purchasing budget
c. Research skills: OWN-IT process:
 Outline the area to be researched
 Wide search
 Narrow search
 Increase your body of knowledge by clipping and
stockpiling
 Transform the collected information into new insights
  Purchase price cost analysis
 Negotiation
6. Understand the use of specifications in procurement and supply
Explanation

ISO 9001:2015 specifies requirements for a quality management system.

ISO 14001:2015 specifies the requirements for an environmental

management system that an organization can use to enhance its
environmental performance. ISO 14001:2015 is intended for use by an
organization seeking to manage its environmental responsibilities in a
systematic manner that contributes to the environmental pillar of
sustainability.
ISO 22716:2007 gives guidelines for the production, control, storage and
shipment of cosmetic products. These guidelines cover the quality
aspects of the product, but as a whole do not cover safety aspects for the
personnel engaged in the plant, nor do they cover aspects of protection of
the environment.
ISO 13485:2016 specifies requirements for a quality management system where
an organization needs to demonstrate its ability to provide medical
devices and related services that consistently meet customer and
applicable regulatory requirements.

BSI / ISO 20400 and others

The ISO 20400 standard offers recommendations for incorporating
sustainability into a company's buying procedures regardless of size,
sector, industry, or geographical location. It addresses the political and
strategic aspects of the procurement process, including how to align the
company’s objectives and foster a culture of sustainability. It is aimed
toward senior managers and directors of the procurement function.

ISO 26000
This standard sets out the core dimensions of social responsibility in
commerce

Areas specified by ISO/IEC 27000 family. The requirements for an

information security management system

ISO 27001 Information Technology

ISO 37000
This sets out the standards expected for governance and control
of organisations

ISO 55000 Standards

The ISO 55000 Standards predominantly address the strategies, plans and
management system framework an organisation uses to derive value from
the assets.

Reference: CIPS L4M2 study guide page 126 / The new syllabus 2024
LO 3, AC 3.1

6.1 Different types of specifications:

a. Technical specification - A Standard normally produced by
BSI(British Standards Institute)ANSI(American National
Standards Institute)
b. Conformance specification – A Recipe. Inc, Engineering drawing.
A chemical formula. Model name, number or brand, Samples,
c. Performance specification – Take the least time to develop.
 Output-based specifications - Output: Involves specific
measurements. The number of training sessions conducted
for employees on a new software tool.
 Outcome-based specifications –Related to differentiation &
Innovation and porter’s threat of new entrances. Outcome: It
can be quite vague. e.g Good quality The improved
productivity and efficiency of employees in their daily tasks
as a result of the training.
 Statement of work specifications. - Defines activities and
deliverable timelines provided and material to be used. Total
3 types; Design, A level of effort, Performance.
 d. Most common forms of questions: scenario then ask which type
of specification would be the most appropriate. You must know the
advantages, disadvantages of each types and typical situations
where they should be used.
Technical specification – Helps to see whole project and budgets
- Not original, plagiarism. No protection, No research, Innovation
e. Advantages, disadvantages of each type of specifications are
possible questions
6.2 Through-life contract specification
a. Typical sessions: Design, Manufacturing, Installation, In-service
support; Decommission; Customer support, Increase supplier
capability.
b. Testing and acceptance – Acceptance testing (End-User,
Operational, Field Testing)/Functional testing(Alpha-Beta
testing, Contract, Regulation, Operation acceptance testing
c. Social and environmental criteria
6.3 Identify risks from over-, under-specified specification and mitigation
approach
a. Over-specified specification
b. Under-specified specification
c. Misinterpreted specification
d. Risk management process
e. Monitor specification written by cross functional team: PID
6.4 Identify opportunities to regulate short- and long-term specification
a. Standardisation
 Process standardisation: Lean principles and types of waste
 Product standardisation: reducing product varieties
 Parts standardisation
b. Value analysis:
 Definitions - the systematic and critical assessment by an
organization of every feature of a product and process to
ensure that its cost is no greater than is necessary to carry
out its functions.
 Target costing - Target costing is A product cost estimate
derived from a competitive market price. It is an
activity aimed at reducing the life-cycle costs of new
products, while ensuring quality, reliability, and other
consumer requirements by examining all possible ideas
for cost reduction at the product planning, research and
development and prototyping phases of production. But
 it is not just a cost reduction technique; it is part of a
comprehensive strategic profit management system.

 Process: Collect the raw data and information -> Identify entities and
process functions -> Connect the entities and functions-> Value the
links in the chain -> Create a diagram for documentation.

c. Value engineering
 Definition - A process used to review and amend new
products/services to reduce costs and increase value to
customers
 Kano model - based on the concepts of customer quality and
provides a simple ranking scheme which distinguishes
between essential and differentiating attributes. Consist of
Reverse contribution, Excitement Requirements (or
Attractive requirements), Performance Requirements (or
One-dimensional requirements), Basic Requirements (or
Must-be requirement) and reverse. Part of LEAN
Pareto Analysis-Pareto analysis is a technique used for business decision making
and is often referred to as the 80/20 rule. The 80/20 rule being that 80% of the
projects benefit can be achieved by just doing 20% of the work. Equally, 80% of
problems can be traced to 20% of the cause.
Pareto analysis helps to identify critical inventory items in your
product range.
d. Roles of other stakeholders in writing specifications:
 The process:
 Identify the stakeholders
  Understand and prioritise stakeholders
 Prepare a stakeholder engagement plan
 Implement the plan
 The stakeholder matrix
 Communication plan
If you need to check your skills, use my practice tests as your reference:
1. L4M1: https://en.evocurement.edu.vn/product-
category/evocurement/l4m1-practice-tests/
2. L4M2: https://www.udemy.com/course/cips-diploma-l4m2-practice-
test/?referralCode=D6857E569E583169D7E6
3. L4M3: https://www.udemy.com/course/cips-diploma-practice-test-
commercial-contracting/?referralCode=A5F71CD5C684538996EB
4. L4M4: https://www.udemy.com/course/cips-diploma-practice-test-
ethical-responsible-sourcing/?referralCode=00CB8A48071CD88E9BE8
5. L4M5: https://www.udemy.com/course/cips-practice-test-commercial-
negotiation/?referralCode=919D1BDB285AFA4CB55A
6. L4M6: https://www.udemy.com/course/cips-diploma-practice-test-
supplier-relationships/?referralCode=76AF6ECB83302BBF245F
7. L4M7: https://www.udemy.com/course/level-4-diploma-whole-life-asset-
management-l4m7/?referralCode=C95CAF196D8460C1A86F
8. L4M8: https://en.evocurement.edu.vn/product-
category/evocurement/l4m8-practice-tests/

Forward and backward integration.

Which of the following are typically included in a conformance specification?

a through-life specification?

A through-life specification is a document that defines the requirements and

expectations for a product or service throughout its entire life cycle, from
design to disposal. It covers aspects such as design, manufacture,
installation, in-service support, decommissioning and disposal. A through-life
specification can help the buyer and the supplier to align their objectives
and expectations, and to achieve a closer match between the asset and the
user’s needs. It can also help to lower the total cost of ownership by
reducing the risks and costs associated with maintenance, repairs,
upgrades, and disposal.
Therefore, Brian’s suggestion to develop a through-life specification before
engaging with the supplier is a correct approach. It will help Sealines Inc to
ensure that the new ship powered by natural gas meets their requirements
and expectations, and that the supplier is accountable for the performance
and quality of the ship throughout its life cycle. It will also help Sealines Inc
to lower the total cost of ownership by minimizing the costs and risks
associated with the operation, maintenance, and disposal of the ship.
Reference:
- CIPS study guide page 141 / The new syllabus 2024
LO 3, AC 3.2

Explanation of Value analysis

Value analysis is a systematic review of the production, purchasing and
product design processes to reduce overall product costs. This can be
accomplished through a variety of activities, including the following:
- Designing products to use lower-tolerance parts that are less expensive
- Switching to lower-cost components
- Standardizing parts across product platforms in order to achieve volume
discounts
- Altering production processes to minimize the amount of production cycle
time, thereby reducing labor costs
- Introducing automation to strip labor costs out of the production process
- Altering product packaging to lower its cost while still protecting the
product
The process is not a wholesale attack on costs. Costs are only reduced when
the result will not impact the perceived level of quality experienced by
customers, or the level of customer satisfaction.

Material Price Variance is the difference between the

standard price and the actual price for the actual
quantity of materials used for production. The cause
for material price variance can be many, including
changes in prices, poor purchasing procedures,
deficiencies in price negotiation, etc.

Explanation
The difference between the standard cost of direct materials specified for
production and the actual cost of direct materials used in production is
known as Direct Material Cost Variance. Material Cost Variance gives an idea
of how much more or less cost has been incurred when compared with the
standard cost. Thus, Variance Analysis is an important tool to keep a tab on
the deviations from the standard set by a company.
Material Cost Variance can be due to less purchase price being paid than the
standard or because of change in the quantity of material used. Thus,
Material Cost Variance is made up of two components namely; Material Price
Variance and Material Usage Variance.
Among the 4 options:
- 'The buyer updates purchase-to-pay system to track payment and
delivery': The use of e-procurement system can increase the productivity
and create labour cost variance, not material cost variance.
- 'An unprocessed goods received note is missing': If a goods received
note is missing, the buyer won't pay for that batch, which create Material
quantity variance.
- 'The employees must work overtime to catch up with the
customers' orders': Overtime salary can cause labour variance, not
material cost variance.
- 'The purchase is made in emergency': Normally, the price in
emergency situation is higher than usual. This can cause Material price
variance.

Prescriptive specifications typically contain detailed descriptions of the

following components:
- General requirements relating to regulations and standards.
- The type of products and materials required.
- The execution and installation methods required.
Prescriptive specifications give the client much more

This is the information on an organisation’s activities over the past year

· Sale were $5,000,000. The value of accounts receivable was $450,000 at
the start of the year and $525,000 at the end of the year
· The value of direct costs was $2,500,000 and 75% of this was bought on
credit
· Indirect costs were $3,000,000 and 25% of this was bought on credit
· During the year the organization spent $1,500,000 on new assets and sold
$150,000 of old assets. $1,000,000 of the spend on assets was funded by a
bank loan
· The organization declared a dividend of $200,000 at the end of the year
but this was not paid for another two months
· Opening balance was $175,000
Which of the following is the bank balance of that organization at the end of
the year?
 $1,875,000
 $2,025,000
 $1,675,000
 $1,700,000
See all questions
BackSkip question

Net Cash Flow = Total Cash Inflows – Total

Cash Outflow
Net cash flow =
175000+(450000+5000000+525000+150000
+1000000+200000)-
((2500000*0.25)+(3000000*0.25)+1500000)

SAMOA – Internet Source, Author,

Objectivity
SCAMPER – Solving issue Substitute,
Combine, Adjust, Modify, Put to other uses,
Eliminate, Reverse
STEEPLE- strategic planning methodology
(FOR PRODUCTION)that can be used across all
business functions to discover, evaluate, organise,
and track external risk. It is an acronym, with the
letters standing for social, technological,
economic, environmental, political, legislative,
ethical, and demographic.
RACI Matrix – Delegation of roles
Monte Carlo model - mathematical technique
that predicts possible outcomes of an
uncertain event or action
Cost plus award/fixed/percentage/Incentive
fee
benefits of through-life asset management

Define the problem vs Identify the problem as a

step to solve problems?