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CIPS L4M4 Exam Questions
- Topic 1: Understand options for sourcing requirements from suppliers: This section covers the sourcing process, approaches, options, and award criteria for obtaining requirements from suppliers. The sub-topics provide a foundation for strategic sourcing.
- Topic 2: Understand the key processes that can be applied to the analysis of potential external suppliers: This section examines analyzing market data, obtaining quotations/tenders, and assessing responses. The sub-topics focus on key processes for evaluating potential suppliers.
- Topic 3: Understand compliance issues when sourcing from suppliers: It explores legislative, regulatory, and organizational requirements for sourcing. It compares the use of audit and other mechanism of feedback.
Free CIPS L4M4 Exam Actual Questions
Note: Premium Questions for L4M4 were last updated On Jul. 11, 2025 (see below)
Greg is doing some research on a potential supplier and is concerned that the supplier's funding is based on long-term debts and loans. Working with this supplier therefore might bring additional risks to Greg's business. What should Greg do about his concerns?
Greg needs to use a gearing ratio. Gearing is a measure of how the business is being funded and is based on the ratio of debt to equity Gearing comes up a lot in the exam. Also make sure you know what Return on Investment, Acid Test and EBITDA are.
Return on Investment (ROI): How to Calculate It and What It Means (investopedia.com)
EBITDA: Definition, Calculation Formulas, History, and Criticisms (investopedia.com)
Acid-Test Ratio: Definition, Formula, and Example (investopedia.com)
A procurement manager who works in the public sector has received 8 submissions to a tender op-port unity that was advertised on OJEU. The average price submission for the contract was 1m but one supplier has submitted a price of 200,000, which the procurement manager has identified as being 'an abnormally low tender'. What should be the procurement manager's course of action?
You should investigate automatically low tenders by clarifying the bid with the supplier. It could be they have misunderstood the requirement. Or the bid could be genuine and they can really provide best value for money. But without enquiring, you just don't know.
Greg is doing some research on a potential supplier and is concerned that the supplier's funding is based on long-term debts and loans. Working with this supplier therefore might bring additional risks to Greg's business. What should Greg do about his concerns?
Greg needs to use a gearing ratio. Gearing is a measure of how the business is being funded and is based on the ratio of debt to equity Gearing comes up a lot in the exam. Also make sure you know what Return on Investment, Acid Test and EBITDA are.
Return on Investment (ROI): How to Calculate It and What It Means (investopedia.com)
EBITDA: Definition, Calculation Formulas, History, and Criticisms (investopedia.com)
Acid-Test Ratio: Definition, Formula, and Example (investopedia.com)
Which of the following are considerations when evaluating quality as a criterion for supplier selection? Select TWO that apply.
Total Quality Management (TQM) practices and ISO 9001 certification are indicators of a supplier's commitment to quality. Responsible sourcing evaluates these factors to ensure suppliers meet high-quality standards and continuous improvement expectations.
ABC Ltd works with supplier XYZ Ltd who uses a variety of subcontractors. ABC has recently learned of an ethical breach being committed by one of XYZ's subcontractors. What should ABC do?
ABC should do a 'root cause analysis' to find out where the issue has come about, and why. From there, once they know what the breach is and how serious it is, they can suggest corrective action.
They can't jump straight to terminating the contract or seeking damages as it's not the supplier itself but rather the subcontractor. Also that would be really hasty considering we don't know what the issue is and what the market conditions are like. That supplier may be the only one who can provide the product. We also don't know if the supplier knows about the issue themselves.
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