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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 Jan. 21, 2025 (see below)
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?
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.
Which of the following can be interpreted as a normal business practice by some cultures but a form of bribery by others?
This is a facilitation payment. It's when a sum of money is given for 'helping to facilitate' a contract. E.g. a procurement manager may accept a facilitation payment from a supplier for selecting him to be a new supplier for a big contract.
In the UK this is definitely considered a bribe. It's also against the CIPS Code of Conflict
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?
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.
Daniel is evaluating bids from new suppliers who are looking to supply his company XYZ Indus-tries with components for manufacturing. Although price is important, Daniel wishes to consider 'added value'. Which of the following is considered an 'added-value solution'? Select THREE
The correct answers are innovation, on time in full deliveries and sustainability.
The other options are pricing mechanisms rather than 'added value'. Added Value is giving the buyer something extra that's not necessarily financial. It can be as simple as delivering orders quicker than expected, or having a dedicated customer service phone line. Something that makes their lives a little easier.
What is a risk of pre-warning a supplier that you will conduct an audit of their facilities?
A risk of pre-planning an audit is the supplier has time to prepare for it. It's a good thing in that they can get their paperwork in order but the downside is they can overprepare so you don't get a realis-tic representation of what they're doing. One way they can do this is coaching staff in what to say to the auditors.
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