Free Apr-2025 UPDATED CIPS L4M4 Exam Questions & Answer
Latest Success Metrics For Actual L4M4 Exam Realistic Dumps
NEW QUESTION # 51
Tracey Collum is a procurement professional and married to Nick Collum.
Tracey has been leading a tender for a new radar system, where four suppliers have submitted their bids.
After the bids were received, Nick joined one of the suppliers (Supplier X) as the project director for radar systems.
Nick has asked Tracey to award the contract to Supplier X. What should Tracey do?
- A. Award the contract to Supplier X because Nick will be promoted if Supplier X wins the contract
- B. Ask to be removed from the tender due to a conflict of interest and complete a conflict of interest form
- C. Award the contract to Supplier X because Tracey can ask for a better price because they are married
- D. Remove Supplier X from the tender due to a conflict of interest and continue with the tender
Answer: B
Explanation:
To maintain integrity and avoid conflicts of interest, Tracey should declare the conflict and remove herself from the tender process. Ethical sourcing practices emphasize transparency and fairness, which prevent potential biases and maintain trust within procurement processes.
NEW QUESTION # 52
When evaluating a supplier's proposal in relation to ESC (Environmental, Social, Governance, and ethical elements), it is common to send questionnaires to suppliers requesting information, which can later be scored.
Which of the following questions would be assessing any of the ESC criteria?
* Could you provide details on your manufacturing and raw material costs as part of an open-book pricing contract?
* How do you promote equal opportunity for your employees, customers, and suppliers?
* What is the annual turnover and profitability of your company?
* Does your company have an anti-bribery policy?
- A. 2 and 3
- B. 2 and 4
- C. 1 and 4
- D. 1 and 3
Answer: B
Explanation:
Questions about equal opportunity and anti-bribery policies assess the supplier's commitment to social and ethical standards. These aspects are part of the ESC criteria, which align with responsible sourcing practices by ensuring suppliers maintain ethical workforce practices and governance.
NEW QUESTION # 53
Which of the following are considerations when evaluating quality as a criterion for supplier selection? Select TWO that apply.
- A. The supplier's environmental impact analysis
- B. Certification to the management system ISO 14001
- C. The existence of Total Quality Management (TQM) and a continuous improvement culture
- D. Certification to the management system ISO 9001
- E. The existence of policies and initiatives toward more sustainable packaging and materials
Answer: C,D
Explanation:
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.
NEW QUESTION # 54
Azram is a facilities category buyer within the UK police force and is managing an overseas sourcing project for police uniform and personal protective equipment. Azram is of the opinion that international sourcing will help deliver much-needed financial savings, which can be utilized in other areas of the UK police force.
Azram is aware that exchange rate fluctuations can create risk for his organisation. How can Azram remove this risk?
- A. Request to use the exchange rate applicable at the time of delivery
- B. Evaluate international supplier's financial accounts
- C. Carry out a competitive tender exercise
- D. Ask suppliers to quote in GBP Sterling
Answer: D
Explanation:
Requesting suppliers to quote in GBP Sterling removes exchange rate risk by fixing the cost in the buyer's local currency. This strategy aligns with responsible sourcing practices by providing cost stability and protecting the procurement budget from currency fluctuations.
NEW QUESTION # 55
A buyer might opt to do an 'Invitation to Tender' rather than a 'Request for Quotation' process because ...
- A. Time is of the essence, and decisions need to be made quickly without additional stakeholder involvement
- B. The contract will be low value and there are many suppliers, so a simpler approach is required
- C. The nature of the goods or services being purchased is complex and high value
- D. The supplier market is an oligopoly where there are a few large suppliers dominating the market
Answer: C
Explanation:
An Invitation to Tender (ITT) is typically used for complex, high-value procurements where the quality and specific features of the goods or services are of paramount importance. This approach ensures that ethical and responsible sourcing criteria are met, aligning with best practices in procuring specialised goods or services.
NEW QUESTION # 56
When conducting a competitive tender, is it appropriate to use a supplier's credit rating as a criteria for pre-section?
- A. yes- because a low rating would indicate the supplier is financially unstable
- B. yes- because a low rating would have a negative impact on the company's reputation
- C. no- because a low credit rating would have a negative impact on the supply chain
- D. no- because a low rating would not affect the quality of the products supplied
Answer: A
Explanation:
The correct answer is 'yes- because a low credit rating would indicate the supplier is financially un-stable'.
The two options beginning with no should automatically be discounted. The other option is incor-rect because credit ratings are private and would therefore not affect reputation.
NEW QUESTION # 57
A buyer in the public sector has put an advert out asking for interested suppliers to express an interest in a potential tender activity to provide a facilities management contract to a hospital trust. The suppliers who have met that criteria are then sent a document detailing how they should submit their tender, how to price the opportunity, asksQuestionsrelating to how they will deliver the service and gives a deadline for bids to be submitted. Which document have the suppliers ben sent?
- A. Request for Tender
- B. Invitation to Tender
- C. Invitation to Quote
- D. Request for Quotation
Answer: B
Explanation:
This is an Invitation to Tender.
The only other real document listed in Request for Quotation. This is incorrect because the document asks questions relating to how they will deliver the service. This means price isn't the only factor, which is the case for a RfQ.
Request for Tender and Invitation to Quote are not real things.
NEW QUESTION # 58
When would a procurement professional use the Pareto principle?
- A. when considering changing a supplier
- B. when conducting a value analysis
- C. when appraising a supplier
- D. when looking at whole-life-cycle costs
Answer: A
Explanation:
The Pareto Principle can be used when considering changing a supplier. It helps to categories suppliers by how strategically important the item is that they provide to the business.
NEW QUESTION # 59
If a company is described as 'liquid' what does this mean?
- A. the company spends a lot of money
- B. the company is highly profitable
- C. the company is funded on equity rather than debt
- D. the company has enough money to pay short-term liabilities
Answer: D
Explanation:
liquid = the ability to pay short and medium term debts. In simple terms do you have more in stuff (money, assets) than you owe in debt?
Understanding Liquidity and How to Measure It (investopedia.com)
This is a hot topic for the exam. Learn everything in this section.
NEW QUESTION # 60
Which of the following is not a indices that measures economic data?
- A. PPI
- B. GDP
- C. CPI
- D. ISO
Answer: D
Explanation:
ISO isn't an indices- it stands for 'International Labour Association'.
The others are all indices that measure economic data; consumer price index, producer price index and gross domestic product.
NEW QUESTION # 61
When selecting a supplier on technical merit, its important that the supplier is a good 'functional fit' for the organisation. What is meant by 'functional fit'?
- A. the supplier shares a common supply chain
- B. the supplier is able to work at the same technical level as the buyer
- C. the supplier is able to adhere to the same ethical standards
- D. the supplier makes a similar profit to that of the buyer
Answer: B
Explanation:
The correct answer is 'the supplier is able to work at the same technical level as the buyer'. It's aboutbeing able to integrate the businesses together in terms of IT systems and such like.
NEW QUESTION # 62
When assessing the financial performance of a potential supplier, it is important to understand how much gross profit they are making. The gross profit margin ratio uses which of the following pieces of information from the profit and loss (statement of financial performance)? Select TWO that apply.
- A. Total current assets
- B. Income from sales
- C. Cost of goods sold
- D. Current liabilities
- E. Value of equity capital
Answer: B,C
Explanation:
The gross profit margin ratio is calculated by subtracting the cost of goods sold (COGS) from income from sales, then dividing by income from sales. This ratio indicates the profitability of a supplier, a critical factor in assessing financial health, which helps buyers ensure reliable supply continuity.
NEW QUESTION # 63
What is the best way to prevent potential issues of conflicts of interest?
- A. openly declare potential conflicts
- B. create a risk register
- C. do not work with suppliers who have relationships with the procurement team
- D. do not hire family members
Answer: A
Explanation:
The best way to deal with potential Conflicts of Interest is to openly declare these. Just because you have a relationship with someone doesn't mean this is going to be an issue or lead to fraud, but it is a good idea to keep a written record of these.
It wouldn't be a risk register, because how can you rate someone's risk of doing something dodgy? Risk registers are for objective risks such as Health and Safety.
NEW QUESTION # 64
Which of the following are signs that modern-day slavery might be taking place within the supply chain?
Select THREE.
- A. suppliers who speak English as a second language
- B. workers that live on-site
- C. suspiciously low labour costs
- D. poor quality products
- E. supplier based in a country with a low score on the Corruption Perception Index
Answer: B,C,D
Explanation:
The correct answers are; suspiciously low labour costs, workers living on site and poor quality products (as this signals that the workforce may be unskilled).
A low score on the CPI is a good thing (high scores are more likely to signify slavery concerns) and just because someone speaks English as a second language doesn't mean you automatically need to be suspicious.
That would be prejudice.
NEW QUESTION # 65
As a procurement officer for a large organisation, a supplier approaches you on social media offering to take you out for dinner to discuss a recent open opportunity and mentions a financial reward if you help them win the business. You accept the invite. Was this the right thing to do?
- A. Yes, you are free to do what you like outside of business hours
- B. Yes, you are keen to see what is on offer as you are only on minimum wage currently and need extra money
- C. No, it is not appropriate to discuss open opportunities with one provider and not another
- D. No, but you will go for the dinner and see what they offer, because it is up to you to decide if you should accept
Answer: C
Explanation:
Accepting an invitation under such circumstances would violate ethical standards, as it could create a conflict of interest. Ethical sourcing and procurement practices require impartiality, and any perceived favoritism or bias can harm the organisation's integrity.
NEW QUESTION # 66
Guillerme is a Category Manager within the procurement department of a Manufacturing company. In his Category there are 200 items he procures, and he has recently undertaken an ABC analysis of these. Which of the following items would be C category items?
- A. strategic sourcing
- B. high value items
- C. tail spent
- D. one-off purchases
Answer: C
Explanation:
The C category is the 'tail spend' - it represents a large number of suppliers of small value items.
I recommend giving this a read ABC Classification & ABC Method | CIPS
NEW QUESTION # 67
In a negotiation, a supplier does not want to upset or offend the buyer, so concedes their own requirement in order to ensure harmony. Which negotiation tactic is the supplier using?
- A. compromising
- B. accommodating
- C. competitive
- D. collaborative
Answer: B
Explanation:
This is accommodating: the supplier puts the buyer's interest above his own.
This is from the Thomas Killman model of conflict resolution. There are 5 strategies; competitive, collaborative, avoiding, accommodating and compromising. In the study guide it doesn't mention the name of the model but you do need to know the 5 strategies. The model comes up a lot in other modules so is a good one to learn. Particularly L5M1 which is about management theory.
NEW QUESTION # 68
Which of the following are primary sources of data? Select TWO.
- A. phone calls with current suppliers
- B. market reasearch commissioned by a rival company
- C. economic indices such as PPI or CPI
- D. published price lists
- E. trade fairs and exibits
Answer: A,E
Explanation:
Primary data includes trade fairs and exhibits, and phone calls to current suppliers. The others are examples of secondary data.
Remember primary= you do it yourself, Secondary = someone else did it.
NEW QUESTION # 69
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