Ensure Success With Updated Verified L4M4 Exam Dumps [2025]
Exam Materials for You to Prepare & Pass L4M4 Exam.
CIPS L4M4 Exam Syllabus Topics:
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NEW QUESTION # 10
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. tail spent
- B. high value items
- C. one-off purchases
- D. strategic sourcing
Answer: A
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 # 11
Which of the following incoterms has the lowest risk to the buyer?
- A. carriage and insurance paid to
- B. exworks
- C. free on board
- D. delivered duty paid
Answer: D
Explanation:
The lowest risk to the buyer is 'delivered duty paid'. This is because the supplier does all the work transporting the items to the buyer's premises. Incoterms_2020_chart | Intersped
NEW QUESTION # 12
Yolo Inc. have recently run a tender opportunity to find a suitable supplier of yoyos and they have received a number of bids. The supplier will become a strategic partner to the business as yoyos are vital to the success to Yolo Inc. The tender asked for both price submissions and had a number of quality questions. Eamon is the Procurement Manager of Yolo Inc and is responsible for selectingthe most appropriate supplier. How should Eamon appraise the bids?
- A. organise a cross-functional team to assess the bids as people from other departments may have important information and experience of yoyos
- B. evaluate the bids himself as this is a complex requirement
- C. organise a cross-functional team of procurement personnel as they will have experience in assessing price and quality of bids
- D. evaluate the bids himself as this is a strategic purchase
Answer: A
Explanation:
Eamon should use a cross-functional team (this rules out two of the options). The purpose of using a cross-functional team is to use the knowledge of people from other departments as they may better understand the service required and help assess any technical questions. Therefore a cross-functional team of procurement personnel, isn't cross-functional (they're all the same function). Yoyos is a bit of a silly example, the exam questions are a little more serious- but the learning outcome is the same; use a cross-functional team to evaluate bids.
NEW QUESTION # 13
Why is it important, when awarding high-value contracts, for a buyer to conduct a financial assessment of a supplier?
- A. The buyer must ensure continuity of supply because financial problems of a supplier could affect the supply
- B. A supplier who is highly profitable will be charging prices higher than the average market rate
- C. Financial assessments provide a holistic view of a company's capability, including quality and delivery performance
- D. If a supplier has a high credit score, this means it pays its own suppliers late, which could result in stock outs
Answer: A
Explanation:
Financial assessments help ensure a supplier can meet the demands of a high-value contract without disruptions. This aligns with responsible sourcing principles by promoting stable supplier relationships and reducing the risk of supply chain interruptions due to financial instability.
NEW QUESTION # 14
Incoterms describe several aspects and responsibilities of transporting goods when sourcing internationally.
Which of the following is described by Incoterms? Select THREE.
- A. how much the transportation will cost
- B. what form of transportation will be used
- C. which party arranges insurance
- D. who is responsible for making duty and tariff arrangements
- E. how long the transportation will take
Answer: B,C,D
Explanation:
Incoterms describe who out of the buer and seller; organises transport and what type of transport this is, who pays for insurance, and who organises duty / tariff arrangements when the goods go through customs. See p.131. Note- some students report a lot of questions on Incoterms in the exam, some say they only had 1. If you can, I'd learn them just to be safe.
NEW QUESTION # 15
A business may be faced with the challenge of deciding whether to source some of its requirements from external suppliers or whether to make them internally. Which of the following factors is likely to justify the decision to make the requirements internally?
- A. The availability of in-house competencies and capacity to carry out the production
- B. The other suppliers are using older technology
- C. External sourcing involves cumbersome tendering procedures
- D. External suppliers are likely to be overcharging
Answer: A
Explanation:
Internal production is often justified when a company has the necessary competencies and capacity. This approach aligns with responsible sourcing by leveraging internal capabilities for better control over quality, cost, and compliance with ethical and environmental standards.
NEW QUESTION # 16
Many organisations prefer a multi-sourcing approach because of the advantages it provides. Which of the following might be an advantage of multi-sourcing?
- A. It is the only approach that enables the buyer to isolate the best supplier from among many
- B. It helps the buyer to increase stock varieties to avoid stock-outs
- C. It increases process flexibility and switching using a range of approved suppliers
- D. It is the only approach that supports the open tendering process
Answer: C
Explanation:
Multi-sourcing allows organisations to diversify their supply base, providing flexibility, and reducing risk by having multiple suppliers. It is an effective strategy to prevent over-dependence on a single source and allows for competition among suppliers, promoting quality and ethical standards in the supply chain.
NEW QUESTION # 17
What are the risks of outsourcing?
* Loss of control of project
* Loss of assets
* Loss of future business opportunities
* Loss of private information
- A. 1 and 4 only
- B. 2 and 3 only
- C. 1 and 2 only
- D. 3 and 4 only
Answer: A
Explanation:
Loss of control and loss of private information are significant risks in outsourcing. Responsible sourcing involves mitigating these risks by setting clear agreements, monitoring, and safeguarding sensitive information to maintain control over outsourced activities.
NEW QUESTION # 18
Amnesty International, Oxfam and CIPS are examples of what type of organisation?
- A. public limited companies
- B. partnerships
- C. limited liability
- D. not-for-profit
Answer: D
Explanation:
These are 'not-for-profit' organisations. You don't need to know much on not-for-profit procurement for this exam. Just that procurement can be regulated in this sector by bodies such as Charities Commission.
NEW QUESTION # 19
A buyer is only interested in working with suppliers who have strong Environmental and Social Governance practices. It is therefore using ethical criteria as supplier selection stage to determine which suppliers to work with. Which of the following statements is true?
- A. the buyer should ask suppliers to be accredited to ISO9001
a supplier who follows the CIPS Code of Conduct is more likely to meet the buyer's needs - B. ethical behaviour is impossible to determine as issues such as Modern Slavery often go undetected
- C. compliance with Codes of Conduct from professional bodies is mandatory
Answer: A
Explanation:
A supplier who follows the CIPS Code of Conduct is more likely to meet the buyer's needs is the correct answer.
The other options are wrong:
1) Compliance with Codes of Conduct from professional bodies is optional. E.g. CIPS - no organi-sation is forced to comply with CIPS.
2) Unethical behaviour is not impossible to detect, it may be difficult but with correct due diligence and things like audits it's completely possible
3) ISO 14001 is quality management so is irelevent.
NEW QUESTION # 20
During which stage of the procurement cycle would you remove suppliers that do not add value, or could pose a risk to the buying organisation?
- A. contract award
- B. asset management
- C. supplier selection
- D. develop strategy
Answer: C
Explanation:
At supplier selection stage, unsuitable suppliers should be removed (those that do not add value or pose a risk). At develop strategy stage you're not even looking at suppliers yet- you're just deciding what you need.
At contract award and asset management it's too late.
CIPS procurement cycle - Procurement Supply Cycle | CIPS
NEW QUESTION # 21
Brooklyn Ltd is a manufacturer of windows and has a single sourcing relationship with their supplier of glass.
What relationship style would be best suited?
- A. adversarial
- B. non-critical
- C. transactional
- D. collaborative
Answer: D
Explanation:
When single sourcing, you should aim to have a collaborative relationship with the supplier. They're the only ones who provide you with glass, which is a vital part of windows. So you need to make sure you have a good relationship with them and work with them to overcome any issues such as supply chain disruptions. If not- you've got no windows to sell!
NEW QUESTION # 22
If a company is described as 'liquid' what does this mean?
- A. the company spends a lot of money
- B. the company has enough money to pay short-term liabilities
- C. the company is highly profitable
- D. the company is funded on equity rather than debt
Answer: B
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 # 23
Which of the following is not a Human Rights as protected by the UN Declaration on Human Rights?
- A. freedom of Belief and to change beliefs
- B. the right to change nationality
- C. the right to free speech
- D. the right to be treated equally
Answer: B
Explanation:
the right to change nationality is not included in the UN Declaration of Human Rights. There are 30 in total but you're not expected to know them all. You should know the big ones though which are; life, security, belief, equal treatment, free speech and expression. A summary can be found here: Universal Declaration of Human Rights | United Nations
NEW QUESTION # 24
Ramesh is an IT category manager within the UK's National Health Service and is responsible for the procurement of a new high-value network system, which will spread across multiple doctors' practices and community health centres. Ramesh has reviewed different tender approaches and concluded that the use of a restricted tender is the most appropriate. Which of the following statements is true for a restricted tender process?
- A. Direct negotiations occur prior to suppliers submitting their offer
- B. Suppliers responding to the tender are pre-qualified
- C. The contract will be awarded strictly on pricing criteria
- D. It is only relevant when there are few suppliers in the market
Answer: B
Explanation:
In a restricted tender process, only pre-qualified suppliers are invited to bid, ensuring that participating suppliers have met necessary qualifications. This approach helps in managing high-value contracts by focusing on capable suppliers. Ethical and responsible sourcing in the public sector demands supplier pre- qualification to ensure compliance, transparency, and quality.
NEW QUESTION # 25
If a company is concerned with ethical sourcing and has concerns about issues such as corruption and modern day slavery within the supply chain, what course of action should they take?
- A. Complete formal tenders to find the best suppliers
- B. Complete Due-Diligence on all new suppliers
- C. Only work with suppliers who have a published Anti-Slavery policy
- D. Only work with known suppliers
Answer: B
Explanation:
Completing Due Diligence checks will help guard against concerns about unethical business practices.
Not all companies will have a published Anti-Slavery policy- this is only required for large companies.
Known suppliers might have issues that you don't know about so you should always do due-diligence checks on everyone you work with Formal tenders won't sort out ethical issues unless specifically addressed within the tender and strong contract management is put in place afterwards.
NEW QUESTION # 26
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