2025 Updated Verified L4M4 Downloadable Printable Exam Dumps
The Ultimate CIPS L4M4 Dumps PDF Review
CIPS L4M4 Exam Syllabus Topics:
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NEW QUESTION # 106
Which of the following are secondary research sources that can be used when investigating markets and suppliers? Select THREE that apply.
- A. Supplier interviews
- B. Economic indices
- C. Supplier websites
- D. Direct conversations
- E. Focus groups
- F. Professional magazines
Answer: B,C,F
Explanation:
Professional magazines, economic indices, and supplier websites provide secondary data that can be useful in understanding market trends and supplier performance. Responsible sourcing often relies on a mix of primary and secondary data sources to make informed decisions about supplier selection.
NEW QUESTION # 107
The bill of lading is one of the main documents associated with sea freight within international sourcing.
Which of the following statements represent some of the uses of the bill of lading? Select TWO that apply.
- A. It provides evidence of the country of origin of the goods
- B. It provides evidence guaranteeing the use of Incoterms on the goods
- C. It provides evidence of the contract of carriage for the goods
- D. It provides evidence of the title of ownership of the goods
- E. It provides evidence that the goods are fully insured in transit
Answer: C,D
Explanation:
The bill of lading serves as both a receipt of goods and a document of title, which means it confirms the contract of carriage and can transfer ownership. Responsible sourcing in international trade requires precise documentation, which is why the bill of lading is critical in verifying both carriage and title.
NEW QUESTION # 108
Which of the following financial ratios would indicate a supplier's potential exposure risk to a steep rise in inflation?
- A. current ratio
- B. gross profit margin
- C. gearing ratio
- D. acid test
Answer: C
Explanation:
The correct answer is 'gearing ratio'.
Gearing measures how much of a company's funding is based on long-term debt or loans- this would be affected by a steep rise in inflation. If a company has a mortgage on their offices or facto-ry and they need to remortgage and inflation has gone up a lot- they'll be paying a lot more on their mortgage. This will severely effect the gearing ratio as they'll have more outgoings than incoming.
Gross profit margin COULD be affected by inflation, for example if you've got hyper-inflation and the country goes into recession and people stop buying your product. However, this answer isn't al-ways right and depends on many factors- the industry, the product, the company etc, so for the purpose of CIPS should be discounted.
There are many industries which are immune to inflation.
NEW QUESTION # 109
Ramesh is a procurement manager who is looking at his supplier base. He is pursuing a sourcing strategy with the aim of enabling logistical cost reductions. He has made the decision to scale-down his supplier base and purchase from one supplier.
Which type of sourcing arrangement has Ramesh began?
- A. dual
- B. single
- C. multiple
- D. sole
Answer: B
NEW QUESTION # 110
The Universal Declaration of Human Rights means that member states cannot restrict their citizens of any of the rights listed. Which of the following rights may apply to employees who make a complaint about unfair pay and conditions that are not comparable to others in the company?
- A. The right to freedom
- B. The right to be treated equally
- C. The right to free speech and expression
- D. The right to beliefs
Answer: B
Explanation:
The Universal Declaration of Human Rights (UDHR) Article 23(2) states that "Everyone, without any discrimination, has the right to equal pay for equal work." This underscores the principle of equality in the workplace, ensuring that employees are treated equally regarding pay and conditions. Therefore, employees raising concerns about unfair pay compared to their colleagues are exercising their right to be treated equally.
Reference:
Universal Declaration of Human Rights, Article 23(2):
NEW QUESTION # 111
A company has a requirement for an item that has been identified as strategic on the positioning model. The company needs to invite competitive tenders and make sure the selected supplier of this item is in a good financial position. What should the company ask the suppliers to send to show that their current assets cover their current liabilities?
- A. Gearing ratio
- B. Acid test
- C. Profit and loss account
- D. Annual turnover
Answer: B
Explanation:
The acid test, also known as the quick ratio, measures a company's ability to cover its current liabilities with its most liquid assets, excluding inventory. It is a stringent indicator of short-term financial health. By requesting this ratio, the company can assess whether a potential supplier has sufficient liquidity to meet its obligations, which is crucial when procuring strategic items.
Reference:
CIPS Level 4 Diploma in Procurement and Supply, L4M4 Study Guide, Section 2.3: Financial Appraisal of Suppliers
NEW QUESTION # 112
'Phishing' is an activity that can occur when an employee within an organisation receives an email that appears to be from a genuine supplier but is false. These types of emails expose the organisation to the activities of expert cyber criminals. Which type of crime category does this activity fall within?
- A. Fraud
- B. Corruption
- C. Bribery
- D. Human rights
Answer: A
Explanation:
Phishing is categorized as fraud because it involves deceptive practices to gain sensitive information or financial benefits. Responsible sourcing includes ensuring that cybersecurity measures are in place to prevent fraud and protect sensitive information within supply chains.
NEW QUESTION # 113
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?
- A. award the bid a 0 for price
- B. investigate the low bid
- C. award the contract to the low bid as this represents better value for money
- D. automatically dismiss the low bid
Answer: B
Explanation:
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.
NEW QUESTION # 114
Ali is the Category Manager at an airplane manufacturing factory. He works with many different suppliers who provide different components for the planes. The company is investing heavily in Environmental and Social Governance and Ali has been asked by the CEO what the best practice is to ensure ethical behaviour from suppliers. Ali has suggested completing Audits. Is this the right thing to do?
- A. No- Ali should simply ask the supplier's about their ethical practices
- B. No- audits will only reveal financial issues not ethical ones
- C. Yes- audits always uncover ethical violations such as modern day slavery
- D. yes - these can be completed without warning which would give Ali an accurate picture of the supplier's operations
Answer: D
Explanation:
The correct answer is 'yes - these can be completed without warning which would give Ali an accurate picture of the supplier's operations'. The other options are incorrect:
1) you can do many types of audit- financial, ethical, Health and Safety etc
2) asking a supplier about their ethical practices isn't likely going to get you accurate information. They'll just tell you what they think you want to hear
3) audits are great- but they don't ALWAYS uncover issues. Always is the key word in that sentence which makes it incorrect.
NEW QUESTION # 115
In which circumstances would a procurement manager effectively use competitive tendering for the award of contracts?
- A. When the requirement is needed urgently and price is not the most important factor
- B. When the value of the procurement is high and special tooling is a major factor
- C. When the suppliers have technical expertise, and the value of the procurement is relatively high
- D. When the specification is likely to be continuously reviewed as the contract progresses
Answer: C
Explanation:
Competitive tendering is ideal for high-value contracts where technical expertise is essential. This method supports responsible sourcing by ensuring quality and aligning the supplier's capabilities with the buyer's needs, as required in more complex procurement scenarios.
NEW QUESTION # 116
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. collaborative
- C. accommodating
- D. competitive
Answer: C
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 # 117
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. transactional
- B. non-critical
- C. adversarial
- 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 # 118
In which type of market would you be most likely to find a 'perfect competition'?
- A. commodity
- B. oligopoly
- C. monopolistic competition
- D. monopoly
Answer: B
Explanation:
An oligopoly. Perfect competition is a situation in a marketplace where there is plenty of competition. A monopoly or monopolistic competition would have 'imperfect competition'
NEW QUESTION # 119
Which of the following incoterms has the lowest risk to the buyer?
- A. delivered duty paid
- B. free on board
- C. carriage and insurance paid to
- D. exworks
Answer: A
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 # 120
Ji Yuan is a procurement manager who is looking for a new supplier to complete reactive maintenance activities throughout his property portfolio. The reactive maintenance will include an array of plumbing tasks as well as fixing electrical items. Suppliers therefore need to be extremely skilled and knowledgeable about a variety of tasks. Ji Yuan has done some initial research and doesn't believe that there are many suppliers who can complete this type of contract. What type of tender should he use?
- A. competitive dialogue
- B. negotiated
- C. restricted
- D. open
Answer: D
Explanation:
Open tenders should be used when the buyer expects there to be little interest / fewer bids. The opportunity is advertised widely allowing any supplier that wishes to submit a bid the opportunity.
The other options limit the number of suppliers and Ji Yuan doesn't want to do that, because he risks getting no interest and no supplier.
P.23
NEW QUESTION # 121
Single sourcing is only used by buyers where the total requirement is too small to justify splitting orders among more suppliers. Is this statement correct?
- A. Yes, because many suppliers tend to increase stock variety and stock proliferation
- B. No, because single sourcing may also be used when a requirement demands expensive set-up costs
- C. Yes, because single sourcing works well within a volatile supply environment
- D. No, because single sourcing should only be used where there is just one supplier in the market
Answer: B
Explanation:
Single sourcing can be appropriate when set-up costs are high, making it impractical to involve multiple suppliers. This aligns with responsible sourcing principles, particularly for high-value or specialised items, where relationship management and collaboration with one supplier can enhance quality and efficiency.
NEW QUESTION # 122
Which of the following areas of legislative and regulatory requirements prevent the deliberate limit-ing of supply and the formation of cartels?
- A. data protection
- B. marketplace competition
- C. product safety standards
- D. ethical practice
Answer: C
Explanation:
the correct answer is 'marketplace competition'.
Ethical practice is about prohibiting corrupt and unfair practice, rather than issues of supply and demand.
Although being in a cartel is 'unethical behavior' this option doesn't fully answer the question which talks about limiting supply- this is related to marketplace competition.
NEW QUESTION # 123
The procurement team received an urgent request from the business to source quotations forpest control services. The team decided to use a local newspaper to advertise the requirements. Was this an appropriate approach to use in the circumstance?
- A. No, because they might receive too many irrelevant proposals which may delay the assessing process
- B. No, because international vendors must also be notified of the opportunity
- C. Yes, so that the local pest control sector can decide between them who should bid
- D. Yes, they must seek as many bids as possible even if it takes longer
Answer: A
Explanation:
Advertising in a local newspaper for urgent services like pest control may not be the most efficient approach.
It can lead to an overwhelming number of responses, many of which may not meet the specific requirements, thereby delaying the evaluation process. For urgent needs, direct sourcing from pre-qualified suppliers or using existing frameworks is often more effective.
Reference:
CIPS Level 4 Diploma in Procurement and Supply, L4M4 Study Guide, Section 2.2: Tendering Procedures
NEW QUESTION # 124
Who was responsible for introducing the concept of Incoterms?
- A. International Commerce Centre
- B. World Trade Organisation
- C. United Nations Commission
- D. International Chamber of Commerce
Answer: D
Explanation:
Incoterms, short for International Commercial Terms, were introduced by the International Chamber of Commerce (ICC) in 1936. These standardized terms are used globally to define the responsibilities of buyers and sellers in international trade, helping to avoid misunderstandings by clarifying tasks, costs, and risks involved in the delivery of goods.
Reference:
International Chamber of Commerce:
NEW QUESTION # 125
Bribery is considered an unethical business practice. What constitutes a bribe?
- A. anything that is of value to the recipient
- B. something of significant monetary value
- C. something that has monetary value
- D. anything that can be traded illegally
Answer: A
Explanation:
A bribe is anything that is of value to the recipient. It's commonly money, but could also be an item such as a car, or doing someone a favour such as hiring their son.
NEW QUESTION # 126
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 makes a similar profit to that of the buyer
- B. the supplier is able to work at the same technical level as the buyer
- C. the supplier shares a common supply chain
- D. the supplier is able to adhere to the same ethical standards
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 # 127
Which of the following is true for CIPS members who sign and comply with the CIPS Code of Conduct?
Members can ...
* gain an understanding of ethical and successful business operations
* acquire automatic entitlement to government sponsorship
* enjoy continued CIPS membership and access to resources
* bypass the need to comply with other voluntary or legal codes
- A. 1 and 4
- B. 1 and 2
- C. 1 and 3
- D. 2 and 3
Answer: C
Explanation:
CIPS members who adhere to the CIPS Code of Conduct gain insight into ethical business practices and retain their membership and access to CIPS resources. This commitment to ethical standards supports responsible sourcing by fostering a community of professionals who value integrity and best practices.
NEW QUESTION # 128
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
- A. bulk discount
- B. innovation
- C. cost plus pricing
- D. on time in full deliveries
- E. sustainability
Answer: B,D,E
Explanation:
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.
NEW QUESTION # 129
GDP is an economic index that a procurement professional can use to measure economic data. What does GDP tell you?
- A. the monatary value of the goods manufactured in a financial period
- B. the value of public limited companies within a country
- C. average changes in price over a year
- D. the value of commodities such as steel, oil and wheat at a point in time
Answer: A
Explanation:
GDP = gross domestic product = "the monetary value of goods and services manufactured or sup-plied in a financial period". People use it to say whether a country's economy is strong or weak.
Stock markets look at the value of public limited companies within a country.
Commodity indices look at the value of commodities such as steel, oil and wheat at a point in time Average changes in price over a year can be measured by CPI or PPI
NEW QUESTION # 130
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