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CIPS L4M4 Exam Syllabus Topics:

TopicDetails
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
  • 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.
Topic 4
  • Understand the key processes that can be applied to the analysis of potential external suppliers:

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CIPS Ethical and Responsible Sourcing Sample Questions (Q201-Q206):

NEW QUESTION # 201
Intra-company trading allows business units within a large enterprise to supply goods or services to another.
What are the likely objectives of intra-company trading?
Enhances production capacity utilisation
Offsets some of the fixed costs of the supplying entity
Compensates the supplying unit for the less effective technology applied Ensures internal technology always out-performs that of external suppliers

Answer: B

Explanation:
Intra-company trading aims to optimize internal resources by enhancing production capacity utilization and offsetting fixed costs. By supplying goods or services internally, organizations can achieve economies of scale and better allocate resources. However, compensating for less effective technology or ensuring superior internal technology over external suppliers are not primary objectives of intra-company trading.
Reference:
CIPS Level 4 Diploma in Procurement and Supply, L4M4 Study Guide, Section 1.1.2: Make or buy decisions and the role of intra-company trading


NEW QUESTION # 202
In order to assess whether a company is able to meet its current liabilities, which financial ratio should you use?

Answer: B

Explanation:
"Meet current liabilities" is a posh way of saying "can you pay your bills". You're therefore looking for a liquidity ratio- a ratio that looks at assets vs liabilities (i.e. money in the bank vs money owed out). The Acid Test is a liquidity ratio. It's sometimes called the 'quick ratio'. Both terms come up on the exam. The other options are financial ratios but aren't for liquidity.


NEW QUESTION # 203
Why do tenders often have longer timescales in the public sector when compared with those of the private sector?

Answer: B

Explanation:
Public sector procurement is governed by specific regulations that stipulate minimum timescales for various stages of the tendering process. These regulations are designed to ensure transparency, fairness, and adequate time for suppliers to prepare their bids. For instance, under the Procurement Act 2023, certain procedures have defined minimum periods for tender submissions to allow sufficient time for supplier participation.
Exact Extract from Study Guide:
"Public sector procurement is subject to specific regulations that dictate minimum timescales for tendering processes to ensure fairness and transparency."


NEW QUESTION # 204
A multi-national company is seeking to negotiate an agreement with a global supplier for the delivery of fresh produce.
At which stage of the procurement process should the buyer consider Incoterms?

Answer: D

Explanation:
Incoterms define the allocation ofcosts, risks, and responsibilitiesbetween buyer and seller in international trade. They must be agreedbefore the contract is finalised, as they form a fundamental part of the contractual terms. Considering Incoterms early ensures clarity on delivery obligations, customs responsibilities, insurance, and transport costs. Selecting Incoterms after contract agreement or at order placement would create ambiguity and risk disputes. Ethical and responsible sourcing requires clear contractual definitions to prevent misunderstandings, ensure compliance, and fairly allocate risk in global supply chains.
Reference:CIPS L4M4 Ethical & Responsible Sourcing Study Guide (v2) - Incoterms and international contracting.


NEW QUESTION # 205
A buyer of bakery products sees wheat shortages due to poor harvests but demand remains high. How does this affect negotiation?

Answer: B

Explanation:
In commodity markets, shortages combined with sustained demand drive price increases. The buyer loses bargaining power, as suppliers can charge higher rates. Negotiating downward is unrealistic; instead, buyers should manage risk through hedging, forward contracts, or alternative sourcing. CIPS notes that responsible sourcing requires understanding market dynamics and their ethical implications (e.g., food security, affordability). The organisation must manage stakeholder expectations about pricing rather than assume negotiation leverage. This reflects the implications of market volatility in global supply chains.
Reference: CIPS L4M4 Study Guide (v2), LO: "Implications" - commodity market dynamics, supply
/demand, and negotiation position.


NEW QUESTION # 206
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