New Launch L4M4 Questions [2026] - CIPS L4M4 Exam Dumps

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| Topic | Details |
|---|
| Topic 1 | - 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.
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| Topic 2 | - Understand the key processes that can be applied to the analysis of potential external suppliers:
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| Topic 3 | - This section examines analyzing market data, obtaining quotations
- tenders, and assessing responses. The sub-topics focus on key processes for evaluating potential suppliers.
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| Topic 4 | - 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.
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CIPS Ethical and Responsible Sourcing Sample Questions (Q130-Q135):
NEW QUESTION # 130
In which instance would multiple sourcing be the most applicable approach?
- A. Sourcing for high-cost, strategically important components
- B. Sourcing for the provision of a service, where close relationship management is required
- C. Sourcing a specialised, unique component where the supplier's knowledge is key
- D. Sourcing for components required at short notice
Answer: D
Explanation:
Multiple sourcing reduces dependency risks and provides flexibility in urgent supply situations. For components needed at short notice, having multiple suppliers ensures continuity and responsiveness.
Strategic, high-value, or unique components (B, C) often require single or closer sourcing to ensure collaboration and expertise. Service provision (A) typically benefits from relationship-based sourcing rather than multiple arrangements. Responsible sourcing stresses that multiple sourcing is a risk management tool, best applied where speed, availability, and resilience are essential.
Reference: CIPS L4M4 Study Guide (v2), LO: "Application" - sourcing strategies (single vs multiple sourcing).
NEW QUESTION # 131
Why is it important, when awarding high-value contracts, for a buyer to conduct a financial assessment of a supplier?
- A. Financial assessments provide a holistic view of a company's capability including quality and delivery performance
- B. If a supplier has a high credit score this means it pays its own suppliers late which could result in stock outs
- C. The buyer must ensure continuity of supply because financial problems of a supplier could affect the supply
- D. A supplier who is highly profitable will be charging prices higher than the average market rate
Answer: C
Explanation:
Financial stability is a critical risk factor in high-value contracts. If a supplier collapses financially during contract performance, the buying organisation faces supply disruption, increased costs, and reputational risk.
Financial assessments help identify vulnerabilities such as high debt, poor liquidity, or over-reliance on limited customers. While profitability, credit scores, and broader capability assessments are useful, the most pressing concern is ensuring continuity of supply. Ethical and responsible sourcing requires buyers to consider the long-term viability of suppliers, not just short-term savings. This aligns with responsible practice, protecting stakeholders, end customers, and the organisation's own obligations.
Reference: CIPS L4M4 Study Guide (v2), LO: "Implications" - supplier financial health, continuity of supply.
NEW QUESTION # 132
The procurement manager has received the following data from the supplier's accounts to facilitate the calculation of the supplier's current ratio:
Current Assets: Stock $200; Debtors $60; Cash $40; Total $300
Short Term Liabilities: Bank overdraft $150
Which calculation will the procurement manager use to find out the current ratio?
- A. (300 ÷ 150) × 100
- B. 300 ÷ 150
- C. (300 - 200 - 150) × 100
- D. (300 - 200) ÷ 150
Answer: B
Explanation:
The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations. It is calculated by dividing current assets by current liabilities. In this case:
Current Assets = $300
Current Liabilities = $150
Current Ratio = 300 ÷ 150 = 2.0
This indicates that the supplier has twice as many current assets as current liabilities, suggesting good short- term financial health.
Reference:
CIPS Level 4 Diploma in Procurement and Supply, L4M4 Study Guide, Section 2.3: Financial Appraisal of Suppliers
NEW QUESTION # 133
One approach to managing supply risk is by having multiple suppliers of a given product or category of requirements. This approach has both advantages and disadvantages. Which of the following conditions would be a reason for multiple sourcing arrangements?
- A. It restricts opportunity for competition within the supplier base
- B. It is suitable for high-value requirements such as raw materials
- C. It is suitable for high-value, one-off requirements such as machinery
- D. It increases the risk and costs of switching within the supplier base
Answer: B
Explanation:
Multiple sourcing is most effective for strategically important, high-value requirements such as raw materials.
These are continuous, large-volume needs where supply disruptions can be costly and damaging. By using more than one supplier, buyers reduce dependency risks, improve resilience, and increase competitive leverage. One-off requirements like machinery (A) don't benefit from multiple sourcing, while options B and D describe disadvantages rather than reasons for adopting the approach. Responsible sourcing promotes balancing cost, risk, and resilience - and multiple sourcing is a key strategy for critical, ongoing supply categories.
Reference: CIPS L4M4 Study Guide (v2), LO: "Application" - sourcing strategies and risk management.
NEW QUESTION # 134
Pre-qualification of suppliers is used to determine if the suppliers meet the basic requirements of the buying organisation. Which of the following is assessed at the pre-qualification stage?
- A. financial stability, capacity and capability
- B. pricing structure, ethics and financial stability
- C. capability, culture and pricing schedules
- D. capacity, capability and pricing structure
Answer: A
Explanation:
The correct answer is financial stability (this is done by using all of those lovely ratios in chapter 1.3) and capacity and capability (which are part of Carter's 10 Cs).
At PQQ stage you're looking purely at whether the supplier is good or bad (to put it simply). You don't give them details of your requirement yet, so they're not providing a quote / pricing structure / price schedule at this point in time. That would be at the next stage, IF they pass PQQ, when you issue the tender competition.
NEW QUESTION # 135
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