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CIPS L4M4 Exam Syllabus Topics:

Topic	Details
Topic 1	Understand the key processes that can be applied to the analysis of potential external suppliers:
Topic 2	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 3	This section examines analyzing market data, obtaining quotations tenders, and assessing responses. The sub-topics focus on key processes for evaluating potential suppliers.
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 (Q289-Q294):

NEW QUESTION # 289
A company has a low gearing of 20%. This shows that the company relies on equity capital and should therefore have less difficulty coping during tough economic times. Is this statement TRUE?

A. No- a low gearing suggests that the company is financed by long-term debt rather than equity
B. Yes- a low gearing ratio shows that the business is solvent and can deal with supply chain disruptions easily
C. Yes- a low gearing ratio means the company's finances are made up of equity rather than debt
D. No- a low gearing shows you that a company isn't likely to be profitable

Answer: C

Explanation:
the correct answer is 'Yes- a low gearing ratio means the company's finances are made up of equity rather than debt'.
Remember low gearing = good (based on equity), high gearing = bad (based on debt). Anything over 50% is considered high.
The two no answers are therefore incorrect and you can discount these straight away. The other yes answer is one of those answers which COULD be true, but isn't always true, and we'd need more information to know for sure. When you get options like this there will be one that is always right and one which is sometimes right - so always pick the always right one.
Dealing with supply chain disruptions is complex, and depending what the disruption is, how big it is, what the industry is etc determines whether a supplier can handle it or not. Because there's more factors to consider than just gearing, this isn't the right answer.

NEW QUESTION # 290
What type of ratio is used to measure a company's ability to meet its short-term financial obligations, specifically focusing on its ability to convert assets into cash to cover current liabilities?

A. Dividend per share
B. Earnings per share
C. Profitability ratio
D. Liquidity ratio

Answer: D

Explanation:
Liquidity ratios, such as the current and quick ratios, evaluate a company's ability to meet short-term liabilities with current assets. This metric is crucial for assessing a supplier's financial stability, ensuring continuity and reliability in the supply chain, which aligns with ethical and responsible sourcing principles.

NEW QUESTION # 291
Which of the following are secondary research sources that can be used when investigating markets and suppliers? Select THREE that apply.

A. Focus groups
B. Supplier interviews
C. Supplier websites
D. Direct conversations
E. Professional magazines
F. Economic indices

Answer: C,E,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 # 292
Which of the following should form part of the initial evaluation process for non-domestic vendor proposals?

A. Internal benchmarking
B. Contract management
C. Incoterm classifications
D. Supplier development

Answer: C

Explanation:
When sourcing internationally, one of the first evaluation considerations is the use of Incoterms (B), which define the allocation of transport costs, risks, and responsibilities between buyer and supplier. They are essential for evaluating total cost and risk implications of international offers. Contract management and supplier development are post-award activities, while benchmarking is an internal tool. Responsible sourcing stresses the importance of clear Incoterm agreements to avoid disputes, ensure compliance, and fairly allocate responsibilities in global supply chains.
Reference: CIPS L4M4 Study Guide (v2), LO: "Implementation" - Incoterms in international evaluation.

NEW QUESTION # 293
Khalid is a procurement manager in the UK who is looking to source exotic fruit for a retailer. As this type of fruit doesn't grow naturally in the UK Khalid is looking at international suppliers, but is worried about variations in exchange rates. He is considering asking the suppliers to provide quotes in their local currencies.
Will this reduce the risk posed to Khalid?

A. no- quoting the prices in GBP / £ will provide Khalid with better security against cur-rency fluctuations
B. no- prices should be quoted in GBP / £ as this will reduce the cost of imports
C. yes- suppliers should quote in their own currencies so there is no risk to the importing company
D. yes- when suppliers quote in local currencies you are more likely to get better prices

Answer: A

Explanation:
So you can immediately discount the options starting with yes.
Quoting in GBP / £ rather than the supplier's currency reduces the risk to the buyer. It will not re-duce the cost of the import, and will probably increase it as the supplier is then taking on the risk of currency fluctuations.

NEW QUESTION # 294
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