[Q133-Q156] Exam Questions and Answers for L4M4 Study Guide Questions and Answers!

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Exam Questions and Answers for L4M4 Study Guide Questions and Answers!

Ethical and Responsible Sourcing Certification Sample Questions and Practice Exam

NEW QUESTION 133
Which financial statement would be used for analysing an organisation’s assets?

Balance sheet (statement of financial position)

Profit and loss account (statement of financial performance)

Credit rating reports

Cash flow statement

NEW QUESTION 134
Which is an example of a criterion for supplier selection during a tender for a hospital build to demonstrate the people element of the ‘triple bottom line’?

Specifications are designed with appropriately certified materials

Demonstrated commitment to a labour industry code of conduct

Project plan is designed to use reverse logistics

Building design is thermal efficient to meet carbon trust targets

NEW QUESTION 135
In which type of market would you be most likely to find a ‘perfect competition’?

monopoly

oligopoly

commodity

monopolistic competition

NEW QUESTION 136
Commodities can be traded on a stock exchange and are generally divided into one of four categories. Which of the following is not one of these four categories?

energy

livestock

metals

plastics

NEW QUESTION 137
Which of the following might encourage an organisation to outsource their IT function?

When there is a limited manufacturing capacity

If the outsourcing solution increases the costs

If there is limited finance investment and resource

When there is an internal conflict within the company

NEW QUESTION 138
Which of the following areas of legislative and regulatory requirements prevent the deliberate limit-ing of supply and the formation of cartels?

data protection

product safety standards

marketplace competition

ethical practice

NEW QUESTION 139
A procurement manager has decided to use a local newspaper to source quotes from external suppliers. Why is it important to advertise tenders? Select TWO that apply.

To gain tactical sourcing

To gain green procurement

To gain value for money

To avoid complex bids

To gain insights from the market

NEW QUESTION 140
Chantelle is a procurement apprentice working in the public sector for an education organisation. As a result of studying towards the CIPS qualification, Chantelle has become aware of the importance of incorporating sustainability and environmental award criteria into tender exercises and has informed her manager of this.
For the purchase of IT supplies, which requirement could be evaluated within the sustainability and environmental award criterion?

After-sales support

Competitive pricing

Delivery lead time

Consolidated delivery

NEW QUESTION 141
Why would you use a credit score to appraise a supplier?

to understand the level of risk the supplier poses to your organisation

to understand if their prices reflect market value

to find out how much money the supplier has in the bank

to find out if the supplier has any unethical business practices

NEW QUESTION 142
Which of the following financial ratios would indicate a supplier’s potential exposure risk to a steeprise in inflation?

acid test

current ratio

gross profit margin

gearing ratio

NEW QUESTION 143
In which instance would multiple sourcing be the most applicable approach?

Sourcing for the provision of a service, where close relationship management is required

Sourcing a specialised, unique component where the supplier’s knowledge is key

Sourcing for high-cost, strategically important components

Sourcing for components required at short notice

NEW QUESTION 144
Which of the following would be a valid reason to make a product inhouse, rather than buy it from a supplier?

improved quality control

less inventory

killset of supplier is higher

threat of substitutions

NEW QUESTION 145
A procurement manager analyses total company expenditure on goods and services. What can expenditure by product category or supplier achieve? (Select TWO)

Provide information on costs and trends for comparison

Help set the organisation’s marketing strategy

Highlight opportunities for negotiating better prices

Provide analysis to help with production planning

Identify how obsolete stock can be disposed of sustainably

NEW QUESTION 146
Faisal is a medical equipment maintenance services procurement specialist within a local hospital. Faisal is responsible for ensuring contracts are in place that will ensure operational continuity of high-value pieces such as radiology equipment. When carrying out tender opportunities for these services, Faisal will specify, as an essential requirement, that certain standards are adhered to. Which of the following is a benefit of incorporating standards as a requirement within a specification?

Standards will mirror the buyer’s requirements in its entirety

Standards provide clear guidelines and remove the risk of ambiguity

Standards will ensure suppliers meet all the buyer’s requirements

Standards will ensure low pricing is submitted in the tender response

NEW QUESTION 147
Added value can be objectively defined. Is this sentence TRUE?

Yes- added value should be assessed along with price

Yes- added value is the same for all organisations

no – added value may change from one company to another

no- added value is always intangible

NEW QUESTION 148
Zeb is a Procurement Manager at Zig Zag Zips manufacturing. The organisation has a complex supply chain and works with 46 different suppliers, many of these international. Which of the follow-ing would be the most useful for Zeb to address issues of Modern Slavery?

carry out regular due diligence checks on the supply base

ensure all 46 suppliers publish an Anti Slavery Statement in line with the Modern Slavery Act

work with less suppliers to reduce the risk of slavery entering the supply chain

ask all suppliers to get Fair Trade accredited

NEW QUESTION 149
If a company is described as ‘liquid’ what does this mean?

the company is funded on equity rather than debt

the company spends a lot of money

the company is highly profitable

the company has enough money to pay short-term liabilities

NEW QUESTION 150
Which of the following incoterms has the lowest risk to the buyer?

exworks

delivered duty paid

carriage and insurance paid to

free on board

NEW QUESTION 151
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?

Earnings per share

Profitability ratio

Dividend per share

Liquidity ratio

NEW QUESTION 152
Which of the following factors are typically considered when assessing a supplier’s financial capacity?

The supplier’s profitability and asset levels

The price quoted in the request for quotation

The supplier’s costing methods and markup percentage

The supplier’s compliance with regulations for minimum wages

NEW QUESTION 153
Which of the following types of data do credit rating agencies include in their assessment of organisations?
(Select TWO)

Value for money

Value chains

Financial obligations

Ecosystems

Payment history

NEW QUESTION 154
There are a number of models that can be used to appraise suppliers before commencing a full tendering process. Which of the following could be considered when appraising a supplier?
* Capacity
* Control
* Compatibility
* Commodity

1 and 2 only

2 and 4 only

1 and 3 only

2 and 3 only

NEW QUESTION 155
For complex and high value tenders, which document is the most appropriate to send to those suppliers who have already been appraised and deemed suitable?

PQQ

ITT

RFQ

RFT

NEW QUESTION 156
Using a weighted scorecard to assess and compare supplier proposals is beneficial for which of the following reasons?

Deciding on what score to give each criterion is subjective and can avoid transparency in the selection process

It provides an objective and consistent approach to evaluating bids and ensures that best value for money is achieved

It increases bias towards suppliers who otherwise might not have been awarded the contract

The focus on price simplifies the assessment process, making it easier to select the lowest cost supplier

CIPS L4M4 Exam Syllabus Topics:

Topic	Details
Topic 1	This section examines analyzing market data, obtaining quotations tenders, and assessing responses. The sub-topics focus on key processes for evaluating potential suppliers.
Topic 2	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 3	Understand the key processes that can be applied to the analysis of potential external suppliers:
Topic 4	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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CIPS L4M4 Exam Syllabus Topics:

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