CIPS L4M2 Exam Questions Instant Access - No Installation Required

Question 1

EV Inc is facing the following challenges:

1. The capital investment is enormous.

2. Most of company's working capital is in form of inventories, which include raw materials, work-in-progress and finished goods.

3. Competitors are increasingly deploying robotics and automation to boost productivity.

Which of the below business sectors does EV Inc belong to?

AConstruction

BManufacturing

CFinancial services

DRetails

Answer : B

Explanation

Every sector among the options requires intensive capital investment. However, only manufacturing and retails bury much of their working capital in form of inventory. Raw materials and WIP only present in manufacturing sector.

The manufacturing industry is undergoing massive change, rivaling the Industrial Revolution that began in England and continued on Detroit's assembly lines. But today's revolution is ''smart,'' thanks to factories using artificial intelligence and robots.

A new trend is the ''cobot'' --- a collaborative robot designed to work with humans. One company called Moduform uses them to make furniture in the U.S. The company credits using cobots for reducing their staffing turnover, since the robots do mundane repetitive tasks that bore humans, while people can now do cognitive tasks requiring judgment and diversified responsibilities. Other innovations include 3D printing, Artificial Intelligence and automation.

Today's artificial intelligence manufacturing revolution improves performance in two key areas of manufacturing: productivity and quality control.

- The Key Characteristics of Manufacturing (bizfluent.com)

- CIPS study guide page 74-76

LO 2, AC 2.1

Question 2

Which of the following are examples of environmental and social criteria in supplier tender evaluation?

Compliance with labour standards

Carbon footprint measures

Compliance with technical specification

After-sales maintenance service levels

A1 and 2 only

B2 and 4 only

C3 and 4 only

D1 and 3 only

Answer : A

Comprehensive and Detailed Explanation (from CIPS L4M2 -- Sustainable Procurement Evaluation)

Environmental criteria: carbon emissions, waste, resource efficiency.

Social criteria: labour standards, equality, community impact.

Thus, 1 and 2 fit perfectly.

Items 3 and 4 are quality or service considerations, not sustainability metrics.

Relevant L4M2 references:

''Incorporating sustainability in tender evaluation''

''Triple bottom line and responsible sourcing''

Question 3

Which of these are advantages of using a conformance specification? Select TWO that apply.

AIt enables supplier flexibility and product innovation

BIt enables value-for-money solutions

CIt forces consideration of actual product needs

DIt provides evidence of requirements if there is a dispute

EThere is a smaller supplier base to select from

Answer : D, E

Question 4

British Steel needs to source a set of instruments that will improve quality of steel. Without these instruments British Steel will loss control of the temperature. The bucket may freeze up, or if it is too hot it leaks out of the casting process, damaging the machine. There is limited supply on the market and quality varies greatly. Which of the following will be the most appropriate managing approach to procure these items?

ABundle these instruments into larger contract

BLeverage market competition to drive down cost

CSeek continuity of supply

DForm partnership with supplier

Answer : D

Explanation

The instrument plays a crucial role in steel manufacturing because it presents in the majority of products, in which case lacking this instrument would have significant impact on the organisation's output (production lines stop or damaging other machine). Otherwise, the risk of supply is high because there is limitation in supply. Therefore, it is considered as a strategic item in term of Kraljic's portfolio matrix. Procurement manager should form partnership with suppliers to maximise the value.

The following graph illustrates Kraljic's portfolio matrix:

LO 2, AC 2.1

Question 5

A manufacturing organisation has initiated a project focusing on costs, with a view to making significant savings. A procurement manager is leading the project. The initial data sources have focused on the cost of raw materials. Which of the following describes this cost?

ADirect, variable costs

BIndirect, variable costs

CDirect, fixed costs

DIndirect, fixed costs

Answer : A

Question 6

Which of the following is an environmental criterion that can be included when drafting a specification for new machinery?

AThe brand name of the preferred machinery

BThe emissions produced by the equipment

CThe location of the manufacturing plant

DThe home country of the supplier

Answer : B

Comprehensive and Detailed Explanation (from CIPS L4M2 -- Sustainable Specification Writing)

Environmental criteria address resource use, pollution, waste, and emissions.

For machinery, specifying maximum emission limits or energy efficiency ratings ensures sustainability compliance.

Brand, location, or supplier nationality are not environmental factors.

Relevant L4M2 references:

''Environmental sustainability criteria in technical specifications''

''Life cycle environmental performance''

Question 7

When analysing competitive forces in a market, which of the following can be seen as a supplier having low bargaining power? Select TWO that apply.

ALow competition in the marketplace

BA high number of substitutes available

CHigh quality products

DLow switching costs between products

ELow levels of innovation

Answer : B, D

Comprehensive and Detailed Explanation (from CIPS L4M2 -- Market Analysis)

Supplier power is low when:

Buyers can easily substitute products (Option B).

Switching costs are low, so buyers can change suppliers without difficulty (Option D).

Low competition (A) or low innovation (E) strengthens supplier power, not weakens it. High quality (C) increases supplier leverage.

Relevant L4M2 references:

''Factors influencing supplier bargaining power''

''Porter's Five Forces model -- supplier power and substitution''

CIPS Defining Business Needs L4M2 Exam Questions