CIPS L4M4 Exam Practice Test Instant Access

Question 1

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

AProfessional magazines

BFocus groups

CEconomic indices

DSupplier websites

EDirect conversations

FSupplier interviews

Answer : A, C, D

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.

Question 2

Philip is a procurement manager at XYZ Company which imports raw materials from abroad. Sup-pliers provide quotes to Philip in their local currency. Is this the best way to reduce the risk to XYZ Company of currency fluctuations?

Ayes- this means the price won't go up or down

Byes- this puts the risk on the supplier

Cno- quoting in the supplier's currency increases the risk for the buyer

Dno- quoting in the supplier's currency does not affect the risk to the buying organisation

Answer : C, C

The correct answer is 'no- quoting in the supplier's currency increases the risk for the buyer'. This questions comes up in a variety of formats in the exam. Remember; if the price is in your own currency (most examples in the exam are given in ) there is less risk than if the prices are quoted in a foreign currency. This is because exchange rates fluctuate; if the price is in you always know what you're paying, if it's in another currency the price can change daily depending on if the exchange rate compared to has gone up or down.

Question 3

Ramesh is an IT category manager within the UK's National Health Service and is responsible for the procurement of a new high-value network system, which will spread across multiple doctors' practices and community health centres. Ramesh has reviewed different tender approaches and concluded that the use of a restricted tender is the most appropriate. Which of the following statements is true for a restricted tender process?

ADirect negotiations occur prior to suppliers submitting their offer

BThe contract will be awarded strictly on pricing criteria

CSuppliers responding to the tender are pre-qualified

DIt is only relevant when there are few suppliers in the market

Answer : C

In a restricted tender process, only pre-qualified suppliers are invited to bid, ensuring that participating suppliers have met necessary qualifications. This approach helps in managing high-value contracts by focusing on capable suppliers. Ethical and responsible sourcing in the public sector demands supplier pre-qualification to ensure compliance, transparency, and quality.

Question 4

How can a buyer monitor a supplier's ethical workforce standards throughout a long-term contract?

ACheck the International Labour Organisation's database regularly for information specifically about that supplier

BRequest a completed self-assessment by the supplier on a monthly basis

CCommission periodic audits by specialist third parties to highlight any malpractice

DContact management directly on a periodic basis, as stipulated in contract terms

Answer : C

Conducting periodic audits by third-party specialists is a reliable way to monitor compliance with ethical standards, as these audits provide an objective assessment. This aligns with ethical sourcing practices, as it promotes accountability and ensures continuous adherence to agreed-upon standards.

Question 5

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

AThere is a more detailed debrief requirement in the public sector

BThere is wider stakeholder involvement in the public sector

CAll public sector purchases are mandated to use a tendering procedure

DRegulation of the public sector usually dictates minimum timescales

Answer : D

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.'

Question 6

When assessing social responsibility elements of a supplier's proposal, what type of supporting evidence could a supplier provide?

AEvidence of compliance with fair trade standards

BResults of a customer service survey on delivery performance

CQuality control reports documenting quality checks in the manufacturing process

DFinancial statements detailing profit and loss accounts

Answer : A

Compliance with fair trade standards demonstrates the supplier's commitment to social responsibility, including fair wages and ethical working conditions. This aligns with responsible sourcing practices, ensuring that suppliers maintain ethical labor standards, as advocated in the principles of ethical sourcing.

Question 7

Single sourcing is only used by buyers where the total requirement is too small to justify splitting orders among more suppliers. Is this statement correct?

ANo, because single sourcing should only be used where there is just one supplier in the market

BYes, because many suppliers tend to increase stock variety and stock proliferation

CNo, because single sourcing may also be used when a requirement demands expensive set-up costs

DYes, because single sourcing works well within a volatile supply environment

Answer : C

Single sourcing can be appropriate when set-up costs are high, making it impractical to involve multiple suppliers. This aligns with responsible sourcing principles, particularly for high-value or specialised items, where relationship management and collaboration with one supplier can enhance quality and efficiency.

CIPS Ethical and Responsible Sourcing L4M4 Exam Practice Test