CIPS L4M4 Exam Questions Instant Access - No Installation Required

Question 1

A business may be faced with the challenge of deciding whether to source some of its requirements from external suppliers or whether to make them internally. There are many factors that need to be considered before arriving at such a decision. Which of the following factors is likely to justify the decision to make the requirements internally?

AThe other suppliers are using older technology

BThe availability of in-house competencies and capacity to carry out the production

CExternal suppliers are likely to be overcharging

DExternal sourcing involves cumbersome tendering procedures

Answer : B

The decision to make a product internally rather than sourcing it externally is influenced by several factors. One of the primary considerations is the availability of in-house competencies and capacity. If an organisation possesses the necessary skills, technology, and resources to produce the required goods or services efficiently, it may opt for internal production to maintain control over quality, reduce costs, and protect proprietary information.

Exact Extract from Study Guide:

'Make or buy decisions take into account: product/service is core, the organisation's capacity to make, current market (cost saving with economy of scales and/or logistics), amount of competition.'

Question 2

Which of the following can be undertaken by the buyer in relation to the governance of a supplier's ethical and sustainable behaviours?

Review the insurance clauses in the contract

Check that the supplier's internal policies are up to date

Check the supplier's conflict of interest register for their contract

Review the non-disclosure agreement for their contract

A2 and 3 only

B1 and 3 only

C1 and 4 only

D2 and 4 only

Answer : B

Governance of ethical and sustainable behaviours involves monitoring risk coverage and transparency measures. Reviewing insurance clauses (1) ensures suppliers are prepared to cover liabilities responsibly. Checking conflict of interest registers (3) promotes transparency, reducing risks of corruption or unfair influence. Simply reviewing NDAs (4) or updated policies (2) does not provide direct assurance of ethical and sustainable practices. Responsible sourcing requires robust governance mechanisms that ensure supplier compliance, reduce risk, and maintain ethical integrity across the supply chain.

Question 3

In the Public Sector, what is the evaluation criteria most often used when evaluating bids from suppliers?

AMost Economically Advantageous Tender

BBest Value for Money

CCheapest Overall Tender

DBest Business Fit

Answer : A

Most Economically Advantageous Tender (MEAT) is the Public Sector's go to evaluation criteria.

NOTE that this is changing from October 2023. Public Sector Procurement is currently based on legislation called PCR 2015 which itself is based on EU Procurement Directives. Now the UK has officially Brexited, we're making our own laws and the new Procurement Bill will be coming into effect in November 2024. One of the major changes is that MEAT is changing to MAT (most ad-vantageous tender - without the economical bit).

If you're sitting this exam until July 2024- you're fine- learn what the study guide says. If you're taking the exam from November 2024 I'm not sure what students are expected to do. The entire section on public sector procurement is incorrect for you. My best guess is CIPS may removequestions this section as the study guide will be wrong, but I really don't know how they plan to handle this.

The new Procurement Bill - MEAT to MAT - Hempsons - Hempsons

Question 4

The sourcing process is considered to include the initial stages of the generic procurement cycle, up to the stage where the contract is awarded to the successful bidder. The stages in the sourcing process may include ...

AComparing the supplier's delivery note with the purchase order to confirm the specification

BReminding the design manager to approve the drawings which will accompany the invitation to tender documents

CProcessing the requisitions to facilitate call-offs against a newly created framework contract

DEngaging with suppliers to ensure that they are achieving the KPIs set in the contract

Answer : B

In the sourcing process, obtaining necessary approvals (such as drawings for the invitation to tender) is critical to ensure clarity and readiness before engaging with suppliers. Responsible sourcing emphasizes structured preparation, ensuring compliance and accuracy in supplier expectations.

Question 5

Which of the following are reasons to outsource part of a business to an external supplier? Select TWO.

Athe product or service is core to the organisation

Bthere are more resources in-house

Coverheads can be kept as effective as possible

Dthe reduction in the need to continually invest in new machinery

Answer : C, D

Reasons to outsource include; 'overheads can be kept as effective as possible' and 'the reduction in the need to continually invest in new machinery'.

When you outsource, you transfer the costs of overheads to the supplier and it is their responsibility to buy new machinery as and when is required. For example if you outsource cleaning, the cleaning company is responsible for replacing the hoovers and floor cleaner

The other two options would be reasons to keep something 'in-house'.

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

Each stage of the tendering procedure requires a timeline to be met by bidders and the tender processing team.

Which of the following explains why timescales are important in the tendering process?

They help in getting the right lead-time on the purchase order

They separate the quickest bidders from the slowest

They ensure that all bidders are treated equally

They ensure that bids are submitted in the correct format

A1 and 2 only

B2 and 3 only

C1 and 3 only

D2 and 4 only

Answer : C

Clearly defined timescales are essential to ensure fairness and consistency in the tendering process. They help buyers plan appropriate lead-times for purchase orders (1) and ensure that all bidders are treated equally (3) by being given the same deadlines. Timescales are not intended to rank bidders by speed, nor do they ensure correct bid formatting. Ethical and responsible sourcing places strong emphasis on transparency and equal treatment, particularly in competitive tendering, ensuring no supplier gains an unfair advantage due to ambiguous or inconsistent deadlines.

CIPS Ethical and Responsible Sourcing L4M4 Exam Questions