CIPS L4M4 Exam Practice Test Instant Access

Question 1

Steff is a procurement manager at Giant Buttons Ltd who are considering offshoring a small section of their manufacturing operations. Which of the following is a risk of offshoring that Steff should consider.

Aimportation rules and tariffs

Bexportation rules and tariffs

Cpayments by electronic bank transfer

Dlower operating costs

Answer : A

The correct answer is importation rules and tariffs. This is because in offshoring some of the manufacturing will be done in another country then shipped back to the UK. The products will have to go through customs so may be subject to tariffs and duties.

Steff's not exporting anything in the scenario and paying electronically and getting lower costs are not RISKS.

Question 2

A company has actively included supporting of disadvantaged groups within their ESG commitment. Which of the following groups are considered disadvantaged?

Aendangered species

Bpregnant women and children

Cinternational suppliers

DMuslims

Answer : B

Pregnant women and children are considered 'disadvantaged' by the UN. The other groups the UN call disadvantaged include; the elderly, the immunocompromised, those with disabilities and those living in poverty. This is the list given in the study guide.

A company could help disadvantaged groups in several ways. Firstly by offering employment (obviously not to the children). It could also include helping these groups as part of a Social Value out-come or community benefit scheme.

Question 3

Roberto is running a tender in which his main concern is price. However he is keen to hear also about the companies' Corporate Social Responsibility Policies and how this will impact their delivery. Roberto is considering awarding the CSR question 4 points in a weighted point system. If he does this, what weight should be given to the price?

D96

Answer : D

96 is the correct answer- weighted point systems should add up to 100 (as in 100%)

Question 4

Damian is a procurement professional in the Public Sector. He has recently run a competition to source new uniforms for hospital staff and has decided on a suitable supplier. Should Damian con-duct post tender negotiation with the supplier?

Ayes- post-tender negotiation may result in a lower price and thus better value for money

Byes- all tender processes should include post-tender negotiation

Cno- this isn't necessary as Damian has selected the most appropriate supplier

Dno- it would be against the law for Damian to do this

Answer : D

Damian works in the Public Sector- it is against the law for the public sector to conduct 'post tender negotiation' after a contract has been awarded. This is because it's not transparent and equal opportunities, which are founding principles of public sector procurement.

Private sector can do whatever they want. They can do post-tender negotiations.

NOTE: this is currently the rules as per Public Contract Regulations 2015. These are being superseded in October by new legislation. The study guide doesn't mention this, but it's happening. At the time of writing (January 2023) we don't have the full details about what the new rules are but I doubt they will change on this particular topic. You can find out more about the changes to Public Sector Procurement here: Transforming Public Procurement - GOV.UK (www.gov.uk)

Question 5

Yolo Inc. have recently run a tender opportunity to find a suitable supplier of yoyos and they have received a number of bids. The supplier will become a strategic partner to the business as yoyos are vital to the success to Yolo Inc. The tender asked for both price submissions and had a number of quality questions. Eamon is the Procurement Manager of Yolo Inc and is responsible for selecting the most appropriate supplier. How should Eamon appraise the bids?

Aevaluate the bids himself as this is a complex requirement

Bevaluate the bids himself as this is a strategic purchase

Corganise a cross-functional team to assess the bids as people from other departments may have important information and experience of yoyos

Dorganise a cross-functional team of procurement personnel as they will have experience in assessing price and quality of bids

Answer : C

Eamon should use a cross-functional team (this rules out two of the options). The purpose of using a cross-functional team is to use the knowledge of people from other departments as they may better understand the service required and help assess any technical questions. Therefore a cross-functional team of procurement personnel, isn't cross-functional (they're all the same function). Yoyos is a bit of a silly example, the exam questions are a little more serious- but the learning outcome is the same; use a cross-functional team to evaluate bids.

Question 6

Tulip Rose Industries is using a restricted approach to tendering for a new contract for the facilities management of their seven factories which produce furniture made of organic materials. What is likely to be the reason they are using a restricted approach?

Athe requirement is complex

Bthe suppliers are likely to be unqualified

Cinterest in the tender opportunity is likely to be low

Dinterest in the tender opportunity is likely to be high

Answer : D

you would use a restricted approach when interest is likely to be high. The buyer needs a method of de-selecting unsuitable bidders and creating a shortlist of acceptable organisations.

For complex requirements you could use both an open or restrictive tender- the difference between the approaches is about how many bids you're likely to get rather than the complexity of it.

Question 7

Which of the following is not a indices that measures economic data?

APPI

BCPI

CGDP

DISO

Answer : D

ISO isn't an indices- it stands for 'International Labour Association'.

The others are all indices that measure economic data; consumer price index, producer price index and gross domestic product.

CIPS L4M4 Ethical and Responsible Sourcing Exam Practice Test