CIPS L4M8 Exam Practice Test Instant Access

Question 1

What does the acronym SMART stand for?

AExplanation:
When the procurement professional is setting key performance indicator (KPI) where which the supplier performance will be monitored and managed. The KPI is expected to be SMART. SMART is an acronym that is used to set KPI and specification.
S - specific ,
M - measurable,
A - achievable,
R - relevant, and
T - timebound.

Answer : A

Question 2

What are the two options for the disposal of an asset if resale is not possible?

AExplanation:
Disposal of an asset is the final stage in the decommissioning process of a fixed asset.
When a fixed asset reaches the end of its useful or cost effective life time within an organization, the decision is made as to whether it should be removed from the premises or disposed off.
If the asset is truly at the end of its life, no longer fit for purpose, not cost effective to repair and is not able to be exchanged, then disposal is the only option; there are two options for disposal;
1) Take the asset to land fill site
2) Taking the asset to a recycling plant.

Answer : A

Question 3

What Incoterm applies here?

The goods are considered 'delivered' at the point of release from the supplier's premises or another name place. The supplier is not responsible for loading or transporting the goods and does not have to arrange export clearance -- this must be arranged by the buyer. The risk is on the buyer from this point.

a) EXW -- Ex Works

b) FCA -- Free Career

c) CPT -- Carriage Paid To

d) CIP -- Carriage and Insurance Paid to

AEXW -- Ex Works

BFCA -- Free Career

CCPT -- Carriage Paid To

DCIP -- Carriage and Insurance Paid to

Answer : A

Question 4

Which Incoterm applies here?

The supplier is responsible for delivering the goods to a point alongside a water vessel (such as a dock or quay) as determined by the buyer at a named port. Once delivered, all risk is transferred to the buyer until the goods are transported and delivered to their name destination.

ADAT -- Delivered At Terminal

BDAP -- Delivered At Place

CDDP -- Delivery Duty Paid

DFAS -- Free Alongside Ship

Answer : D

Question 5

Explain the difference between bonded and forced labor.

AExplanation:
Bonded labour and forced labour are among the five types of modern slavery which is against ethical and responsible sourcing.
Bonded labour also known as debt bondage, this is an individual's promise to provide services through exploitation as repayment, or part of them, of a debt or other obligation whereas forced labour is work that people are forced to do with the heat of punishment if it is not carried out.

Answer : A

Question 6

How can procurement professionals select suppliers?

AExplanation:
During the sourcing stage of the procurement cycle, the procurement professional needs to identify and select suppliers to fulfill the business needs. Supplier selection involves evaluating suppliers against predetermine criteria to assess their suitability in working with the buying organization. Suppliers can be evaluated according to Carter's 10Cs which are as follows: (1) Competency (2) capacity (3) consistency (4) control (5) cost (6) commitment (7) cash (8) Clean (9) culture (10) communication.
Procurement professionals can decide to evaluate and select suppliers based on the overall strategy and the business objectives. After that, it most suitable suppliers receive the documentation (Invitation to tender/ request for quotation).
*
Refer to the question column for response

Answer : A

Question 7

Which Incoterm applies here?

The supplier is responsible for delivering the goods directly onto the vessel that will transport them to their named destination and must also cover the cost of this. The supplier bears all risks until the goods are delivered to the buyer at their named place.

AFOB -- Free On Board

BDAP -- Cost and Freight

CCIF -- Cost Insurance and Freight

DAS -- Free Alongside Ship

Answer : B

CIPS Procurement and Supply in Practice L4M8 Exam Practice Test