100% Pass Top-selling L4M6 Exams - New 2026 CIPS Pratice Exam

CIPS Level 4 Diploma in Procurement and Supply Dumps L4M6 Exam for Full Questions - Exam Study Guide

NEW QUESTION # 117
Which of the following statements are true of a market place which is considered a 'perfect competition'? Select TWO.

• A. competition is not strong
• B. there are no barriers to entry
• C. suppliers are selling differentiated products
• D. competition is at its highest level possible

Answer: B,D

Explanation:
In a 'perfect competition' there are no barriers to entry or exit, and competition is at its highest possible level. For more information on different types of market see p.40

NEW QUESTION # 118
Can a cost leadership strategy be described as 'no frills'?

• A. No, as it increases the costs and narrows the market segment
• B. Yes, it lowers the cost and increases the competitive scope
• C. No, as it increases the costs and differentiates the product
• D. Yes, it lowers the cost and differentiates the product

Answer: B

Explanation:
Cost leadership strategy (Porter's Generic Strategies) is often called a "no-frills" approach. The focus is on being the lowest-cost producer in the industry, allowing the organisation to serve a broad market with minimal differentiation. This approach reduces cost while widening competitive scope, enabling companies to compete on price advantage.

NEW QUESTION # 119
A partnership relationship in portfolio analysis is appropriate for which category of procurement?

• A. Tactical acquisition
• B. Strategic security
• C. Tactical profit
• D. Strategic critical

Answer: D

Explanation:
Partnership relationships are typically used for strategic critical items where the product is essential to operations, and the supplier's input significantly impacts success. These relationships are nurtured through mutual trust and collaboration to mitigate supply risk and ensure long-term value.

NEW QUESTION # 120
A software developer is seeking to develop a new fitness trends app. They are looking to create a contract with a fitness expert to give advice on the type of changing fitness trends. What agreement should the app developer aim to achieve?

• A. Cost-based relationship
• B. Quality-based relationship
• C. Traditional contracting relationship
• D. Partnering relationship

Answer: D

Explanation:
Comprehensive and Detailed Explanation:
In scenarios requiring specialized expertise and collaborative input, apartnering relationshipis most appropriate. This type of relationship fosters close cooperation, shared goals, and mutual trust, enabling both parties to contribute effectively to the project's success.
Reference:
CIPS L4M6 Study Guide

NEW QUESTION # 121
Which of the following relationship types require the most investment from the buyer?

• A. adversarial
• B. partnership
• C. strategic alliance
• D. single source

Answer: B

Explanation:
Partnerships require the most investment out of those listed. The only relationship type that requires more investment than Partnerships is Co-Destiny. See p.9 for more information on this

NEW QUESTION # 122
Robbie is a procurement manager at a public sector organisation. He is running a tender which is worth £2m and so will advertise this on OJEU. His manager has reminded Robbie to include CPV codes on the tender.
What purpose would this serve?

• A. To ensure more suppliers bid for the tender
• B. To ensure only qualified suppliers bid for the tender
• C. To ensure suppliers know the deadline for tender submission
• D. To ensure suppliers can find the opportunity

Answer: D

Explanation:
CPV codes help suppliers find opportunities they can bid for. CPV codes are a numerical classification for products e.g. Strawberry Jam is 15332296 and when they are included on a Tender, any supplier who is registered with that same CPV code will get a notification that the tender is live. CPV codes are discussed on p.72 but not in much detail- so don't worry if you don't know much about them. So long as you know the above, you'll be fine.

NEW QUESTION # 123
Which of the following are NOT one of the four key principles of procurement in the EU?

• A. Value for Money
• B. Transparency
• C. Non-Discrimination
• D. Proportionality

Answer: A

Explanation:
Value for money is not a principle of EU procurement. The four key principles are; transparency, non-discrimination, proportionality and equality of treatment. The principles are basically about ensuring the procurement process is fair. See p.75

NEW QUESTION # 124
Red Manufacturing work with around 40 different suppliers. One of these suppliers is Blue Business. Red Manufacturing order regularly from Blue Business, and have never had any issues with their performance. The materials Blue Business supply are of low value and there are several other suppliers of these materials in the market. What type of relationship should Red Manufacturing seek to have with Blue Manufacturing?

• A. adversarial
• B. single-source
• C. partnership
• D. arms-length

Answer: D

Explanation:
The correct answer is 'arms length'. This is a tactical purchase (as it is low value) and keeping the supplier at arms-length means that Red Manufacturing could possibly exploit them to reduce their prices (think back to the Kraljic matrix and where Blue Business would likely fall). A Partnership or Single- Source relationship requires investment into the relationship, and as the products are low value and Red Manufacturing have a lot of other suppliers, they should not be investing time in developing that relationship with Blue Business. An adversarial relationship wouldn't be advantageous as it may lower the performance of the supplier. See the relationship spectrum on p.5 - this is a hot topic for the exam

NEW QUESTION # 125
Which of the following are primary activities, according to Porter's Value Chain? Select THREE.

• A. Operations
• B. Marketing and Sales
• C. Inbound Logistics
• D. Human Resources
• E. Procurement

Answer: A,B,C

Explanation:
This question refers to Porter's Value Chain (p.35). There's a couple of questions on this in the exam so try to learn it.
Primary activities are; inbound logistics, operations, outbound logistics, marketing and sales, after sales- service

NEW QUESTION # 126
Which of the following are typical drivers for a partnership between the buyer and the supplier? Select the THREE that apply.

• A. The product is critical for the buyer
• B. The product is a commodity
• C. The product is technically complex
• D. The supplier provides the product to a buyer's competitor
• E. The buyer has a high spend with the supplier
• F. There are many suppliers in the market

Answer: A,C,E

Explanation:
Comprehensive and Detailed Explanation:
Partnerships between buyers and suppliers are often driven by:
* High Spend:Significant expenditure justifies the investment in developing a closer relationship to achieve cost savings and efficiencies.
* Critical Products:Items that are essential to the buyer's operations necessitate a reliable and collaborative supplier relationship.
* Technical Complexity:Complex products benefit from joint development efforts, shared expertise, and coordinated problem-solving.
Conversely, commodities and markets with many suppliers typically lend themselves to transactional relationships rather than partnerships.
Reference:
CIPS L4M6 Study Guide

NEW QUESTION # 127
Which of the following factors are considered when using the Kraljic Model to determine the kind of supply relationships and sourcing approaches for a category of items? Select TWO that apply.

• A. The type of tendering
• B. The level of spend
• C. Supplier pre-qualification
• D. Key performance indicators
• E. The market structure

Answer: B,E

Explanation:
Comprehensive and Detailed Explanation:
The Kraljic Matrix is a strategic tool used to segment the supply base and develop differentiated purchasing strategies based on two key dimensions:
* Profit Impact (Level of Spend):This refers to the financial significance of the item or service to the organization. High expenditure items have a greater impact on profitability and thus require more strategic sourcing approaches.
* Supply Risk (Market Structure):This pertains to the complexity and dynamics of the supply market, including factors like the number of suppliers, market competitiveness, and potential for supply disruptions. Understanding the market structure helps in assessing the risk associated with sourcing particular items.
By analyzing these two factors, organizations can categorize their purchases into four quadrants-non-critical, leverage, bottleneck, and strategic items-and tailor their sourcing strategies accordingly.
Reference:
CIPS L4M6 Study Guide

NEW QUESTION # 128
A buyer is seeking to set up an agreement for one year for the purchase of paper. They complete a tender exercise and supplier X wins the contract, and all other suppliers are told that they will not be needed for the next 12 months. Where would the buyer place supplier X on the relationship spectrum?

• A. Partnership
• B. Transactional
• C. Arms length
• D. Single sourced

Answer: D

Explanation:
Comprehensive and Detailed Explanation:
When a buyer selects a single supplier for a specific period, such as a one-year contract, and excludes other suppliers during this time, this is referred to as asingle sourcedrelationship. This approach is often used to consolidate purchases, achieve economies of scale, and build a more streamlined procurement process for specific goods or services.
Reference:
"Single sourcing involves selecting one supplier for a particular item or service, often for a defined period, to streamline procurement and potentially achieve better terms."- CIPS L4M6 Study Guide

NEW QUESTION # 129
Red Manufacturing work with around 40 different suppliers. One of these suppliers is Blue Business. Red Manufacturing order regularly from Blue Business, and have never had any issues with their performance.
The materials Blue Business supply are of low value and there are several other suppliers of these materials in the market. What type of relationship should Red Manufacturing seek to have with Blue Manufacturing?

• A. adversarial
• B. single-source
• C. partnership
• D. arms-length

Answer: D

Explanation:
The correct answer is 'arms length'. This is a tactical purchase (as it is low value) and keeping the supplier at arms-length means that Red Manufacturing could possibly exploit them to reduce their prices (think back to the Kraljic matrix and where Blue Business would likely fall). A Partnership or Single- Source relationship requires investment into the relationship, and as the products are low value and Red Manufacturing have a lot of other suppliers, they should not be investing time in developing that relationship with Blue Business. An adversarial relationship wouldn't be advantageous as it may lower the performance of the supplier. See the relationship spectrum on p.5 - this is a hot topic for the exam

NEW QUESTION # 130
Mendelow's Stakeholder Matrix categorises stakeholders into four groups and provides insight into how these stakeholders should be managed. What is a limitation to using this Matrix to categorise stakeholders?

• A. The categories are hard to remember
• B. Nowadays, Stakeholders fall into more than four categories
• C. The Matrix doesn't consider the power these stakeholders have
• D. The Matrix doesn't consider whether the stakeholder is for or against the activity

Answer: D

Explanation:
The correct answer is 'The Matrix doesn't consider whether the stakeholder is for or against the activity'. For a list of other limitations of using Mendelow's Stakeholder Matrix see p.82

NEW QUESTION # 131
Lee is a procurement manager at Real Pirates Ltd and he has a contract with Peg Leg Industries for the supply of fake, wooden legs for his team of Pirates. Real Pirates Ltd have been working with Peg Leg Industries for almost 10 years but recently Lee has discovered he will need to terminate the contract due to 'Contract Frustration'. What could be the reason for this?

• A. An unexpected incident has occurred beyond anyone's control
• B. The supplier has leaked confidential information about Real Pirates Ltd to a competitor
• C. The supplier has become insolvent
• D. The supplier has committed a material breach

Answer: A

Explanation:
The correct answer is 'An unexpected incident has occurred beyond anyone's control'. A good example of this would be the Covid-19 pandemic- neither the buyer nor supplier could have predicted this, and if this means that the contract can't be completed - then the contract can be terminated (in the UK at least). A way to avoid this would be to include a Force Majeur clause listing possible circumstances that could occur. When there's a Force Majeur clause, these eventualities are now classed as foreseen rather than unforeseen. See p.108

NEW QUESTION # 132
A company is about to invite tenders for a contract to clean external windows at several premises, all at least three storeys high. It is going to do this in two stages. For the first stage, it will issue a pre-qualification questionnaire (PQQ) and, from the replies, select at least five potential suppliers to invite to tender. Which of the following is a selection criterion rather than an award criterion?

• A. Price that will be charged
• B. Method statements for previous contracts
• C. Risk assessments at the premises
• D. Environmental impact assessment

Answer: B

Explanation:
Selection criteria focus on the supplier's capability and experience (e.g., method statements). Award criteria are used to evaluate and compare proposals during the tender process, such as price or environmental considerations.

NEW QUESTION # 133
A common reason attributed to many partnerships failing is ...

• A. Poor communication
• B. A bad advertising campaign
• C. Not winning every contract they bid for
• D. No contract being in place

Answer: A

Explanation:
Poor communication leads to misunderstandings, unmet expectations, and conflict, undermining partnerships.
CIPS stresses the importance of transparent and regular communication to ensure alignment and success.

NEW QUESTION # 134
Which one of the following would constitute a succession issue when terminating a relationship?

• A. Continuity of supplies
• B. Payment of old invoices
• C. Deletion of old specifications
• D. Processing penalties

Answer: A

Explanation:
Comprehensive and Detailed Explanation:
Succession issues pertain to the challenges associated with ensuring the uninterrupted supply of goods or services when transitioning from one supplier to another. Continuity of supplies is a primary concern, as any disruption can impact operations, customer satisfaction, and revenue. Effective succession planning involves:
* Identifying Alternative Suppliers:Ensuring that backup suppliers are in place and capable of meeting requirements.
* Knowledge Transfer:Facilitating the transfer of critical information and processes to new suppliers.
* Inventory Management:Maintaining adequate stock levels during the transition period.
Other options listed, such as processing penalties, deletion of old specifications, and payment of old invoices, are administrative tasks that, while important, do not directly relate to succession planning.
Reference:
CIPS L4M6 Study Guide

NEW QUESTION # 135
A hospital awarded a contract to an IT consultancy to build and maintain their payroll and patient information systems. After a successful implementation, problems started to appear, with poor maintenance and accuracy of information, and slow response times from the supplier. After repeated problems, the decision to terminate the contract was agreed. Which of the following would be the priority legal concern for the hospital?

• A. Capital asset issues
• B. Intellectual property rights
• C. Confidentiality agreement
• D. Employee rights

Answer: B

Explanation:
In IT consultancy contracts, the ownership and control of data, systems, and intellectual property rights (IPR) are critical. If the hospital terminates the supplier relationship, it must ensure continued access to patient records and payroll systems. Confidentiality and service quality are important, but IPR is the priority legal concern.

NEW QUESTION # 136
One of the fist stages of designing a Partnership is to come up with joint KPIs. These should be:

• A. Significant, measurable and achievable
• B. Relatable, specific and measurable
• C. Measurable, achievable and time-bound
• D. Time bound, difficult and relevant

Answer: C

Explanation:
The correct answer is Measurable, achievable and time-bound. This is from SMART KPIs on p. 151. Smart stands for specific, measurable, achievable, relevant, time-bound. In the exam they come up in different orders so be careful.

NEW QUESTION # 137
The CEO of a business has asked his procurement manager to source new machinery for the factory. This machinery will help create a new line of products which will give the company a competitive edge. The CEO is heavily invested in this procurement activity as profits have been lower than expected this year and this new line of products could help increase profitability. How should the procurement manager include the CEO in the procurement activity?

• A. The CEO is a key player- so it is important he is involved early in the process
• B. It is important to keep the CEO satisfied as he runs the business
• C. The CEO is a key player- so should be given regular updates on progress
• D. It is important to keep the CEO informed of all decisions that are made

Answer: A

Explanation:
The correct answer is 'The CEO is a key player- so it is important he is involved early in the process'. The CEO has high power and high interest which puts him in the top right-hand corner of Mendelow's Stakeholder Matrix (p.81). CIPS says Key Players should be involved early in the procurement process (p.82).

NEW QUESTION # 138
A company supplies IT equipment and buys most of its components from first-tier suppliers in the UK. It wants to analyze its supply market to develop the supply chain and is going to review the main factors that have an influence. The company wants to use the STEEPLED external environmental analysis framework to achieve the best result. Which of the following STEEPLED factors is most likely to have the greatest effect?

• A. Sociocultural
• B. Ethical
• C. Technological
• D. Economic

Answer: C

Explanation:
Technological factors play a pivotal role in IT equipment supply chains. Advancements, obsolescence, and innovation significantly affect production, cost, and competitiveness, making it a primary focus in supply chain development.

NEW QUESTION # 139
When developing a supplier partnership, a buyer can take either a strategic or reactive approach. What would be a reason for a reactive approach?

• A. The buyer wishes to create a new product and requires input from a supplier
• B. Sudden changes in the marketplace
• C. You discover that the supplier has a high profit margin
• D. It will allow for consolidation in the supply chain

Answer: B

Explanation:
The correct answer is 'Sudden changes in the marketplace' - this is a reason a buyer would be reactive.
Reactive is when something happens to you and it forces you to act in a certain way.
The other options would be strategic rather than reactive. P. 163

NEW QUESTION # 140
Which of the following is an advantage for the suppler of entering into a partnership with a buyer?

• A. The Intellectual Property Rights of the buyer become yours
• B. There is more flexibility when selling the product
• C. They no longer have to try as hard to win business.
• D. They may gain an increased volume of business

Answer: D

Explanation:
The correct answer is 'They may gain an increased volume of business'. The other options are just not true. See p.130 for advantages and disadvantages of partnerships from both the buyer and supplier's perspective. This is a hot topic for the exam.

NEW QUESTION # 141
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