2023 Latest CIPS L4M6 Real Exam Dumps PDF
L4M6 Exam Dumps, L4M6 Practice Test Questions
CIPS L4M6 Exam Syllabus Topics:
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NEW QUESTION 28
Barry is a procurement manager at Sea Biscuits, a company which manufactures biscuits in the shape of dolphins and starfish. He works in an office that orders stationary regularly for its 100 person workforce. Stationary is a low-spend category item and Barry often orders stationary from different suppliers based on which supplier can provide the item the cheapest at that point in time. According to the Kraljic matrix, what type of suppliers provides stationary to Barry?
- A. Bottleneck
- B. leverage
- C. strategic
- D. routine
Answer: D
Explanation:
Stationary is a routine item; it is ordered often (as Barry uses different suppliers), it is a low category spend, and low risk to the business' operations (a late delivery of pens isn't going to stop the company making its biscuits). There are lots of questions on Kraljic in the exam - do revise this topic and ensure you understand each of the four quadrants of the matrix (see p.20)
NEW QUESTION 29
Why is it more difficult for buyers in the public sector to build relationships with suppliers?
- A. Buyer power is weak in the public sector
- B. Buyer power is strong in the public sector
- C. There are regulations that state competitive tender processes must be undertaken regularly
- D. There are regulations prohibiting public sector buyers from developing relationships
Answer: C
Explanation:
It can be difficult for buyers in the private sector to build relationships with suppliers because of rules that state competitive tenders must be undertaken every few years (within the EU this is usually every 4). This means that both parties aren't as invested in developing the relationship as it's possible the contact will end shortly. Competitive tendering is a requirement in the public sector to ensure value for money for taxpayers. See p.79 for further details. There are no rules stating Public Sector organisations can't have good relationships with suppliers, and in fact most will have good relationships with their current suppliers- the issue is that neither party can get too invested in the relationship as everyone knows it may end shortly. There are rules, however, against entering into Partnership relationships (which is discussed in chapter 3).
NEW QUESTION 30
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. Nowadays, Stakeholders fall into more than four categories
- B. The categories are hard to remember
- 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 31
Grey Stone Memorial Hospital is a private medical facility which has an idea for a vaccine to a deadly disease, but does not have the capacity to make the vaccine itself. It is considering partnering with a well-known pharmaceutical company in order to bring the vaccine to market. What is the biggest risk to Grey Stone?
- A. Intellectual Property Rights
- B. Low quality product
- C. Uninformed stakeholders
- D. Increased Costs
Answer: A
Explanation:
The correct answer is 'Intellectual Property Rights'. Grey Stone will need to share its idea for the vaccine with the pharmaceutical company and this is risky if there is no trust between the parties. See p.134 for more information on Risks of Partnerships.
NEW QUESTION 32
Which of the following are not stages of team development? Select TWO.
- A. Adjourning
- B. Accepting
- C. Achieving
- D. Mourning
- E. Forming
Answer: B,C
Explanation:
This question is very, very similar to a real exam Question: and is
a really mean one. The CIPS study guide describes stages of team development as forming, storming, norming and performing. Of those listed in the book only forming is listed above. What the textbook fails to tell you is that some people add on two additional stages to this model which are mourning and adjourning. I strongly recommend doing some further reading on this (it's called the Tuckman Group Development Model) as it comes up a lot in the exam and the study guide doesn't really go into enough detail.
NEW QUESTION 33
Which of the following documents can be used at the selection stage of a tender process to ensure that short listed bidders meet the requirements of the buying organisation? Select TWO.
- A. Pre-Qualification Questionnaire
- B. Invitation to Tender
- C. Request for Information
- D. Request for Quotation
Answer: A,C
Explanation:
Request for Information and Pre-Qualification Questionnaire can be used for short-listing suppliers. Request for Quotation is used when the only variable is price and you would like suppliers to submit a price for you. Invitation to Tender would be the next stage after RFI / PPQ- this is sent out to those suppliers who have passed selection, and details the second stage of the competition. See p.75 for more details.
NEW QUESTION 34
In which procurement process is a PQQ not issued?
- A. Open
- B. Restricted
- C. Competitive Procedure with Negotiation
- D. Competitive Dialogue
Answer: A
Explanation:
Open Tender processes are a one-stage process which issues and ITT. It has no PQQ (selection) stage. P. 77
NEW QUESTION 35
Which of the following are considered part of the '5 Rights of Procurement'? Select THREE.
- A. time
- B. quality
- C. cost
- D. focus
- E. place
Answer: A,B,E
Explanation:
The 5 Rights of procurement are; place, quality, quantity, time, price. (Price and Cost are not the same thing). See p.38
NEW QUESTION 36
At what stage of the relationship cycle could you use Carter's 10 Cs?
- A. qualification
- B. segmentation and risk management
- C. development and innovation
- D. on-boarding
Answer: A
Explanation:
Carter's 10 Cs are a way to qualify (aka shortlist) a supplier. See p.11 for more details on this and p.10 for the stages of the relationship cycle.
NEW QUESTION 37
Jenny is a procurement manager who works in the public sector. She has been charged with organising a tender to source new Xray machines for a hospital and to ensure that they receive 'value for money'. Which of the following should Jenny consider when drafting her ITT?
- A. Whole life costs
- B. Equity
- C. Availability
- D. Price only
Answer: A
Explanation:
Jenny should consider whole life costing. Ensuring value for money means considering a combination of price and quality throughout the lifetime of the product. See p.65 for more on 'Achieving Value for Money'
NEW QUESTION 38
A doctor's surgery requires a complex database system to manage all of its patients data, which is highly sensitive. The system also needs to link to other departments of the health service such as physiotherapy and intensive care. The Manager of the surgery is considering outsourcing the management of the database to an IT company. What is the Manager's main motivation for doing this?
- A. This will free-up internal resources
- B. This will result in cost-savings
- C. The supplier is an expert in their field
- D. This will result in economies of scale
Answer: C
Explanation:
The reason for outsourcing in this example is that the IT firm is an expert in their field. The requirement is complex and important and this is the reason why it is not being delivered in-house. The other answers given CAN be reasons for out-sourcing, but don't relate to this example. For a full list of reasons a company could use outsourcing see p. 4-5
NEW QUESTION 39
In public sector procurement, according to EU legislation, certain items must be procured via open-competition. What type of items are these?
- A. Items that are imported from outside the EU
- B. Items of high value
- C. Items that are produced by lots of suppliers
- D. Items of strategic importance
Answer: B
Explanation:
The correct answer is 'items of high value'. This links into the EU procurement principle of 'Proportionality' meaning that the procurement process must be proportionate to the value of the contract. Therefore, high value contracts must be procured via competition. What is considered 'high value' is decided by 'thresholds'. These are amended every 2 years to account for inflation etc, but you don't need to know what the thresholds are for this exam. P.75
NEW QUESTION 40
Debbie is a procurement manager at a small manufacturer company. She had a contract in place with a company that provides uniforms, but finds that she doesn't need to order much from them as the staff re-wear the same clothes to work. The contract has now expired. Should Debbie do a Competitive Tender to source a new contract?
- A. Yes- competitive tender is the only option to procure uniforms
- B. Yes - the contract has now expired so she must do a new competitive tender
- C. No- Debbie should continue using the same supplier- it doesn't matter that the contract has expired.
- D. No- the contract is not of significant value
Answer: D
Explanation:
The correct answer is 'no-the contract is not of significant value'. CIPS state that competitive tenders should only be used when 'the item or service is of significant value' p.73. Debbie could continue using the same supplier, but she should organise a contract extension or a new contract if she does.
NEW QUESTION 41
Rachel and Jacky work in the procurement department of Foddy Foods Ltd. They have been told by their CEO to build better relationships with strategic suppliers as this will create value for money for the company. In what ways can value for money be achieved by building strong relationships with suppliers? Select TWO.
- A. Reducing costs
- B. Innovation developed as part of collaborative projects
- C. Better payment terms
- D. Reduction of waste
Answer: B,D
Explanation:
Supplier relationships can result in value for money in the reduction of waste and in innovation developed as part of collaborative projects. Remember that in CIPS waste doesn't necessarily mean physical waste (as in stuff you don't want any more). There are 7 types of waste including waiting, inventory, transportation etc. So when you develop a relationship with a supplier, this can reduce waste (e.g. you may be able to get deliveries quicker by integrating your ordering system with the supplier's, or you might reduce transportation by agreeing a Consignment stock). Having a good relationship with a supplier isn't necessarily going to get you a reduction in cost or better payment terms. See p.70 for more details on this- there's a short list of ways in which good supplier relationships can bring value for money to a business.
NEW QUESTION 42
Fred is a new procurement manager at a large engineering firm. They procure 100s of components and use these to make kitchen appliances such as kettles and toasters. He has been asked by his manager to look into procuring a new component which will go into a new environmentally friendly kettle and has been asked to ensure that the firm receives value for money. What should Fred do?
- A. Hold an open competition
- B. Put together a business case to make the product in-house
- C. Contact current suppliers to try and get a good deal
- D. Invite known suppliers to bid for the contract
Answer: A
Explanation:
Fred should hold a competition as this is a 'key way of achieving value for money' p.67. Fred shouldn't put a business case together to make the product in-house without doing a make vs buy analysis, and that analysis showing make is the way to go. As the firm buy in 100s of components, it's very unlikely that making the component in-house would bring 'value for money'. He should also be careful of only looking at current suppliers or known suppliers- the best supplier of this new component might be unknown to the engineering firm at present.
NEW QUESTION 43
Achieving value for money can often be described as the three Es? What are these?
- A. Efficiency, Economy, Ethics
- B. Economy, Efficiency, Environment
- C. Ethics, Environment, Economy
- D. Effectiveness, Efficiency, Economy
Answer: D
Explanation:
The three Es are; Effectiveness, Efficiency and Economy. Sometimes a 4th E is added which is Equity (but this is mainly for the public sector).
NEW QUESTION 44
Which of the following are not a valid reasons to terminate a relationship with a supplier? Select TWO.
- A. The supplier made one late delivery
- B. The supplier suddenly increases prices
- C. The supplier becomes insolvent
- D. Supply base rationalisation
- E. The supplier has a change in senior management
Answer: A,E
Explanation:
Two invalid reasons are; one late delivery and a change in senior management. Valid reasons to terminate a relationship are listed on p.107 and include the three listed here, as well as a material breach, damage to reputation and the supplier merges or is acquired by another company.
NEW QUESTION 45
Which of the following are possible drivers for partnership sourcing? Select THREE.
- A. Working together will create synergies
- B. The protection of intellectual property rights
- C. The marketplace has become more volatile
- D. The need to improve performance to satisfy the end customer
Answer: A,C,D
Explanation:
To increase production costs and lead-times
Explanation:
The correct answers are; The marketplace has become more volatile, Working together will create synergies and The need to improve performance to satisfy the end customer. Further Drivers of Partnership Sourcing can be found on p.127. The other answers are incorrect as entering a partnership won't protect intellectual property rights- in fact that's one of the big risks of entering into a partnership. Partnerships won't increase costs and lead-times, they're likely to decrease them.
NEW QUESTION 46
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