Free CIPS L4M6 Exam Questions

Question 1

A local government procurement team is undertaking a full review of their current internal working processes. The team of buyers currently have a partnership-style relationship with their routine suppliers. Is this the best relationship style to use?

A : No, as there are many suppliers available

B : No, as these are critical items to the buying organization

C : Yes, as they present a great deal of risk to the organization

D : Yes, as these are low-value items

Answer: A

Question 2

A local government procurement team is undertaking a full review of their current internal working processes. The team of buyers currently have a partnership-style relationship with their routine suppliers. Is this the best relationship style to use?

A : No, as there are many suppliers available

B : No, as these are critical items to the buying organization

C : Yes, as they present a great deal of risk to the organization

D : Yes, as these are low-value items

Answer: A

Question 3

A successful partnership relationship can contribute tremendously to buying organisation's overall profitability. However, identifying right partner can be very difficult. Which tools are most likely to be used to identify the most suitable partner?

1. Kraljic model

2. Supplier preferencing model

3. Open book costing

4. Purchasing structures

A : 4 and 3 only

B : 2 and 1 only

C : 1 and 3 only

D : 2 and 3 only

Answer: B

Question 4

Price fluctuations can affect profitability. Is this statement correct?

A : Yes, if the product's costs increase and the price does not

B : No, only decisions made by the chief executive affect the price

C : No, price is not related to profitability

D : Yes, as sales may drop if the product is price inelastic

Answer: A

Question 5

Sugar Doughnut Ltd has a jam supplier that they have used successfully for over ten years. They have made investments in the supplier’s factory to support them with capital equipment upgrades in return for cost reduction on jam. The two companies also collaborate on bids for large supermarkets when looking to supply doughnuts and work together on quality improvements. No contracts exist between the two companies. Could this relationship be said to be a partnership relationship?

A : No, because contracts do not exist between the two companies

B : No, because they have only worked together for ten years

C : Yes, because they have demonstrated close collaboration on various projects

D : Yes, because they both operate in the food sector

Answer: C