Free CIPS L4M7 Exam Questions

Become CIPS Certified with updated L4M7 exam questions and correct answers

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Total 380 Questions | Updated On: Apr 21, 2026

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Question 1

Which of the following is the formula for calculating the re-order level?

A : erage usage in a lead-time / Required level of safety stock

B : erage usage in a lead-time + Required level of safety stock

C : quired level of safety stock x Average usage in a lead-time.

D : quired level of safety stock – Average usage in a lead-time

Answer: B

Question 2

Is it essential for every type of warehouse to incorporate access to natural lighting as a means to reduce electrical costs?

A : No, because some types of stock are sensitive to sunlight

B : Yes, because sunlight sterilises inventories in damp conditions

C : No, because only ventilation can help to reduce the humidity in the warehouse

D : Yes, because organisation's need for artificial lighting and heating will reduce

Answer: B

Question 3

Warehouse automation involves the use of technology to perform as many warehousing tasks as possible. There are several benefits that can be gained by using automation in a warehouse. They are...

A : Maintenance costs, downtime due to malfunction, investment costs, and reduced flexibility

B : Decreased speed, increasing cost, improved efficiency, and maximising space

C : Reduced customer service, reduced picking errors, reduced accidents, and minimised space utilisation

D : Increased speed, decreasing cost, improved efficiency, and maximised space

Answer: D

Question 4

GAP Ltd is a retail business that wants to reduce its spending on stock. Its current procurement process is manual, repetitive and slow. The management team plans to use procure-to-pay (P2P) software to streamline the process and cut costs. What kind of cost is GAP aiming to lower?

A : Cost of stockouts

B : Acquisition costs

C : Holding costs

D : Disposal costs

Answer: B

Question 5

An organization might find it more beneficial to lease and use an asset over a predetermined period. After this period, the lessee has the right to secure outright ownership of the asset by paying an agreed amount; otherwise, the asset would be repossessed by the lessor. Which of the following is an advantage of leasing?

A : Long-term commitment to pay installments even if not using the asset

B : Costs are known and agreed in advance

C : The usage of the asset is usually capped

D : The total cost of ownership is not applicable as the asset is leased

Answer: B

Page: 1 / 76

Total 380 Questions | Updated On: Apr 21, 2026

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