Free CIPS L4M7 Exam Questions

Become CIPS Certified with updated L4M7 exam questions and correct answers

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Total 343 Questions | Updated On: Jan 05, 2026

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Question 1

A manufacturer aims at increasing the service levels to 99% from 97% through expanding the safety stock. Safety stock can be used to accommodate which of the following?

1. Variability of stock turn

2. Variability of holding costs

3. Variability of demand

4. Variability of lead time

A : 3 and 4 only

B : 1 and 2 only

C : 2 and 4 only

D : 1 and 3 only

Answer: A

Question 2

What advantage can the use of ABC classification of stock provide in warehouse design?

A : It allows the organisation to categorise items in alphabetical order for easier storage and retrieval

B : It gives purchasing staff more time to concentrate on those items that have most financial benefit to the organisation

C : It assists in deciding on the most appropriate layout, handling systems, and what type of picking system to introduce

D : It determines where each item is to be located within the warehouse to aid inspection procedures

Answer: C

Question 3

Why do you need a life cycle asset management plan?

A : It is the basis of calculating the financial depreciation of the asset

B : It is used to calculate the manpower required to operate the asset

C : It is used to determine what the overall costs of disposing of the asset will be

D : It is a basis for planning resources and budgets to support the asset

Answer: D

Question 4

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 5

Amanda is the purchasing manager for AB Construction based in France. She is considering purchasing an asset from overseas but knows she must account for fluctuations in exchange rates in the contract. Is Amanda correct?

A : No, as it will be better to purchase the asset in AB Construction's local currency as it would be efficient and more stable

B : Yes, as AB Construction could pay more for the asset than intended and Amanda should include a currency fluctuation clause

C : No, as the price can be re-negotiated post-contract sign-off by AB Construction and the supplier

D : Yes, as Amanda will be able to decide the currency exchange rates to be used

Answer: B

Page: 1 / 69

Total 343 Questions | Updated On: Jan 05, 2026

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