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: Mar 25, 2026

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Question 1

An organisation needs to determine whether to lease a piece of equipment or purchase it outright. From the following statements, which ones describe the advantages for a procurement organisation to lease rather than to purchase outright? Capital allowances may be set against tax, and grants may be available There is no initial investment which would tie up the organisation’s working capital It would protect against technological obsolescence as equipment can be replaced as required The total cost may be higher than purchasing the equipment outright

A : 1 and 2 only

B : 2 and 3 only

C : 2 and 4 only

D : 3 and 4 only

Answer: B

Question 2

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

Question 3

Which ONE of the following correctly differentiates between obsolescent and redundant stock?

A : Obsolescent stock is in short supply, redundant stock has no current supplier with stock available

B : Obsolescent stock is damaged goods that need returning to suppliers, redundant stock is no longer stocked by the organization

C : Obsolescent stock has been updated by another item but can still be used, redundant stock is no longer used by an organization

D : Obsolescent stock has been supplied by a failed supplier, redundant stock requires quality testing before use

Answer: C

Question 4

Which ONE of the following correctly differentiates between obsolescent and redundant stock?

A : Obsolescent stock is in short supply, redundant stock has no current supplier with stock available

B : Obsolescent stock is damaged goods that need returning to suppliers, redundant stock is no longer stocked by the organization

C : Obsolescent stock has been updated by another item but can still be used, redundant stock is no longer used by an organization

D : Obsolescent stock has been supplied by a failed supplier, redundant stock requires quality testing before use

Answer: C

Question 5

A buyer has been asked to support the chief procurement officer with a whole-life cost analysis. What is thekey benefit of a cross-functional team for the development of a whole-life costing model?

A : It will ensure quicker access to all the data needed to develop the whole-life cost model

B : It will ensure that the decision making process will be slowed down

C : It will ensure that information is not shared

D : It will ensure that no department is left out of the planning process

Answer: D

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Total 380 Questions | Updated On: Mar 25, 2026

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