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

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 2

In the periodic review system, the order quantity is the same for each order. Is this statement true?

A : , the order quantity should be equal to economic order quantity

B : , the inventory position at each review point differs from each other

C : , in periodic review system items are reviewed when the Kanban is triggered

D : , the next order quantity must be larger than the previous one

Answer: B

Question 3

Which of the following are examples of subjective methods of forecasting? Select TWO that apply. Trend line analysis Moving averages Market research Expert opinion Seasonal variations

A : 1 and 2 only

B : 3 and 4 only

C : 2 and 5 only

D : 1 and 5 only

Answer: B

Question 4

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 5

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

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Total 343 Questions | Updated On: Jan 05, 2026

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