Free CIPS L4M7 Exam Questions

Become CIPS Certified with updated L4M7 exam questions and correct answers

Page: 1 / 76

Total 380 Questions | Updated On: Mar 05, 2026

Add To Cart

Question 1

A manufacturing company warehouse manager has recently decided to adopt across-docking system for some of the components held in storage. Which of thefollowing is associated with goods in cross-docking?

A : Cross-docking eliminates any inventory losses

B : Cross-docking leads to increased finished goods delivery costs

C : Cross-docking significantly increases delivery lead times

D : Cross-docking reduces or eliminates storage requirements

Answer: B

Question 2

Which of the following are examples of acquisition costs for the buying organisation? Select TWO that apply.

A : The disposal costs of the assets

B : The costs associated with consumer product sales tax

C : The costs of approving and paying invoices

D : The advertising costs of the marketing company

E : The costs of the goods or materials

Answer: C,E

Question 3

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

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

The managing director requires action to be taken to improve the organization’s profitability and has asked for suggestions to enable this to be achieved. The procurement manager has said that a just-in-time (JIT) system should be introduced. Would such a system improve profitability?

A : Yes, because it would reduce stock holding costs

B : No, because it would increase buffer stock

C : No, because it would increase stock holding costs

D : Yes, because it would reduce stock turn rates

Answer: A

Page: 1 / 76

Total 380 Questions | Updated On: Mar 05, 2026

Add To Cart