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 11, 2026

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Question 1

A big investment bank wants to buy a complex banking system that will work with different applications at different times of the day. The system needs to pass various tests by the in-house team and off-shore testing consultants together. The tests will be done in a shared environment with limited resources and overseen by the on-shore development team. The costs for testing are generally classified as...?

A : Purchase prices

B : Maintenance costs

C : Insurance

D : Acquisition costs

Answer: D

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

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 4

One of the classifications of inventory is referred to as 'indirect supplies.' Which of the following items are examples of indirect supplies in a water bottling plant? Lubricants for maintenance of production machines Computer cartridges for the procurement office Reams of printed labels to stick on water bottles Blue-colored plastic caps to seal the water bottles

A : 1 and 2 only

B : 1 and 3 only

C : 2 and 3 only

D : 3 and 4 only

Answer: A

Question 5

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