[Apr 04, 2023] Fully Updated Free Actual CIPS L4M6 Exam Questions
Free L4M6 Questions for CIPS L4M6 Exam [Apr-2023]
CIPS L4M6 Exam Syllabus Topics:
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NEW QUESTION 46
A company has just hired a new cleaning firm to clean their offices. The specification for the clean was detailed in an appendix in the contract and included a list of pre-approved products that the cleaning firm should use. The cleaners that were sent to site had not read the contract and therefore did not use the appropriate products. What is the reason for the failure of this?
- A. Communication overload
- B. Miscommunication
- C. Poor communication
- D. Distortion of the facts
Answer: C
Explanation:
This is an example of poor-communication. The information was not passed from the person who signed the contract to the staff on site who were to do the cleaning. See p.158 on communication issues.
NEW QUESTION 47
Which of the following are NOT one of the four key principles of procurement in the EU?
- A. Non-Discrimination
- B. Transparency
- C. Proportionality
- D. Value for Money
Answer: D
Explanation:
Value for money is not a principle of EU procurement. The four key principles are; transparency, non-discrimination, proportionality and equality of treatment. The principles are basically about ensuring the procurement process is fair. See p.75
NEW QUESTION 48
Early Supplier Involvement can be described as a collaborative relationship between a buyer and a supplier to develop a new project. Handfield's model describes four different levels of supplier involvement ranging from none to 'black box' (which is when the design is primarily driven by the supplier. What other level features on this model?
- A. White Box - when there is informal integration and the buyer consults with a supplier on a design
- B. Blue Box - when the buyer creates the product without input from the supplier
- C. Red Box- when the supplier provides legal advice to the buyer on areas such as copywrite
- D. Grey Box - when the involvement is buyer driven
Answer: A
Explanation:
The Handfield ESI model is on p.98 and comprises of Black Box, Grey Box, White Box and None. Therefore Red and Blue can be automatically discounted. The correct answer is White Box as the definition given is correct. Grey Box is a formalised supplier integration; joint development activity between buyer and supplier. I have no idea why Handfield calls his system after coloured boxes- but it's only briefly mentioned in the study guide and is not likely to be a big topic in the exam.
NEW QUESTION 49
In an oliogopy market, what would a regulator do?
- A. prevent price fixing and collusion
- B. ensure health and safety standards
- C. ensure value for money for buyers
- D. stop the market becoming a monopoly
Answer: A
Explanation:
In an oliogopy, supplier power is strong. Sometimes regulators are required in the market to prevent the group of suppliers conspiring together to artificially increase prices. See p.40 for more information on Oligopy markets.
NEW QUESTION 50
Harry has just entered into a partnership with a key supplier. Although he is excited about the prospect, he thinks it's a good idea to set some goals and KPIs. Which of the following criteria should Harry use to decide if a KPI is appropriate?
- A. Time bound, difficult and relevant
- B. Relatable, precise, and measurable
- C. Significant, measurable and achievable
- D. Measurable, achievable and relevant
Answer: D
Explanation:
The correct answer is Measurable, achievable and relevant. This is from SMART KPIs on p. 151. Smart stands for specific, measurable, achievable, relevant, time-bound. In the exam they come up in different orders so be careful.
NEW QUESTION 51
Supplier development should be undertaken with all suppliers that a buyer uses. Is this statement TRUE?
- A. yes- this will improve efficiencies for the buyer
- B. no- supplier development should only be done with strategic suppliers
- C. no- supplier development should only be done with tactical suppliers
- D. yes- it is important to develop all relationships
Answer: B
Explanation:
Supplier development is time-consuming and resource-intensive so should only be done with strategic suppliers. P.14
NEW QUESTION 52
A manufacturing company which produces showers struggles to get hold of a certain part called a mixer valve. It is impossible to make the showers without the mixer-valve and there is only one supplier in the market that produces them. The good news is they aren't very expensive to buy. What type of supplier is the supplier of mixer valves?
- A. routine
- B. leverage
- C. strategic
- D. bottleneck
Answer: D
Explanation:
This is a bottleneck supplier- refer to the Kraljic matrix on p.20; these types of supplier hold a monopoly in the marketplace and provide low-value items. There are lots of questions on Kraljic in the exam - do revise this topic and ensure you understand each of the four quadrants of the matrix
NEW QUESTION 53
A supplier is working with a buyer who represents a large percentage of his business. Without this particular buyer, the supplier would likely go out of business. There has been a dispute in the last invoice which the buyer is not happy about. What technique should the supplier use when talking to the buyer about this?
- A. Avoiding- the supplier should avoid talking with the buyer as this may result in conflict
- B. Competing- the supplier needs to earn more money as they are struggling financially
- C. Accommodating- the supplier should show a large degree of co-cooperativeness as the buyer is important to their survival
- D. Accepting - the supplier should accept that conflict should sometimes occur in buyer: supplier relationships and work hard to avoid them
Answer: C
Explanation:
The correct answer is 'accommodating'. This Question: is based
on the Thomas-Kilmann Conflict model on p.87. This comes up quite a bit in the exam. It is comprised of 5 techniques for dealing with conflict; competing, collaborating, compromising, avoiding and accommodating. In this instance, the supplier should have a high degree of co-cooperativeness and a low degree of assertiveness as the long-term relationship is very important- more important than the outcome of the disputed invoice.
NEW QUESTION 54
A supermarket is struggling with sales and has done an analysis on its competitors. It has discovered that it has two major competitors; one provides groceries at a much cheaper price and another that provides only organic products. The supermarket has decided that it wants to continue providing groceries to a wide target audience but that it will compete by offering superior customer service. What is the supermarket's source of competitive advantage?
- A. cost leadership
- B. differentiation focus
- C. differentiation
- D. cost focus
Answer: C
Explanation:
This is differentiation as the target market is broad. Differentiation focus would be if the supermarket was targeting a niche market. There's a couple of questions on Porter's Generic Strategies in the exam- there's a useful diagram of this on P.13
NEW QUESTION 55
Which of the following are recognised organisational culture types? Select THREE
- A. Role
- B. Knowledge
- C. Team
- D. Person
- E. Power
Answer: A,D,E
Explanation:
The correct answer is power, role and person. This is part of Hardyman's Cultural Types on p.169 (there are four- the other one is task). There's quite a few questions on this in the exam, so it's worth doing some additional research on this prior to the exam as the study guide doesn't provide much detail on this.
NEW QUESTION 56
Red Ltd and Blue Ltd have had a disagreement over a high value project they have been partnering on. They have been unable to resolve the issues inhouse and Red Ltd has suggested Mediation as an option. Is this a good option?
- A. Yes- mediation involves a neutral third party and gets both parties to attempt to reach a compromise
- B. Yes- mediation means the buyer and supplier agree to accept a third party's decision which will solve the disagreement issues
- C. No- it would be better to solve the disagreement in-house
- D. No- mediation could have a negative impact on the companies' reputation
Answer: A
Explanation:
The correct answer is 'Yes- mediation involves a neutral third party and gets both parties to attempt to reach a compromise'. Be careful not to confuse mediation with arbitration - arbitration is when the buyer and supplier agree to accept a third party's decision which will solve the disagreement issues. See p.112 for more information on solving disputes
NEW QUESTION 57
Which of the following are not a valid reasons to terminate a relationship with a supplier? Select TWO.
- A. Supply base rationalisation
- B. The supplier made one late delivery
- C. The supplier has a change in senior management
- D. The supplier becomes insolvent
- E. The supplier suddenly increases prices
Answer: B,C
Explanation:
Two invalid reasons are; one late delivery and a change in senior management. Valid reasons to terminate a relationship are listed on p.107 and include the three listed here, as well as a material breach, damage to reputation and the supplier merges or is acquired by another company.
NEW QUESTION 58
Which of the following are Intellectual Property Rights that you would you encounter in procurement and supply contracts? Select THREE.
- A. Patents
- B. Copywrite
- C. Risk Assessments
- D. Method Statements
- E. Trademark
Answer: A,B,E
Explanation:
Intellectual Property Rights include; Patents, Copywrite, Trademarks and Trade Secrets. P.114
NEW QUESTION 59
Togo Bongos is a manufacturer of percussion instruments, in particular of bongo drums. It requires electricity to run its factories and this is a major factor of cost impact. There are lots of suppliers of electricity in the market and there is no switching costs if Togo Bongos wanted to switch suppliers. What type of supplier is Togo Bongo's electricity supplier?
- A. bottleneck
- B. routine
- C. strategic
- D. leverage
Answer: D
Explanation:
This is a leverage supplier on the Kraljic Matrix; high cost impact and low risk impact. The diagram on p.20 gives the example of utility services such as electricity as a common leverage supplier. There are lots of questions on Kraljic in the exam - do revise this topic and ensure you understand each of the four quadrants of the matrix
NEW QUESTION 60
Which of the following is not a stage in the relationship life-cycle?
- A. qualification
- B. design the specification
- C. on-boarding
- D. performance management
Answer: B
Explanation:
Designing the specification is not a stage in the relationship cycle- this would be done before the relationship begins. There are 6 stages of the relationship cycle; on-boarding, qualification, segmentation and risk management, performance management, development and innovation, phase out. P.13
NEW QUESTION 61
Rachel and Jacky work in the procurement department of Foddy Foods Ltd. They have been told by their CEO to build better relationships with strategic suppliers as this will create value for money for the company. In what ways can value for money be achieved by building strong relationships with suppliers? Select TWO.
- A. Innovation developed as part of collaborative projects
- B. Reducing costs
- C. Reduction of waste
- D. Better payment terms
Answer: A,C
Explanation:
Supplier relationships can result in value for money in the reduction of waste and in innovation developed as part of collaborative projects. Remember that in CIPS waste doesn't necessarily mean physical waste (as in stuff you don't want any more). There are 7 types of waste including waiting, inventory, transportation etc. So when you develop a relationship with a supplier, this can reduce waste (e.g. you may be able to get deliveries quicker by integrating your ordering system with the supplier's, or you might reduce transportation by agreeing a Consignment stock). Having a good relationship with a supplier isn't necessarily going to get you a reduction in cost or better payment terms. See p.70 for more details on this- there's a short list of ways in which good supplier relationships can bring value for money to a business.
NEW QUESTION 62
You work at XYZ manufacturers and a competitor has just released a rival washing machine to the product that you make. This model is proving popular with customers. What competitive force is at play?
- A. threat of substitution
- B. supplier power
- C. buyer power
- D. threat of new entrant
Answer: D
Explanation:
This is a threat of a new entrant. The competitor has now entered the washing machine market and is competing directly with you. This is not a threat of substitution as it is the same product. A substitution would be if they invented a new product that washed clothes and people started buying this instead of washing machines. There are many questions in the exam on Porter's 5 Forces - see p. 39
NEW QUESTION 63
A partnership relationship can be described as any relationship between a buyer and supplier where there is a good level of communication and both parties are happy with each other's performance. Is this statement TRUE?
- A. No- good levels of communication can exist in other types of relationships
- B. Yes- partnerships are characterised by strong relationships
- C. No- only strategic relationships involve good levels of communication.
- D. Yes- partnerships are the only relationship type where both parties are happy with each other's performance
Answer: A
Explanation:
The correct answer is 'No- good levels of communication can exist in other types of relationships'. The study guide makes a point that not all good buyer: supplier relationships are partnerships. In fact 70% on supplier relationships will not be partnerships (according to Lambert who is quoted on p.131)
NEW QUESTION 64
Value for money is often described at the 'three Es'; economy, efficiency and effectiveness. However some people consider a 4th E which refers to the public sector. What is the fourth E?
- A. Ethics
- B. Equality
- C. Environment
- D. Equity
Answer: D
Explanation:
Equity is the fourth E- this means the extent to which the service is available. See p.65 for details on the 4 Es
NEW QUESTION 65
Which of the following are possible drivers for partnership sourcing? Select THREE.
- A. The need to improve performance to satisfy the end customer
- B. The marketplace has become more volatile
- C. Working together will create synergies
- D. The protection of intellectual property rights
Answer: A,B,C
Explanation:
To increase production costs and lead-times
Explanation:
The correct answers are; The marketplace has become more volatile, Working together will create synergies and The need to improve performance to satisfy the end customer. Further Drivers of Partnership Sourcing can be found on p.127. The other answers are incorrect as entering a partnership won't protect intellectual property rights- in fact that's one of the big risks of entering into a partnership. Partnerships won't increase costs and lead-times, they're likely to decrease them.
NEW QUESTION 66
Which of the following are considered part of the '5 Rights of Procurement'? Select THREE.
- A. focus
- B. quality
- C. cost
- D. time
- E. place
Answer: B,D,E
Explanation:
The 5 Rights of procurement are; place, quality, quantity, time, price. (Price and Cost are not the same thing). See p.38
NEW QUESTION 67
Janet runs a factory which produces 1 million bread rolls every day. It requires a large amount of flour, and for this to be delivered regularly- in time with manufacturing operations. There are very few suppliers in the market place that can deliver the quality of flour Janet requires in the quantities required. Janet has just established a contract with Friendly Flour Limited - what type of supplier is Friendly Flour Limited to Janet?
- A. bottleneck
- B. routine
- C. strategic
- D. leverage
Answer: C
Explanation:
Friendly Flour Ltd is a strategic supplier; this is a critical supplier, responsible for core products. They represent a high risk impact and a high cost impact. This is the top-right hand corner of the Kraljic matrix. There are lots of questions on Kraljic in the exam - do revise this topic and ensure you understand each of the four quadrants of the matrix (see p.20)
NEW QUESTION 68
Phone Maker Incorporated is a manufacturer of mobile phones. It is considering investing in a partnership with its supplier of batteries and circuit boards as it wishes to produce new models of its phone more regularly. What is the main driver for Phone Maker Incorporated?
- A. Cheaper costs
- B. Better quality products
- C. Reduced product life-cycles
- D. Changes in the marketplace
Answer: C
Explanation:
The correct answer is 'reduced product life-cycles'. In this example the reason for entering a partnership is to be able to produce new models of phones more quickly- this is likely because consumers are wanting to change mobile phones more often than they did in the past, so in order to keep up with demand, Phone Maker Incorporated need to produce more phones, more quickly. Drivers of Partnership Sourcing is a key topic in the exam - you can revise these by looking at p.127 in the Study Guide
NEW QUESTION 69
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