Exam L4M4 Realistic Dumps Verified Questions Free [Oct 05, 2025]
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NEW QUESTION # 20
Which of the following should be assessed in supplier proposals to check compliance with environmental, social, and governance (ESG) standards? Select THREE that apply.
- A. The company's criteria for make or buy decisions
- B. The financial stability of the company
- C. The company's policy on carbon emissions
- D. The company's code of ethics
- E. The company's employee working conditions
- F. Procedures on intra-company trading
Answer: C,D,E
Explanation:
Employee working conditions, a code of ethics, and a carbon emissions policy are all indicative of a supplier's commitment to ESG standards. Assessing these factors aligns with responsible sourcing practices, which prioritize sustainability and ethical considerations.
NEW QUESTION # 21
An organisation within the European Union (EU) wants to import an item from outside of the EU. Which of the following is a valid shipping document?
- A. Goods inward document
- B. Purchase order document
- C. Single transit document
- D. Bill of lading document
Answer: D
Explanation:
A Bill of Lading is a critical shipping document in international trade, serving as a receipt for shipped goods and a contract between the shipper and carrier. It is essential for customs clearance and is recognized as a valid document for importing goods into the EU.
Exact Extract from Study Guide:
"The Bill of Lading (B/L) is a document issued by the shipping company to the operating shipper, which acknowledges that the goods have been received on board."
NEW QUESTION # 22
What course of action should be taken when an audit of a supplier identifies evidence of human rights malpractice?
- A. Allow the supplier to complete current orders placed, while pursuing an alternative source to change to as soon as approved
- B. Immediately raise the issue with the supplier and jointly develop a timely action plan to be implemented before a repeat audit
- C. Remove all business and inform press organisations, who will in turn bring the issue to the attention of formal governmental organisations who can take action
- D. Immediately halt all orders with the supplier, make a record of the violation in the supplier database, and switch to an alternative source of supply
Answer: B
Explanation:
Addressing human rights issues collaboratively by developing an action plan allows for improvement and correction. This approach is consistent with ethical sourcing principles, which encourage responsible intervention to correct and improve supply chain practices rather than punitive measures that may not lead to long-term change.
NEW QUESTION # 23
Which of the following is considered as part of ESG?
- A. market conditions and product lifecycle
- B. bribery, corruption and the environment
- C. economic and social governance
- D. liquidity, gearing and profitability
Answer: A
Explanation:
The correct answer is bribery, corruption and the environment.
ESG stands for environmental and social governance. It's the new buzzword for CIPS and is basically everything to do with ethical procurement- so areas such as bribery and corruption are included as well as the environment.
Option 4 is incorrect as economic doesn't come into it.
NEW QUESTION # 24
Robert is appraising suppliers and is keen to evaluate suppliers' contribution to the community and the environment. Which of the following should Robert look at?
- A. ISO9001
- B. ESG Policy
- C. Anti-Slavery Policy
- D. ISO27000
Answer: B
Explanation:
Robert should look at the supplier's ESG policy. This stands for Environmental Social Governance. So covers both his requirements for community (social) and environmental factors.
ISO 9001 is about Quality Management and ISO27000 about Information Security so these are in-correct answers. An Anti-Slavery Policy would not discuss the environment.
NEW QUESTION # 25
Liquidity is a solvency measure which determines whether an organisation is able to pay its debt. Which of the following would you use to assess a supplier's liquidity? Select TWO.
- A. current assets
- B. shareholder's equity
- C. current liabilities
- D. long-term debt
Answer: A,C
Explanation:
The correct answer is current assets and current liabilities. There are manyQuestionsabout financial ratios on the exam.
If you're unsure on them I suggest doing further reading outside of the study guide as this will help. I like this youtube video (I'm not associated with the makers of this video but think it's a great way to explain liquidity) Liquidity ratios (youtube.com) You can be asked to work out liquidity in the exam. If you are asked this, the numbers will be very simple to the point you may be able to do the sums in your head. There is also a calculator on the test app you can use.
NEW QUESTION # 26
What type of ratio is used to measure a company's ability to meet its short-term financial obligations, specifically focusing on its ability to convert assets into cash to cover current liabilities?
- A. Dividend per share
- B. Profitability ratio
- C. Earnings per share
- D. Liquidity ratio
Answer: D
Explanation:
Liquidity ratios assess a company's capacity to meet its short-term obligations using its most liquid assets.
These ratios, such as the current ratio and quick ratio, provide insight into the financial health of a company by indicating whether it has sufficient resources to pay off its immediate liabilities without raising external capital.
Exact Extract from Study Guide:
"Liquidity ratios: # Typical ratios: current ratio, quick ratio, cash flow ratio, etc. # Formulae of those ratios # Implications of liquidity ratios
NEW QUESTION # 27
A procurement manager has decided to use a local newspaper to source quotes from external suppliers. Why is it important to advertise tenders? Select TWO that apply.
- A. To gain value for money
- B. To avoid complex bids
- C. To gain green procurement
- D. To gain insights from the market
- E. To gain tactical sourcing
Answer: A,B,D,E
Explanation:
Advertising tenders is crucial for achieving value for money by encouraging competitive bids, which can lead to better pricing and service offerings. It also provides insights into the market by revealing the capabilities and innovations of various suppliers, aiding in informed decision-making.
Exact Extract from Study Guide:
"Inviting suppliers to take part in a competitive tender may reduce the potential for the biased selection of a supplier. Time, money and resource could be saved..."
NEW QUESTION # 28
Roberto is running a tender in which his main concern is price. However he is keen to hear also about the companies' Corporate Social Responsibility Policies and how this will impact their delivery. Roberto is considering awarding the CSRquestion4 points in a weighted point system. If he does this, what weight should be given to the price?
- A. 0
- B. 1
- C. 2
- D. 3
Answer: B
Explanation:
96 is the correct answer- weighted point systems should add up to 100 (as in 100%)
NEW QUESTION # 29
When assessing social responsibility elements of a supplier's proposal, what type of supporting evidence could a supplier provide?
- A. Financial statements detailing profit and loss accounts
- B. Evidence of compliance with fair trade standards
- C. Quality control reports documenting quality checks in the manufacturing process
- D. Results of a customer service survey on delivery performance
Answer: B
Explanation:
Compliance with fair trade standards demonstrates the supplier's commitment to social responsibility, including fair wages and ethical working conditions. This aligns with responsible sourcing practices, ensuring that suppliers maintain ethical labor standards, as advocated in the principles of ethical sourcing.
NEW QUESTION # 30
Steff is a procurement manager at Giant Buttons Ltd who are considering offshoring a small section of their manufacturing operations. Which of the following is a risk of offshoring that Steff should consider.
- A. lower operating costs
- B. payments by electronic bank transfer
- C. importation rules and tariffs
- D. exportation rules and tariffs
Answer: C
Explanation:
The correct answer is importation rules and tariffs. This is because in offshoring some of the manufacturing will be done in another country then shipped back to the UK. The products will have to go through customs so may be subject to tariffs and duties.
Steff's not exporting anything in the scenario and paying electronically and getting lower costs are not RISKS.
NEW QUESTION # 31
A procurement manager has developed some reports in order to analyse total company expenditure on bought- in goods and services from external suppliers. Expenditure information by product category or supplier can achieve which of the following? Select TWO that apply.
- A. Highlight opportunities for negotiating better prices and reducing costs with suppliers
- B. Provide analysis to help with planning production schedules
- C. Identify how obsolete stock items can be disposed of in a sustainable way
- D. Provide information on costs and trends to compare with previous time periods
- E. Help the organisation set its marketing strategy
Answer: A,D
Explanation:
Analysing expenditure data by product category or supplier enables procurement managers to:
* Negotiate Better Prices:Identifying high-spend areas or suppliers can provide leverage in negotiations, leading to cost reductions.
* Monitor Cost Trends:Tracking expenditure over time helps in understanding cost fluctuations, budgeting, and forecasting future spend.
Exact Extract from Study Guide:
"Spend analysis is a process that analyses the historical spend data of your organisation to provide answers to questions concerning spend visibility, compliance, and cost-saving opportunities."
NEW QUESTION # 32
Incoterms are divided into four main groups to follow the movement of goods covering the exporter's premises, export and import points, and cost and risk. Which letters represent the four groups of Incoterms?
- A. E, F, B, and C
- B. B, C, F, and G
- C. A, B, C, and D
- D. E, F, C, and D
Answer: D
Explanation:
Incoterms are grouped as E (Ex Works), F (Free Carrier), C (Carriage Paid To), and D (Delivered Duty Paid), reflecting various stages of responsibility transfer between buyer and seller. Understanding Incoterms is critical for responsible sourcing, as it clarifies logistics and cost responsibilities.
NEW QUESTION # 33
During which stage of the procurement cycle would you remove suppliers that do not add value, or could pose a risk to the buying organisation?
- A. contract award
- B. develop strategy
- C. supplier selection
- D. asset management
Answer: C
Explanation:
At supplier selection stage, unsuitable suppliers should be removed (those that do not add value or pose a risk).
At develop strategy stage you're not even looking at suppliers yet- you're just deciding what you need. At contract award and asset management it's too late.
CIPS procurement cycle - Procurement Supply Cycle | CIPS
NEW QUESTION # 34
Greg is doing some research on a potential supplier and is concerned that the supplier's funding is based on long-term debts and loans. Working with this supplier therefore might bring additional risks to Greg's business. What should Greg do about his concerns?
- A. do an Acid Test
- B. work out the supplier's EBITDA
- C. use the Return on Investment Ratio
- D. work out the supplier's gearing ratio
Answer: D
Explanation:
Greg needs to use a gearing ratio. Gearing is a measure of how the business is being funded and is based on the ratio of debt to equity Gearing comes up a lot in the exam. Also make sure you know what Return on Investment, Acid Test and EBITDA are.
Return on Investment (ROI): How to Calculate It and What It Means (investopedia.com) EBITDA: Definition, Calculation Formulas, History, and Criticisms (investopedia.com) Acid-Test Ratio: Definition, Formula, and Example (investopedia.com)
NEW QUESTION # 35
A business may be faced with the challenge of deciding whether to source some of its requirements from external suppliers or whether to make them internally. Which of the following factors is likely to justify the decision to make the requirements internally?
- A. External suppliers are likely to be overcharging
- B. External sourcing involves cumbersome tendering procedures
- C. The other suppliers are using older technology
- D. The availability of in-house competencies and capacity to carry out the production
Answer: D
Explanation:
Internal production is often justified when a company has the necessary competencies and capacity. This approach aligns with responsible sourcing by leveraging internal capabilities for better control over quality, cost, and compliance with ethical and environmental standards.
NEW QUESTION # 36
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