Free Practice Questions for CIPS L4M4 Exam

Explanation

This is sole sourcing as there is only one supplier in the marketplace.

Be careful not to confuse single sourcing and sole sourcing. Single sourcing is when a buyer chooses to work with only one supplier (usually to achieve economies of scale), sole sourcing, on the other hand, is when the buyer doesn't have a choice- they work with one supplier because there is only one supplier in the market.

Types of sourcing is a key concept for this exam.

Explanation

Intracompany trading is when two departments in the same company do trading. AND when two companies owned by the same parent company do trading.

INTRA means 'within' - so it's doing business with yourself.

Advertising in a local newspaper for a specialized requirement can lead to irrelevant bids, delaying the process. Efficient sourcing practices recommend targeted advertising to reach qualified suppliers, ensuring timely responses and reducing assessment time, especially for urgent needs.

Explanation

gross profit = total revenue - cost of sales.

Learn all you can about financial ratios and financial statements for the exam- it's a very common topic

Under theFOB (Free on Board)Incoterm, the seller is responsible for delivering the goods onto the vessel at the named port of shipment. Once the goods are on board, the risk and responsibility transfer to the buyer. From that point onward, the buyer assumes all costs and risks associated with the transportation of the goods, including freight charges, insurance, unloading, and delivery to the final destination.

This interpretation aligns with the Incoterms® 2020 rules set by the International Chamber of Commerce (ICC). It's crucial to note that FOB is applicable only for sea or inland waterway transport and is not suitable for containerized cargo, where theFCA (Free Carrier)term is more appropriate.

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.

Explanation

The C category is the 'tail spend' - it represents a large number of suppliers of small value items.

I recommend giving this a read ABC Classification & ABC Method | CIPS

Explanation

The correct answer is 'yes - these can be completed without warning which would give Ali an accurate picture of the supplier's operations'. The other options are incorrect:

1) you can do many types of audit- financial, ethical, Health and Safety etc

2) asking a supplier about their ethical practices isn't likely going to get you accurate information. They'll just tell you what they think you want to hear

3) audits are great- but they don't ALWAYS uncover issues. Always is the key word in that sentence which makes it incorrect.

Explanation

Plastic is not a commodity. A commodity is something that is naturally occurring and plastic is manufactured. The other category of commodity is agriculture.

In the public sector, procurement activities exceeding certain financial thresholds are required to undergo competitive tendering processes. The anticipated expenditure of £950,000 surpasses the threshold that mandates a formal tendering procedure to ensure compliance with public procurement regulations, promote competition, and achieve value for money.

Exact Extract from Study Guide:

"Public sector procurement activities that exceed specified financial thresholds must follow formal competitive tendering procedures to ensure transparency and compliance with regulations."