Free Practice Questions for CIPS L4M6 Exam

Explanation

The first step is to obtain business approval to terminate. If Senior Management don’t give approval, then the rest of the stages can’t happen and Sandra will be stuck with her current banana supplier. There’s a good diagram on p.109 detailing the steps to supplier termination.

Comprehensive and Detailed Explanation:

Forward buyinginvolves purchasing goods in advance of actual need, often in larger quantities, to take advantage of favorable pricing or to hedge against anticipated price increases. This strategy is commonly used in volatile markets to stabilize costs and ensure supply continuity.

Explanation

Danny should issue a RFI (Request for Information). His next step would be to find out more about the products available by asking suppliers for information- this will help him put a spec together before he goes out to tender. The other options mean; RFQ - request for quotation- when you ask suppliers to submit a price. ITT- Invitation to tender – a document you send out to suppliers which details all the information about the tender (this usually involves both price and quality components of assessment). OJEU- Official Journal of the European Union- where tenders for the Public Sector are published. For more info on RFI see p.74

Explanation

This is one of those questions you have to read carefully- it asks for 'elements of a business'. Cost focus and cost leadership are ways a company can improve their competitive advantage, but they're not elements of a business. The other three options are. Porter created a list of elements of a business that can help a company's competitive advantage- these can be found on p.33-34

Explanation

The definition of value mapping is given on p.69 this is; ‘a process in which value is created through the elimination of waste and operational inefficiencies’. It ties into JIT / Lean.

Poor communication leads to misunderstandings, unmet expectations, and conflict, undermining partnerships. CIPS stresses the importance of transparent and regular communication to ensure alignment and success.

Explanation

Intellectual Property Rights include; Patents, Copywrite, Trademarks and Trade Secrets. P.114

Adding value involves enhancing customer experience through excellent service, providing differentiated product features, and offering convenience. These align with procurement strategies aimed at driving customer satisfaction and loyalty.

Comprehensive and Detailed Explanation:

Therelationship spectrumin procurement outlines the range of relationships between buyers and suppliers, from transactional to strategic partnerships. Key types include:

Transactional:Short-term, price-focused relationships with minimal collaboration.

Partnership:Long-term, collaborative relationships with shared goals and mutual benefits.

While "contractual" refers to the legal agreement aspect of relationships, it is not a specific type on the relationship spectrum. "Conspiratorial" is not a recognized relationship type in procurement contexts.

Explanation

In an adversarial relationship "the outcome of the deal… is more important than maintaining the relationship over a long-term period" p.7. They can be characterised by poor communication and can be used for one-off purchases but be careful for words in answers such as 'only' and 'always', as these can be misleading; adversarial relationships aren't always for one-off purchases, and communication isn't always poor. The other answer is incorrect (price is more important) because it doesn't describe the relationship, which is what the question asked.