(2023) L4M6 Exam Dumps, Practice Test Questions BUNDLE PACK
CIPS Certifications Certification L4M6 Sample Questions Reliable
CIPS L4M6 Exam Syllabus Topics:
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NEW QUESTION 42
Which of the following are considered 'wastes' which can be removed from a business? Select THREE.
- A. Equity
- B. Stockout
- C. Over-processing
- D. Transportation
- E. Inventory
Answer: C,D,E
Explanation:
The seven wastes (as defined by Taiichi Ohno) can be remembered as Tim Wood; transportation, inventory, motion, waiting, over-processing, over-production, defects. Some people add an S onto the end of Tim Wood to make Tim Woods (the s is for skills). In some modules of CIPS, they refer to 8 wastes and include skills, but in M6 they've only put the 7 on p.70.
NEW QUESTION 43
Innovation is a key consideration when entering into a partnership. Is this statement true?
- A. Yes- joint innovation projects are often a strong motivation for entering into a partnership
- B. No- the key consideration when entering a partnership is cost reduction
- C. Yes- innovation is the only reason to enter into a partnership
- D. No- innovation is best achieved in a contractual relationship where KPIs can be monitored closely.
Answer: A
Explanation:
The correct answer is 'Yes- joint innovation projects are often a strong motivation for entering into a partnership'. The other options are simply not true statements. A lot of the questions on the 'Partnerships' chapters of the book are common-sense questions like this. It involves reading the Question: and using logic, rather that relying on your knowledge of procurement. If you found this Question: easy - that's a good sign for the exam.
NEW QUESTION 44
A garden centre has recently purchased some lollypop sticks to use as plant labels. The staff have written the name of the plant on the lollypop stick and put it next to the plant. This helps them identify which plant is which. However, after a couple of weeks, the lollypop sticks have become mouldy and the writing has faded. Staff are now struggling to identity their plants. The Manager of the garden centre is considering returning the lollypop sticks and asking for a full refund as they were not fit for purpose. Can the Manager do this?
- A. Yes- so long as the manager kept the receipt
- B. Yes- the lollypop sticks have gone mouldy- this is unacceptable
- C. No- the manager cannot prove that the product is faulty
- D. No- as this was not the lollypop sticks intended purpose
Answer: D
Explanation:
The correct answer is 'no- as this was not the lollypop sticks intended purpose'. When deciding if something is fit for purpose, you must consider its intended and common purpose. In this case it would be for making lollypops. As the garden centre is using them for something other than their intended purpose, they can't complain if it doesn't work. Fit for purpose is discussed on p.65 p.s. there's a Question: like this in the real exam - it's just not lollypop sticks ; )
NEW QUESTION 45
Which of the following are not a valid reasons to terminate a relationship with a supplier? Select TWO.
- A. The supplier has a change in senior management
- B. The supplier suddenly increases prices
- C. Supply base rationalisation
- D. The supplier becomes insolvent
- E. The supplier made one late delivery
Answer: A,E
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 46
Richie has come up with a new idea for sourcing items for the business but feels that it will have mixed reviews within the team. He thinks that some people will be in favour of the idea, and some will be against it. He doesn't think the CEO will have a strong opinion either way. In order to decide whether to put a business case together and present his idea to the CEO- what should Richie do?
- A. Make vs Buy Analysis
- B. Cost Analysis
- C. Value Engineering Analysis
- D. Force Field Analysis
Answer: D
Explanation:
Richie should do a Force Field Analysis - this is explained on p.86 and is an idea of Kurt Lewin - it identifies the driving forces for a project and the restraining forces (basically who will be for it and who will be against it). The textbook doesn't go into much detail on this but there are questions on it in the exam- so have a quick google to familiarise yourself with Kurt Lewin's Force Field Analysis.
NEW QUESTION 47
David is sourcing a new cleaning contract as he is not impressed with his current cleaning company's performance. He believes that his current supplier has been overcharging him, and due to budget cuts, he is keen to secure a lower price than what he is paying now. His Manager has suggested using an e-auction as the procurement method. Is this the correct way forward?
- A. Yes- an e-auction is an electronic system so it will be easy for David to compare bids
- B. No- a reverse e-auction will ensure only high quality suppliers bid for the opportunity
- C. No- a reverse e-auction would be more suitable as it will secure the lowest price
- D. Yes- an e-auction will allow David to secure the lowest possible price
Answer: C
Explanation:
The correct answer is 'No- a reverse e-auction would be more suitable as it will secure the lowest price'. An E-auction is something like eBay- where bids go up in price. If David wants to secure a lower price, he should use a Reverse E-Auction- where suppliers bid lower than the previous bid in order to win. For example, Supplier 1 offers to fulfil the contract at £50k per year, Supplier 2 can offer to beat this price by bidding £48k per year. Although Reverse E-Auctions may ensure cheaper prices, there are a lot of disadvantages to using this method. See p.21 and p.76 for more information
NEW QUESTION 48
According to Michael Porter, what is procurement?
- A. a support activity which provides a source of competitive advantage
- B. a primary activity which provides value for money
- C. a primary activity which provides a source of competitive activity
- D. a secondary activity which provides value for money
Answer: A
Explanation:
This question refers to Porter's Value Chain (p.35). There's a couple of questions on this in the exam so try to learn it. Procurement is a 'support activity' on this matrix along with firm infrastructure, HR and technology development
NEW QUESTION 49
Victoria runs a hotel and has recently had several security issues such as attempted robberies. She has decided that she needs to hire a security firm to ensure these issues don't continue. She has done some research and has found there are several local security firms who may be able to provide services to her hotel. However, she hasn't decided exactly what she would require the security firm to do. What should be Victoria's next steps?
- A. Issue a Prior Information Notice
- B. Issue a Request for Quotation
- C. Issue an Invitation to Tender
- D. Issue a Request for Proposal
Answer: D
Explanation:
Victoria should use a 'request for proposal' - this allows the security firms to submit ideas on how best to serve the hotel. They might come up with some ideas that Victoria hasn't thought about and can price against their own ideas. As Victoria doesn't have a concrete specification, an ITT or RFQ are not appropriate. A PIN tells suppliers that a tender opportunity is coming up and is used in the Public Sector. A hotel is not a Public Sector organisation. See p.76 for more information on when to issue a Request for Proposal
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. Significant, measurable and achievable
- B. Relatable, precise, and measurable
- C. Time bound, difficult and relevant
- 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
Which of the following relationship types require the most investment from the buyer?
- A. adversarial
- B. single source
- C. partnership
- D. strategic alliance
Answer: C
Explanation:
Partnerships require the most investment out of those listed. The only relationship type that requires more investment than Partnerships is Co-Destiny. See p.9 for more information on this
NEW QUESTION 52
Which of the following are considered part of the '5 Rights of Procurement'? Select THREE.
- A. time
- B. cost
- C. quality
- D. place
- E. focus
Answer: A,C,D
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 53
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. Reduction of waste
- B. Reducing costs
- C. Better payment terms
- D. Innovation developed as part of collaborative projects
Answer: A,D
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 54
Which of the following is characteristic of an adversarial relationship?
- A. They are only used for one-off purchases
- B. The communication is always poor
- C. The outcome of the deal is more important than the long term relationship
- D. The price is more important than the quality of the product
Answer: C
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.
NEW QUESTION 55
When outsourcing, which legislation details the rights of employees who may find themselves now working for the outsourcing company?
- A. PCR 2015
- B. ITT
- C. TUPE
- D. OJEU
Answer: C
Explanation:
The correct answer is TUPE: Transfer of Undertakings (Protection of Employment). Details on TUPE can be found on p.115
NEW QUESTION 56
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. Miscommunication
- B. Distortion of the facts
- C. Communication overload
- D. Poor communication
Answer: D
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 57
Which of the following are advantages for the buyer of entering into a partnership? Select TWO.
- A. They are likely to be able to gain price stability
- B. They will gain an increased volume of business
- C. There may be greater continuity of supply
- D. The supplier may become complacent
Answer: A,C
Explanation:
The correct answers are; They are likely to be able to gain price stability and There may be greater continuity of supply. The other options are an advantage for the supplier rather than the buyer (They will gain an increased volume of business) and a disadvantage of entering into a partnership (The supplier may become complacent). As you may have guessed from these questions - Partnerships come up a LOT in the exam. See p.130 for info on pros and cons of partnerships.
NEW QUESTION 58
The ABC Analysis, also known as the Pareto Analysis, is a technique that can be used by procurement to which purpose?
- A. relationship spectrum
- B. cost analysis
- C. supplier positioning
- D. cost engineering
Answer: C
Explanation:
ABC / Pareto is a "Portfolio Analysis Technique to assess the relationships in a supply chain". This, along with the Kraljic Matrix are two examples of "Supplier Positioning Models". See chapter 2.1 p.17 for more details on this
NEW QUESTION 59
Which of the following would not affect rivalry in a marketplace? Select TWO.
- A. legislative changes
- B. industry growth or decline
- C. supply chain disruption
- D. switching costs
- E. exit barriers
Answer: A,C
Explanation:
Legislative changes wouldn't affect rivalry in a market as all suppliers would be equally as affected, the same with supply chain disruptions. Factors which do affect rivalry include; industry growth and decline, product differences, brand identity, switching costs, diversity of competitors and exit barriers. These are listed on p.41
NEW QUESTION 60
Sandra is a buyer for a large supermarket and has been increasing unhappy with the performance of a long-term supplier of bananas. Over time the deliveries have become unreliable and this has had impacts on the supermarket's profitability. What should Sandra do first?
- A. Review the market and look for an alternative supplier
- B. Give written notice to the supplier of plans to terminate
- C. Obtain business approval to terminate the contract
- D. Develop an exit strategy
Answer: C
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.
NEW QUESTION 61
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