Try L4M6 Free Now! Real Exam Question Answers Updated [Oct 08, 2022]
Get Ready to Pass the L4M6 exam with CIPS Latest Practice Exam
NEW QUESTION 60
Which of the following are NOT one of the four key principles of procurement in the EU?
- A. Value for Money
- B. Transparency
- C. Non-Discrimination
- D. Proportionality
Answer: A
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 61
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. leverage
- B. routine
- C. bottleneck
- D. strategic
Answer: C
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 62
In public sector procurement, tenders are advertised with CPV codes, which provide a reference to describe the product or service being tendered. What does CPV stand for?
- A. Clear Procurement Vocabulary
- B. Complete Procurement Vocabulary
- C. Common Procurement Vocabulary
- D. Condensed Procurement Vocabulary
Answer: C
Explanation:
CPV stands for Common Procurement Vocabulary. This is explained briefly on p.72 but it doesn't really go into much detail as to what CPVs are or how they work. CPVs are a string of numbers which refer to an object that is being procured. For example the CPV for Fire Doors is 44221220. When a Tender gets advertised for Fire Doors, it will have this CPV code on, and any suppliers who provide fire doors will get a notification if they have this CPV code on their profile. It's basically a code that links suppliers with tender opportunities.
NEW QUESTION 63
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. Measurable, achievable and relevant
- D. Significant, measurable and achievable
Answer: C
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 64
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 65
Under what circumstances should a competitive tender not be completed? Select TWO.
- A. When there is a clear specifications
- B. When the items are of high value
- C. When the items are of low value
- D. When there is not a clear specification
Answer: C,D
Explanation:
Note the word 'NOT' in the question. In order for a competitive tender to be successful, there should be a clear specification in place (i.e. you need to know what you want, in order for suppliers to bid for it). Competitive tendering should also only be used for high value purchases; it's time consuming to do, so you wouldn't do it for low value items such as pens for the office. Therefore the correct answer to this question is 'items are of low value' and 'there isn't a clear specification'. There's a useful table on p.73 of when you would and wouldn't use a competitive tender.
NEW QUESTION 66
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- the lollypop sticks have gone mouldy- this is unacceptable
- B. Yes- so long as the manager kept the receipt
- C. No- as this was not the lollypop sticks intended purpose
- D. No- the manager cannot prove that the product is faulty
Answer: C
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 67
Which of the following is characteristic of an adversarial relationship?
- A. They are only used for one-off purchases
- B. The outcome of the deal is more important than the long term relationship
- C. The price is more important than the quality of the product
- D. The communication is always poor
Answer: B
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 68
According to Michael Porter, what is procurement?
- A. a support activity which provides a source of competitive advantage
- B. a primary activity which provides a source of competitive activity
- C. a primary activity which provides value for money
- 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 69
Which of the following are considered part of the '5 Rights of Procurement'? Select THREE.
- A. place
- B. cost
- C. focus
- D. time
- E. quality
Answer: A,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 70
Cigarettes and alcohol are often described as having an 'inelastic price'. What does this mean?
- A. Changes in price will greatly affect how much of the item is bought
- B. Changes in price will not affect how much of the item is bought
- C. The product is subject to high rates of tax
- D. The product is subject to age restrictions
Answer: B
Explanation:
A product with an 'inelastic price' means that consumption doesn't really depend on how much it costs. So you could increase the price of alcohol and cigarettes and people would tend to still buy them. A product with an elastic price means that a change in price would have a large affect on the number of people who bought the item. See p.95 for more details on price elasticity.
NEW QUESTION 71
Jenny is a procurement manager who works in the public sector. She has been charged with organising a tender to source new Xray machines for a hospital and to ensure that they receive 'value for money'. Which of the following should Jenny consider when drafting her ITT?
- A. Availability
- B. Price only
- C. Equity
- D. Whole life costs
Answer: D
Explanation:
Jenny should consider whole life costing. Ensuring value for money means considering a combination of price and quality throughout the lifetime of the product. See p.65 for more on 'Achieving Value for Money'
NEW QUESTION 72
Which of the following is an advantage for the suppler of entering into a partnership with a buyer?
- A. There is more flexibility when selling the product
- B. The Intellectual Property Rights of the buyer become yours
- C. They may gain an increased volume of business
- D. They no longer have to try as hard to win business.
Answer: C
Explanation:
The correct answer is 'They may gain an increased volume of business'. The other options are just not true. See p.130 for advantages and disadvantages of partnerships from both the buyer and supplier's perspective. This is a hot topic for the exam.
NEW QUESTION 73
Brian Air is a company that is trying to break into the air transport market. Which of the following could be barriers to entry for Brian Air? Select THREE
- A. access to capital
- B. licences and permits
- C. economies of scale
- D. health and safety
- E. ethical sourcing
Answer: A,B,C
Explanation:
Barriers to entry are economies of scale (in the air travel industry you can't just start off small and grow), access to capital (you need to already have a lot of money to buy airplanes) and licences and permits (you need to ensure you have the correct licences to fly planes). These are listed on p.41. Other barriers include; strong brand identity already dominant in the market, high switching costs for buyers, access to distribution networks and government policy.
NEW QUESTION 74
'tail spend' is a common category used in procurement and describes a category of items. What characteristics do theses items have?
- A. Low value, high volume
- B. High value, high volume
- C. High value, low volume
- D. Low value, low volume
Answer: A
Explanation:
Tail spend items are low value, high volume. P. 132
NEW QUESTION 75
Value for money in the private sector is concerned with what?
- A. Shareholder profit and business benefit
- B. Getting the best quality possible
- C. Getting the best price possible
- D. Ensuring taxpayers' money is spent wisely
Answer: A
Explanation:
Value for money in the private sector is about achieving shareholder profit and busines benefit (p.66). In the public sector it is about ensuring taxpayers' money is spent wisely. Value for money is a mixture of price and quality.
NEW QUESTION 76
......
Pass Your Next L4M6 Certification Exam Easily & Hassle Free: https://examsites.premiumvcedump.com/CIPS/valid-L4M6-premium-vce-exam-dumps.html