[May 22, 2026] Free CIPS Level 4 Diploma in Procurement and Supply L4M6 Exam Question
L4M6 dumps & CIPS Level 4 Diploma in Procurement and Supply sure practice dumps
CIPS L4M6 certification exam covers a range of topics related to supplier relationship management, including the importance of effective communication, negotiation skills, how to manage risk, and how to build strong relationships with suppliers. L4M6 exam is structured as a multiple-choice test that is designed to test the candidate's knowledge and understanding of these topics. Candidates are also required to complete a case study that tests their ability to apply their knowledge and skills to real-world scenarios.
CIPS L4M6 (CIPS Supplier Relationships) Certification Exam is a highly respected qualification that provides procurement professionals with the skills and knowledge needed to manage strategic supplier relationships effectively. L4M6 exam covers a wide range of topics and is suitable for procurement professionals at all levels of experience. By obtaining this certification, procurement professionals can demonstrate their commitment to professional development and enhance their career prospects.
NEW QUESTION # 120
Which one of the following would constitute a succession issue when terminating a relationship?
- A. Continuity of supplies
- B. Deletion of old specifications
- C. Payment of old invoices
- D. Processing penalties
Answer: A
Explanation:
Comprehensive and Detailed Explanation:
Succession issues pertain to the challenges associated with ensuring the uninterrupted supply of goods or services when transitioning from one supplier to another. Continuity of supplies is a primary concern, as any disruption can impact operations, customer satisfaction, and revenue. Effective succession planning involves:
* Identifying Alternative Suppliers:Ensuring that backup suppliers are in place and capable of meeting requirements.
* Knowledge Transfer:Facilitating the transfer of critical information and processes to new suppliers.
* Inventory Management:Maintaining adequate stock levels during the transition period.
Other options listed, such as processing penalties, deletion of old specifications, and payment of old invoices, are administrative tasks that, while important, do not directly relate to succession planning.
Reference:
CIPS L4M6 Study Guide
NEW QUESTION # 121
Ranjit Singh is carrying out a procurement exercise for medical gases and has been advised that this is a restricted marketplace. A marketplace may be restricted for which of the following reasons?
* The marketplace is heavily regulated by governments and legislation
* Existing suppliers within the marketplace offer excellent services
* There are many suppliers already in operation within the marketplace
* High financial investment is required to enter the marketplace
- A. 2 and 4 only
- B. 2 and 3 only
- C. 1 and 2 only
- D. 1 and 4 only
Answer: D
Explanation:
A restricted marketplace is one where barriers to entry limit the number of suppliers. In L4M6, CIPS identifies two key causes:
* Heavy regulation and legislative controls (e.g. medical gases require safety, licensing, and compliance approvals)
* High capital investment requirements, such as specialised equipment, infrastructure, and certification Offering excellent services or having many suppliers does not restrict a market; these indicate competitive or mature markets.
Therefore, the correct combination is 1 and 4 only.
L4M6 Reference:
* Learning Outcome 1: Understand market structures and supplier positioning
* Topic: Market types and barriers to entry
* CIPS L4M6 Study Guide - Restricted and monopolistic markets
NEW QUESTION # 122
Stephen Jones is assessing the relationships he has with his supplier base. Which of the following would be drivers for Stephen to adopt a partnership relationship with a supplier?
- A. 2 and 4 only
- B. 2 and 3 only
- C. 1 and 4 only
- D. 1 and 2 only
Answer: A
Explanation:
High expenditure levels and the complexity of requirements justify partnership sourcing, as it allows for collaborative problem-solving, innovation, and cost-efficiency. CIPS emphasizes that partnerships are ideal when requirements are complex and require expertise from the supplier.
NEW QUESTION # 123
Which of the following are typical drivers for a partnership between the buyer and the supplier? Select the THREE that apply.
- A. There are many suppliers in the market
- B. The product is critical for the buyer
- C. The product is technically complex
- D. The supplier provides the product to a buyer's competitor
- E. The buyer has a high spend with the supplier
- F. The product is a commodity
Answer: B,C,E
Explanation:
Comprehensive and Detailed Explanation:
Partnerships between buyers and suppliers are often driven by:
* High Spend:Significant expenditure justifies the investment in developing a closer relationship to achieve cost savings and efficiencies.
* Critical Products:Items that are essential to the buyer's operations necessitate a reliable and collaborative supplier relationship.
* Technical Complexity:Complex products benefit from joint development efforts, shared expertise, and coordinated problem-solving.
Conversely, commodities and markets with many suppliers typically lend themselves to transactional relationships rather than partnerships.
Reference:
CIPS L4M6 Study Guide
NEW QUESTION # 124
Which of the following are NOT one of the four key principles of procurement in the EU?
- A. Value for Money
- B. Proportionality
- C. Transparency
- D. Non-Discrimination
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 # 125
A buyer is intending to purchase a new product for their business; however, the market has a large number of suppliers. What would be the most beneficial way for them to initially narrow down the supply options?
- A. Preselect companies who have the largest market share
- B. Predefine minimum standards suppliers must meet
- C. Go only to companies they have bought other products from
- D. Look at lowest-cost suppliers only
Answer: B
Explanation:
Setting minimum standards helps filter suppliers efficiently, ensuring that only capable and reliable suppliers are considered. This approach supports both cost and quality objectives.
NEW QUESTION # 126
Which of the following is not a stage in the relationship life-cycle?
- A. qualification
- B. design the specification
- C. performance management
- D. on-boarding
Answer: B
Explanation:
Designing the specification is not a stage in the relationship cycle- this would be done before the relationship begins. There are 6 stages of the relationship cycle; on-boarding, qualification, segmentation and risk management, performance management, development and innovation, phase out. P.13
NEW QUESTION # 127
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. Reducing costs
- B. Reduction of waste
- C. Innovation developed as part of collaborative projects
- D. Better payment terms
Answer: B,C
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 # 128
ABC is a company which sources a vital component from a supplier. There are only a few suppliers in the industry and without this component, ABC would not be able to produce their final product. What type of relationship should ABC seek to develop with their supplier?
- A. arms length
- B. outsource
- C. strategic alliance
- D. transactional
Answer: C
Explanation:
As the component is vital to their business, ABC should seek a collaborative relationship with the supplier. There are three types of collaborative relationship (co-destiny, partnership and strategic alliance). Of these only strategic-alliance is given as an option. Remember - strategic purchase = collaborative relationship with supplier. There are many questions on the Relationship Spectrum on the exam. See p.5 for more details
NEW QUESTION # 129
An IT company is developing and launching a new product to the market. The project requires experts from different divisions of the business. What type of team should run this project?
- A. Cross-organisational team
- B. Existing performing team
- C. Virtual team
- D. Finance team
Answer: A
Explanation:
Across-organisational teambrings together specialists from various departments-such as R&D, marketing, finance, and production-to collaborate on complex projects. This team structure enables diverse perspectives, innovative solutions, and efficient decision-making, which are crucial when developing and launching new products. The CIPS L4M6 guide emphasizes the importance of integrated teamwork in achieving strategic outcomes in procurement and supply chain projects.
NEW QUESTION # 130
Robbie is a procurement manager at a public sector organisation. He is running a tender which is worth £2m and so will advertise this on OJEU. His manager has reminded Robbie to include CPV codes on the tender.
What purpose would this serve?
- A. To ensure suppliers know the deadline for tender submission
- B. To ensure only qualified suppliers bid for the tender
- C. To ensure more suppliers bid for the tender
- D. To ensure suppliers can find the opportunity
Answer: D
Explanation:
CPV codes help suppliers find opportunities they can bid for. CPV codes are a numerical classification for products e.g. Strawberry Jam is 15332296 and when they are included on a Tender, any supplier who is registered with that same CPV code will get a notification that the tender is live. CPV codes are discussed on p.72 but not in much detail- so don't worry if you don't know much about them. So long as you know the above, you'll be fine.
NEW QUESTION # 131
Which one of the following is an advantage of early supplier involvement?
- A. Supplier is responsible for all intellectual property risks
- B. Large investment in supplier communications
- C. Understanding of supplier capabilities
- D. No need for supplier non-disclosure agreements
Answer: C
Explanation:
Early supplier involvement highlights supplier strengths and capabilities, enabling collaborative development.
This supports innovation and optimizes the procurement process.
NEW QUESTION # 132
Beyond Say is a manufacturer of diamond rings.
It sources a lot of different parts to create its products including diamonds, gold, cardboard boxes for the rings to go in, as well as stationary and copier paper for the offices.
Although it doesn't buy many diamonds, these represent a large part of Beyond Say's spend.
Which category of spend would diamonds represent?
- A. Operational Spend
- B. It isn't possible to tell
- C. Routine Spend
- D. Strategic Spend
Answer: D
Explanation:
This is category 'A' spend in the ABC model - they represent a large value and a small number of purchases / suppliers. See p.17 for more information on the ABC Analysis
NEW QUESTION # 133
Which of the following are typical drivers for a partnership between the buyer and the supplier? Select the THREE that apply.
- A. There are many suppliers in the market
- B. The product is critical for the buyer
- C. The product is technically complex
- D. The supplier provides the product to a buyer's competitor
- E. The buyer has a high spend with the supplier
- F. The product is a commodity
Answer: B,C,E
Explanation:
Drivers for partnership include a high spend with the supplier, criticality of the product, and technical complexity. These factors encourage collaboration for cost efficiency, quality improvement, and risk management. Partnerships are less likely when there are many suppliers or the product is a commodity, as competition and standardization reduce the need for close collaboration.
NEW QUESTION # 134
Which of the following documents can be used at the selection stage of a tender process to ensure that short listed bidders meet the requirements of the buying organisation? Select TWO.
- A. Request for Information
- B. Request for Quotation
- C. Pre-Qualification Questionnaire
- D. Invitation to Tender
Answer: A,C
Explanation:
Request for Information and Pre-Qualification Questionnaire can be used for short-listing suppliers. Request for Quotation is used when the only variable is price and you would like suppliers to submit a price for you.
Invitation to Tender would be the next stage after RFI / PPQ- this is sent out to those suppliers who have passed selection, and details the second stage of the competition. See p.75 for more details.
NEW QUESTION # 135
A large construction group has a critical contract with a brick supplier. This represents high-value spend and the contract has a five-year duration. What type of commercial relationship would be the most appropriate?
- A. Partnership
- B. Closer Tactical
- C. Transactional
- D. Outsourcing
Answer: A
Explanation:
A partnership is the most appropriate type of relationship for high-value, long-term contracts involving strategic goods or services. This relationship allows both parties to work collaboratively toward common goals, share risks, and ensure continuity and quality over the long term. According to the CIPS L4M6 study materials, partnership relationships are encouraged where there is a high level of interdependence and shared objectives.
NEW QUESTION # 136
Price fluctuations can affect profitability. Is this statement correct?
- A. Yes, as sales may drop if the product is price inelastic
- B. No, price is not related to profitability
- C. No, only decisions made by the chief executive affect the price
- D. Yes, if the product's costs increase and the price does not
Answer: D
Explanation:
Profitability is impacted when product costs rise without corresponding price adjustments. Understanding cost- price relationships is key to managing profitability in procurement.
NEW QUESTION # 137
A company supplies IT equipment and buys most of its components from first-tier suppliers in the UK. It wants to analyze its supply market to develop the supply chain and is going to review the main factors that have an influence. The company wants to use the STEEPLED external environmental analysis framework to achieve the best result. Which of the following STEEPLED factors is most likely to have the greatest effect?
- A. Ethical
- B. Economic
- C. Sociocultural
- D. Technological
Answer: D
Explanation:
Technological factors play a pivotal role in IT equipment supply chains. Advancements, obsolescence, and innovation significantly affect production, cost, and competitiveness, making it a primary focus in supply chain development.
NEW QUESTION # 138
A company's analysis shows that some of their products from a supplier fall into the 'strategic' segment of the supply positioning grid. They are meeting with the supplier with the intention that they enter into a partnership. The supplier views the company as 'core' to their business. Which one of the following factors would be most important in determining that a partnership agreement would be good for both companies?
- A. There are many suppliers in the market
- B. They have a high spend with the supplier
- C. They have a low spend with the supplier
- D. Their products are technically simple
Answer: B
Explanation:
For partnerships to succeed, both buyer and supplier must see significant value in the relationship. High spend indicates strategic importance, ensuring mutual commitment. If the buyer is a core customer for the supplier, and has a high spend, partnership sourcing is mutually beneficial.
NEW QUESTION # 139
The CEO of a business has asked his procurement manager to source new machinery for the factory. This machinery will help create a new line of products which will give the company a competitive edge. The CEO is heavily invested in this procurement activity as profits have been lower than expected this year and this new line of products could help increase profitability. How should the procurement manager include the CEO in the procurement activity?
- A. It is important to keep the CEO informed of all decisions that are made
- B. The CEO is a key player- so it is important he is involved early in the process
- C. It is important to keep the CEO satisfied as he runs the business
- D. The CEO is a key player- so should be given regular updates on progress
Answer: B
Explanation:
The correct answer is 'The CEO is a key player- so it is important he is involved early in the process'. The CEO has high power and high interest which puts him in the top right-hand corner of Mendelow's Stakeholder Matrix (p.81). CIPS says Key Players should be involved early in the procurement process (p.82).
NEW QUESTION # 140
A buying organisation has decided to terminate its partnership with its supplier (FGH). For some time, the supplier has not been proactive in advising when deliveries will be late, which has frustrated the buying organisation. The supply market has historically been limited to a small number of suppliers, but new suppliers have decided that the market is attractive. The buying organisation is now considering setting up a partnership with a new supplier (XYZ) who has recently entered the market. What are the reasons for the buying organisation deciding to terminate its relationship with supplier FGH? Select TWO that apply.
- A. The supplier has decided that it no longer wishes to keep the buying organisation as a customer
- B. Changes in the composition of the supply market
- C. The buyer no longer believes in the value of partnership relationships
- D. Levels of supply availability in the market have decreased
- E. Poor communication by the supplier
Answer: B,E
Explanation:
Comprehensive and Detailed Explanation:
The buying organisation's decision to terminate the partnership with supplier FGH is influenced by:
* Changes in the composition of the supply market: The entry of new suppliers into the market provides the buying organisation with more options, reducing dependency on FGH and enabling the pursuit of better partnerships.
* Poor communication by the supplier: FGH's lack of proactive communication regarding delivery delays has led to frustration, indicating a breakdown in the partnership's effectiveness.
These factors align with the principles of supplier relationship management, where effective communication and adaptability to market changes are crucial.
Reference:
"Poor communication by the supplier" and "Changes in the composition of the supply market" are valid reasons for terminating a supplier relationship.- Docsity: CIPS Supplier Relationships L4M6 Questions and Answers
NEW QUESTION # 141
Which of the following are advantages for the buyer of entering into a partnership? Select TWO.
- A. They will gain an increased volume of business
- B. There may be greater continuity of supply
- C. The supplier may become complacent
- D. They are likely to be able to gain price stability
Answer: B,D
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 # 142
A local council requires facilities management services for ten schools based in their region. This service is a high-spend, high-risk, critical contract. Which sourcing approach would be the most appropriate?
- A. Direct negotiation
- B. Request for quotation
- C. Competitive tendering
- D. Statement of source requirements
Answer: C
Explanation:
Competitive tendering is the most suitable approach for high-risk, high-value contracts as it ensures transparency, fairness, and the selection of the most capable supplier based on predefined criteria.
NEW QUESTION # 143
Under what circumstances should a competitive tender not be completed? Select TWO.
- A. When there is not a clear specification
- B. When the items are of low value
- C. When the items are of high value
- D. When there is a clear specifications
Answer: A,B
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 # 144
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