May-2023 L4M6 Study Material, Preparation Guide and PDF Download
Free L4M6 Certification Sample Questions with Online Practice Test
NEW QUESTION 20
In Public Sector procurement a PIN is sent out to inform suppliers of an upcoming tender opportunity. What does PIN stand for?
- A. Prior Information Notice
- B. Possibilities Identified Notice
- C. Procurement Identification Number
- D. Procurement Information Number
Answer: A
Explanation:
A PIN is a 'prior information notice' - it is sent out before the ITT to let suppliers know that an opportunity is coming up and they should look out for it. See p 72 "supplier identification- public sector" for more details.
NEW QUESTION 21
Janet runs a factory which produces 1 million bread rolls every day. It requires a large amount of flour, and for this to be delivered regularly- in time with manufacturing operations. There are very few suppliers in the market place that can deliver the quality of flour Janet requires in the quantities required. Janet has just established a contract with Friendly Flour Limited - what type of supplier is Friendly Flour Limited to Janet?
- A. routine
- B. strategic
- C. leverage
- D. bottleneck
Answer: B
Explanation:
Friendly Flour Ltd is a strategic supplier; this is a critical supplier, responsible for core products. They represent a high risk impact and a high cost impact. This is the top-right hand corner of the Kraljic matrix. 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 (see p.20)
NEW QUESTION 22
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. Common Procurement Vocabulary
- B. Condensed Procurement Vocabulary
- C. Complete Procurement Vocabulary
- D. Clear Procurement Vocabulary
Answer: A
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 23
Which of the following are considered 'wastes' which can be removed from a business? Select THREE.
- A. Transportation
- B. Over-processing
- C. Inventory
- D. Equity
- E. Stockout
Answer: A,B,C
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 24
A restricted market is a market where there are only a small number of capable and competent suppliers. Which of the following is not a reason for a marketplace to be restricted?
- A. Strong governmental regulation
- B. Low levels of profitability
- C. High barriers to entry
- D. The product is easy to source elsewhere
Answer: D
Explanation:
The correct answer is 'The product is easy to source elsewhere'. The other three are given as reasons a marketplace might be restricted on p.138. Other reasons also include; brand loyalty, difficult access to distribution channels, and companies colluding.
NEW QUESTION 25
Gabriel is a procurement manager who wishes to explore a new avenue to procure products for his company. His manager has told him that he should invite internal stakeholders to a meeting to get their feedback. Who should Gabriel invite? Select THREE.
- A. legal department
- B. employees
- C. suppliers
- D. end-users
- E. customers
Answer: A,B,D
Explanation:
Internal stakeholders are those who work within the business so include the legal department, employees and end-users. End-users mean those people and departments who will be using the product or service. For example if Gabriel is procuring new software- an end-user would be anyone who would be using that software (whether they're employees, volunteers or agencies). CIPS outlines types of stakeholders on p.64
NEW QUESTION 26
What is collaborative inertia?
- A. A situation when the apparent output from collaboration is considerably less than expected
- B. Where a third party is invited to join a partnership.
- C. the concept that the value and performance of two companies combined will be greater than the sum of the separate individual parts
- D. When a partnership is unable to create new ideas
Answer: A
Explanation:
The correct answer is 'A situation when the apparent output from collaboration is considerably less than expected'. This is verbatim the definition given in the study guide on p.166 A synergy is the concept that the value and performance of two companies combined will be greater than the sum of the separate individual parts.
NEW QUESTION 27
Which of the following are not a valid reasons to terminate a relationship with a supplier? Select TWO.
- A. Supply base rationalisation
- B. The supplier suddenly increases prices
- C. The supplier has a change in senior management
- D. The supplier made one late delivery
- E. The supplier becomes insolvent
Answer: C,D
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 28
Varying levels of commitment is one reason why many partnerships fail. Why is this?
- A. It can lead to a lack of trust
- B. Sufficient time and resources are put in
- C. One party doesn't fulfil their KPIs
- D. Less profit is made.
Answer: A
Explanation:
The correct answer is 'It can lead to a lack of trust' - this is a quote from p.162. The other answers are all incorrect; in a partnership KPIs are joint between the parties- so there wouldn't be a situation where one party doesn't fulfil their KPIs. Commitment doesn't necessarily have a direct correlation with profit so that answer is incorrect. 'Sufficient time and resources are put in' is a positive thing, so can't be a reason who a partnership fails.
NEW QUESTION 29
Agile Cars Ltd is creating a 'lean' business model which involves receiving deliveries of components only when they are required. Which of the following 'wastes' is being removed from the business?
- A. Over-production
- B. Inventory
- C. Defects
- D. Transportation
Answer: B
Explanation:
This would reduce inventory (holding stock). Inventory is considered a business waste because it costs money to store stuff (e.g. paying the rent on a warehouse, electricity to light it up etc). If you can reduce the need to store materials and components on site- you reduce costs. You also save time because you get deliveries when you need them- you don't need to allow for staff unpacking things, storing them away, then going back to them later when they need them. For more information on the 7 Business Wastes see p.70. This comes up in a couple of modules, so it's worth remembering.
NEW QUESTION 30
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. Communication overload
- B. Miscommunication
- C. Distortion of the facts
- 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 31
Which of the following are not stages of team development? Select TWO.
- A. Mourning
- B. Accepting
- C. Achieving
- D. Forming
- E. Adjourning
Answer: B,C
Explanation:
This question is very, very similar to a real exam Question: and is
a really mean one. The CIPS study guide describes stages of team development as forming, storming, norming and performing. Of those listed in the book only forming is listed above. What the textbook fails to tell you is that some people add on two additional stages to this model which are mourning and adjourning. I strongly recommend doing some further reading on this (it's called the Tuckman Group Development Model) as it comes up a lot in the exam and the study guide doesn't really go into enough detail.
NEW QUESTION 32
The Kraljic Model is most useful for which aspect of procurement?
- A. cost reduction
- B. cost analysis
- C. category management
- D. risk management
Answer: C
Explanation:
The Kraljic model "plays a key part in category management" p.19 of the textbook. Category Management = the spend in an organisation, broken down into categories of related products (e.g. IT, facilities management, marketing). Each of these categories could be plotted on the Kraljic Matrix.
NEW QUESTION 33
A 'synergy' within a partnership can lead to what?
- A. Miscommunications
- B. Poor performance
- C. Increased costs
- D. Greater creativity
Answer: D
Explanation:
The correct answer is 'greater creativity'. A synergy is the concept that the value and performance of two companies combined will be greater than the sum of the separate individual parts. P.160
NEW QUESTION 34
The Queen Victoria is a traditional British pub which serves a range of alcoholic beverages. It has a partnership relationship with a local brewery which supplies several types of beer and cider. Logistics is a key concern for the Queen Victoria as deliveries must be made when there is room in the cellar to store the barrels of beer and cider. In what ways could the logistics risk be reduced?
- A. Using several suppliers instead of one
- B. Sharing up-to-date information
- C. Issuing POs electronically.
- D. Batch ordering
Answer: B
Explanation:
The logistics risk can be reduced by 'Sharing up-to-date information'. If the Pub tells the supplier when it's running low, they can then time the deliveries more accurately.
P. 136. 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 than relying on your knowledge of procurement. If you found this question easy - that's a good sign for the exam.
NEW QUESTION 35
Harry runs a hotel and has recently decided to contract an external supplier to provide the cleaning of the rooms. What is a disadvantage of doing this?
- A. There is dependency on the supplier, which increases risk
- B. The supplier will not perform as well as an internal team
- C. This allows staff to focus on other areas
- D. This will be more expensive than providing the service in house
Answer: A
Explanation:
Using an external supplier always comes with increased risk, as you become dependant upon them, and have less control over their performance (compared to an in-house team). In this example Harry will have the increased risk that the contract cleaners turn up late to their shifts, or don't do a good job. However, there is no reason to believe that the supplier will not perform as well as an internal team- we don't have enough information from the Question: for this to be true. What is true is the RISK is greater. The other answers are incorrect; the Question: doesn't indicate whether outsourcing the cleaning will be more or less expensive for Harry. Allowing staff to focus on other areas is an advantage not a disadvantage. See p.4 for more information on 'External Suppliers'
NEW QUESTION 36
Lion Manufacturing is about to enter into a partnership with Penguin Logistics, who will provide delivery to and from Lion Manufacturing's factories and warehouses. In this relationship, what type of negotiation strategy should Lion manufacturing use?
- A. win: lose with the buyer winning
- B. win: win
- C. lose: lose
- D. win: lose with the supplier winning
Answer: B
Explanation:
partnerships are always win: win p.7
NEW QUESTION 37
Which of the following are NOT one of the four key principles of procurement in the EU?
- A. Non-Discrimination
- B. Transparency
- C. Proportionality
- D. Value for Money
Answer: D
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 38
In a monopoly market, which of the following statements is true?
- A. There is strong rivalry
- B. There is a threat of new entrants
- C. bargaining power of buyers is strong
- D. bargaining power of suppliers is strong
Answer: D
Explanation:
In a monopoly there is only one supplier- therefore their power is strong. Buyers in this market are price takers and their power is weak. There is generally a strong barrier to entry into a monopoly market so the threat of new entrants is low. There is no rivalry. There are many questions in the exam on Porter's 5 Forces - see p. 39
NEW QUESTION 39
Under what circumstances should a competitive tender not be completed? Select TWO.
- A. When the items are of low value
- B. When the items are of high value
- C. When there is not a clear specification
- D. When there is a clear specifications
Answer: A,C
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 40
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