Question 1

What is the best way to prevent potential issues of conflicts of interest?

Accepted Answer

B

Explanation: The best way to deal with potential Conflicts of Interest is to openly declare these. Just because you have a relationship with someone doesn't mean this is going to be an issue or lead to fraud, but it is a good idea to keep a written record of these. It wouldn't be a risk register, because how can you rate someone's risk of doing something dodgy? Risk registers are for objective risks such as Health and Safety.

Question 2

Which of the following incoterms has the lowest risk to the buyer?

Accepted Answer

B

Explanation: The lowest risk to the buyer is 'delivered duty paid'. This is because the supplier does all the work transporting the items to the buyer's premises. Incoterms_2020_chart | Intersped

Question 3

What is a major benefit to using Incoterms when sourcing goods internationally?

Accepted Answer

C

Explanation: Incoterms can replace lengthy contract clauses as they replace the need for contracts to detail which party is responsible for organising transport, paying duties, having the insurance etc. Incoterms is an odd one for exam topics- some students say it was a huge part of their exam and there were many questions on this. Others said there were just one or two. Questions get randomly assigned from the bank so it's completely random how many you'll get on this topic.

Question 4

When using a 'credit account' payment mechanism, when does a supplier receive payment for the goods?

Accepted Answer

A

Explanation: In a 'Credit Account' payment mechanism- the supplier receives payment after the goods are delivered, in line with agreed payment terms (which may be 30 days or something like that).

Question 5

Which of the following are examples of secondary data? Select TWO

Accepted Answer

A, E

Explanation: economic indices and comparison websites are secondary sources of data. The other three are examples of primary sources of data. Primary= you get the data yourself Secondary = you find the data from somewhere else

Question 6

A procurement manager has a new contract to award. They know there will be considerable interest
from potential suppliers, as there are approximately twelve companies in the market. Which of the
following is a benefit of using a full competitive tendering process for this new contract?

Accepted Answer

C

Explanation: A full competitive tendering process ensures fairness by treating all suppliers equally, allowing them to compete on a level playing field. This aligns with ethical sourcing principles, especially in the public sector, where transparency and equal opportunity are paramount.

Question 7

Ivan is an investor who is looking to invest in new businesses. He is reviewing several companies and
working out what his equity would be. Which of the following does Ivan need to know to calculate
shareholder equity? Select TWO.

Accepted Answer

C, D

Explanation: Shareholder Equity = Total Assets - Total Liabilities

Question 8

Which of the following is true for CIPS members who sign and comply with the CIPS Code of
Conduct? Members can ...
gain an understanding of ethical and successful business operations
acquire automatic entitlement to government sponsorship
enjoy continued CIPS membership and access to resources
bypass the need to comply with other voluntary or legal codes

Accepted Answer

D

Explanation: CIPS members who adhere to the CIPS Code of Conduct gain insight into ethical business practices and retain their membership and access to CIPS resources. This commitment to ethical standards supports responsible sourcing by fostering a community of professionals who value integrity and best practices.

Question 9

There are a number of models that can be used to appraise suppliers before commencing a full
tendering process. Which of the following could be considered when appraising a supplier?
Capacity
Control
Compatibility
Commodity

Accepted Answer

C

Explanation: Capacity and compatibility are critical factors in supplier appraisal. Evaluating these factors ensures that the supplier can meet the buyer’s requirements in terms of production capacity and aligns with responsible sourcing by ensuring the supplier’s values and practices are compatible with the buyer’s expectations.

Question 10

As a procurement officer for a large organisation, a supplier approaches you on social media offering
to take you out for dinner to discuss a recent open opportunity and mentions a financial reward if
you help them win the business. You accept the invite. Was this the right thing to do?

Accepted Answer

B

Explanation: Accepting an invitation under such circumstances would violate ethical standards, as it could create a conflict of interest. Ethical sourcing and procurement practices require impartiality, and any perceived favoritism or bias can harm the organisation's integrity.

Question 11

A procurement manager of a medium-sized company has suggested to their executive board that
implementing an ISO environmental standard would improve procurement practices and reduce
environmental and social impacts. However, some colleagues are concerned about the potential
complexity and supplier resistance. Should the company go ahead with the recommendation?

Accepted Answer

A

Explanation: Adopting ISO environmental standards aligns procurement practices with sustainability goals and helps reduce environmental and social impacts. Although implementing ISO standards may require initial adjustments, they foster long-term benefits by promoting responsible and ethical sourcing practices across the supply chain.

Question 12

Daniel is evaluating bids from new suppliers who are looking to supply his company XYZ Indus-tries
with components for manufacturing. Although price is important, Daniel wishes to consider 'added
value'. Which of the following is considered an 'added-value solution'? Select THREE

Accepted Answer

A, B, D

Explanation: The correct answers are innovation, on time in full deliveries and sustainability. The other options are pricing mechanisms rather than 'added value'. Added Value is giving the buyer something extra that's not necessarily financial. It can be as simple as delivering orders quicker than expected, or having a dedicated customer service phone line. Something that makes their lives a little easier.

Question 13

Which of the following is not a Human Rights as protected by the UN Declaration on Human Rights?

Accepted Answer

D

Explanation: the right to change nationality is not included in the UN Declaration of Human Rights. There are 30 in total but you're not expected to know them all. You should know the big ones though which are; life, security, belief, equal treatment, free speech and expression. A summary can be found here: Universal Declaration of Human Rights | United Nations

Question 14

Faisal is a medical equipment maintenance services procurement specialist within a local hospital.
Faisal is responsible for ensuring contracts are in place that will ensure operational continuity of
high-value pieces such as radiology equipment. When carrying out tender opportunities for these
services, Faisal will specify, as an essential requirement, that certain standards are adhered to. Which
of the following is a benefit of incorporating standards as a requirement within a specification?

Accepted Answer

A

Explanation: Incorporating standards within specifications provides clear guidelines for suppliers, reducing ambiguity and helping ensure consistency in quality and performance. This aligns with ethical and responsible sourcing practices by promoting transparency and setting consistent expectations for suppliers.

Question 15

Which award criteria can be applied when sourcing requirements from external suppliers?

Accepted Answer

B

Explanation: Evaluating total life-cycle costs, including initial purchase price and long-term maintenance, aligns with ethical sourcing by promoting cost-effective and sustainable procurement. It ensures value for money and supports environmentally and financially responsible sourcing practices.

Free CIPS L4M4 Actual Exam Questions