Free and Premium CIPS L4M4 Dumps Questions Answers

Explanation

the correct answer is 'Yes- a low gearing ratio means the company's finances are made up of equity rather than debt'.

Remember low gearing = good (based on equity), high gearing = bad (based on debt). Anything over 50% is considered high.

The two no answers are therefore incorrect and you can discount these straight away. The other yes answer is one of those answers which COULD be true, but isn't always true, and we'd need more information to know for sure. When you get options like this there will be one that is always right and one which is sometimes right - so always pick the always right one.

Dealing with supply chain disruptions is complex, and depending what the disruption is, how big it is, what the industry is etc determines whether a supplier can handle it or not. Because there's more factors to consider than just gearing, this isn't the right answer.

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

The balance sheet (statement of financial position) shows assets, liabilities, and equity at a point in time. The profit and loss account (income statement) shows revenues, expenses, and profit over a period. These are the two core statements used to assess supplier stability and performance. The cash flow statement is useful but supplementary, while chairman’s statements are narrative, not financial records. Responsible sourcing emphasises using balance sheet and P&L analysis to evaluate supplier financial strength, ensuring continuity of supply and risk management.

Multiple sourcing reduces dependency risks and provides flexibility in urgent supply situations. For components needed at short notice, having multiple suppliers ensures continuity and responsiveness. Strategic, high-value, or unique components (B, C) often require single or closer sourcing to ensure collaboration and expertise. Service provision (A) typically benefits from relationship-based sourcing rather than multiple arrangements. Responsible sourcing stresses that multiple sourcing is a risk management tool, best applied where speed, availability, and resilience are essential.

Explanation

At supplier selection stage, unsuitable suppliers should be removed (those that do not add value or pose a risk). At develop strategy stage you're not even looking at suppliers yet- you're just deciding what you need. At contract award and asset management it's too late.

CIPS procurement cycle - Procurement Supply Cycle | CIPS

Payment history and financial stress scores provide insights into a supplier’s financial health and stability. This information is crucial for procurement professionals in assessing whether a supplier can fulfill long-term commitments, supporting responsible sourcing by mitigating financial risks.

Explanation

Completing Due Diligence checks will help guard against concerns about unethical business practices.

Not all companies will have a published Anti-Slavery policy- this is only required for large companies.

Known suppliers might have issues that you don't know about so you should always do due-diligence checks on everyone you work with

Formal tenders won't sort out ethical issues unless specifically addressed within the tender and strong contract management is put in place afterwards.

Explanation

GDP = gross domestic product = "the monetary value of goods and services manufactured or sup-plied in a financial period". People use it to say whether a country's economy is strong or weak.

Stock markets look at the value of public limited companies within a country.

Commodity indices look at the value of commodities such as steel, oil and wheat at a point in time

Average changes in price over a year can be measured by CPI or PPI

Weighted points systems are appropriate for complex or high-value purchases where multiple factors (e.g., quality, sustainability, delivery) must be balanced. For simple, low-value purchases like pens, price is typically the only differentiating factor. Using a weighted points system would overcomplicate the process, wasting resources. Responsible sourcing requires proportionality — applying robust evaluation methods where justified, while keeping processes simple and efficient for routine purchases. This ensures efficiency without compromising governance, freeing procurement resources for strategic projects.

Explanation

Request for Quotations can include more details than just prices. They can include specs and technical drawings and samples. It's like saying 'we can give you this price with these conditions'.

The other no answer is wrong because RfQ don't always include samples. A sample wouldn't be possible for a quote for an IT consultancy piece of work.

Incoterms define the allocation ofcosts, risks, and responsibilitiesbetween buyer and seller in international trade. They must be agreedbefore the contract is finalised, as they form a fundamental part of the contractual terms. Considering Incoterms early ensures clarity on delivery obligations, customs responsibilities, insurance, and transport costs. Selecting Incoterms after contract agreement or at order placement would create ambiguity and risk disputes. Ethical and responsible sourcing requires clear contractual definitions to prevent misunderstandings, ensure compliance, and fairly allocate risk in global supply chains.

Explanation

The correct answer is 'demand is exceeding supply'- If everyone wants to buy something, the sup-pliers will likely increase the price.

If there was little demand or there were threats of substitutions, this would likely result in a price decrease.

Addressing human rights issues collaboratively by developing an action plan allows for improvement and correction. This approach is consistent with ethical sourcing principles, which encourage responsible intervention to correct and improve supply chain practices rather than punitive measures that may not lead to long-term change.

Financial stability is a critical risk factor in high-value contracts. If a supplier collapses financially during contract performance, the buying organisation faces supply disruption, increased costs, and reputational risk. Financial assessments help identify vulnerabilities such as high debt, poor liquidity, or over-reliance on limited customers. While profitability, credit scores, and broader capability assessments are useful, the most pressing concern is ensuring continuity of supply. Ethical and responsible sourcing requires buyers to consider the long-term viability of suppliers, not just short-term savings. This aligns with responsible practice, protecting stakeholders, end customers, and the organisation’s own obligations.

Explanation

ISO9001 is Quality Management so is therefore the correct answer. The other options can be used to appraise suppliers but do not link directly or fully to Quality Management.

Regularly checking supplier policies and conflict of interest registers helps ensure that suppliers are upholding ethical standards, which supports responsible sourcing practices. This governance activity aligns with ethical guidelines to promote transparency and prevent conflicts that could affect the integrity of the supply chain.

Ordering in November, when demand is lowest, may allow the buyer to secure better pricing and availability, aligning with responsible sourcing by optimizing purchase timing to achieve cost savings and reliable supply.

Explanation

Ex-Works has the lowest risk to the supplier- in Exworks the buyer collects the items directly from the supplier - so they have all the issues and risks of transporting it back home.

There are many question on Incoterms CIPS can ask. But as there's such a huge bank of questions it's really hit or miss if you'll get one of those question. Two students sitting the exam at the same time in the same study centre can get different question sets. One person can get 3 Incoterm questions and the other gets 0.

I would learn the major ones- the ones at the ends of the table in particular because these are the ones question are likely to be about. Ex works / Free carrier and Delivered at Place Unloaded/ De-livered Duty Paid in particular.

I like this graph as I'm a visual person. I think it makes it easier to understand than the study guide:

Shipping Incoterms: the Complete Guide - Guided Imports

Technical capability focuses on the capacity to meet specification, volume, and reliability (including contingency). While maintenance is relevant, the clearest indicator among these options is the proven ability to deliver required quantities and hold contingency stock. Financial gearing and reputational associations are separate selection dimensions (financial/ethical).

Implementing full anti-bribery training, policies, and procedures demonstrates a proactive stance against bribery and corruption. Ethical sourcing principles encourage organisations to institutionalise comprehensive anti-bribery measures to ensure transparency, fairness, and compliance within the supply chain, reducing the risk of corrupt practices.

Modern slavery and human rights are social sustainability issues. Under the triple bottom line (environmental, social, economic), the social dimension covers labour rights, working conditions, equality, and compliance with modern slavery laws. Responsible sourcing requires buyers to integrate such social criteria in supplier prequalification to prevent unethical practices from entering supply chains. Environmental criteria cover impacts like carbon and waste; economic focuses on cost and competitiveness; quality addresses technical performance. Including modern slavery checks at the prequalification stage reflects due diligence and ensures alignment with legal and ethical obligations.

Explanation

security, consultancy and cleaning are services which are often tendered as they tend to be high value and complex opportunities.

Office supplies and raw materials have less variables so you could use a RFQ for these instead.

A hint for this is also the word services. Security, consultancy and cleaning are services. Raw Materials and Office Supplies are goods.

Explanation

Raja should send out a RFI- request for information; this will allow him to gain feedback from the marketplace prior to tender.

Speaking only with current suppliers will not provide all the information Raja requires.

He should not send out a request for quotation since he is still conducting market research

An open competition would be how he can procure, after he's completed his research

Competitive tendering is ideal for high-value contracts where technical expertise is essential. This method supports responsible sourcing by ensuring quality and aligning the supplier’s capabilities with the buyer’s needs, as required in more complex procurement scenarios.

Explanation

Open account (aka credit account) is most beneficial to the buyer. The supplier delivers the goods then the buyer pays.

Cash in advance is most beneficial to the supplier. The buyer pays for the item before receiving it.

This is a known exam topic.

An RFI is an exploratory tool, used to gather information before specifications or tendering. It is appropriate for obtaining indicative pricing (A), understanding the range of products/services (C), and confirming certifications like environmental or quality standards (D). RFQs, by contrast, request firm pricing based on defined specifications. RFIs are not used to renegotiate existing contracts (E) or agree payment terms (B). Responsible sourcing emphasises using RFIs to identify suppliers aligned with ethical, environmental, and operational expectations before moving to a formal competitive process.

Explanation

A risk of pre-planning an audit is the supplier has time to prepare for it. It's a good thing in that they can get their paperwork in order but the downside is they can overprepare so you don't get a realis-tic representation of what they're doing. One way they can do this is coaching staff in what to say to the auditors.

To facilitate the legal movement of goods across borders, specific documentation is required. An export or import license authorizes the shipment of goods to or from a particular country. A customs declaration provides details about the goods being transported, ensuring compliance with the importing country's regulations. Non-disclosure agreements and conflict of interest declarations are related to confidentiality and ethical considerations, not the physical movement of goods.

Exact Extract from Study Guide:

"Documents and systems that allow the movement of goods within the EU:

• T1 Documents

• Import/Export Licence

• Single Administrative Document

• New Computerised Transit System

• Customs Declaration Service"

Prohibiting trade union membership is a violation of workers' rights and international labor standards. Such a practice indicates potential non-compliance with ethical sourcing principles and necessitates further investigation. Ensuring that suppliers respect workers' rights to association is fundamental to ethical procurement.

Secondary sources are data sets and publications that already exist and are not collected directly by the buyer. Examples include published economic indices (A), which provide information on inflation, commodity prices, and market trends, and financial/trade press (D), which offers insights into industries, suppliers, and economic conditions. By contrast, a buyer’s internal database and field observation studies are primary data sources, while supplier marketing materials are biased and less reliable. Responsible sourcing requires procurement professionals to use both secondary and primary sources for comprehensive market analysis, but secondary sources are especially useful for benchmarking and environmental scanning.

For urgent, low-value local services, targeted sourcing (e.g., RFQs to pre-vetted suppliers) is more efficient than open advertising that can create excess, low-quality responses and slow down delivery. Responsible practice also considers proportionality and timely risk control.

Explanation

Price and Quality are the two considerations when marking a competitive tender.

Location, distribution and reputation may be considered for SOME tenders, but these would be sub-categories that fall under 'quality questions.

Explanation

"Meet current liabilities" is a posh way of saying "can you pay your bills". You're therefore looking for a liquidity ratio- a ratio that looks at assets vs liabilities (i.e. money in the bank vs money owed out). The Acid Test is a liquidity ratio. It's sometimes called the 'quick ratio'. Both terms come up on the exam. The other options are financial ratios but aren't for liquidity.

Sourcing relates to identifying suppliers (E) and requesting quotations (D) as part of the market engagement stage of the procurement cycle. By contrast, creating call-off orders, raising requisitions, and goods receipting are post-contract operational activities. Responsible sourcing highlights that supplier identification and quotations are key to ensuring ethical, competitive, and compliant supply chains. These activities help ensure alignment with organisational goals, supplier diversity, and sustainability objectives.

Explanation

The correct answer is bribery, corruption and the environment.

ESG stands for environmental and social governance. It's the new buzzword for CIPS and is basically everything to do with ethical procurement- so areas such as bribery and corruption are included as well as the environment.

Option 4 is incorrect as economic doesn't come into it.

Explanation

Futures exchanges are used to trade commodities. It's when a buyer and supplier agree a price and deal for something in the future. For example a carrot farmer may agree to sell his carrots to Gary in 3 months time when they're finished growing. It's used when the product / commodity isn't ready yet.

It's also used for hedging and other complex financial stuff- but you don't need to know that yet. Commodities and Future contracts are a big part of L5M4 to warn you though. Futures Contract Definition: Types, Mechanics, and Uses in Trading (investopedia.com)

Explanation

Open tenders should be used when the buyer expects there to be little interest / fewer bids. The opportunity is advertised widely allowing any supplier that wishes to submit a bid the opportunity.

The other options limit the number of suppliers and Ji Yuan doesn't want to do that, because he risks getting no interest and no supplier.

P.23

An Invitation to Tender (ITT) is typically used for complex, high-value procurements where the quality and specific features of the goods or services are of paramount importance. This approach ensures that ethical and responsible sourcing criteria are met, aligning with best practices in procuring specialised goods or services.

Explanation

When single sourcing, you should aim to have a collaborative relationship with the supplier. They're the only ones who provide you with glass, which is a vital part of windows. So you need to make sure you have a good relationship with them and work with them to overcome any issues such as supply chain disruptions. If not- you've got no windows to sell!

In the sourcing process, obtaining necessary approvals (such as drawings for the invitation to tender) is critical to ensure clarity and readiness before engaging with suppliers. Responsible sourcing emphasizes structured preparation, ensuring compliance and accuracy in supplier expectations.

Explanation

Plastic is not a commodity. A commodity is something that is naturally occurring and plastic is manufactured. The other category of commodity is agriculture.

A full competitive tender ensures fairness, transparency, and equal treatment of all suppliers. Each bidder has an equal opportunity to compete, and award decisions are based on pre-published criteria. This builds trust, prevents corruption, and strengthens market confidence. It is not quick or informal (A), nor does it disclose competitor bids (B). Decision-making is collective and accountable, not unilateral (D). Responsible sourcing stresses fairness and transparency in supplier engagement, ensuring a level playing field and compliance with ethical procurement standards.

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.

Compliance with fair trade standards demonstrates the supplier's commitment to social responsibility, including fair wages and ethical working conditions. This aligns with responsible sourcing practices, ensuring that suppliers maintain ethical labor standards, as advocated in the principles of ethical sourcing.

Explanation

If tenders are received by electronic submission exclusively, the buyer can reduce the timescale. On average the time for a standard tender submission can be reduced by 5 days if bids are submitted electronically.

*Note* this is based off current PCR Regs 2015 which are being superseded in October 2024 by new legislation. We currently don't know what the new regs will say on this. If it's different, my best guess is CIPS will remove any question about it from their exam- because the study guide would be wrong and that would lead to complaints.

A weighted scorecard provides astructured, objective, and transparentmethod of evaluating supplier bids against pre-agreed criteria such as price, quality, sustainability, and delivery. Weightings reflect the relative importance of each criterion, ensuring decisions are aligned with organisational priorities and value-for-money principles. This approach reduces bias, improves consistency, and creates an auditable record of the decision-making process. It does not focus solely on price, nor does it increase subjectivity when designed correctly. Ethical and responsible sourcing promotes the use of weighted scorecards to support fair competition, transparency, and defensible procurement decisions.

Informing suppliers of non-conformances and improvement opportunities supports responsible sourcing by promoting continuous improvement. Preparing a report for supplier review also aligns with transparency and collaborative improvement, integral to ethical sourcing standards.

An Invitation to Tender (ITT) is used when requirements are complex, high-value, or strategic, requiring detailed supplier submissions, robust evaluation, and structured governance. RFQs are better for low-value, straightforward purchases where price is the main factor. ITTs ensure fairness, transparency, and comprehensive evaluation when the stakes are high. It is not chosen simply because of oligopolies or time pressure. Responsible sourcing requires matching the sourcing process to the complexity and risk of the procurement, ensuring appropriate competition and governance.

Explanation

cash in advance is the most beneficial to a supplier.

Open account /credit account is the most beneficial to the buyer. Learn this as it's a known exam topic.

Explanation

cost and freight is specific to transport over water. The others relate to all types of transportation. Incoterms_2020_chart | Intersped

Some students report a lot of questions on Incoterms in the exam, some say they only had 1. It real-ly is luck of the draw.

Explanation

The correct answer is 'the supplier has a lot of long-term debt'. Gearing is a measure of how the business is being funded and looks at the ratio of debt to equity. For example if they have taken out lots of loans and mortgages, this would equate to a lot of debt which means a poor gearing ratio.

Gearing is a hot topic for the exam.

Explanation

Damian works in the Public Sector- it is against the law for the public sector to conduct 'post tender negotiation' after a contract has been awarded. This is because it's not transparent and equal opportunities, which are founding principles of public sector procurement.

Private sector can do whatever they want. They can do post-tender negotiations.

NOTE: this is currently the rules as per Public Contract Regulations 2015. These are being superseded in October by new legislation. The study guide doesn't mention this, but it's happening. At the time of writing (January 2023) we don't have the full details about what the new rules are but I doubt they will change on this particular topic. You can find out more about the changes to Public Sector Procurement here: Transforming Public Procurement - GOV.UK

Explanation

So you can immediately discount the options starting with yes.

Quoting in GBP / £ rather than the supplier's currency reduces the risk to the buyer. It will not re-duce the cost of the import, and will probably increase it as the supplier is then taking on the risk of currency fluctuations.

The acid test (quick ratio) is an effective measure of a supplier's ability to meet short-term liabilities, providing insights into financial stability. This aligns with responsible sourcing by ensuring the supplier is financially capable of fulfilling a strategic contract.

In a restricted tender process, suppliers are pre-qualified through a selection process before being invited to submit tenders. This approach is suitable when there is a need to ensure that only capable suppliers are considered, often due to the complexity or high value of the procurement. It is not limited to situations with few suppliers, and direct negotiations typically occur after tender submissions, not before. Contracts are awarded based on multiple criteria, not solely on price.

Explanation

Robert should look at the supplier's ESG policy. This stands for Environmental Social Governance. So covers both his requirements for community (social) and environmental factors.

ISO 9001 is about Quality Management and ISO27000 about Information Security so these are in-correct answers. An Anti-Slavery Policy would not discuss the environment.

When supplier audits reveal issues, buyers should implement constructive measures. Supplier development programmes (A) help improve performance through training, mentoring, and joint improvement initiatives. Corrective action plans (E) outline specific steps and timelines to address identified gaps. Options like hiring supplier staff or informal brainstorming do not provide structured improvements, while violating contracts would undermine governance. Responsible sourcing emphasises supplier engagement and continuous improvement, ensuring suppliers meet ethical, quality, and sustainability expectations rather than simply penalising them.

Thecurrent ratiomeasures a supplier’s ability to meet short-term financial obligations and is calculated astotal current assets divided by total current liabilities. Current assets include cash, receivables, and inventory, while current liabilities include overdrafts, trade payables, and short-term debt. Equity capital relates to ownership, not liquidity, and sales income and cost of goods sold appear in the income statement, not the balance sheet. Ethical and responsible sourcing requires procurement professionals to assess supplier liquidity to reduce the risk of supply disruption caused by cash-flow problems.

The withholding of passports is a potential indication of modern slavery, and the offer of a discount to avoid reporting this is a form of bribery. Reporting these ethical concerns aligns with responsiblesourcing practices and is critical for maintaining a supply chain free from human rights abuses.

Phishing is a form of fraud, where deception is used to gain financial advantage or access to sensitive data. It is not corruption (misuse of power), bribery (offering inducements), or a human rights issue. Procurement professionals must be alert to fraud risks in supply chains, including cyber-enabled risks such as phishing and invoice fraud. Responsible sourcing extends to protecting organisational data and finances against such attacks, often through robust controls, training, and supplier verification procedures.

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.

Strategic sourcing focuses onlong-term value creation, alignment with organisational objectives, and cross-functional stakeholder involvement. Reviewing product design modifications with stakeholders directly influences cost, sustainability, quality, and supply risk over the product lifecycle. Similarly, evaluating quotations for major systems such as accounting software represents a high-value, long-term sourcing decision with strategic impact. In contrast, sourcing office chairs and routine stationery purchases are low-value, repetitive activities and are therefore classified as tactical sourcing. Ethical and responsible sourcing requires procurement professionals to prioritise strategic activities that affect long-term performance, risk management, and sustainability outcomes.

Explanation

The Pareto Principle can be used when considering changing a supplier. It helps to categories suppliers by how strategically important the item is that they provide to the business.

Explanation

The correct answer is 'no - added value may change from one company to another'.

Added value is very subjective. What one person thinks is excellent added value, another may not rate highly. For example one buyer may consider a supplier having good brand reputation as added value, but another might not care.

The other no answer is incorrect because added value can be tangible or intangible. Tangible means you can touch and see it and intangible means you can't.

Governance of ethical and sustainable behaviour focuses on ensuring suppliers have the right systems, policies, and transparency measures in place. Reviewing insurance clauses ensures suppliers are prepared to manage liability and risks responsibly. Checking conflict of interest registers promotes transparency and prevents corruption. By contrast, NDAs protect confidentiality but are not primarily ethical governance tools, and simply checking “up-to-date policies” without context may not guarantee compliance. CIPS highlights governance mechanisms such as audits, policy reviews, and conflict registers as integral to monitoring ethical performance and ensuring accountability.

Explanation

Greg needs to use a gearing ratio. Gearing is a measure of how the business is being funded and is based on the ratio of debt to equity Gearing comes up a lot in the exam. Also make sure you know what Return on Investment, Acid Test and EBITDA are.

Return on Investment (ROI): How to Calculate It and What It Means (investopedia.com)

EBITDA: Definition, Calculation Formulas, History, and Criticisms (investopedia.com)

Acid-Test Ratio: Definition, Formula, and Example (investopedia.com)

Explanation

The correct answer is financial stability (this is done by using all of those lovely ratios in chapter 1.3) and capacity and capability (which are part of Carter's 10 Cs).

At PQQ stage you're looking purely at whether the supplier is good or bad (to put it simply). You don't give them details of your requirement yet, so they're not providing a quote / pricing structure / price schedule at this point in time. That would be at the next stage, IF they pass PQQ, when you issue the tender competition.

Explanation

liquid = the ability to pay short and medium term debts. In simple terms do you have more in stuff (money, assets) than you owe in debt?

Understanding Liquidity and How to Measure It (investopedia.com)

This is a hot topic for the exam. Learn everything in this section.

Financial assessments help ensure a supplier can meet the demands of a high-value contract without disruptions. This aligns with responsible sourcing principles by promoting stable supplier relationships and reducing the risk of supply chain interruptions due to financial instability.

In an open tender process, any supplier can submit a bid, and there is no pre-qualification stage. This approach is suitable when the requirements are well-defined, and there is a sufficient number of suppliers in the market to ensure competition. However, if too many suppliers respond, it can lead to an overwhelming number of bids to evaluate. Therefore, it's essential to consider the number of potential suppliers in the market before opting for an open tender.

Exact Extract from Study Guide:

"Open procedure – used for well-specified requirements and there is no pre-qualification of bidders. Many suppliers could submit a bid, which could result in lots of bids to assess, so the open procedure is normally only used where the number of potential bidders is expected to be relatively low."

The current ratio = Current Assets ÷ Current Liabilities. Here, Current Assets = 300; Current Liabilities = 150. Therefore, Current Ratio = 300 ÷ 150 = 2.0. This means the supplier has twice the assets available to cover short-term debts, indicating strong liquidity. The other options incorrectly subtract assets or liabilities, which is not the formula. Responsible sourcing emphasises interpreting ratios accurately: a ratio below 1 signals liquidity risks, while excessively high ratios may indicate inefficient asset utilisation.

The acid test, also known as the quick ratio, measures a company's ability to cover its current liabilities with its most liquid assets, excluding inventory. It is a stringent indicator of short-term financial health. By requesting this ratio, the company can assess whether a potential supplier has sufficient liquidity to meet its obligations, which is crucial when procuring strategic items.

In a restricted tender process, only pre-qualified suppliers are invited to bid, ensuring that participating suppliers have met necessary qualifications. This approach helps in managing high-value contracts by focusing on capable suppliers. Ethical and responsible sourcing in the public sector demands supplier pre-qualification to ensure compliance, transparency, and quality.

Embedding ESG/ethical clauses and reporting in contracts is a key mechanism to implement responsible sourcing, set clear expectations, and enable monitoring and remedies. Suppliers can be held to contractual ESG obligations where these are defined and agreed.

Explanation

Pregnant women and children are considered 'disadvantaged' by the UN. The other groups the UN call disadvantaged include; the elderly, the immunocompromised, those with disabilities and those living in poverty. This is the list given in the study guide.

A company could help disadvantaged groups in several ways. Firstly by offering employment (obviously not to the children). It could also include helping these groups as part of a Social Value out-come or community benefit scheme.

Explanation

they are stock markets.

What is the FTSE 100 Index? Complete Beginner's Guide (moneycheck.com)

BSE SENSEX – Wikipedia

Public sector procurement is governed by specific regulations that stipulate minimum timescales for various stages of the tendering process. These regulations are designed to ensure transparency, fairness, and adequate time for suppliers to prepare their bids. For instance, under the Procurement Act 2023, certain procedures have defined minimum periods for tender submissions to allow sufficient time for supplier participation.

Exact Extract from Study Guide:

"Public sector procurement is subject to specific regulations that dictate minimum timescales for tendering processes to ensure fairness and transparency."

Explanation

gross profit = total revenue - cost of sales.

Learn all you can about financial ratios and financial statements for the exam- it's a very common topic

International trade relies on proper documentation. A certificate of origin (2) confirms where goods are produced, often required for customs clearance and to determine tariffs. A purchase order (3) provides formal buyer intent and agreement of terms, forming the basis for customs and logistics processes. Product quality statistics (1) and supplier financial position (4) are relevant for supplier selection and monitoring but not directly for import/export processes. Responsible sourcing requires procurement professionals to ensure correct documentation is used to avoid delays, penalties, or breaches of trade regulations.

Explanation

the correct answer is 'marketplace competition'.

Ethical practice is about prohibiting corrupt and unfair practice, rather than issues of supply and demand. Although being in a cartel is 'unethical behavior' this option doesn't fully answer the question which talks about limiting supply- this is related to marketplace competition.

The growth in international sourcing has been significantly supported by theexistence of trading blocs and the reduction of trade barriers, such as tariffs and quotas. Trading blocs encourage cross-border trade by simplifying regulations, reducing duties, and improving market access between member countries. Exchange rate fluctuations, cultural differences, and varying legal frameworks representchallenges, not drivers, of international sourcing. Ethical and responsible sourcing requires procurement professionals to understand how global trade agreements and reduced barriers create opportunities for cost savings, supplier diversification, and access to global expertise, while still managing associated risks.

Responsible award decisions should consider price and total life-cycle cost (TCO) to capture acquisition, operation, maintenance, and end-of-life costs, aligning with sustainability. Other items may inform due diligence but are not, by themselves, robust award criteria without being translated into measurable value and risk outcomes.

Explanation

ABC should do a 'root cause analysis' to find out where the issue has come about, and why. From there, once they know what the breach is and how serious it is, they can suggest corrective action.

They can't jump straight to terminating the contract or seeking damages as it's not the supplier itself but rather the subcontractor. Also that would be really hasty considering we don't know what the issue is and what the market conditions are like. That supplier may be the only one who can provide the product. We also don't know if the supplier knows about the issue themselves.

Explanation

Cleaning and Facilities Management are the most appropriate items to outsource. They would not outsource the making of confectionary products as this is the 'core' business.

See p.4 for "what is outsourcing?"

Explanation

The correct answers are 'it is easy to drive down costs' (as you can pit the suppliers against each other) and 'low risk of failure to supply' (if one supplier can't provide what you need, the other supplier might be able to).

Economies of scale and supplier loyalty are advantages of single-sourcing.

There is a risk of failure to supply is a risk associated with single sourcing.

There's a useful table of advantages and disadvantages of single / multi sourcing on p.22. Types of sourcing is a key topic for the exam.

Explanation

The buyer should seek a 'collaborative' relationship. Transactional and arms-length relationships are more suited to tactical sourcing. Partnerships are reserved for joint-ventures.

Explanation

tactical is the correct answer; items that are short-term or low value are considered tactical.

Strategic sourcing is long term and high value.

Outsourcing is moving a key business function to an external company.

Insourcing is bringing a previously outsourced part of the company back in-house.

CIPS promotes a constructive and corrective approach when suppliers fall short of ethical standards, especially on critical issues like human rights. Immediately cutting ties can harm workers further and disrupt supply without addressing root causes. A responsible sourcing approach requires buyers to engage suppliers, escalate the concern, and establish a corrective action plan with monitoring to ensure compliance. Only if the supplier refuses to act or breaches persist should termination occur. This supports continuous improvement, supplier development, and ethical due diligence, reflecting global standards such as the UN Guiding Principles on Business and Human Rights.

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