CIPS Level - Diploma in Procurement and Supply Module 4 - Ethical and Responsible Sourcing
CIPS Level - Diploma in Procurement and Supply Module 4 - Ethical and Responsible Sourcing
CIPS Level - Diploma in Procurement and Supply Module 4 - Ethical and Responsible Sourcing
Supply
Module 4 – Ethical and Responsible Sourcing
a. Acid test
b. Gearing
c. Inventory days
d. Turnover
LO: 2
AC: 2.3
Q2. A procurement organisation has a complex and very high spend requirement for which there are many
suppliers, all with capacity and a desire to deliver the contract. Once awarded, the contract can be easily switched
to an alternative source of supply. Price is just one consideration but other more qualitative factors are also
important in deciding which supplier to award the contract to.
Which of the following describes the characteristics of the item and provides the best method of awarding
the contract?
LO: 3
AC: 3.1
Q3. Which of the following is the most useful to assess a supplier's liquidity?
a. Current ratio
c. Profit margin
d. Return on equity
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L4M4 Exam Exemplar Questions Dec 2018
LO: 1
AC: 1.3
Q4. Which of the following Incoterms applies to any form of transportation and carries the highest risk profile for
the buyer?
c. Ex-works (ExW)
LO: 3
AC: 3.2
Q5. A major public body has a requirement to award a high value services contract. Procurement for the body is
regulated. It has conducted market analysis and has identified many potential suppliers that could potentially
deliver the contract. It has a clear specification. It is an important contract but the requirement is not urgent. The
most important driver for the organisation is to find the best supplier. Given all of these factors which of the
following approaches is likely to be the most appropriate?
a. Direct award
b. Restricted tendering
c. Negotiated procedure
d. Competitive dialogue
LO: 1
AC: 1.2
Q6. Hi-Tech Products Inc (HTPI) has developed a new product, the patent for which has been registered worldwide.
It has identified target customers and potential distributors for the product to be sold around the world. HTPI
realises that profit margins will be tight and so finding the best suppliers will be key. It is open to ideas in terms of
production processes and is keen to learn more from the supply market, before running a formal competition.
Which of the following should HTPI conduct as a priority?
a. Competitive negotiation
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L4M4 Exam Exemplar Questions Dec 2018
b. Invitation to tender
d. Supplier appraisal
LO: 2
AC: 2.2
Q7. Which of the following items found in a supplier's financial statements are relevant to gearing?
1. Long-term debt
2. Opening inventory
3. Short-term investments
4. Shareholder's equity
a. 1 and 3 only
b. 2 and 4 only
c. 2 and 3 only
d. 1 and 4 only
LO: 2
AC: 2.3
Q8. Credit rating is a relevant selection criterion when running a competitive tender. Is this statement true?
b. Yes, because the credit rating will impact the profitability for the supplier
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L4M4 Exam Exemplar Questions Dec 2018
LO: 1
AC: 1.3
Q9. Which of the following are examples of secondary data that might be useful to understand the market when
sourcing? Select the TWO that apply.
a. Government reports
b. Supplier websites
c. Focus groups
d. Online surveys
e. Customer questionnaires
LO: 2
AC: 2.1
Q10. Which of the following should be considered when calculating ratios relating to a supplier's liquidity? Select
TWO that apply.
a. Receivables
b. Equity
c. Reserves
d. Payables
e. Inventories
LO: 2
AC: 2.3
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L4M4 Exam Exemplar Questions Dec 2018