L4M4 Exam Dumps - CIPS Level 4 Diploma in Procurement and Supply Questions and Answers

Analysing expenditure data by product category or supplier enables procurement managers to:

Negotiate Better Prices:Identifying high-spend areas or suppliers can provide leverage in negotiations, leading to cost reductions.

Monitor Cost Trends:Tracking expenditure over time helps in understanding cost fluctuations, budgeting, and forecasting future spend.

Exact Extract from Study Guide:

"Spend analysis is a process that analyses the historical spend data of your organisation to provide answers to questions concerning spend visibility, compliance, and cost-saving opportunities."

Explanation

The correct answers are; lead times, product competition and changes in the marketplace.

You wouldn't expect to receive samples or costings from a Request for Information - rather, these should be expected as part of the Tender Competition

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

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

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.

Multiple sourcing is most effective for strategically important, high-value requirements such as raw materials. These are continuous, large-volume needs where supply disruptions can be costly and damaging. By using more than one supplier, buyers reduce dependency risks, improve resilience, and increase competitive leverage. One-off requirements like machinery (A) don’t benefit from multiple sourcing, while options B and D describe disadvantages rather than reasons for adopting the approach. Responsible sourcing promotes balancing cost, risk, and resilience — and multiple sourcing is a key strategy for critical, ongoing supply categories.

Explanation

a balance sheet shows 'equity, assets and liabilities'. The other financial statements you need to know for this exam are cash flow statements and and income statements.

If you're not familiar with these three I strongly recommend you do some further reading on this before the exam if you can. This is helpful: How the 3 Financial Statements are Linked Together - Step by Step (corporatefinanceinstitute.com)

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

The correct answer is 'gearing ratio'.

Gearing measures how much of a company's funding is based on long-term debt or loans- this would be affected by a steep rise in inflation. If a company has a mortgage on their offices or facto-ry and they need to remortgage and inflation has gone up a lot- they'll be paying a lot more on their mortgage. This will severely effect the gearing ratio as they'll have more outgoings than incoming.

Gross profit margin COULD be affected by inflation, for example if you've got hyper-inflation and the country goes into recession and people stop buying your product. However, this answer isn't al-ways right and depends on many factors- the industry, the product, the company etc, so for the purpose of CIPS should be discounted. There are many industries which are immune to inflation.

Explanation

EXW- exworks is a suitable incoterm for transporting goods both by rail and boat. It can be used regardless of the mode of transport. The other three are for transport over water. P. 143 Shipping Incoterms: the Complete Guide - Guided Imports

Some students report a lot of questions on Incoterms in the exam, some say they only had 1. Best bet is to learn them if you possibly can.