[Q43-Q58] View L4M6 Exam Question Dumps With Latest Demo [Apr 22, 2023]

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View L4M6 Exam Question Dumps With Latest Demo [Apr 22, 2023]

Free L4M6 Test Questions Real Practice Test Questions

The CIPS L4M6 certification is widely recognized by employers and can help procurement professionals to advance their careers and secure more senior roles within their organizations. The certification also provides professionals with the skills and knowledge necessary to build and maintain strong relationships with suppliers, which can help to improve the quality and reliability of goods and services provided by suppliers.

Passing the CIPS L4M6 Certification Exam demonstrates that the candidate has a solid understanding of supplier relationship management and is capable of managing supplier relationships effectively. This certification is recognized globally and is highly valued by employers in the procurement and supply chain industry. Candidates who pass the exam are awarded the CIPS L4M6 Certificate in Supplier Relationships, which is a testament to their commitment to professional development and expertise in procurement and supply chain management.

QUESTION 43
Which of the following are considered part of the ‘5 Rights of Procurement’? Select THREE.

place

quality

cost

focus

time

The 5 Rights of procurement are; place, quality, quantity, time, price. (Price and Cost are not the same thing). See p.38

QUESTION 44
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?

Transportation

Defects

Over-production

Inventory

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.

QUESTION 45
The Kraljic Model is most useful for which aspect of procurement?

category management

cost analysis

risk management

cost reduction

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.

QUESTION 46
Which of the following relationship types are characterised by low levels of trust? Select TWO options

Adversarial
(Correct)

Arm’s Length

Outsourced

Single- Sourced

Partnership

Adversarial and Arm’s Length relationships have low levels of trust. Single Source, Partnership and Outsourcing require high level of trust. See p.5 for the Supplier Relationship Spectrum

QUESTION 47
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?

bottleneck

strategic

routine

leverage

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)

QUESTION 48
Francisco has entered a partnership with Pedro, who is a key supplier, and wants to ensure that the partnership achieves all of Francisco’s goals. As well as qualitative and quantitative KPIs, what other measures could Francisco take to ensure the partnership is a success?

Do frequent appraisals on the supplier

Conduct regular audits

Ensure there is a damages clause in the contract

Threaten the supplier with termination if he underperforms

The correct answer is ‘Conduct regular audits’. This is explained on p.153. You wouldn’t do an appraisal on a supplier in a partnership relationship as both parties are equal. Threatening a partner isn’t good for the relationship and a damages clause would be used in a contractual relationship rather than a partnership.

QUESTION 49
Cigarettes and alcohol are often described as having an ‘inelastic price’. What does this mean?

Changes in price will greatly affect how much of the item is bought

Changes in price will not affect how much of the item is bought

The product is subject to high rates of tax

The product is subject to age restrictions

A product with an ‘inelastic price’ means that consumption doesn’t really depend on how much it costs. So you could increase the price of alcohol and cigarettes and people would tend to still buy them. A product with an elastic price means that a change in price would have a large affect on the number of people who bought the item. See p.95 for more details on price elasticity.

QUESTION 50
Which of the following would you use to qualify new suppliers? Select THREE.

competency

cash

culture

cooperation

coordination

This is based on a real exam question- it’s looking to see if you can remember Carter’s 10 Cs. These are; cash, cost, consistency, culture, clean, communication, competency, capacity, commitment and control. (p.12 in the text book)

QUESTION 51
Which of the following is an advantage for the suppler of entering into a partnership with a buyer?

They may gain an increased volume of business

There is more flexibility when selling the product

The Intellectual Property Rights of the buyer become yours

They no longer have to try as hard to win business.

The correct answer is ‘They may gain an increased volume of business’. The other options are just not true. See p.130 for advantages and disadvantages of partnerships from both the buyer and supplier’s perspective. This is a hot topic for the exam.

QUESTION 52
Which of the following is characteristic of an adversarial relationship?

The communication is always poor

The price is more important than the quality of the product

They are only used for one-off purchases

The outcome of the deal is more important than the long term relationship

In an adversarial relationship “the outcome of the deal… is more important than maintaining the relationship over a long-term period” p.7. They can be characterised by poor communication and can be used for one-off purchases but be careful for words in answers such as ‘only’ and ‘always’, as these can be misleading; adversarial relationships aren’t always for one-off purchases, and communication isn’t always poor. The other answer is incorrect (price is more important) because it doesn’t describe the relationship, which is what the question asked.

QUESTION 53
Which of the following factors would you use to analyse the macro-environment? Select THREE.

social

cultural

political

philosophical

legislative

STEEPLE is what is used to analyse the macro-environment; the factors are; social, technological, economic, environmental, political, legislative and ethical. Details of this can be found on p.43-44

QUESTION 54
In a monopoly market, which of the following statements is true?

bargaining power of suppliers is strong

bargaining power of buyers is strong

There is strong rivalry

There is a threat of new entrants

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

QUESTION 55
Which of the following are characteristics that differentiate between a partnership relationship and traditional contracting relationships? Select THREE.

Lower costs

No tender process

Early supplier involvement

Supplier KPIs

No defined end period

The correct answers are; no tender process, early supplier involvement and no defined end-period. A partnership wouldn’t automatically mean lower costs, and in a partnership the KPIs are usually a joint performance measurement rather than set to the supplier. For more information on the difference between partnerships and contractual relationships see p.124-5

QUESTION 56
Which of the following are possible drivers for partnership sourcing? Select THREE.

The protection of intellectual property rights

The marketplace has become more volatile

Working together will create synergies

The need to improve performance to satisfy the end customer

To increase production costs and lead-times
Explanation:
The correct answers are; The marketplace has become more volatile, Working together will create synergies and The need to improve performance to satisfy the end customer. Further Drivers of Partnership Sourcing can be found on p.127. The other answers are incorrect as entering a partnership won’t protect intellectual property rights- in fact that’s one of the big risks of entering into a partnership. Partnerships won’t increase costs and lead-times, they’re likely to decrease them.

QUESTION 57
Tim manages the procurement department at a large retailer. He wants to ensure that his team are achieving value for money in their procurement activities. Which of the following should Tim set up?

ITT

Audit

Framework

Contract

Tim should do an audit. P.71 of the textbook says “to ensure that a procurement department is achieving value for money, an audit should be undertaken”

QUESTION 58
ABC is a company which sources a vital component from a supplier. There are only a few suppliers in the industry and without this component, ABC would not be able to produce their final product. What type of relationship should ABC seek to develop with their supplier?

outsource

strategic alliance

transactional

arms length

As the component is vital to their business, ABC should seek a collaborative relationship with the supplier. There are three types of collaborative relationship (co-destiny, partnership and strategic alliance). Of these only strategic-alliance is given as an option. Remember – strategic purchase = collaborative relationship with supplier. There are many questions on the Relationship Spectrum on the exam. See p.5 for more details

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The CIPS L4M6 exam is a crucial certification exam for procurement professionals who want to understand and manage supplier relationships. The exam is designed to provide a comprehensive understanding of the essential elements of supplier relationship management, including the development, implementation, and management of supplier relationships. It is an ideal certification for procurement professionals who want to enhance their skills and knowledge in managing supplier relationships to improve the procurement process.

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