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Pass the CIPS Level 4 Diploma in Procurement and Supply L4M6 Questions and answers with Dumpstech

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CIPS Level 4 Diploma in Procurement and Supply
L4M6
L4M6 Questions and Answers

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Questions # 71:

Red Ltd and Blue Ltd have had a disagreement over a high value project they have been partnering on. They have been unable to resolve the issues inhouse and Red Ltd has suggested Mediation as an option. Is this a good option?

Options:

Yes- mediation involves a neutral third party and gets both parties to attempt to reach a compromise

Yes- mediation means the buyer and supplier agree to accept a third party’s decision which will solve the disagreement issues

No- it would be better to solve the disagreement in-house

No- mediation could have a negative impact on the companies’ reputation

Answer

Explanation

The correct answer is ‘Yes- mediation involves a neutral third party and gets both parties to attempt to reach a compromise’. Be careful not to confuse mediation with arbitration – arbitration is when the buyer and supplier agree to accept a third party’s decision which will solve the disagreement issues. See p.112 for more information on solving disputes

Questions # 72:

What is collaborative inertia?

Options:

the concept that the value and performance of two companies combined will be greater than the sum of the separate individual parts

A situation when the apparent output from collaboration is considerably less than expected

When a partnership is unable to create new ideas

Where a third party is invited to join a partnership.

Answer

Explanation

The correct answer is ‘A situation when the apparent output from collaboration is considerably less than expected’. This is verbatim the definition given in the study guide on p.166 A synergy is the concept that the value and performance of two companies combined will be greater than the sum of the separate individual parts.

Questions # 73:

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

Options:

competency

cash

culture

cooperation

coordination

Answer

A, B, C

Explanation

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)

Questions # 74:

Lee is a procurement manager at Real Pirates Ltd and he has a contract with Peg Leg Industries for the supply of fake, wooden legs for his team of Pirates. Real Pirates Ltd have been working with Peg Leg Industries for almost 10 years but recently Lee has discovered he will need to terminate the contract due to ‘Contract Frustration’. What could be the reason for this?

Options:

The supplier has committed a material breach

An unexpected incident has occurred beyond anyone’s control

The supplier has become insolvent

The supplier has leaked confidential information about Real Pirates Ltd to a competitor

Answer

Explanation

The correct answer is ‘An unexpected incident has occurred beyond anyone’s control’. A good example of this would be the Covid-19 pandemic- neither the buyer nor supplier could have predicted this, and if this means that the contract can’t be completed – then the contract can be terminated (in the UK at least). A way to avoid this would be to include a Force Majeur clause listing possible circumstances that could occur. When there’s a Force Majeur clause, these eventualities are now classed as foreseen rather than unforeseen. See p.108

Questions # 75:

Which of the following are primary activities, according to Porter's Value Chain? Select THREE.

Options:

Procurement

Operations

Marketing and Sales

Human Resources

Inbound Logistics

Answer

B, C, E

Explanation

This QUESTION NO: refers to Porter's Value Chain (p.35). There's a couple of questions on this in the exam so try to learn it. Primary activities are; inbound logistics, operations, outbound logistics, marketing and sales, after sales- service

Questions # 76:

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 fewsuppliers 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?

Options:

bottleneck

strategic

routine

leverage

Answer

Explanation

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)

Questions # 77:

Stephen Jones is assessing the relationships he has with his supplier base. Which of the following would be drivers for Stephen to adopt a partnership relationship with a supplier?

Options:

1 and 2 only

2 and 3 only

1 and 4 only

2 and 4 only

Answer

Explanation

High expenditure levels and the complexity of requirements justify partnership sourcing, as it allows for collaborative problem-solving, innovation, and cost-efficiency. CIPS emphasizes that partnerships are ideal when requirements are complex and require expertise from the supplier.

Questions # 78:

Which of the following are advantages of partnering?

Options:

Supply chain consolidation

Continual improvement

Hard to displace

Prioritization of transactions

Answer

A, B

Explanation

Partnering supports supply chain consolidation and continual improvement by fostering collaboration and shared objectives. These benefits align with the strategic goals of building resilient and efficient supply chains.

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