CIPS L4M8 Q&A - in .pdf
- Exam Code: L4M8
- Exam Name: Procurement and Supply in Practice
- Updated: Sep 18, 2026
- Q & A: 198 Questions and Answers
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CIPS L4M8 Exam Syllabus Topics:
| Section | Objectives |
|---|---|
| Risk, Ethics and Sustainability | - Procurement risk management
|
| Procurement and Supply Context | - Role of procurement in organisations
|
| Procurement Technology and Innovation | - Digital procurement tools
|
| Supplier Relationships and Performance | - Supplier relationship management
|
| Procurement Process and Sourcing | - Supplier selection and evaluation
|
| Contracting and Legal Principles | - Contract management
|
CIPS Procurement and Supply in Practice Sample Questions:
What is depreciation and deterioration?
Reveal Solution Discussion 0Correct Answer:
See the answer in explanation.
Explanation:
When an organization want to purchase an asset, it considers the depreciation and deterioration in the whole life of the asset and how it will be manage.
Depreciation is the reduction in value of a tangible and a fixed asset over time. The purpose of calculating the depreciation of the asset is to give the organization a fair and current view of what the asset is worth at a particular time. Depreciation is a way of converting the cost of an asset into an expense over a period of time.
Depreciation is a permanent feature listed against an asset throughout its life time and it based on wear and tear, reduction in performance and reduction in value.
Deterioration is the process of something becoming lower in quality or performance. The longer the asset can last without deteriorating the better value the asset represents.
* Refer to the question column for response
What is PQQ and what does it include?
Reveal Solution Discussion 0Correct Answer:
See the answer in explanation.
Explanation:
Pre-qualification questionnaire (PQQ) is often standard forms that buyers send to po-tential suppliers. The purpose is to ensure that these potential suppliers could, if they win the contract, supply the product or service to the standard required. PQQ includes requesting details from the potential suppliers on the following information
1. Company Details
2. Environment policies
3. Trading history
4. Ethical policies
5. Financial information
6. Health and safety policies
7. Quality standards
8. References
9. Insurance.
What Incoterm applies here?
The supplier is responsible of placing the goods in the hands of a chosen carrier by the buyer, at which point the buyer takes on the risk.
- A. FCA - Free Career
- B. CPT - Carriage Paid To
- C. EXW - Ex Works
- D. CIP - Carriage and Insurance Paid to
Correct Answer: A 🗳️
What are advantages and disadvantages of the two types of specifications?
Reveal Solution Discussion 0Correct Answer:
See the answer in explanation.
Explanation:
Ones the need is understood, the procurement professional develops the specifications while working together with stakeholders and colleagues to ensure that the final design is fit for purposes that it meets the generated need.
Specification can be focus on performance or conformance.
Performance specification states what the product or service must do or how it should perform but leave the supplier the freedom to achieve this, however they wish.
Performance specification brings the following advantages; it allows supplier innovation, promote competition in the market place, shorter document, quick to prepare. The disadvantage of perfor-mance specification is that buyers may not know exactly what they will be getting.
Conformance specification gives clear instructions to the supplier about what is required and how it should be achieved. Examples of conformance specifications are chemical formulae, recipes and technical drawings.
Conformance specification specifies which standards a requirement must meet or exceed. The advantage of using it is; buyers know exactly what they will get. It has the following disadvantages; the buyer bears the risk, it does not encourage supplier to innovate, take longer and complex documentation.
What two areas of an organization do the Kraljic Portfolio matrix uses to establish the category of a product or service?
Reveal Solution Discussion 0Correct Answer:
See the answer in explanation.
Explanation:
The Kraljic Portfolio Matrix shows where a product or services fits into in an organization. It is based on two areas 1) the risk of supply (Risk Impact). 2) Effect it has on profit (cost impact).
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