CIPS L4M6 Supplier Relationships Online Training
CIPS L4M6 Online Training
The questions for L4M6 were last updated at Apr 13,2024.
- Exam Code: L4M6
- Exam Name: Supplier Relationships
- Certification Provider: CIPS
- Latest update: Apr 13,2024
When developing a supplier partnership, a buyer can take either a strategic or reactive approach .
What would be a reason for a reactive approach?
- A . You discover that the supplier has a high profit margin
- B . The buyer wishes to create a new product and requires input from a supplier
- C . Sudden changes in the marketplace
- D . It will allow for consolidation in the supply chain
C
Explanation:
The correct answer is ‘Sudden changes in the marketplace’ C this is a reason a buyer would be reactive. Reactive is when something happens to you and it forces you to act in a certain way. The other options would be strategic rather than reactive. P. 163
What is a disadvantage of including qualitative KPIs into a contract?
- A . They can lead to poor supplier performance
- B . They pull focus from the more important quantitative KPIs
- C . They are hard to measure
- D . They make the buyer seem weak
C
Explanation:
The correct answer is ‘They are hard to measure’ p.103
In Public Sector procurement a PIN is sent out to inform suppliers of an upcoming tender opportunity .
What does PIN stand for?
- A . Prior Information Notice
- B . Procurement Information Number
- C . Procurement Identification Number
- D . Possibilities Identified Notice
A
Explanation:
A PIN is a ‘prior information notice’ C it is sent out before the ITT to let suppliers know that an opportunity is coming up and they should look out for it. See p 72 “supplier identification-public sector” for more details.
Brian Air is a company that is trying to break into the air transport market .
Which of the following could be barriers to entry for Brian Air? Select THREE
- A . economies of scale
- B . access to capital
- C . licences and permits
- D . health and safety
- E . ethical sourcing
A,B,C
Explanation:
Barriers to entry are economies of scale (in the air travel industry you can’t just start off small and grow), access to capital (you need to already have a lot of money to buy airplanes) and licences and permits (you need to ensure you have the correct licences to fly planes). These are listed on p.41. Other barriers include; strong brand identity already dominant in the market, high switching costs for buyers, access to distribution networks and government policy.
Which of the following documents would you expect a supplier to submit as part of a Request for Proposal? Select THREE
- A . Full pricing information
- B . Liquidity Ratio
- C . Risk Assessments
- D . Method Statements
- E . Gearing Ratio
A,C,D
Explanation:
You would expect a supplier to submit full pricing information, risk assessments and method statements. However, depending on what you’re procuring, you might not need to see risk assessments or method statements. Liquidity and Gearing may be looked at during the Pre-Qualification stage, but wouldn’t form part of a RFP. See p.76
Mendelow’s Stakeholder Matrix categorises stakeholders into four groups and provides insight into how these stakeholders should be managed .
What is a limitation to using this Matrix to categorise stakeholders?
- A . Nowadays, Stakeholders fall into more than four categories
- B . The Matrix doesn’t consider the power these stakeholders have
- C . The Matrix doesn’t consider whether the stakeholder is for or against the activity
- D . The categories are hard to remember
C
Explanation:
The correct answer is ‘The Matrix doesn’t consider whether the stakeholder is for or against the activity’. For a list of other limitations of using Mendelow’s Stakeholder Matrix see p.82
Which of the following are possible drivers for partnership sourcing? Select THREE.
- A . The protection of intellectual property rights
- B . The marketplace has become more volatile
- C . Working together will create synergies
- D . The need to improve performance to satisfy the end customer
To increase production costs and lead-times
B,C,D
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.
A doctor’s surgery requires a complex database system to manage all of its patients data, which is highly sensitive. The system also needs to link to other departments of the health service such as physiotherapy and intensive care. The Manager of the surgery is considering outsourcing the management of the database to an IT company .
What is the Manager’s main motivation for doing this?
- A . The supplier is an expert in their field
- B . This will result in economies of scale
- C . This will free-up internal resources
- D . This will result in cost-savings
A
Explanation:
The reason for outsourcing in this example is that the IT firm is an expert in their field. The requirement is complex and important and this is the reason why it is not being delivered in-house. The other answers given CAN be reasons for out-sourcing, but don’t relate to this example. For a full list of reasons a company could use outsourcing see p. 4-5
What is the correct order of the stages of team development?
- A . Forming, storming, norming, performing
- B . Forming, norming, performing, storming
- C . Storming, forming, performing, norming
- D . Storming, forming, norming, performing
A
Explanation:
The correct answer is Forming, storming, norming, performing (p.91). Note; some people add on two additional stages to this; mourning and adjourning. The study guide forgets to mention this, but the exam may ask you about these additional stages. So I strongly recommend doing some further reading on this (it’s called the Tuckman Group Development Model)
Which of the following statements are true of a market place which is considered a ‘perfect competition’? Select TWO.
- A . there are no barriers to entry
- B . suppliers are selling differentiated products
- C . competition is at its highest level possible
- D . competition is not strong
A,C
Explanation:
In a ‘perfect competition’ there are no barriers to entry or exit, and competition is at its highest possible level. For more information on different types of market see p.40
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