Free and Premium CIPS L4M4 Dumps Questions Answers

Multiple sourcing is most suitable for strategically important, high-value requirements such as raw materials. This approach reduces dependency on a single supplier, improves resilience, and increases competition. One-off requirements like machinery (A) are not suited to multiple sourcing, while options B and D describe disadvantages, not benefits. Responsible sourcing requires risk mitigation strategies tailored to the category, and multiple sourcing is effective where continuity and bargaining power are critical.

Explanation

Weighted points systems can be time consuming to create. They're very transparent and allow for objective grading of supplier bids (so these answers are incorrect). They are not easy to manipulate and this is an advantage of using them.

Requesting suppliers to quote in GBP Sterling removes exchange rate risk by fixing the cost in the buyer’s local currency. This strategy aligns with responsible sourcing practices by providing cost stability and protecting the procurement budget from currency fluctuations.

Phishing is a form of fraud, where deception is used to gain financial advantage or access to sensitive data. It is not corruption (misuse of power), bribery (offering inducements), or a human rights issue. Procurement professionals must be alert to fraud risks in supply chains, including cyber-enabled risks such as phishing and invoice fraud. Responsible sourcing extends to protecting organisational data and finances against such attacks, often through robust controls, training, and supplier verification procedures.

DDP (Delivered Duty Paid) requires the supplier to cover all delivery costs, including import duties and taxes. This term ensures that the buyer receives the goods without additional charges, aligning with public sector procurement practices for cost-effective and transparent sourcing.

Explanation

ISO isn't an indices- it stands for 'International Labour Association'.

The others are all indices that measure economic data; consumer price index, producer price index and gross domestic product.

Restricted tendering is a two-stage process: first, a pre-qualification stage to ensure only capable, compliant suppliers are invited; second, the issue of the ITT to that shortlist. This method is appropriate when requirements are complex, high-value, or where assurance of supplier competence is essential. It is not based solely on price and does not rely on limited supplier numbers but on filtering through qualification. This balances transparency and efficiency, avoiding wasteful evaluation of unsuitable suppliers while still maintaining competitive tension. CIPS L4M4 highlights that restricted tendering strengthens governance, improves efficiency, and ensures due diligence in supplier selection.

Explanation

A bribe is anything that is of value to the recipient. It’s commonly money, but could also be an item such as a car, or doing someone a favour such as hiring their son.

Explanation

If tenders are received by electronic submission exclusively, the buyer can reduce the timescale. On average the time for a standard tender submission can be reduced by 5 days if bids are submitted electronically.

*Note* this is based off current PCR Regs 2015 which are being superseded in October 2024 by new legislation. We currently don't know what the new regs will say on this. If it's different, my best guess is CIPS will remove any question about it from their exam- because the study guide would be wrong and that would lead to complaints.

Accepting an invitation under such circumstances would violate ethical standards, as it could create a conflict of interest. Ethical sourcing and procurement practices require impartiality, and any perceived favoritism or bias can harm the organisation's integrity.

CIPS promotes a constructive and corrective approach when suppliers fall short of ethical standards, especially on critical issues like human rights. Immediately cutting ties can harm workers further and disrupt supply without addressing root causes. A responsible sourcing approach requires buyers to engage suppliers, escalate the concern, and establish a corrective action plan with monitoring to ensure compliance. Only if the supplier refuses to act or breaches persist should termination occur. This supports continuous improvement, supplier development, and ethical due diligence, reflecting global standards such as the UN Guiding Principles on Business and Human Rights.

The 35-day minimum applies to public sector procurement under EU/UK directives, not the private sector. In private procurement, response times should be proportional to the complexity and value of the requirement. Simple RFQs may require only a few days, while complex tenders involving technical submissions may justifiably need weeks. Responsible sourcing involves ensuring suppliers have fair opportunity to respond adequately, but without unnecessary delays that could affect business needs. Therefore, rigidly applying a fixed number of days in the private sector is neither necessary nor efficient.

The balance sheet and profit and loss account provide a comprehensive view of an organisation’s financial health, showing assets, liabilities, and profits. These statements are essential in evaluating a supplier’s financial capacity, aligning with responsible sourcing practices for financial stability.

Unscheduled audits can provide an unbiased view of supplier practices and help identify compliance issues that might be hidden during scheduled audits. This approach supports responsible sourcing by ensuring accurate assessments of ethical and quality standards.

Total Quality Management (TQM) practices and ISO 9001 certification are indicators of a supplier’s commitment to quality. Responsible sourcing evaluates these factors to ensure suppliers meet high-quality standards and continuous improvement expectations.

An RFI is an exploratory tool, used to gather information before specifications or tendering. It is appropriate for obtaining indicative pricing (A), understanding the range of products/services (C), and confirming certifications like environmental or quality standards (D). RFQs, by contrast, request firm pricing based on defined specifications. RFIs are not used to renegotiate existing contracts (E) or agree payment terms (B). Responsible sourcing emphasises using RFIs to identify suppliers aligned with ethical, environmental, and operational expectations before moving to a formal competitive process.

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

Gearing measures how much of an organisation's long-term funding is made up of long term debt and loans. Therefore the correct answers are 'shareholder equity' and 'long term debt'.

There are many question about financial ratios that can come up on the exam. If you're unsure on them I suggest doing further reading outside of the study guide as this will help. I like this youtube video (I'm not associated with the makers of this video but think they're really good at explaining things to beginners) Gearing Ratio explained (youtube.com)

Providing a debrief allows suppliers to understand the tender process and learn areas of improvement, promoting transparency. This practice supports responsible sourcing by fostering a fair, competitive environment and encouraging suppliers to improve their future offerings.

A balance sheet sets out assets, liabilities and equity at a point in time. Current (short-term) liabilities such as overdrafts and tax creditors are part of it. Cash receipts (A) sit in cash-flow statements; expenses and profit (B) are in the income statement; ratios (C) are derived metrics, not items on the statement.

Explanation

the correct answer is 'marketplace competition'.

Ethical practice is about prohibiting corrupt and unfair practice, rather than issues of supply and demand. Although being in a cartel is 'unethical behavior' this option doesn't fully answer the question which talks about limiting supply- this is related to marketplace competition.

Exchange rate fluctuations can significantly affect the cost of international contracts. The most direct way to eliminate this risk is to agree prices in the buyer’s home currency (GBP Sterling). This passes the risk to the supplier, who must manage currency exposures through hedging or local arrangements. Using the exchange rate at delivery (C) retains exposure for the buyer, while financial analysis (A) and competitive tendering (B) don’t address exchange risk. Responsible sourcing requires buyers to consider financial risk-sharing mechanisms as part of contract negotiations.

Sourcing relates to identifying suppliers (E) and requesting quotations (D) as part of the market engagement stage of the procurement cycle. By contrast, creating call-off orders, raising requisitions, and goods receipting are post-contract operational activities. Responsible sourcing highlights that supplier identification and quotations are key to ensuring ethical, competitive, and compliant supply chains. These activities help ensure alignment with organisational goals, supplier diversity, and sustainability objectives.

To facilitate the legal movement of goods across borders, specific documentation is required. An export or import license authorizes the shipment of goods to or from a particular country. A customs declaration provides details about the goods being transported, ensuring compliance with the importing country's regulations. Non-disclosure agreements and conflict of interest declarations are related to confidentiality and ethical considerations, not the physical movement of goods.

Exact Extract from Study Guide:

"Documents and systems that allow the movement of goods within the EU:

• T1 Documents

• Import/Export Licence

• Single Administrative Document

• New Computerised Transit System

• Customs Declaration Service"

Advertising tenders is crucial for achieving value for money by encouraging competitive bids, which can lead to better pricing and service offerings. It also provides insights into the market by revealing the capabilities and innovations of various suppliers, aiding in informed decision-making.

Exact Extract from Study Guide:

"Inviting suppliers to take part in a competitive tender may reduce the potential for the biased selection of a supplier. Time, money and resource could be saved..."

A carnet (specifically an ATA Carnet) is a customs document that allows for the temporary duty-free and tax-free movement of goods across international borders. It is commonly used for exhibitions, fairs, and professional equipment but is not proof of origin. Proof of origin is instead provided by a certificate of origin or other trade documents. It is also not an insurance policy. Responsible sourcing requires buyers to distinguish between documents used for temporary movement (carnet), origin evidence (certificate of origin), and risk transfer (insurance). Correct understanding avoids compliance failures, delays, or unexpected costs in international trade.

The Triple Bottom Line framework evaluates an organisation's impact on social, environmental, and economic factors. Financial and environmental performance are critical components, along with social metrics, aligning with responsible sourcing goals to promote sustainability and ethical practices.

Explanation

Continuity of supply for the buying organisation is an advantage of TUPE regulations.

TUPE is the Transfer of Undertakings (Protection of Employment). It's when the workforce / em-ployees of one company go to work for another one, usually after their company is bought out. They're transferred to the new company along with the furniture and buildings.

TUPE is UK specific. You don't need to know too much details about it for this exam - just what it is and the benefits. The main benefit is people don't lose their jobs when their company gets bought out. Basic guide to TUPE (pinsentmasons.com)

Explanation

Eamon should use a cross-functional team (this rules out two of the options). The purpose of using a cross-functional team is to use the knowledge of people from other departments as they may better understand the service required and help assess any technical questions. Therefore a cross-functional team of procurement personnel, isn't cross-functional (they're all the same function). Yoyos is a bit of a silly example, the exam questions are a little more serious- but the learning outcome is the same; use a cross-functional team to evaluate bids.

Ordering in November, when demand is lowest, may allow the buyer to secure better pricing and availability, aligning with responsible sourcing by optimizing purchase timing to achieve cost savings and reliable supply.

Compliance with fair trade standards demonstrates the supplier's commitment to social responsibility, including fair wages and ethical working conditions. This aligns with responsible sourcing practices, ensuring that suppliers maintain ethical labor standards, as advocated in the principles of ethical sourcing.

Explanation

they are stock markets.

What is the FTSE 100 Index? Complete Beginner's Guide (moneycheck.com)

BSE SENSEX – Wikipedia

Explanation

A supplier who follows the CIPS Code of Conduct is more likely to meet the buyer's needs is the correct answer.

The other options are wrong:

1) Compliance with Codes of Conduct from professional bodies is optional. E.g. CIPS - no organi-sation is forced to comply with CIPS.

2) Unethical behaviour is not impossible to detect, it may be difficult but with correct due diligence and things like audits it's completely possible

3) ISO 14001 is quality management so is irelevent.

Explanation

gross profit = total revenue - cost of sales.

Learn all you can about financial ratios and financial statements for the exam- it's a very common topic

The acid test (quick ratio) is an effective measure of a supplier's ability to meet short-term liabilities, providing insights into financial stability. This aligns with responsible sourcing by ensuring the supplier is financially capable of fulfilling a strategic contract.

Explanation

This is a facilitation payment. It's when a sum of money is given for 'helping to facilitate' a contract. E.g. a procurement manager may accept a facilitation payment from a supplier for selecting him to be a new supplier for a big contract.

In the UK this is definitely considered a bribe. It's also against the CIPS Code of Conflict

Explanation

cost and freight is specific to transport over water. The others relate to all types of transportation. Incoterms_2020_chart | Intersped

Some students report a lot of questions on Incoterms in the exam, some say they only had 1. It real-ly is luck of the draw.

Explanation

shareholder equity = the owner/s of the organisation's residual claim once all debts have been paid. What Is Shareholder Equity (SE) and How Is It Calculated? (investopedia.com)

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 correct answer is 'yes - these can be completed without warning which would give Ali an accurate picture of the supplier's operations'. The other options are incorrect:

1) you can do many types of audit- financial, ethical, Health and Safety etc

2) asking a supplier about their ethical practices isn't likely going to get you accurate information. They'll just tell you what they think you want to hear

3) audits are great- but they don't ALWAYS uncover issues. Always is the key word in that sentence which makes it incorrect.

Profitability and asset levels indicate a supplier’s financial stability and ability to meet contract demands. Responsible sourcing practices include assessing financial capacity to reduce risk in the supply chain and ensure long-term supplier viability.

Incorporating sustainability and environmental criteria into procurement decisions is essential for promoting responsible sourcing practices.Consolidated deliveryrefers to combining multiple shipments into a single delivery, which can significantly reduce the carbon footprint associated with transportation. By minimizing the number of deliveries, organizations can decrease fuel consumption and emissions, aligning with environmental sustainability goals.

This practice is particularly relevant in the procurement of IT supplies, where frequent, small deliveries can be consolidated to improve efficiency and environmental performance. Evaluating suppliers based on their ability to provide consolidated deliveries demonstrates a commitment to sustainable procurement practices.

Explanation

The correct answer is importation rules and tariffs. This is because in offshoring some of the manufacturing will be done in another country then shipped back to the UK. The products will have to go through customs so may be subject to tariffs and duties.

Steff's not exporting anything in the scenario and paying electronically and getting lower costs are not RISKS.

Explanation

Exchange rates and tariffs are associated with international sourcing.

The other options are concerns for both local sourcing and international sourcing.

Explanation

A cash flow statement shows the money coming in and out. This would therefore show whether a supplier has enough money coming in, to be able to pay some of it out to a subcontractor.

P&L and Balance Sheets look more broadly at finances, rather than saying what's physically in the bank at a specific given time.

Do learn the difference between these three financial documents for the exam.

Balance Sheet: Explanation, Components, and Examples (investopedia.com)

Profit and Loss Statement Meaning, Importance, Types, and Examples (investopedia.com)

Cash Flow Statement: How to Read and Understand It (investopedia.com)

A bill of lading serves as:

Evidence of the contract of carriage between shipper and carrier.

Local anti-corruption laws (A) provide insight into the legal framework and enforcement environment, while Transparency International (B) publishes the Corruption Perceptions Index and reports on bribery risks worldwide. These are reliable sources for assessing corruption levels and associated risks. UNSDGs set broad sustainability goals but not country-specific corruption risks. The ICC deals with arbitration, not anti-bribery. ISO standards provide frameworks for compliance but do not analyse country risk. Responsible sourcing requires due diligence on governance environments to mitigate bribery risks and comply with anti-corruption legislation such as the UK Bribery Act.

Advertising in a local newspaper for urgent services like pest control may not be the most efficient approach. It can lead to an overwhelming number of responses, many of which may not meet the specific requirements, thereby delaying the evaluation process. For urgent needs, direct sourcing from pre-qualified suppliers or using existing frameworks is often more effective.

For urgent, low-value local services, targeted sourcing (e.g., RFQs to pre-vetted suppliers) is more efficient than open advertising that can create excess, low-quality responses and slow down delivery. Responsible practice also considers proportionality and timely risk control.

In an open tender process, any supplier can submit a bid, and there is no pre-qualification stage. This approach is suitable when the requirements are well-defined, and there is a sufficient number of suppliers in the market to ensure competition. However, if too many suppliers respond, it can lead to an overwhelming number of bids to evaluate. Therefore, it's essential to consider the number of potential suppliers in the market before opting for an open tender.

Exact Extract from Study Guide:

"Open procedure – used for well-specified requirements and there is no pre-qualification of bidders. Many suppliers could submit a bid, which could result in lots of bids to assess, so the open procedure is normally only used where the number of potential bidders is expected to be relatively low."

Weighted points systems are appropriate for complex or high-value purchases where multiple factors (e.g., quality, sustainability, delivery) must be balanced. For simple, low-value purchases like pens, price is typically the only differentiating factor. Using a weighted points system would overcomplicate the process, wasting resources. Responsible sourcing requires proportionality — applying robust evaluation methods where justified, while keeping processes simple and efficient for routine purchases. This ensures efficiency without compromising governance, freeing procurement resources for strategic projects.

Standards, such as ISO or BS norms, establish clear, universally recognised benchmarks for quality, safety, and performance. Including them in specifications reduces ambiguity, ensuring suppliers know exactly what is required and how compliance will be measured. They do not automatically guarantee lowest pricing or cover all unique buyer requirements. Instead, they improve comparability, fairness, and governance in tendering. Responsible sourcing emphasises use of recognised standards to ensure safety, ethical compliance, and consistent quality, particularly in sensitive categories like healthcare, where patient safety and continuity of service are paramount.

Explanation

GDP = gross domestic product = "the monetary value of goods and services manufactured or sup-plied in a financial period". People use it to say whether a country's economy is strong or weak.

Stock markets look at the value of public limited companies within a country.

Commodity indices look at the value of commodities such as steel, oil and wheat at a point in time

Average changes in price over a year can be measured by CPI or PPI

Explanation

Damian works in the Public Sector- it is against the law for the public sector to conduct 'post tender negotiation' after a contract has been awarded. This is because it's not transparent and equal opportunities, which are founding principles of public sector procurement.

Private sector can do whatever they want. They can do post-tender negotiations.

NOTE: this is currently the rules as per Public Contract Regulations 2015. These are being superseded in October by new legislation. The study guide doesn't mention this, but it's happening. At the time of writing (January 2023) we don't have the full details about what the new rules are but I doubt they will change on this particular topic. You can find out more about the changes to Public Sector Procurement here: Transforming Public Procurement - GOV.UK

Explanation

The correct answer is financial stability (this is done by using all of those lovely ratios in chapter 1.3) and capacity and capability (which are part of Carter's 10 Cs).

At PQQ stage you're looking purely at whether the supplier is good or bad (to put it simply). You don't give them details of your requirement yet, so they're not providing a quote / pricing structure / price schedule at this point in time. That would be at the next stage, IF they pass PQQ, when you issue the tender competition.

Conducting periodic audits by third-party specialists is a reliable way to monitor compliance with ethical standards, as these audits provide an objective assessment. This aligns with ethical sourcing practices, as it promotes accountability and ensures continuous adherence to agreed-upon standards.

Loss of control and loss of private information are significant risks in outsourcing. Responsible sourcing involves mitigating these risks by setting clear agreements, monitoring, and safeguarding sensitive information to maintain control over outsourced activities.

A full competitive tendering process ensures fairness by treating all suppliers equally, allowing them to compete on a level playing field. This aligns with ethical sourcing principles, especially in the public sector, where transparency and equal opportunity are paramount.

Explanation

Plastic is not a commodity. A commodity is something that is naturally occurring and plastic is manufactured. The other category of commodity is agriculture.

The balance sheet provides a snapshot of a company's financial position at a specific point in time, detailing assets, liabilities, and equity. Short-term liabilities, such as unpaid taxes and bank overdrafts, are obligations the company must settle within a year and are critical indicators of the company's liquidity and financial health.

Exact Extract from Study Guide:

"The balance sheet includes details of current liabilities, such as unpaid taxes and bank overdrafts, which are essential for assessing a supplier's short-term financial obligations and overall stability."

Incoterms are grouped into four categories:

E: Departure (EXW)

F: Main carriage unpaid (FCA, FAS, FOB)

C: Main carriage paid (CFR, CIF, CPT, CIP)

Addressing human rights issues collaboratively by developing an action plan allows for improvement and correction. This approach is consistent with ethical sourcing principles, which encourage responsible intervention to correct and improve supply chain practices rather than punitive measures that may not lead to long-term change.

Public sector procurement is governed by specific regulations that stipulate minimum timescales for various stages of the tendering process. These regulations are designed to ensure transparency, fairness, and adequate time for suppliers to prepare their bids. For instance, under the Procurement Act 2023, certain procedures have defined minimum periods for tender submissions to allow sufficient time for supplier participation.

Exact Extract from Study Guide:

"Public sector procurement is subject to specific regulations that dictate minimum timescales for tendering processes to ensure fairness and transparency."

Explanation

The correct answers are; suspiciously low labour costs, workers living on site and poor quality products (as this signals that the workforce may be unskilled).

A low score on the CPI is a good thing (high scores are more likely to signify slavery concerns) and just because someone speaks English as a second language doesn't mean you automatically need to be suspicious. That would be prejudice.

Explanation

The Pareto Principle can be used when considering changing a supplier. It helps to categories suppliers by how strategically important the item is that they provide to the business.

Expenditure analysis by category/supplier enables buyers to track trends over time (A), supporting benchmarking and financial control. It also identifies opportunities for negotiation (C) by highlighting concentration of spend and potential leverage with suppliers. Marketing strategy, production scheduling, and stock disposal are outside procurement’s primary scope. Responsible sourcing relies on robust spend analysis to identify efficiency opportunities, reduce wasteful expenditure, and support supplier relationship management strategies, all while aligning with sustainability and compliance goals.

Explanation

The correct answers are innovation, on time in full deliveries and sustainability.

The other options are pricing mechanisms rather than 'added value'. Added Value is giving the buyer something extra that's not necessarily financial. It can be as simple as delivering orders quicker than expected, or having a dedicated customer service phone line. Something that makes their lives a little easier.

Under FOB (Free on Board), the buyer assumes responsibility once the goods are loaded onto the ship, including costs and risks beyond this point. This Incoterm is commonly used in international trade, helping both parties clarify responsibilities and promote fair risk distribution.

Protectionist measures are designed to shield domestic industries from foreign competition. The most common form is import duties (tariffs), which raise the landed cost of goods entering the country. This creates a barrier to trade by making imports less competitive compared to local products. Arbitration is a dispute resolution method, not a trade barrier. Carnets are documents for temporary duty-free movement of goods, and inward processing relief is an exemption for goods imported for re-export. Responsible sourcing requires buyers to anticipate the cost and risk implications of protectionism when engaging in international supply.

Financial stability is a critical risk factor in high-value contracts. If a supplier collapses financially during contract performance, the buying organisation faces supply disruption, increased costs, and reputational risk. Financial assessments help identify vulnerabilities such as high debt, poor liquidity, or over-reliance on limited customers. While profitability, credit scores, and broader capability assessments are useful, the most pressing concern is ensuring continuity of supply. Ethical and responsible sourcing requires buyers to consider the long-term viability of suppliers, not just short-term savings. This aligns with responsible practice, protecting stakeholders, end customers, and the organisation’s own obligations.

Incorporating recognized standards into procurement specifications provides clear guidelines for suppliers, reducing ambiguity and ensuring that products or services meet predefined quality and safety criteria. This is particularly important in sectors like healthcare, where equipment must adhere to strict standards to ensure patient safety and operational efficiency.

Financial assessments help ensure a supplier can meet the demands of a high-value contract without disruptions. This aligns with responsible sourcing principles by promoting stable supplier relationships and reducing the risk of supply chain interruptions due to financial instability.

The current ratio = Current Assets ÷ Current Liabilities. Here, Current Assets = 300; Current Liabilities = 150. Therefore, Current Ratio = 300 ÷ 150 = 2.0. This means the supplier has twice the assets available to cover short-term debts, indicating strong liquidity. The other options incorrectly subtract assets or liabilities, which is not the formula. Responsible sourcing emphasises interpreting ratios accurately: a ratio below 1 signals liquidity risks, while excessively high ratios may indicate inefficient asset utilisation.

Liquidity ratios (e.g., current ratio, quick ratio) measure whether a company can cover short-term debts with liquid assets like cash, receivables, and inventory. These ratios provide insight into a supplier’s ability to remain operational without defaulting on immediate obligations. Profitability ratios show long-term returns; EPS and dividends per share apply to shareholders, not supply continuity. Responsible sourcing emphasises liquidity as a key measure of supplier stability, as poor liquidity can cause supply interruptions or business failure, jeopardising contracts and buyer obligations.

Competitive tendering is ideal for high-value contracts where technical expertise is essential. This method supports responsible sourcing by ensuring quality and aligning the supplier’s capabilities with the buyer’s needs, as required in more complex procurement scenarios.

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."

Regularly checking supplier policies and conflict of interest registers helps ensure that suppliers are upholding ethical standards, which supports responsible sourcing practices. This governance activity aligns with ethical guidelines to promote transparency and prevent conflicts that could affect the integrity of the supply chain.

Explanation

Raja should send out a RFI- request for information; this will allow him to gain feedback from the marketplace prior to tender.

Speaking only with current suppliers will not provide all the information Raja requires.

He should not send out a request for quotation since he is still conducting market research

An open competition would be how he can procure, after he's completed his research

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.

Explanation

Price and Quality are the two considerations when marking a competitive tender.

Location, distribution and reputation may be considered for SOME tenders, but these would be sub-categories that fall under 'quality questions.

Explanation

"Meet current liabilities" is a posh way of saying "can you pay your bills". You're therefore looking for a liquidity ratio- a ratio that looks at assets vs liabilities (i.e. money in the bank vs money owed out). The Acid Test is a liquidity ratio. It's sometimes called the 'quick ratio'. Both terms come up on the exam. The other options are financial ratios but aren't for liquidity.

Explanation

Most Economically Advantageous Tender (MEAT) is the Public Sector's go to evaluation criteria.

NOTE that this is changing from October 2023. Public Sector Procurement is currently based on legislation called PCR 2015 which itself is based on EU Procurement Directives. Now the UK has officially Brexited, we're making our own laws and the new Procurement Bill will be coming into effect in November 2024. One of the major changes is that MEAT is changing to MAT (most ad-vantageous tender - without the economical bit).

If you're sitting this exam until July 2024- you're fine- learn what the study guide says. If you're taking the exam from November 2024 I'm not sure what students are expected to do. The entire section on public sector procurement is incorrect for you. My best guess is CIPS may removequestions this section as the study guide will be wrong, but I really don't know how they plan to handle this.

The new Procurement Bill - MEAT to MAT - Hempsons - Hempsons

An Invitation to Tender (ITT) is used when requirements are complex, high-value, or strategic, requiring detailed supplier submissions, robust evaluation, and structured governance. RFQs are better for low-value, straightforward purchases where price is the main factor. ITTs ensure fairness, transparency, and comprehensive evaluation when the stakes are high. It is not chosen simply because of oligopolies or time pressure. Responsible sourcing requires matching the sourcing process to the complexity and risk of the procurement, ensuring appropriate competition and governance.