Verified L4M6 dumps Q&As - 2022 Latest L4M6 Download
Dumps Questions [2022] Pass for L4M6 Exam
NEW QUESTION 37
Phone Maker Incorporated is a manufacturer of mobile phones. It is considering investing in a partnership with its supplier of batteries and circuit boards as it wishes to produce new models of its phone more regularly. What is the main driver for Phone Maker Incorporated?
- A. Changes in the marketplace
- B. Cheaper costs
- C. Better quality products
- D. Reduced product life-cycles
Answer: D
Explanation:
The correct answer is 'reduced product life-cycles'. In this example the reason for entering a partnership is to be able to produce new models of phones more quickly- this is likely because consumers are wanting to change mobile phones more often than they did in the past, so in order to keep up with demand, Phone Maker Incorporated need to produce more phones, more quickly. Drivers of Partnership Sourcing is a key topic in the exam - you can revise these by looking at p.127 in the Study Guide
NEW QUESTION 38
Victoria runs a hotel and has recently had several security issues such as attempted robberies. She has decided that she needs to hire a security firm to ensure these issues don't continue. She has done some research and has found there are several local security firms who may be able to provide services to her hotel. However, she hasn't decided exactly what she would require the security firm to do. What should be Victoria's next steps?
- A. Issue an Invitation to Tender
- B. Issue a Prior Information Notice
- C. Issue a Request for Quotation
- D. Issue a Request for Proposal
Answer: D
Explanation:
Victoria should use a 'request for proposal' - this allows the security firms to submit ideas on how best to serve the hotel. They might come up with some ideas that Victoria hasn't thought about and can price against their own ideas. As Victoria doesn't have a concrete specification, an ITT or RFQ are not appropriate. A PIN tells suppliers that a tender opportunity is coming up and is used in the Public Sector. A hotel is not a Public Sector organisation. See p.76 for more information on when to issue a Request for Proposal
NEW QUESTION 39
Innovation is a key consideration when entering into a partnership. Is this statement true?
- A. No- the key consideration when entering a partnership is cost reduction
- B. Yes- innovation is the only reason to enter into a partnership
- C. Yes- joint innovation projects are often a strong motivation for entering into a partnership
- D. No- innovation is best achieved in a contractual relationship where KPIs can be monitored closely.
Answer: C
Explanation:
The correct answer is 'Yes- joint innovation projects are often a strong motivation for entering into a partnership'. The other options are simply not true statements. A lot of the questions on the 'Partnerships' chapters of the book are common-sense questions like this. It involves reading the Question: and using logic, rather that relying on your knowledge of procurement. If you found this Question: easy - that's a good sign for the exam.
NEW QUESTION 40
Partnership sourcing is often considered a 'high-risk' strategy for a buyer. Which of the following is not a risk generally associated with partnership sourcing?
- A. Single-sourcing may leave the buyer without a supply if the supplier goes into liquidation
- B. Reduced waste in the supply chain
- C. Sharing commercially sensitive data with another party
- D. Supplier may become complacent
Answer: B
Explanation:
The correct answer is 'Reduced waste in the supply chain' - this is not a risk, this is a benefit P.134
NEW QUESTION 41
A garden centre has recently purchased some lollypop sticks to use as plant labels. The staff have written the name of the plant on the lollypop stick and put it next to the plant. This helps them identify which plant is which. However, after a couple of weeks, the lollypop sticks have become mouldy and the writing has faded. Staff are now struggling to identity their plants. The Manager of the garden centre is considering returning the lollypop sticks and asking for a full refund as they were not fit for purpose. Can the Manager do this?
- A. No- the manager cannot prove that the product is faulty
- B. No- as this was not the lollypop sticks intended purpose
- C. Yes- the lollypop sticks have gone mouldy- this is unacceptable
- D. Yes- so long as the manager kept the receipt
Answer: B
Explanation:
The correct answer is 'no- as this was not the lollypop sticks intended purpose'. When deciding if something is fit for purpose, you must consider its intended and common purpose. In this case it would be for making lollypops. As the garden centre is using them for something other than their intended purpose, they can't complain if it doesn't work. Fit for purpose is discussed on p.65 p.s. there's a Question: like this in the real exam - it's just not lollypop sticks ; )
NEW QUESTION 42
Why is it more difficult for buyers in the public sector to build relationships with suppliers?
- A. There are regulations prohibiting public sector buyers from developing relationships
- B. Buyer power is strong in the public sector
- C. There are regulations that state competitive tender processes must be undertaken regularly
- D. Buyer power is weak in the public sector
Answer: C
Explanation:
It can be difficult for buyers in the private sector to build relationships with suppliers because of rules that state competitive tenders must be undertaken every few years (within the EU this is usually every 4). This means that both parties aren't as invested in developing the relationship as it's possible the contact will end shortly. Competitive tendering is a requirement in the public sector to ensure value for money for taxpayers. See p.79 for further details. There are no rules stating Public Sector organisations can't have good relationships with suppliers, and in fact most will have good relationships with their current suppliers- the issue is that neither party can get too invested in the relationship as everyone knows it may end shortly. There are rules, however, against entering into Partnership relationships (which is discussed in chapter 3).
NEW QUESTION 43
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. Method Statements
- D. Risk Assessments
- E. Gearing Ratio
Answer: 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
NEW QUESTION 44
Which of the following are not a valid reasons to terminate a relationship with a supplier? Select TWO.
- A. The supplier suddenly increases prices
- B. The supplier made one late delivery
- C. Supply base rationalisation
- D. The supplier becomes insolvent
- E. The supplier has a change in senior management
Answer: B,E
Explanation:
Two invalid reasons are; one late delivery and a change in senior management. Valid reasons to terminate a relationship are listed on p.107 and include the three listed here, as well as a material breach, damage to reputation and the supplier merges or is acquired by another company.
NEW QUESTION 45
In a partnership who is responsible for decision making?
- A. Both the supplier and the buyer
- B. The buyer
- C. The supplier
- D. The project steering committee
Answer: A
Explanation:
The correct answer is both the supplier and the buyer- joint decision making is a key aspect of partnership relationships. A project steering committee decides on priorities, suggests improvements, conducts audits etc. See p.152
NEW QUESTION 46
You work at XYZ manufacturers and a competitor has just released a rival washing machine to the product that you make. This model is proving popular with customers. What competitive force is at play?
- A. threat of new entrant
- B. threat of substitution
- C. buyer power
- D. supplier power
Answer: A
Explanation:
This is a threat of a new entrant. The competitor has now entered the washing machine market and is competing directly with you. This is not a threat of substitution as it is the same product. A substitution would be if they invented a new product that washed clothes and people started buying this instead of washing machines. There are many questions in the exam on Porter's 5 Forces - see p. 39
NEW QUESTION 47
Sandra is a buyer for a large supermarket and has been increasing unhappy with the performance of a long-term supplier of bananas. Over time the deliveries have become unreliable and this has had impacts on the supermarket's profitability. What should Sandra do first?
- A. Review the market and look for an alternative supplier
- B. Develop an exit strategy
- C. Give written notice to the supplier of plans to terminate
- D. Obtain business approval to terminate the contract
Answer: D
Explanation:
The first step is to obtain business approval to terminate. If Senior Management don't give approval, then the rest of the stages can't happen and Sandra will be stuck with her current banana supplier. There's a good diagram on p.109 detailing the steps to supplier termination.
NEW QUESTION 48
Rachel and Jacky work in the procurement department of Foddy Foods Ltd. They have been told by their CEO to build better relationships with strategic suppliers as this will create value for money for the company. In what ways can value for money be achieved by building strong relationships with suppliers? Select TWO.
- A. Better payment terms
- B. Reduction of waste
- C. Reducing costs
- D. Innovation developed as part of collaborative projects
Answer: B,D
Explanation:
Supplier relationships can result in value for money in the reduction of waste and in innovation developed as part of collaborative projects. Remember that in CIPS waste doesn't necessarily mean physical waste (as in stuff you don't want any more). There are 7 types of waste including waiting, inventory, transportation etc. So when you develop a relationship with a supplier, this can reduce waste (e.g. you may be able to get deliveries quicker by integrating your ordering system with the supplier's, or you might reduce transportation by agreeing a Consignment stock). Having a good relationship with a supplier isn't necessarily going to get you a reduction in cost or better payment terms. See p.70 for more details on this- there's a short list of ways in which good supplier relationships can bring value for money to a business.
NEW QUESTION 49
Which of the following behaviours are you likely to see in a Partnership relationship?
- A. Strong levels of trust and honest communication
- B. Opportunistic behaviour and strong levels of trust
- C. Secrecy and honest communication
- D. Honest communication and opportunistic behaviour
Answer: A
Explanation:
The correct answer is 'Strong levels of trust and honest communication'. The questions on Partnership in the exam tend to be quite straightforward, but if you're struggling with this see p. 148 for further details of behaviour in Partnerships.
NEW QUESTION 50
Togo Bongos is a manufacturer of percussion instruments, in particular of bongo drums. It requires electricity to run its factories and this is a major factor of cost impact. There are lots of suppliers of electricity in the market and there is no switching costs if Togo Bongos wanted to switch suppliers. What type of supplier is Togo Bongo's electricity supplier?
- A. leverage
- B. routine
- C. strategic
- D. bottleneck
Answer: A
Explanation:
This is a leverage supplier on the Kraljic Matrix; high cost impact and low risk impact. The diagram on p.20 gives the example of utility services such as electricity as a common leverage supplier. 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
NEW QUESTION 51
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. This will result in cost-savings
- B. This will free-up internal resources
- C. This will result in economies of scale
- D. The supplier is an expert in their field
Answer: D
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
NEW QUESTION 52
One of the fist stages of designing a Partnership is to come up with joint KPIs. These should be:
- A. Measurable, achievable and time-bound
- B. Relatable, specific and measurable
- C. Time bound, difficult and relevant
- D. Significant, measurable and achievable
Answer: A
Explanation:
The correct answer is Measurable, achievable and time-bound. This is from SMART KPIs on p. 151. Smart stands for specific, measurable, achievable, relevant, time-bound. In the exam they come up in different orders so be careful.
NEW QUESTION 53
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. licences and permits
- B. economies of scale
- C. ethical sourcing
- D. health and safety
- E. access to capital
Answer: A,B,E
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.
NEW QUESTION 54
Harry runs a hotel and has recently decided to contract an external supplier to provide the cleaning of the rooms. What is a disadvantage of doing this?
- A. There is dependency on the supplier, which increases risk
- B. The supplier will not perform as well as an internal team
- C. This will be more expensive than providing the service in house
- D. This allows staff to focus on other areas
Answer: A
Explanation:
Using an external supplier always comes with increased risk, as you become dependant upon them, and have less control over their performance (compared to an in-house team). In this example Harry will have the increased risk that the contract cleaners turn up late to their shifts, or don't do a good job. However, there is no reason to believe that the supplier will not perform as well as an internal team- we don't have enough information from the Question: for this to be true. What is true is the RISK is greater. The other answers are incorrect; the Question: doesn't indicate whether outsourcing the cleaning will be more or less expensive for Harry. Allowing staff to focus on other areas is an advantage not a disadvantage. See p.4 for more information on 'External Suppliers'
NEW QUESTION 55
Which of the following is not a stage in the relationship life-cycle?
- A. performance management
- B. design the specification
- C. on-boarding
- D. qualification
Answer: B
Explanation:
Designing the specification is not a stage in the relationship cycle- this would be done before the relationship begins. There are 6 stages of the relationship cycle; on-boarding, qualification, segmentation and risk management, performance management, development and innovation, phase out. P.13
NEW QUESTION 56
Which of the following is not a type of tender process used in the Public Sector?
- A. Unrestricted
- B. Competitive Procedure with Negotiation
- C. Restricted
- D. Competitive Dialogue
Answer: A
Explanation:
Unrestricted is not a type of tender. The 5 types are; open, restricted, competitive with negotiation, competitive dialogue and innovative partnership (though this last one is very rare in the public sector). The five types are explained in detail on p.77
NEW QUESTION 57
Which of the following are Intellectual Property Rights that you would you encounter in procurement and supply contracts? Select THREE.
- A. Risk Assessments
- B. Copywrite
- C. Method Statements
- D. Trademark
- E. Patents
Answer: B,D,E
Explanation:
Intellectual Property Rights include; Patents, Copywrite, Trademarks and Trade Secrets. P.114
NEW QUESTION 58
Value for money is often described at the 'three Es'; economy, efficiency and effectiveness. However some people consider a 4th E which refers to the public sector. What is the fourth E?
- A. Ethics
- B. Equity
- C. Equality
- D. Environment
Answer: B
Explanation:
Equity is the fourth E- this means the extent to which the service is available. See p.65 for details on the 4 Es
NEW QUESTION 59
The procurement department is sourcing new uniforms for its housekeeping team. Although the housekeeping team in itself doesn't hold a lot of power within the business, they have a high interest in the activity as it will be them who is wearing the items. When designing the specification, how should the procurement department manage the housekeeping team?
- A. Minimal effort is required as they do not hold a lot of power in the business.
- B. Manage them closely- they're key players in this procurement activity
- C. Keep them informed- it's important the housekeeping team know what's going on at each stage of the procurement
- D. Keep them satisfied- they will be wearing the uniform so need to be happy with it
Answer: C
Explanation:
The housekeeping team have low power and high interest. According to Mendelow's stakeholder matrix, this puts them in the bottom right corner which is 'keep informed'. See p.81 for more information
NEW QUESTION 60
According to Mendelow, there are four ways stakeholders can be managed, depending on the amount of power they have, and how interested they are in your project. What are these four categories?
- A. Manage closely, manage loosely, keep satisfied, keep informed
- B. Keep informed, keep happy, keep satisfied, keep notified
- C. Keep satisfied, keep informed, minimal effort, no effort
- D. Minimal effort, manage closely, keep informed, keep satisfied
Answer: D
Explanation:
The four categories are; Minimal effort, manage closely, keep informed, keep satisfied. You can see the Matrix on p.81. An easy way to remember this is there are 2 Ms and 2 Keeps. And these sit on opposite sides of the matrix.
NEW QUESTION 61
Which of the following are characteristics that differentiate between a partnership relationship and traditional contracting relationships? Select THREE.
- A. Early supplier involvement
- B. No tender process
- C. Supplier KPIs
- D. Lower costs
- E. No defined end period
Answer: A,B,E
Explanation:
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
NEW QUESTION 62
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