CIPS LEVEL 4 MODULE 1 ACTUAL EXAM
PAPER 2026 QUESTIONS WITH ANSWERS
GRADED A+
⩥ Definition of Procurement & Supply. Answer: recognition of the fact
that the purchasing function has a role in not just "buying inputs" but in
"securing supply"
⩥ Direct Costs. Answer: These are costs which can be identified directly
with the production of a good or service; e.g. raw materials.
Usually strategic or leverae suppliers
⩥ Indirect Costs. Answer: These are costs which cannot be matched
against each product because they need to be paid whether or not the
production of good or services takes place; e.g. rent on the premises.
⩥ Kraljic Matrix. Answer: A tool for portfolio analysis: a four-box
matrix that reflects the segmentation of spend based on an assessment of
the value of the spend relative to the market risk to acquire
1. Leverage Suppliers
2. Strategic Suppliers
3. Routine Suppliers
4. Bottleneck Suppliers
,⩥ CAPEX is. Answer: 1. Capital expenditures are for major purchases
that will be used in the future.
2. The life of these purchases extends beyond the current accounting
period in which they were purchased.
3. Because these costs can only be recovered over time through
depreciation, companies ordinarily budget for 4. CAPEX purchases
separately from preparing an operational budget.
⩥ OPEX. Answer: Operating expenses are the costs for a company to
run its business operations on a daily basis.
⩥ CAPEX. Answer: 1. Useful beyond its curent year
2. Lump sum up front
3. 3-10 year accounting lifespan for depreciaiton
4. Listed as preprty or equipment
5. Tax deducted as asset depreciated
⩥ Name the 13 stages of the procurement cycle. Answer: 1. Understand
the need.
2. Market Commodity options.
3. Develop Stratgey/ Plan.
4. Pre-procurement / market test.
5. Develop required documentation.
,6. Supplier Selection.
7. Issue invitation to tender.
8. Bid / tender evaluation.
9. Contract Award.
10. Warehouse logistics & receipt.
11. Contract performance review and continuous improvement.
12. Supplier relationships / contract management.
13. Asset management / end of life.
⩥ Scope of Procurement. Answer: 1. Contributor of Added Value
2. Manages cost of procured materials & services on behalf of an
organisation
3. Helps manage inventory
4. Works alongside logistics partner function
5. Helps mange quality in procurement
6. Manages delivery performance
7. Manages & controls waste in the supply chain
⩥ Porters Value Chain. Answer: Primary - Inbound Logistics,
Operations, Outbound Logistics, Marketing & sales, Services
Support Activities - Firm Infrastructure, HR Management, Technology,
Procurement
, ⩥ Action points for CAPEX purchasing. Answer: 1. Documentation or
guidline and standard procedure
2. Cross-functional team for appraisal & evaluation
3. Appropriate project evaluation methology
4. Process automation (E-platform)
5. TCO / Life cycle costing
6. Regular review for better control & monitoring
⩥ 5 rights of procurement. Answer: Right Quality
Right Quantity
Right Price
Right Place
Right Time
⩥ Right Quality. Answer: goods which are of satisfactory quality and fit
for their intended purpose e.g. ensuring an accurate specification of the
requirement and its quality standards.
⩥ Right Quantity. Answer: sufficient to meet demand and maintain
service levels while minimising stock holding e.g. by ensuring that there
is accurate demand forecasting and efficient inventory management.
PAPER 2026 QUESTIONS WITH ANSWERS
GRADED A+
⩥ Definition of Procurement & Supply. Answer: recognition of the fact
that the purchasing function has a role in not just "buying inputs" but in
"securing supply"
⩥ Direct Costs. Answer: These are costs which can be identified directly
with the production of a good or service; e.g. raw materials.
Usually strategic or leverae suppliers
⩥ Indirect Costs. Answer: These are costs which cannot be matched
against each product because they need to be paid whether or not the
production of good or services takes place; e.g. rent on the premises.
⩥ Kraljic Matrix. Answer: A tool for portfolio analysis: a four-box
matrix that reflects the segmentation of spend based on an assessment of
the value of the spend relative to the market risk to acquire
1. Leverage Suppliers
2. Strategic Suppliers
3. Routine Suppliers
4. Bottleneck Suppliers
,⩥ CAPEX is. Answer: 1. Capital expenditures are for major purchases
that will be used in the future.
2. The life of these purchases extends beyond the current accounting
period in which they were purchased.
3. Because these costs can only be recovered over time through
depreciation, companies ordinarily budget for 4. CAPEX purchases
separately from preparing an operational budget.
⩥ OPEX. Answer: Operating expenses are the costs for a company to
run its business operations on a daily basis.
⩥ CAPEX. Answer: 1. Useful beyond its curent year
2. Lump sum up front
3. 3-10 year accounting lifespan for depreciaiton
4. Listed as preprty or equipment
5. Tax deducted as asset depreciated
⩥ Name the 13 stages of the procurement cycle. Answer: 1. Understand
the need.
2. Market Commodity options.
3. Develop Stratgey/ Plan.
4. Pre-procurement / market test.
5. Develop required documentation.
,6. Supplier Selection.
7. Issue invitation to tender.
8. Bid / tender evaluation.
9. Contract Award.
10. Warehouse logistics & receipt.
11. Contract performance review and continuous improvement.
12. Supplier relationships / contract management.
13. Asset management / end of life.
⩥ Scope of Procurement. Answer: 1. Contributor of Added Value
2. Manages cost of procured materials & services on behalf of an
organisation
3. Helps manage inventory
4. Works alongside logistics partner function
5. Helps mange quality in procurement
6. Manages delivery performance
7. Manages & controls waste in the supply chain
⩥ Porters Value Chain. Answer: Primary - Inbound Logistics,
Operations, Outbound Logistics, Marketing & sales, Services
Support Activities - Firm Infrastructure, HR Management, Technology,
Procurement
, ⩥ Action points for CAPEX purchasing. Answer: 1. Documentation or
guidline and standard procedure
2. Cross-functional team for appraisal & evaluation
3. Appropriate project evaluation methology
4. Process automation (E-platform)
5. TCO / Life cycle costing
6. Regular review for better control & monitoring
⩥ 5 rights of procurement. Answer: Right Quality
Right Quantity
Right Price
Right Place
Right Time
⩥ Right Quality. Answer: goods which are of satisfactory quality and fit
for their intended purpose e.g. ensuring an accurate specification of the
requirement and its quality standards.
⩥ Right Quantity. Answer: sufficient to meet demand and maintain
service levels while minimising stock holding e.g. by ensuring that there
is accurate demand forecasting and efficient inventory management.
