CIPS Flashcards L4M1 with correct answers 100% 2026

CIPS Flashcards L4M1 with correct answers 100% 2026 Define procurement - Correct Answer Procurement is the process of obtaining goods or services through following a process that includes identifying the need through to goods or services being delivered. Define purchasing - Correct Answer Purchasing is the act of physically ordering and buying something. Define supply - Correct Answer Supply is the infrastructure which ensures goods/services can be delivered Define value - Correct Answer Value is the worth of something, the difference between what we pay and what a potential customer is willing to pay What is a good - Correct Answer A good is a tangible physical item such as raw materials, components What is a service - Correct Answer A service is an intangible item such as cleaning, training What are constructional works - Correct Answer Constructional works include both goods and services, such as concrete, architecture What are stock items - Correct Answer Stock items are ones we can hold inventory of such as raw materials, components What are non-stock items - Correct Answer Non-items are ones which cannot be held, such as capital procurements, services Outline what is meant by direct and indirect procurements - Correct Answer Direct material - traceable to units of production such as wood into furniture Indirect material - not traceable to specific units such as sanding paper into sanding machinery Direct labour - directly involved in the making of units Indirect labour - Indirectly involved in the making of units such as maintenance engineers Direct expense - variable costs which are rare such as paying royalties on each unit produced Indirect expense - fixed or step-fixed, such as factory rent What are primary activities in Porter's value chain - Correct Answer Inbound logistics Operations Distributional logistics Marketing & sales Services What are support activities in Porter's value chain - Correct Answer Firm infrastructure Human resource management Technology development Procurement What is a capital expense - Correct Answer expenses incurred for future benefit which depreciates over time, such as machinery, building What is an operational expense - Correct Answer the day-to-day running costs of a business such as office supplies, wages What are the key features of capital procurements - Correct Answer Charged to capital account Procured for a long time period and long lifespan Tend to be high-value assets Procurement involves complex requirements and many stakeholders Involves developing a business case Less frequent and irregular What are the key feature of operational procurements - Correct Answer Financed from resource budget Purchased for short-term consumption Tend to be low-value Less complex repeat spends Straight-forward, following pre-set budgets What are the key features of services procurements - Correct Answer Intangibility - specifying services levels is challenging Heterogeneity - every instance is unique Perishable - provided in real time and cannot be stored Location - can only be performed in specific locations Evaluate - they are difficult to assess due to subjectivity Changing - requirements may change from initial specification What are the 5 rights of procurement and their definitions - Correct Answer price - securing all of the below at a reasonable, affordable, and competitive price place - goods delivered to the appropriate point and transported to ensure good condition on arrival quality - goods which are fit for purpose quantity - sufficient quantity to meet demand while minimising excess stock holding time - goods delivered at the right time, not so early as to incur invento