CIPS Level 4 M1 Scope and Influence of
Procurement and Supply Exam 2026 Test Guide
1. What is Procurement? Procurement is a STRATEGIC function of a business obtains some-
thing Tangible as goods or Intangible as services. Include Purchas-
ing Inventory, Logistics, Supply, Waste Management Quality, Cost,
Added Value
2. What is Purchasing? Is the ACT of physically ordering and buying something.
3. What is Supply? Is the INFRASTRUCTURE which ensures that products and services
get from supplier to the customer.
4. What is inventory? the stock of goods, materials or products
5. What is a stock? Asset available in the warehouse
6. What is asset? Value of everything an organization owns
7. Fixed cost Costs do not change (Salaries, Insurance, Rent)
8. Variable Cost Costs do change as they are linked to the business (Raw Material,
Extra hours)
9. Directly Cost (Direct Pro- Cost associated with the Job or production (Raw material, Man
curement) Power)
10. Indirectly Cost (Indirect Not associated with the Job (Clean Liquid, Stationary, Mobile phones
Procurement) contracts, MRO - Maintenance repairs and Operations.
11. Primary Sector of the The part of the economy that draws raw materials from the natural
Economy environment (Cotton, Oil, Silver, Wheat)
12. Secondary sector of the The part of the economy that transforms raw materials into manu-
Economy factured goods (Light Bulbs, Nuts and Bolts, Metal housing, Plastic
fittings)
13. Finished goods
, Units of products that have been completed but not yet sold to
customers (Shoes, Beds, Clothes, Jewellery)
14. Stock Procurement In- Can be stored and inventory Raw Material, Components and Fin-
cludes ished Goods.
15. Non-Stock Procurement Are not stored and not listed in the Organization inventory (Cleaning
Includes Services, Internet Contract, Insurances, Advertising Campaigns)
16. Explain why the procure- Procurement can influence the majority of the costs within an orga-
ment department should nization:
be consulted before an or- 1.- Evaluating potential suppliers
ganization spends money. 2.- Involved in preparing specifications
3.- Review Quality standards
4.- Assess ethical requirements
5.- Compare buy or lease options
6.- Investigate transport
7.- Review packing options.
8.- Research total life cost
9.- Calculate currency ditterences
10.- Benchmark prices
11.- Ensure assets are fit for a propose
17. Total life Cost (TLC) The total amount a product will cost an organization.
18. Mentioned some exam- Insurance, Marketing, Salaries/Pensions, Cleaning, IT and Catering
ples of NON-STOCK IN- Services, Statt Development, Electricity, Gas, Rent or Mortage.
TANGIBLE procurements.
19. Mentioned some exam- Components, Stationary, Uniforms
ples of STOCK TANGIBLE
procurements.
,20. Mentioned some ex- Machinery, Buildings, Lands, Vehicles
amples of CAPITAL
NON-STOCK TANGIBLE
procurements.
21. CapEx (Capital Expendi- The cost associated to assets of an Organization (The value of a Capi-
ture) tal Purchases reduce overtime, the amount of the asset depreciated)
22. OPEX (Operating Expendi- Cost Associated with the running of an Organization, such as elec-
ture) tricity, labour, transport, rent, the raw material (Day to day running
of the business)
23. What is a budget? Financial plan for a set period on how much can spend money.
24. Depreciation The reduction overtime in the value of an asset held by the company.
25. What should a procure- The TCL - Total Cost of Life, Depreciation.
ment professional consid-
er when sourcing a capital
purchase?
26. Procurement Process A cross-functional business process that originates when a company
needs to acquire goods or services from external sources, and it
concludes when the company receives and pays for them.
27. What are the stages of 1.-Understand the need
the procurement cycle 2.- Market/commodity
process? 3.- Develop a strategy
4.- Pre procure
5.- Develop Documentation
6.- Supplier Selection
7.- ITT/RFQ
8.- BID/TENDER
, 9.- Contract Award
10.- Warehouse Logistics
11.- Contract Performance
12.- SRM & SC Management
13.- Asset Management
28. List the Pre-award process From 1 to 8
(Sourcing) in Procurement 1.-Understand the need
Cycle 2.- Market/commodity
3.- Develop a strategy
4.- Pre procure
5.- Develop Documentation
6.- Supplier Selection
7.- ITT/RFQ
8.- BID/TENDER
29. Mention the award 9.- Contract Award
process (Contract/ PO) in
Procurement Cycle
30. List the Post-award 10.- Warehouse Logistics
process (Contract Man- 11.- Contract Performance
agement) in Procurement 12.- SRM & SC Management
Cycle 13.- Asset Management
31. Product specification Describes the technical criteria
32. Typical Specification Out- Description, Drawing, Color, Materials, Quantity, Packing, Quality.
lines
33. Performance Specifica- Simple to prepare. Open up the supplier market and promote inno-
tions vation and competition by letting suppliers otter the solution to the
required need.
Procurement and Supply Exam 2026 Test Guide
1. What is Procurement? Procurement is a STRATEGIC function of a business obtains some-
thing Tangible as goods or Intangible as services. Include Purchas-
ing Inventory, Logistics, Supply, Waste Management Quality, Cost,
Added Value
2. What is Purchasing? Is the ACT of physically ordering and buying something.
3. What is Supply? Is the INFRASTRUCTURE which ensures that products and services
get from supplier to the customer.
4. What is inventory? the stock of goods, materials or products
5. What is a stock? Asset available in the warehouse
6. What is asset? Value of everything an organization owns
7. Fixed cost Costs do not change (Salaries, Insurance, Rent)
8. Variable Cost Costs do change as they are linked to the business (Raw Material,
Extra hours)
9. Directly Cost (Direct Pro- Cost associated with the Job or production (Raw material, Man
curement) Power)
10. Indirectly Cost (Indirect Not associated with the Job (Clean Liquid, Stationary, Mobile phones
Procurement) contracts, MRO - Maintenance repairs and Operations.
11. Primary Sector of the The part of the economy that draws raw materials from the natural
Economy environment (Cotton, Oil, Silver, Wheat)
12. Secondary sector of the The part of the economy that transforms raw materials into manu-
Economy factured goods (Light Bulbs, Nuts and Bolts, Metal housing, Plastic
fittings)
13. Finished goods
, Units of products that have been completed but not yet sold to
customers (Shoes, Beds, Clothes, Jewellery)
14. Stock Procurement In- Can be stored and inventory Raw Material, Components and Fin-
cludes ished Goods.
15. Non-Stock Procurement Are not stored and not listed in the Organization inventory (Cleaning
Includes Services, Internet Contract, Insurances, Advertising Campaigns)
16. Explain why the procure- Procurement can influence the majority of the costs within an orga-
ment department should nization:
be consulted before an or- 1.- Evaluating potential suppliers
ganization spends money. 2.- Involved in preparing specifications
3.- Review Quality standards
4.- Assess ethical requirements
5.- Compare buy or lease options
6.- Investigate transport
7.- Review packing options.
8.- Research total life cost
9.- Calculate currency ditterences
10.- Benchmark prices
11.- Ensure assets are fit for a propose
17. Total life Cost (TLC) The total amount a product will cost an organization.
18. Mentioned some exam- Insurance, Marketing, Salaries/Pensions, Cleaning, IT and Catering
ples of NON-STOCK IN- Services, Statt Development, Electricity, Gas, Rent or Mortage.
TANGIBLE procurements.
19. Mentioned some exam- Components, Stationary, Uniforms
ples of STOCK TANGIBLE
procurements.
,20. Mentioned some ex- Machinery, Buildings, Lands, Vehicles
amples of CAPITAL
NON-STOCK TANGIBLE
procurements.
21. CapEx (Capital Expendi- The cost associated to assets of an Organization (The value of a Capi-
ture) tal Purchases reduce overtime, the amount of the asset depreciated)
22. OPEX (Operating Expendi- Cost Associated with the running of an Organization, such as elec-
ture) tricity, labour, transport, rent, the raw material (Day to day running
of the business)
23. What is a budget? Financial plan for a set period on how much can spend money.
24. Depreciation The reduction overtime in the value of an asset held by the company.
25. What should a procure- The TCL - Total Cost of Life, Depreciation.
ment professional consid-
er when sourcing a capital
purchase?
26. Procurement Process A cross-functional business process that originates when a company
needs to acquire goods or services from external sources, and it
concludes when the company receives and pays for them.
27. What are the stages of 1.-Understand the need
the procurement cycle 2.- Market/commodity
process? 3.- Develop a strategy
4.- Pre procure
5.- Develop Documentation
6.- Supplier Selection
7.- ITT/RFQ
8.- BID/TENDER
, 9.- Contract Award
10.- Warehouse Logistics
11.- Contract Performance
12.- SRM & SC Management
13.- Asset Management
28. List the Pre-award process From 1 to 8
(Sourcing) in Procurement 1.-Understand the need
Cycle 2.- Market/commodity
3.- Develop a strategy
4.- Pre procure
5.- Develop Documentation
6.- Supplier Selection
7.- ITT/RFQ
8.- BID/TENDER
29. Mention the award 9.- Contract Award
process (Contract/ PO) in
Procurement Cycle
30. List the Post-award 10.- Warehouse Logistics
process (Contract Man- 11.- Contract Performance
agement) in Procurement 12.- SRM & SC Management
Cycle 13.- Asset Management
31. Product specification Describes the technical criteria
32. Typical Specification Out- Description, Drawing, Color, Materials, Quantity, Packing, Quality.
lines
33. Performance Specifica- Simple to prepare. Open up the supplier market and promote inno-
tions vation and competition by letting suppliers otter the solution to the
required need.
