CIPS L4M1 Test Questions with Verified
Correct Answers
LO 1.1 Definition of Procurement, supply chains and networks
Procurement - Added Value, Cost, Inventory, Logistics, Purchasing, Quality, Supply, Waste
management.
Supply Chains - encompass all organizations and activities associated with the flow of goods
from material stage to end user.
Primary - oil drilling -> Secondary - Refining -> Teritiary - Services (healthcare).
Supply chain network (SCN) - Involves all other parties involved in the supply process.
Supplier -> manufacturer -> carrying/forwarding agent -> distributor -> wholesaler.
REMEMBER: Goods flow 1 way. Info flows 2 ways.
Value in supply chain
Price, Delivery, Storage, Ethics, Environment, Sustainability, Communication, Quality
Supply chain tiering
Allows concentrated development of small number of suppliers, fewer suppliers to manage =
resources allocated elsewhere.
Disadvantage - more susceptible for risk factors as less control over tier 2 suppliers and
above
Fleet management
Businesses can manage their own fleet for transport and distribution or can outsource this
responsibility to a contractor to maintain and add value. Think of enterprise at work.
Waste management
, Strategies to reduce, recycle and prevent waste as well as dispose.
Designed to protect and preserve human health and environment, rivers, air.
Closed loop recycling
Recycled waste can be reprocessed/repurposed indefinitely.
plastic, aluminium and glass.
minimises environmental effect, reduced landfill space sustainability
Added value - 5 rights of procurement
Quality, Quantity, Price, Place, Time
PPQQT
REMEMBER: ISO certs
Added value
Sourcing - suitable suppliers can provide necessary material or service.
Price comparisons - RFQs to benchmark prices and standardise/ normalise offers to easily
compare.
Remember - currency if supplier is abroad, net or gross price on quotes.
Negotiations - payment terms, inclusions in price = payment terms, warranty, discounts,
carriage costs and certs.
think ZFR4 and Zdoc
incoterms - shipping and delivery methods that are most advantageous to the business
Correct Answers
LO 1.1 Definition of Procurement, supply chains and networks
Procurement - Added Value, Cost, Inventory, Logistics, Purchasing, Quality, Supply, Waste
management.
Supply Chains - encompass all organizations and activities associated with the flow of goods
from material stage to end user.
Primary - oil drilling -> Secondary - Refining -> Teritiary - Services (healthcare).
Supply chain network (SCN) - Involves all other parties involved in the supply process.
Supplier -> manufacturer -> carrying/forwarding agent -> distributor -> wholesaler.
REMEMBER: Goods flow 1 way. Info flows 2 ways.
Value in supply chain
Price, Delivery, Storage, Ethics, Environment, Sustainability, Communication, Quality
Supply chain tiering
Allows concentrated development of small number of suppliers, fewer suppliers to manage =
resources allocated elsewhere.
Disadvantage - more susceptible for risk factors as less control over tier 2 suppliers and
above
Fleet management
Businesses can manage their own fleet for transport and distribution or can outsource this
responsibility to a contractor to maintain and add value. Think of enterprise at work.
Waste management
, Strategies to reduce, recycle and prevent waste as well as dispose.
Designed to protect and preserve human health and environment, rivers, air.
Closed loop recycling
Recycled waste can be reprocessed/repurposed indefinitely.
plastic, aluminium and glass.
minimises environmental effect, reduced landfill space sustainability
Added value - 5 rights of procurement
Quality, Quantity, Price, Place, Time
PPQQT
REMEMBER: ISO certs
Added value
Sourcing - suitable suppliers can provide necessary material or service.
Price comparisons - RFQs to benchmark prices and standardise/ normalise offers to easily
compare.
Remember - currency if supplier is abroad, net or gross price on quotes.
Negotiations - payment terms, inclusions in price = payment terms, warranty, discounts,
carriage costs and certs.
think ZFR4 and Zdoc
incoterms - shipping and delivery methods that are most advantageous to the business
