CIPS L4M4 Ethical and Responsible
Sourcing UPDATED ACTUAL Exam
Questions and CORRECT Answers
Sourcing - CORRECT ANSWER - The process of identifying, selecting and developing
suppliers
What represents value for money - CORRECT ANSWER - Price, delievry , quality, ethics,
sustainable, available
Tactical sourcing - CORRECT ANSWER - Everyday, non critical low risk short term
Strategic Sourcing - CORRECT ANSWER - Items that are critical to the orgs long term
success, high value high risk items
Kraljic Matrix - CORRECT ANSWER - Low supply risk, low profit: routine
Low supply risk high profit: leverage
High supply risk low profit: bottleneck
High supply risk high profit: strategic
Novak and Simco 11 stage sourcing process - CORRECT ANSWER - Identify needs
Define requirements
Decide whether to make or buy
Identify purchase type
Market analysis
Identify pot suppliers
Pre screen supplier
Evaluate shortlisted suppliers
, Supplier selections
Final product delivered
Monitor performance
straight rebuy - CORRECT ANSWER - a situation in which the purchaser reorders the
same goods or services without looking for new information or investigating other suppliers
modified rebuy - CORRECT ANSWER - a situation in which the purchaser wants some
change in the original good or service
new buy - CORRECT ANSWER - a situation requiring the purchase of a product for the
first time
Porter's 5 Forces - CORRECT ANSWER - Potential new entrants, buyer power, supplier
power, threat of substitutes, rivalry and competition.
Factors support make (make/ buy) - CORRECT ANSWER - Lead time reduces
Cost of work is known
Control the production quality
Less supply risk
Factors that support buy (make buy) - CORRECT ANSWER - Quantities are too small to
be profitable
Machinery / labour costs too high
Reduced inventory costs
Access to specialist knowledge
Risks of Outsourcing - CORRECT ANSWER - loss of control, benefits outweighed by
long-term costs, no easy exit, quality, reputation
Sourcing UPDATED ACTUAL Exam
Questions and CORRECT Answers
Sourcing - CORRECT ANSWER - The process of identifying, selecting and developing
suppliers
What represents value for money - CORRECT ANSWER - Price, delievry , quality, ethics,
sustainable, available
Tactical sourcing - CORRECT ANSWER - Everyday, non critical low risk short term
Strategic Sourcing - CORRECT ANSWER - Items that are critical to the orgs long term
success, high value high risk items
Kraljic Matrix - CORRECT ANSWER - Low supply risk, low profit: routine
Low supply risk high profit: leverage
High supply risk low profit: bottleneck
High supply risk high profit: strategic
Novak and Simco 11 stage sourcing process - CORRECT ANSWER - Identify needs
Define requirements
Decide whether to make or buy
Identify purchase type
Market analysis
Identify pot suppliers
Pre screen supplier
Evaluate shortlisted suppliers
, Supplier selections
Final product delivered
Monitor performance
straight rebuy - CORRECT ANSWER - a situation in which the purchaser reorders the
same goods or services without looking for new information or investigating other suppliers
modified rebuy - CORRECT ANSWER - a situation in which the purchaser wants some
change in the original good or service
new buy - CORRECT ANSWER - a situation requiring the purchase of a product for the
first time
Porter's 5 Forces - CORRECT ANSWER - Potential new entrants, buyer power, supplier
power, threat of substitutes, rivalry and competition.
Factors support make (make/ buy) - CORRECT ANSWER - Lead time reduces
Cost of work is known
Control the production quality
Less supply risk
Factors that support buy (make buy) - CORRECT ANSWER - Quantities are too small to
be profitable
Machinery / labour costs too high
Reduced inventory costs
Access to specialist knowledge
Risks of Outsourcing - CORRECT ANSWER - loss of control, benefits outweighed by
long-term costs, no easy exit, quality, reputation
