CIPS L4M8 Chapter 2 Exam Questions with Correct Answers Latest Update 2026/2027
identifying and vetting those suppliers who are able to supply the product or service, as required
in a specification from a procurement professional - Answers Sourcing involves
- User need
- Raise requisition
- Approved process
- Issue PO
- Receive goods/service
- Approve invoice - Answers Different stages of Ordering
- Understand the need
- Develop strategy
- Raise requisition
- Source suppliers
- Issue ITT/RFQ
- Negotiate and award contract
- SRM/contract management - Answers Different stages of Sourcing
- Localised
- Regional
- National
- Global - Answers Sourcing can take place in the following locations
conducted with suppliers who are near to the buying organisation - Answers Localised sourcing
conducted with suppliers in the same area, but slightly further away than the localised choices -
Answers Regional sourcing
conducted throughout an entire country. EG suppliers may be hundreds of miles away from the
buying organisation but they are still controlled by the same legislation and regulations -
Answers National sourcing
conducted worldwide. This type of sourcing often involves different legislation and regulations
, to those of the buying organisation - Answers Global sourcing
- Urgency of need: local suppliers shorter lead times
- Volume of need: larger quantities for economies of scale better for global sourcing
- Quality of need: high quality may need further than local
- Budget allocated to need: low budget may need global sourcing - Answers The buyer needs to
think about the following factors when deciding which type of sourcing is best
Verbal or Written - Answers Contracts can either be
1. Intention
2. Capacity
3. Offer
4. Consideration
5. Acceptance - Answers The five stages of forming a contract
the contracting parties must intend to enter into a legal contract. If there is no intention to
create a legal relationship, the contract is not legally binding - Answers Stages of a contract:
1.Intention
all parties should be of sound mind and fully aware of their contractual obligations - Answers
Stages of a contract: 2. Capacity
the promise in exchange for performance from the other party - Answers Stages of a contract: 3.
Offer
the exchange of one thing for another within an agreement - Answers Stages of a contract: 4.
Consideration
the point where the offeree accepts the proposal from the offeror. Offers can be accepted by
body language, a formal letter or email or by paying for the goods/services - Answers Stages of
a contract: 5. Acceptance
an expression of willingness to negotiate with the intention of forming a contract - Answers
Invitation to treat
are always present in a contract in a contract and are set by national law. The do not have to be
written or verbally agreed: they always exist - Answers Implied terms
terms that are negotiated and created rather than being automatically included. They are agreed
between the parties negotiating the contract - Answers Express terms are
identifying and vetting those suppliers who are able to supply the product or service, as required
in a specification from a procurement professional - Answers Sourcing involves
- User need
- Raise requisition
- Approved process
- Issue PO
- Receive goods/service
- Approve invoice - Answers Different stages of Ordering
- Understand the need
- Develop strategy
- Raise requisition
- Source suppliers
- Issue ITT/RFQ
- Negotiate and award contract
- SRM/contract management - Answers Different stages of Sourcing
- Localised
- Regional
- National
- Global - Answers Sourcing can take place in the following locations
conducted with suppliers who are near to the buying organisation - Answers Localised sourcing
conducted with suppliers in the same area, but slightly further away than the localised choices -
Answers Regional sourcing
conducted throughout an entire country. EG suppliers may be hundreds of miles away from the
buying organisation but they are still controlled by the same legislation and regulations -
Answers National sourcing
conducted worldwide. This type of sourcing often involves different legislation and regulations
, to those of the buying organisation - Answers Global sourcing
- Urgency of need: local suppliers shorter lead times
- Volume of need: larger quantities for economies of scale better for global sourcing
- Quality of need: high quality may need further than local
- Budget allocated to need: low budget may need global sourcing - Answers The buyer needs to
think about the following factors when deciding which type of sourcing is best
Verbal or Written - Answers Contracts can either be
1. Intention
2. Capacity
3. Offer
4. Consideration
5. Acceptance - Answers The five stages of forming a contract
the contracting parties must intend to enter into a legal contract. If there is no intention to
create a legal relationship, the contract is not legally binding - Answers Stages of a contract:
1.Intention
all parties should be of sound mind and fully aware of their contractual obligations - Answers
Stages of a contract: 2. Capacity
the promise in exchange for performance from the other party - Answers Stages of a contract: 3.
Offer
the exchange of one thing for another within an agreement - Answers Stages of a contract: 4.
Consideration
the point where the offeree accepts the proposal from the offeror. Offers can be accepted by
body language, a formal letter or email or by paying for the goods/services - Answers Stages of
a contract: 5. Acceptance
an expression of willingness to negotiate with the intention of forming a contract - Answers
Invitation to treat
are always present in a contract in a contract and are set by national law. The do not have to be
written or verbally agreed: they always exist - Answers Implied terms
terms that are negotiated and created rather than being automatically included. They are agreed
between the parties negotiating the contract - Answers Express terms are
