L4M4 TEST EXAM WITH Latest Update
2026 (Questions and Answers-Verified
solutions
Sourcing involves - CORRECT ANSWERS establishing, evaluating and engaging with
suppliers to achieve the best vavlue for money when purchasing goods or services
Sourcing is the - CORRECT ANSWERS 'location, acquisition and management of all the vital
inputs required for an organisation to operate.'
Tactical/operational sourcing - CORRECT ANSWERS -Low-level decision-making
-High-profit, low-risk items
-Short-term projects
-Transactional relationships
Strategic sourcing - CORRECT ANSWERS - Top-level decision-making
-High-profit, high-risk items
-Long-term projects
-Collaborative relationships
Two types of sourcing - CORRECT ANSWERS - Tactical/operational
- Strategic
Factors that represent value to the procurement organisation are - CORRECT ANSWERS -
Price
- Delivery
,- Quality
- Ethics
- Sustainability
- Availability
Value for money - Price - CORRECT ANSWERS is rarely considered on its own when ensuring
value for money
Value for money - Delivery - CORRECT ANSWERS Lead time should be acceptable and
freight/transport costs fair
Value for money - Quality - CORRECT ANSWERS Goods should always be fit for purpose and
meet the required specification
Value for money - Ethics - CORRECT ANSWERS Suppliers should follow ethical codes of
practice and ensure workers are treated fairly
Value for money - Sustainability - CORRECT ANSWERS Suppliers should be sustainable in
their existance, as well as promoting environmental sustainability
Value for money - Availability - CORRECT ANSWERS Products sourced need to be available -
a competitive price becomes irrelevant if there is no availability
Novack and Simco's 11 stage sourcing process - CORRECT ANSWERS 1. Identify needs
2. Define user requirements
3. Decide whether to make or buy
4. Identify purchase type (new buy, modified re-buy, straight re-buy)
5. Carry out market analysis
,6. Identify potential suppliers
7. Pre-screen suppliers and create a shortlist
8. Evaluate shortlisted suppliers
9. Supplier selection
10. Final product or service delivered
11. Evaluate supplier performance
The CIPS procurement cycle - CORRECT ANSWERS 1. Understand need
2. Market/Commodity
3. Develop strategy
4. Pre-procurement questionaire
5. Develop documentation
6. Supplier selection
7. Issue ITT/RFQ
8. Bid/Tender
9. Contract Award
10. Warehouse logistics
11. Contract performance
12. SRM & SC management
13. Asset management
Oursourcing means - CORRECT ANSWERS contracting an external supplier to manage and
run a function that was previously handled in-house
Reasons for oursourcing - CORRECT ANSWERS - Financial
- Technological
, - Resource
- Skillset
- Improved focused
- Reduce risk
Porter's Five Forces - CORRECT ANSWERS - Threat of new entrants
- Bargaining power of buyers
- Threat of substitutes
- Bargaining power of suppliers
- Rivalry among existing competitors
Benefits of decision to 'Make' - CORRECT ANSWERS - Strategy of the organisation is to be
self sufficient
- Enhanced control over processes
- Improved quality control
- Workforce remains stable
- Continuity of supply
- No suitable 'buy' suppliers
- Economies of scale available
- Reduced risk
- Easier to amend volumes/specifications
Benefits of decision to 'Buy' - CORRECT ANSWERS - Specified knowledge available
- Technological advancements available
- Small volumes are not cost effective for 'make'
- Cheaper to buy in than manufacture
2026 (Questions and Answers-Verified
solutions
Sourcing involves - CORRECT ANSWERS establishing, evaluating and engaging with
suppliers to achieve the best vavlue for money when purchasing goods or services
Sourcing is the - CORRECT ANSWERS 'location, acquisition and management of all the vital
inputs required for an organisation to operate.'
Tactical/operational sourcing - CORRECT ANSWERS -Low-level decision-making
-High-profit, low-risk items
-Short-term projects
-Transactional relationships
Strategic sourcing - CORRECT ANSWERS - Top-level decision-making
-High-profit, high-risk items
-Long-term projects
-Collaborative relationships
Two types of sourcing - CORRECT ANSWERS - Tactical/operational
- Strategic
Factors that represent value to the procurement organisation are - CORRECT ANSWERS -
Price
- Delivery
,- Quality
- Ethics
- Sustainability
- Availability
Value for money - Price - CORRECT ANSWERS is rarely considered on its own when ensuring
value for money
Value for money - Delivery - CORRECT ANSWERS Lead time should be acceptable and
freight/transport costs fair
Value for money - Quality - CORRECT ANSWERS Goods should always be fit for purpose and
meet the required specification
Value for money - Ethics - CORRECT ANSWERS Suppliers should follow ethical codes of
practice and ensure workers are treated fairly
Value for money - Sustainability - CORRECT ANSWERS Suppliers should be sustainable in
their existance, as well as promoting environmental sustainability
Value for money - Availability - CORRECT ANSWERS Products sourced need to be available -
a competitive price becomes irrelevant if there is no availability
Novack and Simco's 11 stage sourcing process - CORRECT ANSWERS 1. Identify needs
2. Define user requirements
3. Decide whether to make or buy
4. Identify purchase type (new buy, modified re-buy, straight re-buy)
5. Carry out market analysis
,6. Identify potential suppliers
7. Pre-screen suppliers and create a shortlist
8. Evaluate shortlisted suppliers
9. Supplier selection
10. Final product or service delivered
11. Evaluate supplier performance
The CIPS procurement cycle - CORRECT ANSWERS 1. Understand need
2. Market/Commodity
3. Develop strategy
4. Pre-procurement questionaire
5. Develop documentation
6. Supplier selection
7. Issue ITT/RFQ
8. Bid/Tender
9. Contract Award
10. Warehouse logistics
11. Contract performance
12. SRM & SC management
13. Asset management
Oursourcing means - CORRECT ANSWERS contracting an external supplier to manage and
run a function that was previously handled in-house
Reasons for oursourcing - CORRECT ANSWERS - Financial
- Technological
, - Resource
- Skillset
- Improved focused
- Reduce risk
Porter's Five Forces - CORRECT ANSWERS - Threat of new entrants
- Bargaining power of buyers
- Threat of substitutes
- Bargaining power of suppliers
- Rivalry among existing competitors
Benefits of decision to 'Make' - CORRECT ANSWERS - Strategy of the organisation is to be
self sufficient
- Enhanced control over processes
- Improved quality control
- Workforce remains stable
- Continuity of supply
- No suitable 'buy' suppliers
- Economies of scale available
- Reduced risk
- Easier to amend volumes/specifications
Benefits of decision to 'Buy' - CORRECT ANSWERS - Specified knowledge available
- Technological advancements available
- Small volumes are not cost effective for 'make'
- Cheaper to buy in than manufacture
