CIPS L4M1 - Question & Answer 2025
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O1. Outline FIVE differences between purchasing goods and purchasing
services. - 🧠 ANSWER ✔✔1. Goods are tangible, services are intangible:
2. Services cannot be separated from their supplier:
3. Heterogeneity: goods are usually uniform in nature while services are
unique at each delivery
4. Services 'perish' immediately on delivery whereas goods can be stored
until required
5. Products are easier to specify, being tangible
O2. Explain THREE circumstances in which a competitive tendering
exercise might not be the best approach to making a purchase. - 🧠
ANSWER ✔✔1. Urgency
2. Commercial confidentiality or national security (e.g. military
organisations):
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER:
619652435. TERMS OF USE. PRIVACY STATEMENT. ALL RIGHTS RESERVED 1
,3. Value of the purchase:
4. Production costs cannot be measured accurately:
5. Price is not the only criterion for supplier selection and contract award
6. Intellectual Property Rights and monopoly
O2. Describe TWO e-sourcing tools and their use in procurement and
supply. - 🧠 ANSWER ✔✔1. E-Catalogues
2. E-Tendering
3. E. Auction
4. Reverse Auctions
5. Online suppleir evaluation data
O3. Explain the role of a shared services unit (SSU). - 🧠 ANSWER
✔✔SSUs reflect a desire to centralise and share services
The shared service provider becomes a dedicated provider of services
such as; finance, HR, IT and procurement which continue to be provided
internally
An SSU manages costs and quality SLAs to demonstrate value for money.
An SSU's benefits may be summarised as:
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER:
619652435. TERMS OF USE. PRIVACY STATEMENT. ALL RIGHTS RESERVED 2
,• cost effective internal service;
• liaison with its customers;
• anticipating future demand;
• employing resources and providing higher levels of service more cost
effectively than if they were provided by a department or an external
provider.
O3. A manufacturer of electrically powered tools for the engineering
industry consists of four separate business units, each of which undertakes
its own purchasing activities.
Discuss THREE benefits of centralising all purchasing activities with those
of retaining the present decentralised structure. (1 of 2) - 🧠 ANSWER
✔✔Centralisation' and 'decentralisation' refer to the degree to which
responsibility and authority is delegated. Arguments for centralisation can
only be evaluated in the context of specific organisational environment and
might include:
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER:
619652435. TERMS OF USE. PRIVACY STATEMENT. ALL RIGHTS RESERVED 3
, 1. Policies & procedures
2. Consolidation of requirements
3. Location
4. Supply market structure
5. Expertise required:
6. Customer demands
O3. A manufacturer of electrically powered tools for the engineering
industry consists of four separate business units, each of which undertakes
its own purchasing activities.
Discuss THREE benefits of centralising all purchasing activities with those
of retaining the present decentralised structure. (2 of 2) - 🧠 ANSWER
✔✔The benefits of retaining the present de-centralised structure include:
1. Local responsibility
2. Knowledge of the local environment, culture and customer needs
3. Skills development of buyers in each unit
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER:
619652435. TERMS OF USE. PRIVACY STATEMENT. ALL RIGHTS RESERVED 4
Expert Verified | Ace the Test
O1. Outline FIVE differences between purchasing goods and purchasing
services. - 🧠 ANSWER ✔✔1. Goods are tangible, services are intangible:
2. Services cannot be separated from their supplier:
3. Heterogeneity: goods are usually uniform in nature while services are
unique at each delivery
4. Services 'perish' immediately on delivery whereas goods can be stored
until required
5. Products are easier to specify, being tangible
O2. Explain THREE circumstances in which a competitive tendering
exercise might not be the best approach to making a purchase. - 🧠
ANSWER ✔✔1. Urgency
2. Commercial confidentiality or national security (e.g. military
organisations):
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER:
619652435. TERMS OF USE. PRIVACY STATEMENT. ALL RIGHTS RESERVED 1
,3. Value of the purchase:
4. Production costs cannot be measured accurately:
5. Price is not the only criterion for supplier selection and contract award
6. Intellectual Property Rights and monopoly
O2. Describe TWO e-sourcing tools and their use in procurement and
supply. - 🧠 ANSWER ✔✔1. E-Catalogues
2. E-Tendering
3. E. Auction
4. Reverse Auctions
5. Online suppleir evaluation data
O3. Explain the role of a shared services unit (SSU). - 🧠 ANSWER
✔✔SSUs reflect a desire to centralise and share services
The shared service provider becomes a dedicated provider of services
such as; finance, HR, IT and procurement which continue to be provided
internally
An SSU manages costs and quality SLAs to demonstrate value for money.
An SSU's benefits may be summarised as:
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER:
619652435. TERMS OF USE. PRIVACY STATEMENT. ALL RIGHTS RESERVED 2
,• cost effective internal service;
• liaison with its customers;
• anticipating future demand;
• employing resources and providing higher levels of service more cost
effectively than if they were provided by a department or an external
provider.
O3. A manufacturer of electrically powered tools for the engineering
industry consists of four separate business units, each of which undertakes
its own purchasing activities.
Discuss THREE benefits of centralising all purchasing activities with those
of retaining the present decentralised structure. (1 of 2) - 🧠 ANSWER
✔✔Centralisation' and 'decentralisation' refer to the degree to which
responsibility and authority is delegated. Arguments for centralisation can
only be evaluated in the context of specific organisational environment and
might include:
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER:
619652435. TERMS OF USE. PRIVACY STATEMENT. ALL RIGHTS RESERVED 3
, 1. Policies & procedures
2. Consolidation of requirements
3. Location
4. Supply market structure
5. Expertise required:
6. Customer demands
O3. A manufacturer of electrically powered tools for the engineering
industry consists of four separate business units, each of which undertakes
its own purchasing activities.
Discuss THREE benefits of centralising all purchasing activities with those
of retaining the present decentralised structure. (2 of 2) - 🧠 ANSWER
✔✔The benefits of retaining the present de-centralised structure include:
1. Local responsibility
2. Knowledge of the local environment, culture and customer needs
3. Skills development of buyers in each unit
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER:
619652435. TERMS OF USE. PRIVACY STATEMENT. ALL RIGHTS RESERVED 4
