CIPS L4M4 - RESPONSIBLE AND
ETHICAL SOURCING UPDATED
ACTUAL Exam Questions and CORRECT
Answers
What does sourcing mean? - CORRECT ANSWER - When procurement professionals try
to find suitable suppliers, products or services for the right money, quantity etc
What are the two types of sourcing? - CORRECT ANSWER - Tactical and Strategic
What is Tactical Sourcing? - CORRECT ANSWER - This involves low level decision
making
High profit, low risk items
Short term projects
Transactional relationships
What is strategic sourcing? - CORRECT ANSWER - Top level decision making
High profit, high risk items
Long term projects
Collaborative relationships
What factors are normally taken into account when sourcing? - CORRECT ANSWER -
Price
Delivery
Quality
Ethics
Sustainability
Availability
,What are NOVACK and SIMCO'S 11 stage sourcing process? - CORRECT ANSWER -
Identify needs
Define user requirements
Decide whether to make or buy
Identify purchase type
Carry out market analysis
Identify potential suppliers
Pre screen suppliers and create shortlists
Evaluate shortlisted suppliers
Supplier selection
Final product of service delivered
Evaluate supplier performance
What is outsourcing? - CORRECT ANSWER - Outsourcing means contracting an external
supplier to manage and run a function that was previously handled IN HOUSE
What reasons may procurement choose to outsource something? - CORRECT ANSWER -
Financial
Technological
Resource
Skillset
Improved focus
Reduce risk
What is a MAKE OR BUY decision? - CORRECT ANSWER - This is whether to
manufacture a product or to find from an external supplier
, What are Porter's Five Forces? - CORRECT ANSWER - Character of the rivalry, threat of
new entrants, threat of substitute products or services, bargaining power of suppliers, bargaining
power of buyers
What are leverage items? - CORRECT ANSWER - High cost, low risk
What are strategic items? - CORRECT ANSWER - High risk, high cost
What are non critical items? - CORRECT ANSWER - Low risk, low cost
What are bottleneck items? - CORRECT ANSWER - High risk, low cost
What are the 3 types of of buys? - CORRECT ANSWER - Straight re-buy
Modified re-buy
New buy
What is outsourcing? - CORRECT ANSWER - Contracting an external supplier to manage
and run a function that was previously handled in house.
What are Porter's 5 forces? - CORRECT ANSWER - supplier power, threat of substitutes,
buyer power, threat of new entrants, degree of rivalry
What is not recommended when outsourcing? - CORRECT ANSWER - Outsourcing core
activities is NOT recommended
What are core activities? - CORRECT ANSWER - They are integral to the organisation-
they are critical and relate closely to its strategies and objectives.
What are 4 parts of the outsourcing decision matrix? - CORRECT ANSWER - Strategic
alliance
ETHICAL SOURCING UPDATED
ACTUAL Exam Questions and CORRECT
Answers
What does sourcing mean? - CORRECT ANSWER - When procurement professionals try
to find suitable suppliers, products or services for the right money, quantity etc
What are the two types of sourcing? - CORRECT ANSWER - Tactical and Strategic
What is Tactical Sourcing? - CORRECT ANSWER - This involves low level decision
making
High profit, low risk items
Short term projects
Transactional relationships
What is strategic sourcing? - CORRECT ANSWER - Top level decision making
High profit, high risk items
Long term projects
Collaborative relationships
What factors are normally taken into account when sourcing? - CORRECT ANSWER -
Price
Delivery
Quality
Ethics
Sustainability
Availability
,What are NOVACK and SIMCO'S 11 stage sourcing process? - CORRECT ANSWER -
Identify needs
Define user requirements
Decide whether to make or buy
Identify purchase type
Carry out market analysis
Identify potential suppliers
Pre screen suppliers and create shortlists
Evaluate shortlisted suppliers
Supplier selection
Final product of service delivered
Evaluate supplier performance
What is outsourcing? - CORRECT ANSWER - Outsourcing means contracting an external
supplier to manage and run a function that was previously handled IN HOUSE
What reasons may procurement choose to outsource something? - CORRECT ANSWER -
Financial
Technological
Resource
Skillset
Improved focus
Reduce risk
What is a MAKE OR BUY decision? - CORRECT ANSWER - This is whether to
manufacture a product or to find from an external supplier
, What are Porter's Five Forces? - CORRECT ANSWER - Character of the rivalry, threat of
new entrants, threat of substitute products or services, bargaining power of suppliers, bargaining
power of buyers
What are leverage items? - CORRECT ANSWER - High cost, low risk
What are strategic items? - CORRECT ANSWER - High risk, high cost
What are non critical items? - CORRECT ANSWER - Low risk, low cost
What are bottleneck items? - CORRECT ANSWER - High risk, low cost
What are the 3 types of of buys? - CORRECT ANSWER - Straight re-buy
Modified re-buy
New buy
What is outsourcing? - CORRECT ANSWER - Contracting an external supplier to manage
and run a function that was previously handled in house.
What are Porter's 5 forces? - CORRECT ANSWER - supplier power, threat of substitutes,
buyer power, threat of new entrants, degree of rivalry
What is not recommended when outsourcing? - CORRECT ANSWER - Outsourcing core
activities is NOT recommended
What are core activities? - CORRECT ANSWER - They are integral to the organisation-
they are critical and relate closely to its strategies and objectives.
What are 4 parts of the outsourcing decision matrix? - CORRECT ANSWER - Strategic
alliance
