CIPS L4M4 - Ethical & Responsible
Sourcing UPDATED ACTUAL Exam
Questions and CORRECT Answers
What does RFQ stand for and what does it mean? - CORRECT ANSWER - Request for
quote - It is an invitation to suppliers to ask them to give a quotation to supply goods and
services.
What does ITT stand for and what does it mean? - CORRECT ANSWER - Invitation to
tender - It is a formal invitation sent to suppliers inviting them to make an offer to supply goods
and services.
What is the key difference between a RFQ and an ITT? - CORRECT ANSWER - An RFQ
is less formal and less detailed whereas an ITT is more formal and more detailed.
What can a RFQ involve? - CORRECT ANSWER - Specification
Technical drawings
Samples
Quantities
What are the two types of sourcing? - CORRECT ANSWER - Tactical & Strategic
What is the difference between tactical & strategic sourcing? - CORRECT ANSWER -
Tactical is short term low risk, low value items (routine items)
Strategic is longer term more critical and high risk items (core products/services)
What are the 6 stages of the sourcing process? - CORRECT ANSWER - Identification of
the requirement
Sourcing plan
, Market analysis
Pre-qualification of suppliers
Evaluating supply offers and options
Creation of contract or relationships
What is make vs buy? - CORRECT ANSWER - Deciding whether a product or service
should be made within the organisation or brought in from an external supplier
What are 3 factors to consider when thinking about make vs buy? - CORRECT
ANSWER - Is the product/service core to the organisation?
Would it create EOS (economies of Scale) if you nought in from an existing supplier? may result
in cost saving.
How much competition is there? If there is no/little suppliers, the buying organisation may not be
able to negotiate a favourable price.
What are the benefits of a make decision? - CORRECT ANSWER - Strategy of the
organisation is to be self sufficient.
Enhanced control over process
Improved quality control
Workforce remains stable
Continuity of supply
No suitable 'buy' suppliers
What are the benefits of a buy decision? - CORRECT ANSWER - Specialised knowledge
available
Technological advancement available
Small volumes are not cost effective to make
Cheaper to buy than manufacture/deliver (no cost of machinery etc)
Sourcing UPDATED ACTUAL Exam
Questions and CORRECT Answers
What does RFQ stand for and what does it mean? - CORRECT ANSWER - Request for
quote - It is an invitation to suppliers to ask them to give a quotation to supply goods and
services.
What does ITT stand for and what does it mean? - CORRECT ANSWER - Invitation to
tender - It is a formal invitation sent to suppliers inviting them to make an offer to supply goods
and services.
What is the key difference between a RFQ and an ITT? - CORRECT ANSWER - An RFQ
is less formal and less detailed whereas an ITT is more formal and more detailed.
What can a RFQ involve? - CORRECT ANSWER - Specification
Technical drawings
Samples
Quantities
What are the two types of sourcing? - CORRECT ANSWER - Tactical & Strategic
What is the difference between tactical & strategic sourcing? - CORRECT ANSWER -
Tactical is short term low risk, low value items (routine items)
Strategic is longer term more critical and high risk items (core products/services)
What are the 6 stages of the sourcing process? - CORRECT ANSWER - Identification of
the requirement
Sourcing plan
, Market analysis
Pre-qualification of suppliers
Evaluating supply offers and options
Creation of contract or relationships
What is make vs buy? - CORRECT ANSWER - Deciding whether a product or service
should be made within the organisation or brought in from an external supplier
What are 3 factors to consider when thinking about make vs buy? - CORRECT
ANSWER - Is the product/service core to the organisation?
Would it create EOS (economies of Scale) if you nought in from an existing supplier? may result
in cost saving.
How much competition is there? If there is no/little suppliers, the buying organisation may not be
able to negotiate a favourable price.
What are the benefits of a make decision? - CORRECT ANSWER - Strategy of the
organisation is to be self sufficient.
Enhanced control over process
Improved quality control
Workforce remains stable
Continuity of supply
No suitable 'buy' suppliers
What are the benefits of a buy decision? - CORRECT ANSWER - Specialised knowledge
available
Technological advancement available
Small volumes are not cost effective to make
Cheaper to buy than manufacture/deliver (no cost of machinery etc)
