CIPS L4M6 Supplier Relationships Online Training
CIPS L4M6 Online Training
The questions for L4M6 were last updated at Nov 22,2024.
- Exam Code: L4M6
- Exam Name: Supplier Relationships
- Certification Provider: CIPS
- Latest update: Nov 22,2024
Beyond Say is a manufacturer of diamond rings. It sources a lot of different parts to create its products including diamonds, gold, cardboard boxes for the rings to go in, as well as stationary and copier paper for the offices. Although it doesn’t buy many diamonds, these represent a large part of Beyond Say’s spend .
Which category of spend would diamonds represent?
- A . Option
- B . Option
- C . Option
- D . It isn’t possible to tell
A
Explanation:
This is category ‘A’ spend in the ABC model – they represent a large value and a small number of purchases / suppliers. See p.17 for more information on the ABC Analysis
Early Supplier Involvement can be described as a collaborative relationship between a buyer and a supplier to develop a new project. Handfield’s model describes four different levels of supplier involvement ranging from none to ‘black box’ (which is when the design is primarily driven by the supplier .
What other level features on this model?
- A . Blue Box C when the buyer creates the product without input from the supplier
- B . Red Box- when the supplier provides legal advice to the buyer on areas such as copywrite
- C . White Box C when there is informal integration and the buyer consults with a supplier on a design
- D . Grey Box C when the involvement is buyer driven
C
Explanation:
The Handfield ESI model is on p.98 and comprises of Black Box, Grey Box, White Box and None. Therefore Red and Blue can be automatically discounted. The correct answer is White Box as the definition given is correct. Grey Box is a formalised supplier integration; joint development activity between buyer and supplier. I have no idea why Handfield calls his system after coloured boxes- but it’s only briefly mentioned in the study guide and is not likely to be a big topic in the exam.
Grey Stone Memorial Hospital is a private medical facility which has an idea for a vaccine to a deadly disease, but does not have the capacity to make the vaccine itself. It is
considering partnering with a well-known pharmaceutical company in order to bring the vaccine to market .
What is the biggest risk to Grey Stone?
- A . Intellectual Property Rights
- B . Increased Costs
- C . Low quality product
- D . Uninformed stakeholders
A
Explanation:
The correct answer is ‘Intellectual Property Rights’. Grey Stone will need to share its idea for the vaccine with the pharmaceutical company and this is risky if there is no trust between the parties. See p.134 for more information on Risks of Partnerships.
Danny is procuring a new IT software, which he doesn’t know much about. He has done a bit of research on the internet but is still unsure how much he can expect to pay .
What should be Danny’s next step?
- A . Issue a RFI
- B . Issue a RFQ
- C . Issue an ITT
- D . Issue an OJEU
A
Explanation:
Danny should issue a RFI (Request for Information). His next step would be to find out more about the products available by asking suppliers for information- this will help him put a spec together before he goes out to tender. The other options mean; RFQ – request for quotation- when you ask suppliers to submit a price. ITT- Invitation to tender C a document you send out to suppliers which details all the information about the tender (this usually involves both price and quality components of assessment). OJEU- Official Journal of the European Union- where tenders for the Public Sector are published. For more info on RFI see p.74
According to Mendelow, there are four ways stakeholders can be managed, depending on the amount of power they have, and how interested they are in your project .
What are these four categories?
- A . Keep satisfied, keep informed, minimal effort, no effort
- B . Manage closely, manage loosely, keep satisfied, keep informed
- C . Minimal effort, manage closely, keep informed, keep satisfied
- D . Keep informed, keep happy, keep satisfied, keep notified
C
Explanation:
The four categories are; Minimal effort, manage closely, keep informed, keep satisfied. You can see the Matrix on p.81. An easy way to remember this is there are 2 Ms and 2 Keeps. And these sit on opposite sides of the matrix.
In public sector procurement, tenders are advertised with CPV codes, which provide a reference to describe the product or service being tendered .
What does CPV stand for?
- A . Condensed Procurement Vocabulary
- B . Common Procurement Vocabulary
- C . Complete Procurement Vocabulary
- D . Clear Procurement Vocabulary
B
Explanation:
CPV stands for Common Procurement Vocabulary. This is explained briefly on p.72 but it doesn’t really go into much detail as to what CPVs are or how they work. CPVs are a string of numbers which refer to an object that is being procured. For example the CPV for Fire Doors is 44221220. When a Tender gets advertised for Fire Doors, it will have this CPV code on, and any suppliers who provide fire doors will get a notification if they have this CPV code on their profile. It’s basically a code that links suppliers with tender opportunities.
Which of the following would you use to qualify new suppliers? Select THREE.
- A . commitment
- B . clean
- C . collection
- D . cost
- E . call
A,B,D
Explanation:
This is based on a real exam question- it’s looking to see if you can remember Carter’s 10 Cs. These are; cash, cost, consistency, culture, clean, communication, competency, capacity, commitment and control. (p.12 in the text book)
Intellectual Property Rights (IPR) include items such as copywrite and trademarks. A buyer is considering entering into a partnership with their supplier to create a new product which will be released in two years’ time. Should IPR be included into a contract between partners?
- A . Yes- IPR should always remain with the buyer- this will protect those rights
- B . Yes- IPR is a valid concern for both parties but will survive the termination of the agreement
- C . No- a separate legal agreement should be created to cover IPR
- D . No- a contract is not necessary if it is a partnership.
B
Explanation:
The correct answer is ‘Yes- IPR is a valid concern for both parties but will survive the termination of the agreement’ (p.112). See the section on ‘Legal considerations’ in chapter 2.4
Which of the following are advantages for the buyer of entering into a partnership? Select
TWO.
- A . They are likely to be able to gain price stability
- B . There may be greater continuity of supply
- C . They will gain an increased volume of business
- D . The supplier may become complacent
A,B
Explanation:
The correct answers are; They are likely to be able to gain price stability and There may be greater continuity of supply. The other options are an advantage for the supplier rather than the buyer (They will gain an increased volume of business) and a disadvantage of entering into a partnership (The supplier may become complacent). As you may have guessed from these questions C Partnerships come up a LOT in the exam. See p.130 for info on pros and cons of partnerships.
David is sourcing a new cleaning contract as he is not impressed with his current cleaning company’s performance. He believes that his current supplier has been overcharging him, and due to budget cuts, he is keen to secure a lower price than what he is paying now. His Manager has suggested using an e-auction as the procurement method.
Is this the correct way forward?
- A . Yes- an e-auction is an electronic system so it will be easy for David to compare bids
- B . Yes- an e-auction will allow David to secure the lowest possible price
- C . No- a reverse e-auction would be more suitable as it will secure the lowest price
- D . No- a reverse e-auction will ensure only high quality suppliers bid for the opportunity
C
Explanation:
The correct answer is ‘No- a reverse e-auction would be more suitable as it will secure the lowest price’. An E-auction is something like eBay- where bids go up in price. If David wants to secure a lower price, he should use a Reverse E-Auction- where suppliers bid lower than the previous bid in order to win. For example, Supplier 1 offers to fulfil the contract at £50k per year, Supplier 2 can offer to beat this price by bidding £48k per year. Although Reverse E-Auctions may ensure cheaper prices, there are a lot of disadvantages to using this method. See p.21 and p.76 for more information
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