Pass the CIPS CIPS Level 4 Diploma in Procurement and Supply L4M4 Questions and answers with CertsForce

Responsible procurement and supply are governed by several key regulatory areas to ensure ethical and fair practices. These include:

Ethical Practice:Ensures that organisations conduct business in a manner that is ethical and free from corruption.

Data Protection:Involves safeguarding personal and sensitive information, ensuring compliance with laws such as the General Data Protection Regulation (GDPR).

Marketplace Competition:Ensures fair competition among businesses, preventing monopolies and promoting consumer choice.

These areas are critical in maintaining integrity, trust, and compliance within procurement activities.

Exact Extract from Study Guide:

"Key areas of regulation that organisations must follow include data protection, ethical practice, health, safety and environment, worker rights, marketplace competition, and product safety standards."

In commodity markets, shortages combined with sustained demand drive price increases. The buyer loses bargaining power, as suppliers can charge higher rates. Negotiating downward is unrealistic; instead, buyers should manage risk through hedging, forward contracts, or alternative sourcing. CIPS notes that responsible sourcing requires understanding market dynamics and their ethical implications (e.g., food security, affordability). The organisation must manage stakeholder expectations about pricing rather than assume negotiation leverage. This reflects the implications of market volatility in global supply chains.

Explanation

Open account (aka credit account) is most beneficial to the buyer. The supplier delivers the goods then the buyer pays.

Cash in advance is most beneficial to the supplier. The buyer pays for the item before receiving it.

This is a known exam topic.

The 35-day minimum applies to public sector procurement under EU/UK directives, not the private sector. In private procurement, response times should be proportional to the complexity and value of the requirement. Simple RFQs may require only a few days, while complex tenders involving technical submissions may justifiably need weeks. Responsible sourcing involves ensuring suppliers have fair opportunity to respond adequately, but without unnecessary delays that could affect business needs. Therefore, rigidly applying a fixed number of days in the private sector is neither necessary nor efficient.

Explanation

Raja should send out a RFI- request for information; this will allow him to gain feedback from the marketplace prior to tender.

Speaking only with current suppliers will not provide all the information Raja requires.

He should not send out a request for quotation since he is still conducting market research

An open competition would be how he can procure, after he's completed his research

Expenditure analysis by category/supplier enables buyers to track trends over time (A), supporting benchmarking and financial control. It also identifies opportunities for negotiation (C) by highlighting concentration of spend and potential leverage with suppliers. Marketing strategy, production scheduling, and stock disposal are outside procurement’s primary scope. Responsible sourcing relies on robust spend analysis to identify efficiency opportunities, reduce wasteful expenditure, and support supplier relationship management strategies, all while aligning with sustainability and compliance goals.

Explanation

"yes- ethics and sustainability form part of 'value for money' " is the correct answer.

There are several factors that represent value for money and these are listed on p.3. These include; price, delivery, quality, ethics, sustainability and availability.

CIPS promotes a constructive and corrective approach when suppliers fall short of ethical standards, especially on critical issues like human rights. Immediately cutting ties can harm workers further and disrupt supply without addressing root causes. A responsible sourcing approach requires buyers to engage suppliers, escalate the concern, and establish a corrective action plan with monitoring to ensure compliance. Only if the supplier refuses to act or breaches persist should termination occur. This supports continuous improvement, supplier development, and ethical due diligence, reflecting global standards such as the UN Guiding Principles on Business and Human Rights.

The EXW (Ex Works) term means the seller’s responsibility ends once goods are made available at their premises. The buyer must take on costs and risks from that point, including loading, transport, and export clearance. Because the seller is not responsible for logistics, the quoted price is lower. In contrast, FCA includes delivery to a carrier, FOB covers loading onto a vessel, and CIP includes carriage and insurance arranged by the seller. By accepting these responsibilities, the buyer leveraged cost savings, demonstrating knowledge of Incoterms and alignment with efficient sourcing practices.

Weighted criteria allow the buyer to evaluate multiple factors, not just price, to make a fair and balanced decision. This approach ensures responsible sourcing by considering quality, sustainability, and other relevant factors alongside cost, which aligns with public procurement ethics and standards.