CIPS L4M6 Practice Exams
Last updated on Oct 22,2026- Exam Code: L4M6
- Exam Name: Supplier Relationships
- Certification Provider: CIPS
- Latest update: Oct 22,2026
Agile Cars Ltd is creating a ‘lean’ business model which involves receiving deliveries of components only when they are required.
Which of the following ‘wastes’ is being removed from the business?
- A . Transportation
- B . Defects
- C . Over-production
- D . Inventory
D
Explanation:
This would reduce inventory (holding stock). Inventory is considered a business waste because it costs money to store stuff (e.g. paying the rent on a warehouse, electricity to light it up etc). If you can reduce the need to store materials and components on site- you reduce costs. You also save time because you get deliveries when you need them- you don’t need to allow for staff unpacking things, storing them away, then going back to them later when they need them. For more information on the 7 Business Wastes see p.70. This comes up in a couple of modules, so it’s worth remembering.
A large office orders weekly from a stationery supplier. The items are low-cost, and if the delivery is a day late, it does not affect the running of the office.
Where would this supplier be positioned in a supplier matrix?
- A . Routine
- B . Leverage
- C . Critical
- D . Bottleneck
A
Explanation:
Routine suppliers provide low-value, low-risk items with minimal operational impact. These suppliers are managed with minimal engagement or oversight in a cost-effective manner.
A restricted market is a market where there are only a small number of capable and competent suppliers.
Which of the following is not a reason for a marketplace to be restricted?
- A . Low levels of profitability
- B . High barriers to entry
- C . Strong governmental regulation
- D . The product is easy to source elsewhere
D
Explanation:
The correct answer is ‘The product is easy to source elsewhere’. The other three are given as reasons a marketplace might be restricted on p.138. Other reasons also include; brand loyalty, difficult access to distribution channels, and companies colluding.
Cigarettes and alcohol are often described as having an ‘inelastic price’.
What does this mean?
- A . Changes in price will greatly affect how much of the item is bought
- B . Changes in price will not affect how much of the item is bought
- C . The product is subject to high rates of tax
- D . The product is subject to age restrictions
B
Explanation:
A product with an ‘inelastic price’ means that consumption doesn’t really depend on how much it costs. So you could increase the price of alcohol and cigarettes and people would tend to still buy them. A product with an elastic price means that a change in price would have a large affect on the number of people who bought the item. See p.95 for more details on price elasticity.
Construct Builders Ltd works very closely with a supplier called Solid Timber Co on house-building projects. They have a very close working relationship, sharing investment, setting pricing levels, and looking at sharing resources. The two companies also work closely together to set strategic directions and explore new markets for long-term growth. There is no formal contract in place between the two companies.
Using the relationship spectrum, what relationship does this scenario best describe?
- A . Constructive
- B . Transactional
- C . Co-operative
- D . Partnership
D
Explanation:
The relationship reflects a partnership due to the strategic alignment, resource sharing, and focus on long-term growth, even without a formal contract. CIPS highlights that partnerships are based on trust and collaboration.
Which of the following is characteristic of an adversarial relationship?
- A . The communication is always poor
- B . The price is more important than the quality of the product
- C . They are only used for one-off purchases
- D . The outcome of the deal is more important than the long term relationship
D
Explanation:
In an adversarial relationship "the outcome of the deal… is more important than maintaining the relationship over a long-term period" p.7. They can be characterised by poor communication and can be used for one-off purchases but be careful for words in answers such as ‘only’ and ‘always’, as these can be misleading; adversarial relationships aren’t always for one-off purchases, and communication isn’t always poor. The other answer is incorrect (price is more important) because it doesn’t describe the relationship, which is what the question asked.
Pablo has run an open- competition to secure a new contract for a supplier of paper for his Birthday Card making company. He has received 10 submissions from various suppliers and needs to put a team together to evaluate the bids.
What type of team should Pablo consider?
- A . A team composed of internal stakeholders
- B . A cross-functional team
- C . A team of procurement experts
- D . A team composed of internal and external stakeholders
B
Explanation:
Pablo should use a ‘cross-functional team’. CIPS love ‘cross-functional teams’ and refer to them frequently throughout the study guide. A cross-functional team is people from different departments who come together for a purpose, such as to evaluate a tender. The benefit of using a cross-functional team is that you get people with different experiences and knowledge. So in this example a Cross-Functional team could compose of people from various departments such as procurement, logistics, manufacturing and legal. P.76
A medical consumables buyer has adopted a close relationship approach with their suppliers that are considered to be complicated, technical suppliers. Is this the right approach?
- A . Yes, as the items are of high financial risk
- B . No, as there is often a supply risk with items offered
- C . Yes, as all the items supplied are off the shelf
- D . No, as there are only a small number of suppliers in the marketplace
A
Explanation:
Complex and technical suppliers often involve high financial risks due to the critical nature of their products. A close relationship ensures better collaboration, risk management, and value generation.
When using competitive forces theory, suppliers are powerful in which of the following situations? Select THREE that apply.
- A . There are few substitute products
- B . The product is highly differentiated
- C . There is potential for backward integration
- D . The switching costs are high
- E . The volume purchased is not important
- F . The product is undifferentiated
A, B, D
Explanation:
Suppliers gain power when their products have limited substitutes, are highly differentiated, or when switching costs are high. These factors reduce buyer leverage and increase supplier influence, as described in Porter’s Five Forces model.
Harry runs a hotel and has recently decided to contract an external supplier to provide the cleaning of the rooms.
What is a disadvantage of doing this?
- A . This allows staff to focus on other areas
- B . There is dependency on the supplier, which increases risk
- C . The supplier will not perform as well as an internal team
- D . This will be more expensive than providing the service in house
B
Explanation:
Using an external supplier always comes with increased risk, as you become dependant upon them, and have less control over their performance (compared to an in-house team). In this example Harry will have the increased risk that the contract cleaners turn up late to their shifts, or don’t do a good job. However, there is no reason to believe that the supplier will not perform as well as an internal team- we don’t have enough information from the QUESTIO N N O: for this to be true.
What is true is the RISK is greater. The other answers are incorrect; the QUESTIO N N O: doesn’t indicate whether outsourcing the cleaning will be more or less expensive for Harry. Allowing staff to focus on other areas is an advantage not a disadvantage. See p.4 for more information on ‘External Suppliers’