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
When a large organization partners with a small supplier to develop new technology, it is necessary for regular communication. Is this statement true?
- A . No, because partnerships do not require regular communication during development of new technology
- B . Yes, because partnerships require regular communication to succeed in meeting mutual objectives
- C . Yes, because a small supplier must be told what to do and when, because they have fewer employees
- D . No, because regular communication will stop a small supplier from doing their work
B
Explanation:
Effective communication is essential in partnerships to ensure alignment on objectives, progress updates, and issue resolution. Regular communication builds trust and fosters collaboration, leading to successful outcomes.
In the Purchasing Portfolio Matrix, a leverage product is a product in a market where it is easy to switch suppliers and the quality is standardized. Is this TRUE or FALSE?
- A . False, the product is in a supply market which is highly complex and the product is of low importance
- B . False, the product is in a supply market which is highly complex and the product is of high importance
- C . True, the product is in a supply market which is of low complexity and the product is of high importance
- D . True, the product is in a supply market which is of low complexity and the product is of low importance
C
Explanation:
Leverage products are characterized by high spend and low complexity, giving buyers the ability to negotiate favorable terms due to supplier competition and standardization.
George is running a competition to find a supplier to install solar panels on the roof of his factory. The energy this produces will power some of the machines. Cost is an important factor, but there are also other considerations that are important such as how long the solar panels will last, and the maintenance costs if they ever break.
What should George do?
- A . Use a weighted award criteria
- B . Only invite suppliers he knows will be able to provide good quality products which won’t break
- C . Run a separate tender for a company who can provide reactive maintenance to the solar panels
- D . Evaluate the bids on price only as this is an important factor
A
Explanation:
George should use a weighted award criteria C this will allow him to judge suppliers not only on cost, but also on the quality of their products and whether or not they can provide maintenance. For example George could weight the bids in this way; 40% cost, 30% durability of the panels and 30% maintenance costs. For more information on how weighted award criteria works see p.78
Harry has just entered into a partnership with a key supplier. Although he is excited about the
prospect, he thinks it’s a good idea to set some goals and KPIs.
Which of the following criteria should
Harry use to decide if a KPI is appropriate?
- A . Measurable, achievable and relevant
- B . Relatable, precise, and measurable
- C . Time bound, difficult and relevant
- D . Significant, measurable and achievable
A
Explanation:
The correct answer is Measurable, achievable and relevant. This is from SMART KPIs on p. 151. Smart stands for specific, measurable, achievable, relevant, time-bound. In the exam they come up in different orders so be careful.
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.
Which of the following are examples of ways in which businesses can add value? Select THREE that apply.
- A . Through delivering excellent service
- B . Creating a win-win price
- C . Product features and benefits
- D . Reducing customer service levels
- E . Investing in customers
- F . Offering convenience
A, C, F
Explanation:
Adding value involves enhancing customer experience through excellent service, providing differentiated product features, and offering convenience. These align with procurement strategies aimed at driving customer satisfaction and loyalty.
Red Manufacturing work with around 40 different suppliers. One of these suppliers is Blue Business. Red Manufacturing order regularly from Blue Business, and have never had any issues with their performance. The materials Blue Business supply are of low value and there are several other suppliers of these materials in the market.
What type of relationship should Red Manufacturing seek to have with Blue Manufacturing?
- A . partnership
- B . single-source
- C . arms-length
- D . adversarial
C
Explanation:
The correct answer is ‘arms length’. This is a tactical purchase (as it is low value) and keeping the supplier at arms-length means that Red Manufacturing could possibly exploit them to reduce their prices (think back to the Kraljic matrix and where Blue Business would likely fall). A Partnership or Single- Source relationship requires investment into the relationship, and as the products are low value and Red Manufacturing have a lot of other suppliers, they should not be investing time in developing that relationship with Blue Business. An adversarial relationship wouldn’t be advantageous as it may lower the performance of the supplier. See the relationship spectrum on p.5 – this is a hot topic for the exam
Togo Bongos is a manufacturer of percussion instruments, in particular of bongo drums. It requires electricity to run its factories and this is a major factor of cost impact. There are lots of suppliers of electricity in the market and there is no switching costs if Togo Bongos wanted to switch suppliers.
What type of supplier is Togo Bongo’s electricity supplier?
- A . strategic
- B . leverage
- C . routine
- D . bottleneck
B
Explanation:
This is a leverage supplier on the Kraljic Matrix; high cost impact and low risk impact. The diagram on p.20 gives the example of utility services such as electricity as a common leverage supplier. There are lots of questions on Kraljic in the exam – do revise this topic and ensure you understand each of the four quadrants of the matrix
Janet runs a factory which produces 1 million bread rolls every day. It requires a large amount of flour, and for this to be delivered regularly- in time with manufacturing operations. There are very few suppliers in the market place that can deliver the quality of flour Janet requires in the quantities required. Janet has just established a contract with Friendly Flour Limited – what type of supplier is Friendly Flour Limited to Janet?
- A . bottleneck
- B . strategic
- C . routine
- D . leverage
B
Explanation:
Friendly Flour Ltd is a strategic supplier; this is a critical supplier, responsible for core products. They represent a high risk impact and a high cost impact. This is the top-right hand corner of the Kraljic matrix. There are lots of questions on Kraljic in the exam – do revise this topic and ensure you understand each of the four quadrants of the matrix (see p.20)
In the public sector, there are many sources of information that a buyer can use to identify a suitable supplier.
Which of the following could be used? Select THREE
- A . Intranet
- B . Tradeshows
- C . OJEU
- D . Internal stakeholders’ knowledge
- E . Procurement Platforms
B, D, E
Explanation:
The correct answers are; tradeshows, internal stakeholders’ knowledge and e-procurement platforms. Intranet is incorrect as this is an internal system so you wouldn’t find information on external suppliers on here the careful not to confuse intranet with internet). OJEU is also incorrect; this is the platform on which tender opportunities in the public sector are published- its not a list of suppliers.