[Mar 17, 2026] New Updated L4M4 Exam Questions 2026
Updated Free CIPS L4M4 Test Engine Questions with 293 Q&As
NEW QUESTION # 76
Roberto is running a tender in which his main concern is price. However he is keen to hear also about the companies' Corporate Social Responsibility Policies and how this will impact their delivery. Roberto is considering awarding the CSRquestion4 points in a weighted point system. If he does this, what weight should be given to the price?
- A. 0
- B. 1
- C. 2
- D. 3
Answer: A
Explanation:
96 is the correct answer- weighted point systems should add up to 100 (as in 100%)
NEW QUESTION # 77
Why is it important to consider factors such as environmental, social, governance and ethics when analysing tender proposals from the market?
* To ensure adherence to sustainability initiatives
* To improve the process workflow
* To perform supplier spend and monitoring
* To identify potential risks within the supply chain
- A. 3 and 4 only
- B. 2 and 3 only
- C. 1 and 4 only
- D. 1 and 2 only
Answer: C
Explanation:
Incorporating Environmental, Social, and Governance (ESG) and ethical considerations into tender analysis is crucial for:
* Adherence to Sustainability Initiatives:Ensuring that suppliers align with the organisation's sustainability goals and legal obligations.
* Risk Identification:Assessing ESG factors helps in identifying potential risks in the supply chain, such as environmental violations or unethical labour practices, which can impact the organisation's reputation and operations.
Exact Extract from Study Guide:
"This unit focuses on responsible procurement practices, ensuring that sourcing decisions align with legal, environmental, and social governance (ESG) principles."
NEW QUESTION # 78
Incoterms are divided into four main groups to follow the movement of goods covering the exporter's premises, export and import points, and cost and risk. Which letters represent the four groups of Incoterms?
- A. B, C, F, and G
- B. E, F, C, and D
- C. E, F, B, and C
- D. A, B, C, and D
Answer: B
Explanation:
Incoterms are grouped as E (Ex Works), F (Free Carrier), C (Carriage Paid To), and D (Delivered Duty Paid), reflecting various stages of responsibility transfer between buyer and seller. Understanding Incoterms is critical for responsible sourcing, as it clarifies logistics and cost responsibilities.
NEW QUESTION # 79
When looking at credit scores, a supplier may be classified as a high risk for reasons that are not linked to poor credit. Which of the following could these be? Select TWO
- A. The organisation is new
- B. The organisation does not employ many people
- C. The organisation has lots of fixed assets
- D. The organisation has no loans or credit cards
Answer: C,D
Explanation:
New organisations or those with no loans/ credit cards may have low credit scores. This is simply because they do not have enough financial history to make their scores good. That means banks au-tomatically class them as higher risk, because they simply don't know that they're trustworthy yet.
NEW QUESTION # 80
The use of a full competitive tendering process, especially by a public authority, can prevent the quick selection of a preferred supplier where the buyer's need is urgent. Is this statement correct?
- A. Yes, there should be no formal preferred supplier in a competitive tender
- B. Yes, the aim of such a process is to prevent quick decisions as these are always incorrect
- C. No, this type of process is the quickest way for any organisation to award a contract
- D. No, it is always possible to negotiate with a preferred supplier
Answer: A
Explanation:
In a full competitive tendering process, particularly in the public sector, buyers must not pre-select or favour a supplier. The process is designed to ensurefairness, transparency, and equal treatment, even though this can limit speed in urgent situations. While this may delay rapid supplier selection, it protects against bias and misuse of public funds. The objective is not to prevent quick decisions altogether, but to preventunfair or non-compliant decisions. Ethical and responsible sourcing requires adherence to due process, especially where public accountability is involved.
Reference:CIPS L4M4 Ethical & Responsible Sourcing Study Guide (v2) - public sector procurement; competitive tendering principles.
NEW QUESTION # 81
In which type of market would you be most likely to find a 'perfect competition'?
- A. monopoly
- B. monopolistic competition
- C. commodity
- D. oligopoly
Answer: D
Explanation:
An oligopoly. Perfect competition is a situation in a marketplace where there is plenty of competition. A monopoly or monopolistic competition would have 'imperfect competition'
NEW QUESTION # 82
Tracey Collum is a procurement professional and married to Nick Collum.
Tracey has been leading a tender for a new radar system, where four suppliers have submitted their bids.
After the bids were received, Nick joined one of the suppliers (Supplier X) as the project director for radar systems.
Nick has asked Tracey to award the contract to Supplier X.
What should Tracey do?
- A. Remove Supplier X from the tender due to a conflict of interest and continue with the tender
- B. Award the contract to Supplier X because Tracey can ask for a better price because they are married
- C. Ask to be removed from the tender due to a conflict of interest and complete a conflict of interest form
- D. Award the contract to Supplier X because Nick will be promoted if Supplier X wins the contract
Answer: C
Explanation:
To maintain integrity and avoid conflicts of interest, Tracey should declare the conflict and remove herself from the tender process. Ethical sourcing practices emphasize transparency and fairness, which prevent potential biases and maintain trust within procurement processes.
NEW QUESTION # 83
Added value can be objectively defined. Is this sentence TRUE?
- A. no - added value may change from one company to another
- B. Yes- added value is the same for all organisations
- C. no- added value is always intangible
- D. Yes- added value should be assessed along with price
Answer: A
Explanation:
The correct answer is 'no - added value may change from one company to another'.
Added value is very subjective. What one person thinks is excellent added value, another may not rate highly.
For example one buyer may consider a supplier having good brand reputation as added value, but another might not care.
The other no answer is incorrect because added value can be tangible or intangible. Tangible means you can touch and see it and intangible means you can't.
NEW QUESTION # 84
A company has a low gearing of 20%. This shows that the company relies on equity capital and should therefore have less difficulty coping during tough economic times. Is this statement TRUE?
- A. Yes- a low gearing ratio means the company's finances are made up of equity rather than debt
- B. No- a low gearing shows you that a company isn't likely to be profitable
- C. Yes- a low gearing ratio shows that the business is solvent and can deal with supply chain disruptions easily
- D. No- a low gearing suggests that the company is financed by long-term debt rather than equity
Answer: A
Explanation:
the correct answer is 'Yes- a low gearing ratio means the company's finances are made up of equity rather than debt'.
Remember low gearing = good (based on equity), high gearing = bad (based on debt). Anything over 50% is considered high.
The two no answers are therefore incorrect and you can discount these straight away. The other yes answer is one of those answers which COULD be true, but isn't always true, and we'd need more information to know for sure. When you get options like this there will be one that is always right and one which is sometimes right - so always pick the always right one.
Dealing with supply chain disruptions is complex, and depending what the disruption is, how big it is, what the industry is etc determines whether a supplier can handle it or not. Because there's more factors to consider than just gearing, this isn't the right answer.
NEW QUESTION # 85
Incoterms are designed to be understood and interpreted on a worldwide basis. What is the interpretation for FOB (Free on Board)?
- A. The buyer takes responsibility for the goods after they are loaded on the ship, plus all subsequent costs including freight charges
- B. The buyer takes responsibility for transferring the goods from the seller's premises to the ship, plus all subsequent costs
- C. The buyer takes responsibility for taking the goods from the departure quayside to the ship, plus all subsequent costs
- D. The buyer takes responsibility for the goods after they are loaded on the ship, plus subsequent costs excluding freight charges
Answer: A
Explanation:
Under theFOB (Free on Board)Incoterm, the seller is responsible for delivering the goods onto the vessel at the named port of shipment. Once the goods are on board, the risk and responsibility transfer to the buyer.
From that point onward, the buyer assumes all costs and risks associated with the transportation of the goods, including freight charges, insurance, unloading, and delivery to the final destination.
This interpretation aligns with the Incoterms 2020 rules set by the International Chamber of Commerce (ICC). It's crucial to note that FOB is applicable only for sea or inland waterway transport and is not suitable for containerized cargo, where theFCA (Free Carrier)term is more appropriate.
References:
Trade Finance Global: FOB (Free on Board) - Incoterms 2020 Rule
Maersk: FOB Incoterms meaning | Free on Board shipping
NEW QUESTION # 86
Which of the following is considered as part of ESG?
- A. bribery, corruption and the environment
- B. market conditions and product lifecycle
- C. liquidity, gearing and profitability
- D. economic and social governance
Answer: B
Explanation:
The correct answer is bribery, corruption and the environment.
ESG stands for environmental and social governance. It's the new buzzword for CIPS and is basically everything to do with ethical procurement- so areas such as bribery and corruption are included as well as the environment.
Option 4 is incorrect as economic doesn't come into it.
NEW QUESTION # 87
What is a major benefit to using Incoterms when sourcing goods internationally?
- A. it replaces the need for insurance
- B. it ensures ethical business practices
- C. it replaces lengthy contractual clauses
- D. it ensures value for money
Answer: C
Explanation:
Incoterms can replace lengthy contract clauses as they replace the need for contracts to detail which party is responsible for organising transport, paying duties, having the insurance etc.
Incoterms is an odd one for exam topics- some students say it was a huge part of their exam and there were many questions on this. Others said there were just one or two. Questions get randomly assigned from the bank so it's completely random how many you'll get on this topic.
NEW QUESTION # 88
Which of the following areas of legislative and regulatory requirements prevent the deliberate limit-ing of supply and the formation of cartels?
- A. marketplace competition
- B. data protection
- C. ethical practice
- D. product safety standards
Answer: D
Explanation:
the correct answer is 'marketplace competition'.
Ethical practice is about prohibiting corrupt and unfair practice, rather than issues of supply and demand.
Although being in a cartel is 'unethical behavior' this option doesn't fully answer the question which talks about limiting supply- this is related to marketplace competition.
NEW QUESTION # 89
Incoterms are designed to be understood and interpreted on a worldwide basis. What is the interpretation for FOB (Free on Board)?
- A. The buyer takes responsibility for transferring the goods from the seller's premises to the ship, plus all subsequent costs
- B. The buyer takes responsibility for the goods after they are loaded on the ship, plus all subsequent costs, including freight charges
- C. The buyer takes responsibility for the goods after they are loaded on the ship, plus subsequent costs, excluding freight charges
- D. The buyer takes responsibility for taking the goods from the departure quayside to the ship, plus all subsequent costs
Answer: B
Explanation:
Under FOB (Free on Board), the buyer assumes responsibility once the goods are loaded onto the ship, including costs and risks beyond this point. This Incoterm is commonly used in international trade, helping both parties clarify responsibilities and promote fair risk distribution.
NEW QUESTION # 90
Which of the following characteristics are likely to be required within sourcing processes undertaken in the public sector?
* An emphasis on long-term supplier relationships where possible
* Maintaining service levels within value and cost parameters
* All dealings between buyers and suppliers are kept confidential
* A competitive tendering process is usually encouraged
- A. 2 and 3 only
- B. 2 and 4 only
- C. 1 and 3 only
- D. 1 and 2 only
Answer: B
Explanation:
Public sector sourcing prioritises maintaining service levels within budget constraints and often mandates competitive tendering to promote transparency and fairness. These principles align with ethical sourcing practices, ensuring responsible expenditure and fair competition among suppliers.
NEW QUESTION # 91
A Request for Quotation asks a supplier to submit a price only, with no other details provided. Is this TRUE?
- A. Yes- price is the only factor considered
- B. No - quotations provide samples too
- C. Yes- this ensures the cheapest supplier is appointed
- D. No - specifications, technical details and quantities can also be provided
Answer: D
Explanation:
Request for Quotations can include more details than just prices. They can include specs and technical drawings and samples. It's like saying 'we can give you this price with these conditions'.
The other no answer is wrong because RfQ don't always include samples. A sample wouldn't be possible for a quote for an IT consultancy piece of work.
NEW QUESTION # 92
Which of the following should be conducted during the analysis of tender responses?
* Produce a report on each submission
* Review the pre-qualification questionnaire
* Check the arithmetical accuracy of each tender
* Evaluate the market dynamics
- A. 3 and 4 only
- B. 2 and 3 only
- C. 1 and 3 only
- D. 1 and 2 only
Answer: C
Explanation:
During tender evaluation, buyers must ensure that each submission is analysed thoroughly and consistently.
Producing a report on each submission (1) supports transparency, auditability, and fairness. Checking arithmetical accuracy (3) ensures that pricing data is correct and prevents calculation errors from misleading the evaluation. Reviewing pre-qualification questionnaires is part of the earlier stage, not tender analysis, while market dynamics are external context, not part of evaluating responses. Responsible sourcing highlights the importance of structured and auditable evaluation processes to protect against bias, ensure compliance, and provide stakeholders with a defendable record of decisions.
Reference: CIPS L4M4 Study Guide (v2), LO: "Implementation" - tender evaluation and analysis procedures.
NEW QUESTION # 93
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