CIPS Level 4 Diploma in Procurement and Supply Practice Questions — 10 Free (2026)

Under what conditions is an electronic auction a suitable way to award a requirement?

• A. Where the specification is clear and suppliers can compete on price alone ✓
• B. Where the requirement is novel and the specification is still being developed
• C. Where only one supplier in the market is capable of meeting the requirement
• D. Where the relationship with the incumbent supplier is the primary consideration
• E. Where the award must be made without any prior evaluation of the bidders

An auction reduces the decision to a number. That only works when everything else has already been settled and the bidders are genuinely interchangeable on everything but price. CIPS Level 4 Diploma Core Study Guide, L4M1

What tension exists between a response-time KPI and a first-time-fix KPI?

• A. They rely on data held by different parties
• B. They are measured over different reporting periods
• C. One is binary and the other numerical
• D. One of them measures the supplier and the other one measures the purchaser
• E. Speed of attendance can reduce the ability to resolve on the first visit ✓

The same tension runs through call centre measures: dedicating resource to answering quickly costs the quality of the calls already in progress. CIPS Level 4 Diploma Core Study Guide, L4M3

Three sites each buy 4,000 units a year at 6.80 each. Placing the combined requirement centrally secures a price of 6.15. What does centralising save each year?

• A. 2,600
• B. 5,200
• C. 7,020
• D. 7,800 ✓
• E. 12,000

The saving comes entirely from the volume rather than from anything the buyer did differently, which is exactly the economy of scale the guide credits the structure with. CIPS Level 4 Diploma Core Study Guide, L4M1

What are the three basic groups of whole-life costing model?

• A. Fixed models, variable models and the semi-variable family of models
• B. Annual, quarterly and monthly models
• C. Public, private and third-sector models
• D. Cash, accrual and deferred models
• E. Decision support, simulation and optimisation models ✓

Decision support models rank alternatives, simulation models handle costs that come as ranges, and optimisation models calculate support costs such as inventory and maintenance. CIPS Level 4 Diploma Core Study Guide, L4M2

A large company collapses and a parliamentary committee calls for the governance regime to be overhauled. What does that reaction indicate about governance?

• A. It is treated as a public interest matter, not only a matter for shareholders ✓
• B. Governance is set by parliament and may only ever be amended by primary legislation
• C. It applies to public sector bodies rather than to listed companies
• D. It is enforced by the external auditors appointed to the company
• E. It becomes relevant only once a company has entered insolvency

Employees, suppliers, pension holders and customers all carry the consequences of a collapse. That is why the response reaches beyond the shareholders who owned it. CIPS Level 4 Diploma Core Study Guide, L4M1

A manufacturer budgets 12,000 units and each unit needs 3.5 kg of steel. Steel costs 1.80 per kg. What is the budgeted steel cost?

• A. 37,800
• B. 56,700
• C. 75,600 ✓
• D. 94,500
• E. 113,400

The quantity comes from the manufacturing budget multiplied by the bill of materials figure, and the cost follows from the unit purchase price. Both inputs are already held by the organisation. CIPS Level 4 Diploma Core Study Guide, L4M2

What are the risks at the two extremes of specification detail?

• A. Overpricing at one end and non-compliance at the other
• B. Too few bidders at one end and too many at the other
• C. Missing innovation at one end, an unenforceable wish list at the other ✓
• D. Spending far too much at one end and accepting poor quality at the other
• E. Supplier lock-in at one end and loss of control at the other

A market that cannot meet what you asked for and a document too vague to enforce are the same failure seen from either side of the middle ground. CIPS Level 4 Diploma Core Study Guide, L4M3

Why must all potential suppliers receive identical tender documentation?

• A. So each supplier pays the same fee
• B. So that the process is fair and can be seen to be transparent ✓
• C. So that the buying organisation can print the packs in a single run
• D. So that suppliers are prevented from asking clarification questions
• E. So that the evaluation panel has fewer documents to read afterwards

If one bidder knows something the others do not, the comparison is worthless and the award is open to challenge. Identical packs are what make the competition real. CIPS Level 4 Diploma Core Study Guide, L4M1

What risk does a process-driven tender exercise carry?

• A. That the timescales slip
• B. That suppliers price for the process rather than the work
• C. That the evaluation criteria are applied inconsistently
• D. A lack of project-specific thought ✓
• E. That the documentation becomes too long for bidders to read

Following the process correctly can substitute for thinking about this particular procurement, which is why auditing a random sample for compliance is not enough on its own. CIPS Level 4 Diploma Core Study Guide, L4M3

On what basis may a procurement professional be required to conform to the regulations and standards set out in organisational policies?

• A. Under the general law of contract governing the purchases they make
• B. Under the terms of their contract of employment with the organisation ✓
• C. Under the conditions attached to their professional membership only
• D. Under the terms agreed with each supplier at the point of award
• E. Under the delegated authority granted to them by the finance function

Where the employment contract requires it, following the policy stops being advice and becomes an obligation the individual owes their employer. CIPS Level 4 Diploma Core Study Guide, L4M1