CIPS L4M4 Exam - Topic 3 Question 43 Discussion

Actual exam question for CIPS's L4M4 exam

Question #: 43
Topic #: 3

[All L4M4 Questions]

Azram is a facilities category buyer within the UK police force and is managing an overseas sourcing project for police uniform and personal protective equipment. Azram is of the opinion that international sourcing will help deliver much-needed financial savings, which can be utilized in other areas of the UK police force. Azram is aware that exchange rate fluctuations can create risk for his organisation. How can Azram remove this risk?

AEvaluate international supplier's financial accounts

BCarry out a competitive tender exercise

CRequest to use the exchange rate applicable at the time of delivery

DAsk suppliers to quote in GBP Sterling

Show Suggested Answer

Suggested Answer: D

Requesting suppliers to quote in GBP Sterling removes exchange rate risk by fixing the cost in the buyer's local currency. This strategy aligns with responsible sourcing practices by providing cost stability and protecting the procurement budget from currency fluctuations.

by Beatriz at Jan 05, 2026, 05:16 AM

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Ceola

3 days ago

Option C is a risky move. Relying on the exchange rate at the time of delivery could backfire.

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Sabra

8 days ago

Definitely option D. Azram needs to protect his organization from the volatility of exchange rates.

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Veda

13 days ago

Option D is the way to go. Asking suppliers to quote in GBP Sterling eliminates the exchange rate risk.

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Brittni

18 days ago

I recall that evaluating financial accounts of suppliers is important, but it doesn't directly address the exchange rate risk, right?

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Svetlana

23 days ago

I practiced a similar question where we had to evaluate risk management strategies, and I feel like using the exchange rate at the time of delivery could be a viable option.

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Corinne

29 days ago

I think asking suppliers to quote in GBP Sterling could help, but I wonder if that might limit our options for suppliers.

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Nelida

1 month ago

I remember discussing how exchange rate fluctuations can impact budgeting in international sourcing, but I'm not sure which option best mitigates that risk.

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Caprice

1 month ago

I'm leaning towards option D as well. Locking in the GBP price upfront seems like the best way to avoid any nasty surprises from exchange rate changes down the line. Gotta minimize that risk as much as possible.

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Terrilyn

1 month ago

I'm pretty confident that option D is the way to go here. Asking the suppliers to quote in GBP eliminates the exchange rate fluctuation risk entirely. Seems like the cleanest solution to me.

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Nada

2 months ago

I'm a bit confused on this one. I'm not sure if evaluating the suppliers' financial accounts (option A) is really relevant to managing the exchange rate risk. And I'm not convinced a competitive tender (option B) would necessarily solve the issue either.

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Soledad

2 months ago

Hmm, I'm not sure. Option C about using the exchange rate at time of delivery also seems like it could work. I'd have to think through the pros and cons of each approach.

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Esteban

2 months ago

I think I'd go with option D - asking the suppliers to quote in GBP Sterling. That seems like the most straightforward way to remove the exchange rate risk.

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