Free Preparation Discussions
MENU
CIPS L4M3 Exam Questions
- Topic 1: Scope and Influence of Procurement and Supply (L4M1): This module assesses the capabilities of Procurement Officers, focusing on how procurement adds value across organisations. It covers the procurement cycle, stakeholder roles, compliance across sectors, and how electronic systems support various procurement stages. Learners examine corporate structures, governance, and IT tools, developing insights into the strategic positioning of procurement functions.
- Topic 2: Defining Business Need (L4M2): Designed for Sourcing Analysts, this section explores how to create a solid business case when sourcing externally. It includes market evaluation, pricing strategies, budgeting models, and competitive forces across different sectors. The module also highlights the importance of detailed specifications and how these impact supplier decisions and risk management.
- Topic 3: Commercial Contracting (L4M3): Aimed at Contract Managers, this module explores the legal and structural elements of formal contracts. It includes content on contract types, specifications, key clauses, KPIs, pricing methods, and risk areas in contract law. It helps learners understand the legal foundation required for clear and enforceable agreements with suppliers.
- Topic 4: Ethical and Responsible Sourcing (L4M4): This module targets Compliance Specialists and focuses on responsible supplier selection. It looks into sourcing options, financial evaluations, pre-contract activities, award criteria, and the importance of sustainability, governance, and ethical considerations, both domestically and internationally. Learners also explore audit mechanisms and environmental strategies.
- Topic 5: Commercial Negotiation (L4M5): Tailored for Category Buyers, this section covers commercial negotiation techniques and preparation. It includes stakeholder dynamics, power balance, relationship impact, economic influences, and communication strategies. The module provides the foundation for conducting effective negotiations and evaluating outcomes for future improvements.
- Topic 6: Supplier Relationships (L4M6): Designed for Vendor Relationship Officers, this unit investigates supply chain relationship models and the tools needed to build strong partnerships. Learners explore competitive influences, team dynamics, stakeholder management, conflict resolution, and reasons partnerships fail. It emphasises trust, communication, and performance review processes.
- Topic 7: Whole-Life Asset Management (L4M7): Targeted at Inventory Controllers, this module explains inventory storage, movement, and control. It breaks down asset lifecycle costing, forecasting methods, inventory classifications, and warehousing technologies. Learners also assess the environmental and financial factors tied to long-term asset ownership and disposal.
- Topic 8: Procurement and Supply in Practice (L4M8): For Procurement Specialists, this capstone module consolidates all other units, applying theory to real workplace settings. Learners demonstrate the full procurement cycle, from pre- to post-contract phases, supplier performance measurement, whole-life costing, and ESG (environmental, social, governance) practices across industries and sectors.
Free CIPS L4M3 Exam Actual Questions
Note: Premium Questions for L4M3 were last updated On Sep. 07, 2025 (see below)
A construction company is undertaking a housing development project. They need lots of bricks and other building materials, but the construction site doesn't have large area for storage of materials. Therefore, the company's suppliers must deliver the building materials with fixed quantity and at fixed time intervals. What type of contract is used between the construction company and its suppliers?
In the scenario, the contract between the company and its suppliers is continuous rather than one-off. So it cannot be one-off contract or spot purchase. The quantity and time is well known and fixed, this type of contract is known as call-off contract or blanket order.
LO 1, AC 1.3
Which of the following is an agreement between service provider and user that quantifies the minimum quality of service?
A service-level agreement (SLA) is a commitment between a service provider and a client. Particular aspects of the service -- quality, availability, responsibilities -- are agreed between the service provider and the service user. The most common component of an SLA is that the services should be provided to the customer as agreed upon in the contract.
A customer service charter is a document that outlines how an organization promises to work with its customers along with providing insights into how an organization operates.
A service guarantee is a marketing tool service firms have increasingly been using to reduce consumer risk perceptions, signal quality, differentiate a service offering, and to institutionalize and professionalize their internal management of customer complaint and service recovery.
LO 2, AC 2.2
Which of the following is a key feature of liquidated damage clauses?
Liquidated damages are presented in certain legal contracts as an estimate of otherwise intangible or hard-to-define losses to one of the parties. It is a provision that allows for the payment of a specified sum should one of the parties be in breach of contract.
Understanding Liquidated Damages
Liquidated damages are meant as a fair representation of losses in situations where actual damages are difficult to ascertain. In general, liquidated damages are meant to be fair, rather than punitive.
Liquidated damages may be referred to in a specific contract clause to cover circumstances where a party faces a loss from assets that do not have a direct monetary correlation. For example, if a party in a contract were to leak supply chain pricing information that is vital to a business, this could fall under liquidated damages.
A common example is a design phase for a new product that may involve consultation with outside suppliers and consultants in addition to a company's employees. The underlying plans or designs for a product might not have a set market value. This may be true even if the subsequent product is crucial to the progress and growth of a company. These plans may be deemed to be trade secrets of the business and highly sensitive. If the plans were exposed by a disgruntled employee or supplier, it could greatly hamper the ability to generate revenue from the release of that product. A company would have to make an estimation in advance of what such losses could cost in order to include this in a liquidated damages clause of a contract.
Limitations of Liquidated Damages
It is possible that a liquidated damages clause might not be enforced by the courts. This can occur if the monetary amount of liquidated damages cited in the clause is extraordinarily disproportional to the scope of what was affected by the breached contract.
Such limitations prevent a plaintiff from attempting to claim an unsubstantiated exorbitant amount from a defendant. For instance, a plaintiff might not be able to claim liquidated damages that amount to multiples of its gross revenue if the breach only affected a specific portion of its operations. The concept of liquidated damages is framed around compensation related to some harm and injury to the party rather than a fine imposed on the defendant.
The courts typically require that the parties involved make the most reasonable assessment possible for the liquidated damages clause at the time the contract is signed. This can provide a sense of understanding and reassurance of what is at stake if that aspect of the contract is breached. A liquidated damages clause can also give the parties involved a basis to negotiate from for an out-of-court settlement.
- Liquidated Damages
- CIPS study guide page 158-159
LO 3, AC 3.2
Which of the following documents are likely to have legal standing? Select TWO that apply:
A quotation and a tender are both firm offers which have legal standing to the offeror. Tenders are more detailed than quotations and will include quality aspects as well as prices.
LO 1, AC 1.1 & AC 1.2
Under a price adjustment agreement, which of the following would be supplier's justification for increasing unit price?
Normally in a price adjustment agreement, the supplier is allowed to change price based on an indexation, which is published by a third party (for example, government or exchange market). The selected indices often associate with input materials of supplier. For instance, the plastics manufacturer may adjust their price based on crude oil price as oil is major input of producing plastics. Other suppliers may select different set of indices, such as Producer Perception Index.
In this question, only 'Rise in fuel price' could be a justification for supplier to increase price because:
- It may affect the input material price
- The index is checked and published by an independent third party.
LO 3, AC 3.3
- Select Question Types you want
- Set your Desired Pass Percentage
- Allocate Time (Hours : Minutes)
- Create Multiple Practice tests with Limited Questions
- Customer Support
Abel
2 months agoKimi
2 months agoColby
3 months agoJacquelyne
3 months agoToshia
3 months agoHayley
4 months agoAshley
4 months agoDolores
5 months agoCraig
5 months agoOdelia
6 months agoPok
6 months agoSherman
6 months agoKati
7 months agoJeniffer
7 months agoAnika
7 months agoHollis
7 months agoDerrick
8 months agoJulianna
8 months agoEvelynn
8 months agoCaprice
8 months agoDortha
8 months agoWillard
9 months agoLeota
9 months agoLizette
9 months agoAnnabelle
9 months agoYvonne
9 months agoLarae
10 months agoOna
10 months agoAmber
10 months agoViola
10 months agoQuentin
10 months agoGlory
11 months agoValene
11 months agoMarg
11 months agoEladia
11 months agoLarae
11 months agoAhmed
12 months agoMalcom
12 months agoSunny
1 years agoAdelaide
1 years agoGraciela
1 years agoJacquelyne
1 years agoSunny
1 years agoKattie
1 years agoWei
1 years agoLaurel
1 years agoGladis
1 years ago