[Sep-2023] Dumps Practice Exam Questions Study Guide for the L4M3 Exam [Q89-Q107]

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[Sep-2023] Dumps Practice Exam Questions Study Guide for the L4M3 Exam

L4M3 Dumps with Practice Exam Questions Answers

CIPS L4M3 (CIPS Commercial Contracting) Certification Exam is designed for procurement and supply chain professionals who are interested in enhancing their knowledge and skills in commercial contracting. CIPS Commercial Contracting certification exam is part of the CIPS (Chartered Institute of Procurement and Supply) qualifications and is recognized globally. The CIPS L4M3 exam covers a range of topics related to commercial contracting, including contract management, contract law, and negotiation skills.

NO.89 Which of the following statements is FALSE on contracts for the leasing of assets?

The party responsible for maintenance, insurance and taxes is subject to negotiation

In lease agreement, the possession and right of use of an asset are transferred to the lessee

The ownership of leased asset is transferred to the lessee at the end of the period

The lessee may bear some risks of ownership, such as the liability to insure the asset

NO.90 A fashion company is drafting a specification for an order in next year. The company wants to expand its supply base in low cost countries. The procurement department is considering applying standard ISO 3759 on method for the preparation, marking and measuring of textile fabrics, garments and fabric assemblies for use in tests for assessing dimensional change after a specified treatment. Which of the following should be taken into account when embedding this standard into the specification?

Date of publication

Supplier selection

Type of specification

Legality

NO.91 CMS Corp goes into a gainshare agreement with the contractor, EIP Ltd. Both parties agree that the final fee will be calculated on target cost – target fee basis. Which of the following will affect the final fee payable in this gainshare agreement? Select TWO that apply:

Accrual expense

Final price

Purchaser goodwill

Supplier share

Actual cost

NO.92 Which of the following are likely to be advantages of using invitation to tender? Select TWO that apply:
Short turnaround times

Quick implementation

Driving forward planning culture

Lower administration costs

Reducing risks of bribery and corruption

Advantages of using invitation to tender may be as below:
No Nepotism: Tenders or bids are evaluated on the basis of certain predetermined criteria, such as price, quality and value for money. In other words, the firm offering the highest quality product or service at the lowest price point would win the contract. As most tender documents are opened and evaluated in a public process, I think that there remains little room for nepotism or favoritism of any kind.
Value for Money: From the perspective of the client, tenders offer the greatest value for the amount of money spent. This is due to the fact that the client can choose from a wide pool of potential suppliers to select the ones that can produce the highest quality product or service at the lowest price point. This allows the company, establishment or organization to save money without having to compromise on quality. Therefore, despite being quite time consuming, tendering is, in my opinion, a profitable long-term process from an organization’s point of view.
Encourages Competition: The process of tendering helps promote a competitive market. This is because a number of potential contractors, firms or suppliers get a chance to bid for every project. And because selection depends on quality and price, every bidder tries to reduce operational inefficiencies and redundancies as much as possible in order to lower expenses and improve quality. This entire process encourages healthy competition in the market and prevents complacency and laziness, which in turn provides a boost to innovation and new ideas.
Easier Entry: The system of tendering makes it easier and simpler for new firms to enter the market or even a particular industry. This is due to the fact that contracts under this system are awarded on the basis of predetermined, objective criteria. As a result, even a firm that is a new entrant to the market, having no connections or contacts in the industry, can win a prestigious and lucrative contract by providing the highest value for the client’s money. This process therefore helps new firms to quickly get a foothold in the market or industry, thus significantly lowering the traditional barriers to entry.
Reference:
– Characteristics and Benefits of the Tendering Process
– CIPS study guide page 6-8
LO 1, AC 1.1

NO.93 Blakenall District Hospital (BDH) is a large hospital that is a major part of the government’s health service. Purchasing staff are in the habit of placing many long-term contracts with suppliers and sub-contractors. Whilst these contracts are usually carried out successfully, prices are often paid that are well over budget. The purchasing manager is concerned to find that, in some cases, members of staff are forcing suppliers to accept fixed price contracts. The policy has caused several problems such as some suppliers refusing to deal with BDH and a few going out of business mid-way through performing a contract with BDH. This is due to fluctuating market prices of materials. The procurement manager suggests supplier to adopt variable pricing arrangement with price index. Is this a right course of action?

No, variable pricing would only benefit the suppliers

Yes, this type of arrangement would provide absolute certainty when budgeting

Yes, this pricing arrangement would reimburse the fluctuation of material prices

No, price adjustment should be applied to short-term supply contract only (3-month duration or less)

NO.94 Which of the following are driving forces for increasing use of social and environmental criteria in specifications? Select TWO that apply.,

Process efficiencies

Stakeholder pressure

Insufficient financial resources

Scarcity of environmentally sustainable suppliers

Carbon footprint measure

NO.95 A procurement manager is setting KPIs measurement for user satisfaction. He also wants to encourage users to share the reason why they feel the way they do. Which of the following types of KPI should the procurement manager apply?

Quantitative measure

Numerical measure

Binary measure

Qualitative assessment

NO.96 Which of the following KPIs is qualitative?
1. Openness and co-operation of supplier
2. Responsiveness of supplier
3. Customer satisfactory ratings
4. Cost management
5. OTIF deliveries

2 and 5 only

1 and 3 only

2 and 3 only

1 and 4 only

NO.97 Which of the following is the model form of contract for construction which is recommended by World Bank?

ITC

JCT

CIPS

FIDIC

FIDIC is the International Federation of Consulting Engineers (or Federation Internationale des Ingenieurs Conseils in French). FIDIC has produced many publications, including the model form contracts, best practice guidances, research on sustainability, integrity and risk management. FIDIC model form contracts have been developed by this organisation since 1999, now they consist of several different books which are marked by colours. Thus, FIDIC model contracts also have the nickname “Rainbow suite of contracts”. Basically, the “Rainbow Suite” include the following books:
* Yellow book: Plant and Design-Build Contract (2 editions: 1999 and 2017)
* Silver book: EPC/Turnkey Contract (2 editions: 1999 and 2017)
* Red book: Construction Contracts (2 editions: 1999 and 2017)
* Emerald book: Conditions of Contract for Underground Works (1st Ed 2019)
* Blue-Green book: Dredgers Contract (2 editions: 2006 and 2016)
* Gold book: Design, Build and Operate Contract Guide
* Pink book: Construction Contract Multilateral Development Bank Harmonised Ed (2 editions: 2005 and 2010) This type of model contract is commonly used around the world because its author, International Federation of Consulting Engineers, collaborates closely with development banks such as World Bank, Africa Development Bank, Asia Development Bank, etc. Every construction project that is financed by these institutions must adopt the FIDIC contracts.
The Joint Contracts Tribunal, also known as the JCT, produces standard forms of contract for construction, guidance notes and other standard documentation for use in the construction industry in the United Kingdom. From its establishment in 1931, JCT has expanded the number of contributing organisations.
ITC (International Trade Centre) produces contracts specifically designed for small companies doing international business, covering the sale of goods, distribution, services and joint ventures. Many small companies are now engaged in international trade, but don’t have access to the necessary contract forms to protect themselves. ITC and leading legal experts developed eight generic contract templates that incorporate internationally recognized standards and laws for most small business situations.
CIPS has several model forms of contract designed specifically for IT buying and servicing.
Reference:
LO 3, AC 3.1

NO.98 A buyer and a supplier plan to sign a contract with cost-plus arrangement. If the cost base is $350 and the markup component is 11% then the invoice price will be…

393.26

388.5

368.5

362

NO.99 Which of the following is the reason why liquidated damage clauses are embedded into a contract?

Because liquidated damages are the only remedy

To penalise the supplier for their wrongdoing

To avoid argument on correct measure of damage

Because compensation will be awarded immediately

NO.100 Which of the following will be always automatically deemed as a consideration?

Promise to perform over and above an existing obligation

Promise given to a third party

Implied consideration

Past consideration

NO.101 Which of the following would be useful tools to incentivise supplier innovation over the duration of the contract?
1. Gainshare arrangement
2. Liquidated damages
3. Service credits
4. Fixed bonus payments

3 and 4 only

2 and 4 only

1 and 4 only

1 and 3 only

NO.102 The pricing arrangement in which markup is added into cost base to calculate the final price is known as…?

Fixed Price approach

Market based approach

Price indices

Cost plus pricing

NO.103 In a sale contract, a clause requires the seller to “defend, reimburse, and hold harmless” the buyer and its personnel from and against any and all damages arising in connection with some specific circumstances. This clause is an example of…?

Insurance

Liquidated damages

Indemnity

Force Majeure

NO.104 Which of the following are reasons why a buying organisation adopts a model contract?
1. Extremely advantageous terms for buyer
2. Correct legal terminology
3. Supplier cannot make variation to the model form
4. Specific to industry

1 and 2 only

2 and 4 only

2 and 3 only

1 and 4 only

NO.105 In a contract, express terms and implied terms may contradict on the same issues. Under which of the following circumstances, implied terms will override express terms?

Implied terms are created by trade customs

Contracting parties are silent on a matter that was not included in express terms

No circumstances. Express terms always take precedence over implied terms

Implied terms are created by law which prevents them to be overridden

NO.106 Which of the following will always give rise to a claim of misrepresentation?
1. Silence
2. False thought
3. Statement of fact
4. Representation by conduct

1 and 2 only

1 and 3 only

3 and 4 only

2 and 4 only

NO.107 Under which of the following scenarios an RFQ is most likely to be used?

Purchase of a small number of standardised products under a framework agreement

Purchase of complex machinery

Design of a unique and complex software code

When the buying organisation does not know the requirements in details and needs the input from suppliers

CIPS L4M3 exam is an essential qualification for procurement professionals who want to advance their careers in the field of commercial contracting. L4M3 exam is recognized globally and is highly respected by employers in industries such as manufacturing, construction, and services. Procurement professionals who pass the exam will have a competitive advantage in the job market and will be well-positioned to take on more senior roles in their organizations.

Free CIPS Certifications L4M3 Exam Question: https://www.actualtests4sure.com/L4M3-test-questions.html