CIPS Level 2 Exam Flashcards

Q: How many questions are on a CIPS Level 2 module exam?

Each of the five CIPS Level 2 module exams (L2M1-L2M5) uses the Objective Response format and contains approximately 40-60 multiple-choice questions. CIPS does not publish a fixed question count for every module on its public pages.

Q: What score do I need to pass CIPS Level 2?

CIPS requires a minimum of 70% to pass each Level 2 module exam. All five modules (L2M1-L2M5) must be passed to be awarded the Level 2 Certificate in Procurement and Supply Operations.

Q: Do I need experience or qualifications to take CIPS Level 2?

No. CIPS positions Level 2 as an entry-level qualification with no formal educational prerequisites or prior procurement experience required, making it suitable for anyone starting out in procurement.

Q: How are CIPS Level 2 exams delivered?

CIPS Level 2 module exams are delivered as computer-based Objective Response assessments at CIPS accredited test centres, with exam sittings offered in months such as March, May, July, September, and November.

Question 1

Five rights of procurement

Accepted Answer

The core objectives procurement aims to achieve: right quality, right quantity, right time, right place, and right price. All five must be balanced together, not optimized in isolation.

Question 2

Right quality (five rights)

Accepted Answer

Goods or services must meet the agreed specification and be fit for purpose - not necessarily the highest quality available, but the quality level the requirement actually needs.

Question 3

Right price (five rights)

Accepted Answer

The price that represents best value for money considering total cost, not simply the lowest purchase price on offer.

Question 4

Right time (five rights)

Accepted Answer

Delivery must occur when the goods or services are actually needed - early delivery can raise storage costs, late delivery can disrupt operations.

Question 5

Right place (five rights)

Accepted Answer

Goods or services must be delivered to the correct location specified by the buyer, which affects transport cost and choice of delivery terms.

Question 6

Procurement and supply cycle

Accepted Answer

The end-to-end sequence of procurement activities: identify need, define specification, source and select a supplier, negotiate and award the contract, receive goods or services, then manage the ongoing contract and supplier relationship.

Question 7

Private sector organisation

Accepted Answer

An organisation owned by individuals or shareholders that operates primarily to generate profit and is accountable mainly to its owners and investors.

Question 8

Public sector organisation

Accepted Answer

A government-funded body accountable to citizens and taxpayers; its procurement is typically subject to public procurement regulations that promote transparency and fair competition.

Question 9

Third sector organisation

Accepted Answer

A not-for-profit body such as a charity or social enterprise, driven by a social or environmental mission rather than shareholder profit.

Question 10

Local sourcing vs. global sourcing

Accepted Answer

Local sourcing buys from suppliers in the buyer's own country, favoring shorter lead times and lower transport risk. Global sourcing seeks suppliers worldwide for the best price, quality, or innovation, at the cost of longer lead times and more supply chain risk.

Question 11

Steps in the procurement process

Accepted Answer

Typical sequence: raise a requisition, define the specification, source and evaluate suppliers (RFQ/ITT), award the contract, issue a purchase order, receive the goods or services, and process the invoice for payment.

Question 12

Purchase requisition

Accepted Answer

An internal document raised by a department to formally request that procurement buy specified goods or services; it triggers sourcing but is not itself a contract.

Question 13

Purchase order (PO)

Accepted Answer

A document issued by the buyer to a chosen supplier specifying the goods or services, quantity, and price; once accepted by the supplier it becomes a legally binding contract.

Question 14

Conformance specification

Accepted Answer

A design/technical specification that precisely states dimensions, materials, and standards the product must meet - best suited to standard, well-defined commodities.

Question 15

Performance specification

Accepted Answer

A specification that states the required outcome or function rather than how to achieve it, giving suppliers freedom to propose innovative solutions; commonly used for services.

Question 16

RFQ vs. ITT

Accepted Answer

A Request for Quotation (RFQ) asks suppliers for prices on lower-value, straightforward purchases. An Invitation to Tender (ITT) is a formal, detailed process used for higher-value or more complex requirements.

Question 17

Approved supplier list (ASL)

Accepted Answer

A pre-vetted list of suppliers who have met an organisation's quality, financial, and compliance criteria; buyers select from the ASL to reduce sourcing risk.

Question 18

Contract terms: express vs. implied, standard vs. bespoke

Accepted Answer

Express terms are explicitly written into the contract; implied terms are not written but assumed by law or custom. Standard contracts use pre-drafted template terms for routine purchases; bespoke contracts are custom-drafted for complex, high-value, or high-risk agreements.

Question 19

CIPS Code of Conduct

Accepted Answer

Requires CIPS members to act with integrity, professionalism, and high ethical standards - rejecting improper business practices such as bribery and conflicts of interest - and to be held accountable for their conduct.

Question 20

Sustainable / responsible procurement

Accepted Answer

Procurement decisions that weigh environmental and social impact alongside cost and quality, including working to eradicate unethical practices such as human rights abuses, fraud, and corruption from the supply chain - a core part of corporate social responsibility (CSR).

Question 21

Internal stakeholders

Accepted Answer

Individuals or groups within the buying organisation with an interest in a procurement decision, e.g., finance, operations, end users, and senior management.

Question 22

External stakeholders

Accepted Answer

Individuals or groups outside the buying organisation affected by or interested in procurement decisions, e.g., suppliers, regulators, customers, and the local community.

Question 23

Stakeholder mapping (Mendelow's power-interest matrix)

Accepted Answer

A tool that plots stakeholders on two axes - power to influence and interest in the outcome - to decide the appropriate level and type of engagement for each.

Question 24

Mendelow's matrix: 'Key players' quadrant

Accepted Answer

Stakeholders with high power and high interest; manage these closely and engage them fully in decision-making.

Question 25

Mendelow's matrix: 'Keep satisfied' quadrant

Accepted Answer

Stakeholders with high power but low interest; keep them satisfied with periodic updates, without overwhelming them with detail.

Question 26

Mendelow's matrix: 'Keep informed' quadrant

Accepted Answer

Stakeholders with low power but high interest; keep them adequately informed since they can raise useful concerns or become influential later.

Question 27

Mendelow's matrix: 'Minimal effort' quadrant

Accepted Answer

Stakeholders with low power and low interest; monitor them with minimal communication effort.

Question 28

Communication channels: formal vs. informal

Accepted Answer

Formal channels (reports, meetings, contracts) provide documented, structured communication; informal channels (emails, calls, conversations) are faster and build relationships but lack a formal record.

Question 29

Constructive conflict management

Accepted Answer

Resolving stakeholder disagreements using approaches such as collaborating (win-win), compromising, avoiding, accommodating, or competing - chosen to fit the situation's importance and the relationship involved.

Question 30

Benefits of effective cross-functional teamwork

Accepted Answer

Combining diverse expertise (e.g., procurement, finance, technical) improves specification quality, speeds up decision-making, and increases stakeholder buy-in for procurement decisions.

Question 31

Purchase-to-Pay (P2P) system

Accepted Answer

An integrated system covering the full procurement transaction cycle - requisition, purchase order, goods receipt, invoice, and payment - within one platform.

Question 32

E-procurement

Accepted Answer

The use of electronic/internet-based systems to conduct procurement activities such as sourcing, ordering, and invoicing, improving speed, accuracy, and spend visibility.

Question 33

E-catalogue

Accepted Answer

An online, searchable listing of a supplier's products and pre-agreed prices that buyers use to place orders directly within a P2P system.

Question 34

Reverse auction

Accepted Answer

An e-sourcing event where multiple pre-qualified suppliers compete by bidding the price down in real time, with the buyer typically awarding to the lowest compliant bid.

Question 35

Electronic Data Interchange (EDI)

Accepted Answer

The structured, computer-to-computer exchange of business documents (e.g., purchase orders, invoices) between buyer and supplier systems without manual re-entry.

Question 36

Three-way matching

Accepted Answer

A payment control that checks the purchase order, goods receipt note, and supplier invoice agree before an invoice is approved for payment, reducing the risk of paying for incorrect or undelivered goods.

Question 37

Materials Requirements Planning (MRP)

Accepted Answer

A production-planning system that calculates the materials and components needed, and when, based on demand forecasts and bills of materials, to support manufacturing schedules.

Question 38

Enterprise Resource Planning (ERP)

Accepted Answer

An integrated software system that links procurement with other business functions (finance, HR, production, inventory) on a single platform, of which purchasing/MRP is one module.

Question 39

Supplier portal

Accepted Answer

A secure online interface that lets suppliers view orders, submit invoices, update catalogues, and communicate directly with the buying organisation's procurement system.

Question 40

Importance of procurement data and record-keeping

Accepted Answer

Accurate digital records create an audit trail, support spend analysis, ensure compliance, and provide evidence in the event of a contract or supplier dispute.

Question 41

ABC analysis

Accepted Answer

An inventory classification method: 'A' items are the small percentage of stock lines that represent the largest share of value (tightest control), 'B' items are mid-value, and 'C' items are low-value, high-volume lines (loosest control).

Question 42

Economic Order Quantity (EOQ)

Accepted Answer

The order quantity that minimises the combined total of ordering costs and holding (storage) costs for an item of inventory.

Question 43

Just-In-Time (JIT)

Accepted Answer

An inventory strategy where materials arrive only as they are needed in the production or sales process, minimising stock holding but requiring highly reliable suppliers and logistics.

Question 44

Safety stock

Accepted Answer

A buffer quantity of inventory held above expected demand to protect against uncertainty in demand or supplier lead time, reducing the risk of a stockout.

Question 45

Reorder point

Accepted Answer

The stock level at which a new replenishment order must be placed so the new stock arrives before existing inventory runs out, accounting for lead time and demand.

Question 46

Cycle stock

Accepted Answer

The portion of inventory that is used up and replenished during the normal operating cycle to meet expected, regular demand.

Question 47

FIFO (First In, First Out)

Accepted Answer

A warehousing/stock rotation method where the oldest stock is issued or sold first, reducing the risk of obsolescence or spoilage.

Question 48

Cross-docking

Accepted Answer

A logistics technique where incoming goods are transferred directly from inbound to outbound transport with little or no intermediate warehouse storage, speeding up distribution.

Question 49

Incoterms

Accepted Answer

A set of standardised international trade terms (published by the ICC) that define the point at which cost and risk for goods transfer from seller to buyer, e.g., EXW (seller's minimum responsibility) through DDP, delivered duty paid (seller's maximum responsibility).

Question 50

Expediting

Accepted Answer

Proactively monitoring and following up on outstanding orders with a supplier to confirm progress and resolve delays, ensuring delivery happens on time.

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