How to deal with different types of CIPS exam questions (Part 1)

23/06/2025 jessica Comments 1 comment

In the previous post, “How to Maximize Your Score in the CIPS OR Exam“ I shared some tips on optimizing your exam performance. However, you may still find it hard to imagine what the exam questions actually look like.

In the OR exam, all questions are in multiple-choice format, but they’re presented in different ways. To help you better understand, I’ll walk you through some of the question types below.

In the exam, CIPS may ask a simple question like…

Example 1: Which of the following are commonly used in conjunction with an output-focused specification?
a. Key performance indicators
b. Clear conformance standards
c. Detailed technical requirements
d. Product brand names

Obviously, CIPS wants to assess your understanding of output-focused specifications. If you’re unable to differentiate between the two types of specifications (conformance and performance), you might lose points on the question. Among the four options, you can eliminate options B and C, as they are typical features of conformance specifications. This leaves us with options A and D.

As mentioned in the book, a product brand name is also a conformance specification because it specifies sourcing products from a specific company like Adidas, Nestlé, or Apple…. Therefore, A is clearly the correct answer.

Key Performance Indicators (KPIs) are specific expectations regarding outcomes, used to measure how well the supplier delivers on the buyer’s requirements. KPIs are more specific than general outcome-based specifications. You can use them to determine whether the supplier fulfills the contract.

For example, if you hire a company to build a fence, an output-focused specification might include the desired height, length, and thickness of the fence, the required completion time, and the use of specific materials (such as force-resistant, opaque materials). Based on these outputs, you can develop KPIs as measurable values that reflect your expectations for each requirement. Once the supplier completes the contract, you can assess their performance using these KPIs.

In another type of question such as

Example 2: A procurement manager, as an integral member of the cross-functional product design team, has helped build the specification for a new component in a product. The procurement manager has already assessed the availability of suppliers and their relative market influence and has determined that the sources of supply are plentiful. Which competitive market forces factor would be important for the procurement manager to consider?
a. Competitive rivalry
b. Power of buyers
c. Strength of suppliers
d. Supply chain impact

The question is quite long because it includes a scenario. However, in my opinion, it’s just as straightforward as Example 1. It simply tests your understanding of Porter’s Five Forces model. You’ll definitely lose points if you’re unfamiliar with the model or cannot distinguish the five forces in a market.

In this question, CIPS asks about the main concern of the buyer. To answer correctly, we need to return to the scenario. Reviewing it, we see that the procurement manager wants to assess the number of suppliers in the market and evaluate their influence. But why is that important?

If you can answer that, you’ll likely arrive at the correct option. Ultimately, the goal is to understand the buying organization’s power in the marketplace. If the procurement manager has high power, they may be able to negotiate lower prices or extended payment terms. On the other hand, if there are only two or three dominant suppliers, the procurement manager has little leverage unless their purchases account for a significant portion of the supplier’s revenue.

Therefore, option B is the correct answer.

Example 3: Which of the following are common barriers to entry that could affect competition in a market?

Set-up costs
Direct labour costs
Customer switching costs
Inventory holding costs
a. 1 and 2 only
b. 3 and 4 only
c. 2 and 3 only
d. 1 and 3 only

The question is slightly different from Examples 1 and 2. This time, you are required to choose two out of four options to arrive at the correct answer. In this case, CIPS is asking about the barriers to entering a new market.

You can approach this using your experience and logical thinking. For instance, imagine you want to enter the textile industry. What steps would you take to make that happen? You would need to build or lease factories to produce garments and purchase machinery and equipment, such as spreading and cutting machines. This may be financially unfeasible if you’re on a tight budget.

It’s also difficult to compete with established players who’ve been in the market for years and may already benefit from economies of scale. Direct labor costs and inventory costs are common for all companies and are typically recovered through sales.

Interestingly, some students tend to overlook option 3, “Customer switching costs,” assuming it’s irrelevant to the question. However, this is actually a valid point. Imagine you’re purchasing a product from Company A. If there are many suppliers offering the same item at competitive prices and it costs little or nothing to switch so you’re free to buy from anyone. This low switching cost represents a lower barrier for a new market entrant.

Therefore, the correct answer to this question is option D (1 and 3 only).

I will analyse other types of CIPS exam questions in the next blog post. Thank you for reading my post!

We provide CIPS practice questions with answers and detailed explanation, besides they are updated regularly to reflect the actual exam. If you want to consolidate your knowledge before the exam, you can check the links below

L4M1: https://www.udemy.com/course/cips-l4m1-practice-test-short-learning-guide/?couponCode=STUDYSMART25

L4M2: https://www.udemy.com/course/cips-diploma-l4m2-practice-test/?couponCode=STUDYSMART25

L4M3: https://www.udemy.com/course/cips-diploma-practice-test-commercial-contracting/?couponCode=STUDYSMART25

L4M4: https://www.udemy.com/course/cips-diploma-practice-test-ethical-responsible-sourcing/?couponCode=STUDYSMART25

L4M5: https://www.udemy.com/course/cips-practice-test-commercial-negotiation/?couponCode=STUDYSMART25

L4M6: https://www.udemy.com/course/cips-diploma-practice-test-supplier-relationships/?couponCode=STUDYSMART25

L4M7: https://www.udemy.com/course/level-4-diploma-whole-life-asset-management-l4m7/?couponCode=STUDYSMART25

L4M8: https://www.udemy.com/course/cips-l4m8-practice-in-procurement-and-supply/?couponCode=STUDYSMART25

L5M1: https://www.udemy.com/course/updated-l5m1-full-course-managing-teams-and-individuals/?couponCode=STUDYSMART25

L5M2: https://www.udemy.com/course/cips-l5m2-daniel-do/?couponCode=STUDYSMART25

L5M3: https://www.udemy.com/course/l5m3-daniel/?couponCode=STUDYSMART25

L5M4: https://www.udemy.com/course/l5m4-advanced-contract-and-finance/?couponCode=STUDYSMART25

L5M5: https://www.udemy.com/course/l5m5-daniel/?couponCode=STUDYSMART25