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L3M1 Exam Questions & Answers

Procurement and Supply Environments  •  CIPS

90 Questions Updated Sep 2026 99% Pass Rate
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Sample L3M1 Questions

Practice with real exam-style questions, each with the verified correct answer and explanation.

Q1 MultipleChoice

Which of the following could be part of STEEPLED?

Select all that apply.

Correct Answer: A, B
Explanation:

Social and technological are part of STEEPLED: they were also part of PEST, the forerunner to STEEPLED.

The other two words shown as possible answers are included because they sound a bit like 'econom-ic' and 'demographic', which would also be correct answers, had they been included here.

Read the QUESTION NO : carefully.

Q2 MultipleChoice

The total variety of life on Earth' is CIPS' definition of:

Correct Answer: B
Explanation:

Biodiversity is significantly under threat, with many species being lost almost daily on Earth.

The other answers given in response to this QUESTION NO :, whilst they can be seen as being broadly relat-ed do not fit the bill precisely.

The BBC's one-hour documentary (2020) 'Extinction - The Facts' explains in all-too-chilling detail the meaning of biodiversity, and is recommended viewing for all.

Q3 MultipleChoice

Which of the following are normally not a source of funds for a third sector organisation?

Correct Answer: A
Explanation:

Third sector organisations often rely on charitable contributions. An example might be Medecins Sans Frontieres.

They also sometimes receive grants from taxpayers, sometimes in return for work done eg the chari-ty Barnardo's receive government funding in return for advising the British government on man-agement of some children in its care.

Finally some NFPs have, for example, retail outlets which generate income to aid the organisation. Oxfam is such an example.

Third sector can be expected to ster clear of certain areas for ethical reasons. Alcohol, gambling, to-bacco, and weapons are examples.

Q4 MultipleChoice

Which of the following is likely to reduce 'capital growth'? Select all that apply.

Correct Answer: B, C
Explanation:

Payment of high salaries and large allowances, may, fairly obviously reduce the amount of profit which can be retained for capital growth. If money is being distributed in this way, it isn't being re-tained.

A profitable company has a choice: to pay dividends to a greater or lesser extent; or retain some of its profits to a greater or lesser extent in the form of retained capital - capital growth.

Increased sales and increased profit may result in increased capital growth, all other things being equal, depending on the firm's dividend policy.

Q5 MultipleChoice

An arrangement between a buyer and a supplier in which they agree to apportion benefits (such a reduced costs, or increased outputs) arising from particularly sound contract performance may be called:

Correct Answer: D
Explanation:

There is an expression 'painshare' which is an almost-ironic term referring to the opposite of the situ-ation described in the QUESTION NO : - when something has gone wrong, and the additional cost must be shared between the parties. The other two answers are a little bit facetious.

The correct answer is 'gainshare' when the parties share benefits, according to a pre-agreed ratio or formula.

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Frequently Asked Questions

The L3M1 (Procurement and Supply Environments) is a Level 3 module offered by CIPS that focuses on understanding the external and internal environments affecting procurement and supply chain functions. It is designed for professionals seeking to develop expertise in how organizational and market factors influence procurement strategy and decision-making.

The L3M1 exam typically consists of 100 multiple-choice questions that must be completed within 2 hours. Candidates need to achieve a passing score of 50% or higher to successfully complete this module.

The L3M1 exam covers organizational structures, market analysis, supply chain environments, stakeholder management, and the impact of external factors such as economic, legal, and technological changes on procurement. It also addresses how internal organizational factors influence procurement strategy and operations.

Candidates typically need to have completed CIPS Level 2 qualifications or equivalent experience in procurement and supply chain management before attempting Level 3 modules like L3M1. Specific entry requirements may vary by region and training provider.

Candidates should study the official CIPS learning materials, textbooks, and case studies provided for this module, and consider enrolling in instructor-led or online training courses. Practice mock exams and group study sessions can also help reinforce key concepts and improve exam performance.
Exam Details
  • Exam CodeL3M1
  • VendorCIPS
  • Total Questions90
  • LanguageEnglish
  • Last UpdatedSep 3, 2026
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