Get CIPS L4M2 Exam Dumps (V9.02) to Pass the Defining Business Needs Exam in a Proven Way

1. The position of a product in its life cycle can affect the price that suppliers set. Is this statement correct?

2. A CPO is making a business case for acquiring a new computer system. He has set out objective, generated options, cost and benefit of each option and implementation plan.

Which of the following elements should be included in the business case?

3. What is the document that defines the activities, deliverables and timelines a supplier must carry out during contract performance?

4. A procurement manager is writing a conformance specification for a non-core component. She thinks that if the requirements in specification are higher than ISO standards, her company can achieve greater cost-savings.

Is the procurement manager’s opinion correct?

5. British Steel needs to source a set of instruments that will improve quality of steel. Without these instruments British Steel will loss control of the temperature. The bucket may freeze up, or if it is too hot it leaks out of the casting process, damaging the machine. There is limited supply on the market and quality varies greatly.

Which of the following will be the most appropriate managing approach to procure these items?

6. Thani Ltd is a fast growing logistics company with a fleet of 20 tractors. To meet Net Zero objective, the company needs to electrify its fleet. Angelica is assigned to investigate the market price of electrifying services. After the investigation, she realises that the current market price is very expensive and unsustainable for her company. She decides to break down the costs before negotiating with the suppliers.

Which internal stakeholders may help Angelica estimate the breakdown of costs? Select TWO that apply.

7. The purchase is made in emergency

8. What does the acronym RAQSCI stand for?

9. Which of the following standards specifies requirements for a quality management system?

10. Housing Ltd is inviting a number of contractors to a tender for the construction of a commercial building. In the attachment to the invitation to tender, there is a document which describes the re-quired materials and installation methods. This document is known as...?

11. A purchaser is looking for alternative supplies if there is a major disruption to their supply chain, including logistics, manufacturing and all support services.

Which of the following method is that purchaser applying?

12. A procurement team is categorising their purchased items into four quadrants of Kraljic's supply chain portfolio matrix. They realise that there are some low-value items which come from very few suppliers in the market. The organisation is critically dependent on these suppliers. The team plans

to reduce the dependence by finding alternative sources. Is this a right course of action?

13. Which of the following is the structured approach for defining customer requirements and translating them into technical specification?

14. Which of the following factors might prompt an organisation to procure an alternative product?

Select THREE that apply:

15. Standardisation

16. Which of the following sources of information are considered as primary data? Select TWO that apply.

17. At which stage of through-life contract management, procurement team needs to identify sources of risk and the ways to mitigate them?

18. Acquiring competitors

19. Robert is a senior buyer at MMC Construction Ltd. His company is doing multiple development projects in the country, which increases procurement workload significantly. Meanwhile, most of the tasks are handled manually, which causes bottlenecks in the workflows. The procurement team is overwhelmed by the workload and complains from other departments. From previous experience, Robert knows that electronic system may help his procurement team. He writes a business case to submit to the senior management, in which he insists on the possible productivity improvement by adopting e-system in procurement.

Is Robert's action reasonable?

20. Which of the following are typically included in a conformance specification? Select TWO that apply.

21. Which of the following indicates types of waste that procurement department concentrates on when adopting Lean methods?

22. A procurement manager includes provision on recovery from natural disaster into a through-life specification. Some suppliers suppose that provision is unnecessary. Is procurement manager’s action justified?

23. Which of the following is the new technology that has impact on manufacturing sector?

24. Sealines Inc is developing its fleet of cargo ships. The company is planning to build a new ship powered by natural gas. Brian, the procurement manager at Sealines, suggests the project team to develop a through-life specification before engaging with the supplier.

Is this a correct approach?

25. Which of the following are typically reasons why an organisation implements value analysis? Select TWO that apply:

26. Which type of specification is less time-consuming to develop?

27. Low switching costs

28. A procurement manager consolidates the company expense on printing and office supplies into broader range of spend category. Other senior managers are concerned that it may increase company’s spend.

Is that concern justified?

29. This is the information on an organisation’s activities over the past year

• Sale were $5,000,000. The value of accounts receivable was $450,000 at the start of the year and $525,000 at the end of the year

• The value of direct costs was $2,500,000 and 75% of this was bought on credit

• Indirect costs were $3,000,000 and 25% of this was bought on credit

• During the year the organization spent $1,500,000 on new assets and sold $150,000 of old assets. $1,000,000 of the spend on assets was funded by a bank loan

• The organization declared a dividend of $200,000 at the end of the year but this was not paid for another two months

• Opening balance was $175,000

Which of the following is the bank balance of that organization at the end of the year?

30. When procuring an IT equipment, at which stage the buyer’s expectations are translated into a technical specification?

31. Interserve is a construction contractor in UK. When receiving a huge and complex project, Inter-serve’s procurement manager assesses the risks by quantifying them and recommends other stake-holders to plan mitigating actions. Is the procurement manager’s action justified?

32. Which of the following are considered as direct costs in a construction company? Select TWO op-tions

33. A procurement manager is requested to source a major component. She needs information on sup-pliers’ direct and indirect cost, fixed and variable costs to prepare for negotiations. Therefore, she collects 17 annual reports from potential suppliers who are competing in the same industry.

In order to estimate an approximate value of fixed and variable costs in that industry, which of the following technique should be adopted by the procurement manager?

34. A charity is reviewing their spend and budget after an operation in flooded areas. They realise that the operators save money against the budgeting plan.

This saving is known as...?

35. Which of the following can directly affect labour variance? Select TWO that apply:

36. Which of the following areas is specified by ISO/IEC 27001 family?

37. Which of the following provides in-depth detail for both functional and non-functional require-ments and covers assumptions, constraints, performance, dimensions, weights and reliability of a product?

38. Which of the following is the technology that disrupts traditional retail?

39. A buying organisation may not have technical capability to produce a highly complex specification.

Which of the following are sources of information that can be used to create the specification? Select

TWO that apply

40. Which of the following is the best definition of target costing?

41. Which of the following might be the consequences of under-specification? Select TWO that apply:

42. Competitors are increasingly deploying robotics and automation to boost productivity.

Which of the below business sectors does EV Inc belong to?

43. Lider Ltd is a leading bathroom furniture manufacturer in India. The company has more than 30 years experience in the market with extended knowledge of engineering and customers' taste. Lider is planning to launch a new type of bath fitting next year which offers Bluetooth connectivity and thermostat display. The company gathers a team of multi-disciplines, including engineering, procurement, sales and marketing. At the first team meeting, the project leader tells the team to discuss which functions will be valued by the customers, and how to deliver those functions with the lowest costs possible.

Which of the following describes the process that the project team is undertaking?

44. Dana is an automobile manufacturer. It has a new electrification strategy that aims at making eco-friendly electric pick-up trucks. To implement this strategy, the procurement department must source new categories of parts that make motors, sensors, solenoids and stators. He starts to analyse the market by identifying specific supply market segments for those parts and finding suppliers who have the best capabilities in those segment. He intends to segment the market based on specific features of the products.

Which variable is used by Dana procurement manager to shape and manage supply market?

45. Which of the following is a risk to buying organization when using conformance specification?

46. After a project, the procurement team at CLK Ltd meets up and summarises on the performance. They see that they actually spent $5,000 less than planned budget. The team tries to identifies why there is such difference.

This activity is known as...?

47. Which of the following bodies provides standards for the products and services in the US?

48. Sabic is a petrochemical manufacturer. It wants to digitalise its operation and is looking for new IT system. The procurement manager approaches this matter with a through-life specification. He supposes that stating “good quality” in the specification will be enough for quality standard section. Is the procurement manager’s thought appropriate?

49. Which of the following factors are likely to be direct barriers to a new entrant in a supply market?

50. Due to increasing demand, a local restaurant is requesting its fish vendor to supply larger quantity.

The restaurant manager also asks the vendor whether it is possible to reduce the total price by 5%.

This is known as...?

51. Which of the following are the fair and reasonable comparators in price analysis? Select TWO that apply:

52. Facing fiercer competition at home and abroad, IKEA, the leading furniture retailer, needs to im-prove its competitiveness. In order to do this, IKEA must decrease operating costs and improve quality of current and new retail stores. The company establishes a project team. The job of the team is to collect data on performance from multiple stores in several countries, then select the best performing one. The team will work closely with best performing store and study its processes. After the research, the team will recommend best practices to other retail stores. IKEA management can also apply these practices to new stores in the future.

Which of the following correctly describe the process undertaken by IKEA project team?

53. Which of the following activities are considered as primary activities of an organization according to Porter's value chain? Select TWO that apply:

54. Builder Inc is a rapidly expanding business in construction sector. Due to an increase in projects, it cannot manage the flow of materials by Excel spreadsheets but by more dedicated software.

Who would be a key internal stakeholder in defining software compatibility with company's current system?

55. Apple’s CPO is planning a budget for purchasing carbon-free aluminium next year. There are 27.4 tonnes of aluminum in stock, while Apple will need 200 tonnes for production next year and double inventory for production in the following year.

How much aluminum will Apple need to purchase in next year?

56. Which of the following is the core of value analysis process?

57. Warwickshire Ambulance Service (WAS) is an NHS Trust. It operates throughout Warwickshire and the neighbouring areas. It has three core areas of activity, namely the provision of Emergency Ambulance Services, routine Patient Transport Services, and Logistic Medical Services. The agency is working towards higher service level through benchmarking.

Which of the following is the benefit of benchmarking to WAS?

58. Which of the following specific markets engage in creation, liquidation and change of ownership of stock?

59. XYZ Ltd is a large supermarket chain which operates mainly in the UK and Europe. Their customers are increasingly concerned about sustainability. Therefore, procurement manager is required to source the products from suppliers who have good environmental performance.

Which of the following can be an assurance that the supplier has procedures and policies to enhance its environmental performance?

60. Which of the following might be consequences of over-specification? Select TWO that apply:

61. Total cost of ownership of a solar panel is $5,000 and it is expected that the panel will make a sav-ing of $1,000 each year. So it would take 5 years for the benefits to repay the investment. Therefore, the firm plans to keep the solar panel for at least 5 years. Is payback period calculation right for making the business decision?

62. Which of the following can cause overhead variance? Select TWO that apply:

63. Which of the following may allow suppliers free to choose the materials, manufacturing process or delivery process?

64. Which of the following problems may be identified as closed problems? Select TWO that apply: