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L4M2 Defining Business Needs is now Stable and With Pass Result | Test Your Knowledge for Free

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L4M2 Practice Questions

Defining Business Needs

Last Update 10 hours ago
Total Questions : 303

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Our free CIPS Level 4 Diploma in Procurement and Supply practice questions crafted to reflect the domains and difficulty of the actual exam. The detailed rationales explain the 'why' behind each answer, reinforcing key concepts about L4M2. Use this test to pinpoint which areas you need to focus your study on.

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Question # 71

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

Options:

A.  

ISO 27001

B.  

ISO 9001:2015

C.  

ISO 22000:2018

D.  

ISO 14001:2015

Discussion 0
Question # 72

It could be argued that wherever possible, specifications should be more output and outcome focused. Why is this?

Options:

A.  

So that they can be amended easily after contract award

B.  

To allow as many suppliers as possible to respond

C.  

To reduce the number of options available

D.  

So that a specific branded product is provided

Discussion 0
Question # 73

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?

Options:

A.  

Yes, decommissioning and disposal costs will not be accounted in this approach

B.  

Yes, this approach will lower the total cost of ownership

C.  

No, a ship is used only once, through-life management is unnecessary

D.  

No, the company just needs to select the lowest bidder

Discussion 0
Question # 74

Ranjit is purchasing a large piece of laboratory equipment which is brand new to the market. Can this be classified as a straight re-buy?

Options:

A.  

Yes, as the equipment is available from a supplier used in the past

B.  

Yes, as there is an existing specification

C.  

No, as a standing purchase agreement exists

D.  

No, as this has not been specified or sourced before

Discussion 0
Question # 75

A procurement manager has noticed that profitability within a market has increased steadily over the years. In addition, the market is relatively easy to enter, and demand within the market is predicted to remain high. Which of the following is likely to happen in this particular market as a direct consequence of these factors?

Options:

A.  

Buyers will switch to a different market

B.  

The market will attract new entrants

C.  

Suppliers will invest more heavily in technology

D.  

The regulator will intervene and establish pricing controls

Discussion 0
Question # 76

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?

Options:

A.  

Cost analysis

B.  

Standardisation

C.  

Value engineering

D.  

Just in time

Discussion 0
Question # 77

A market has many buyers and suppliers. Loyalty is low and switching is common. Which market characteristic supports this behaviour?

Options:

A.  

Supplier bargaining strength

B.  

Increasing use of technology

C.  

The availability of substitute products

D.  

Barriers to market entry

Discussion 0
Question # 78

Which of the following is an advantage of competitive benchmarking over other types of bench-marking?

Options:

A.  

Limited access to competitor's data

B.  

Similarity among processes

C.  

Different corporate culture

D.  

Cost effectiveness

Discussion 0
Question # 79

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

Options:

A.  

The net present cost of the purchase or project and all future revenues flowing from it discounted back to the present time.

B.  

The total of all costs in acquiring goods or services from the inception of the demand for them until their safe and satisfactory delivery at the point required.

C.  

The cost of a product after analysing its components step by step

D.  

A product cost estimate derived from a competitive market price.

Discussion 0
Question # 80

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?

Options:

A.  

No, there's no need to make a business case for new purchase

B.  

Yes, productivity improvement is a mandatory element in every business case

C.  

No, adopting e-system may make procurement department jobless

D.  

Yes, his reason may appeal the senior management

Discussion 0
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