[Aug 30, 2023] 100% Pass Guarantee for L4M2 Dumps with Actual Exam Questions
Today Updated L4M2 Exam Dumps Actual Questions
CIPS L4M2 (Defining Business Needs) Certification Exam is designed to test the knowledge and skills of professionals who are involved in the process of defining business needs. L4M2 exam is an essential part of the CIPS (Chartered Institute of Procurement and Supply) certification program and is a requirement for professionals who wish to obtain the CIPS Level 4 Diploma in Procurement and Supply.
CIPS L4M2 (Defining Business Needs) certification exam is an essential credential for professionals looking to advance their career in the field of business analysis. L4M2 exam is designed to test the candidate's knowledge and skills in defining business needs and requirements, which are crucial elements of any successful business project.
CIPS L4M2 (Defining Business Needs) Certification Exam covers a wide range of topics related to business analysis, including the identification of business needs, the development of business cases, the analysis of business requirements, and the creation of solutions that meet these requirements. Defining Business Needs certification exam is designed to ensure that individuals who pass it have the skills and knowledge necessary to succeed in a career in business analysis or project management.
NEW QUESTION # 53
What does the acronym RAQSCI stand for?
- A. Regulatory, Availability, Quantity, Sustainability, Inventory
- B. Regulatory, Ability, Quality, Service, Cost, Inventory
- C. Relationship, Availability, Quantity, Sustainability, Cost, Innovation
- D. Regulatory, Availability, Quality, Service, Cost, Innovation
- E. Relationship, Ability, Quality, Service, Cost, Innovation
Answer: D
Explanation:
RAQSCI stands for Regulatory, Availability, Quality, Service, Cost, Innovation.
LO 1, AC 1.1
NEW QUESTION # 54
Halfords is a major bicycle and car parts retailer with long history in the market. Its suppliers are plentiful and there is no threat of forward integration. Some other smaller retailers are applying 3D-printing technology to make personalized bicycle parts but their market share is relatively low. 3D-printing technology is an example of which competitive force?
- A. Threat of substitute
- B. New entrants may enter the market
- C. Bargaining power of buyer
- D. Rivalry within the industry
Answer: A
Explanation:
3D-printed parts can replace traditional metal parts. They are also more easily customised to fit customer's needs. This technology is an example of threat of substitute in Porter's Five Forces model.
Substitute goods or services that can be used in place of a company's products or services pose a threat. Companies that produce goods or services for which there are no close substitutes will have more power to increase prices and lock in favorable terms. When close substitutes are available, customers will have the option to forgo buying a company's product, and a company's power can be weakened.
Reference:
- CIPS study guide page 85-96
- Porter's 5 Forces Definition: Analyzing Businesses (investopedia.com) LO 2, AC 2.2
NEW QUESTION # 55
Buyers in the same industry with the same understanding of relative value and price may still make different decisions about whether to switch. Which of the following factors may prompt a buying organization to incline toward substitute products?
1. There is potential for backward integration
2. Access to financial resources
3. The switching cost is high
4. The substitute fits organisation's strategy
- A. 3 and 4 only
- B. 2 and 4 only
- C. 1 and 2 only
- D. 1 and 4 only
Answer: B
Explanation:
The threat of substitution is a function of three factors:
* The relative value/ price of a substitute compared to an industry's product
* The cost of switching to the substitute
* The buyer's propensity to switch
Buyers with different circumstances and in different industries do not all have equal propensities to substitute when faced with a comparable economic motivation. Differences in their circumstances lead buyers to respond to a given relative value to price (RVP) and switching cost differently. While such differences might be treated as factors that modify RVP or switching costs, it is more helpful in practice to isolate them.
Resources. Substitution often involves up-front investments of capital and other resources. Access to such resources will differ from one buyer to another.
Risk Profile. Buyers often have very different risk profiles, the result of such things as their past history, age and income, ownership structure, background and orientation of management, and nature of competition in their industry. Buyers prone to risk taking are more likely to substitute than buyers that are risk-averse.
Technological Orientation. Buyers experienced with technological change may be less concerned with some kinds of substitution risks, while extremely aware of others that a less technologically sophisticated buyer would be oblivious to.
Previous Substitutions. The second substitution may be easier for a buyer than the first, unless the first substitution has been a failure. The buyer's uncertainties over undertaking a substitution may have diminished if a past substitution has been successful, or risen if a past substitution has led to difficulties. In the soft drink industry, this seems to have worked to the benefit of aspartame.
Intensity of Rivalry. Buyers under intense competitive pressure and searching for competitive ad-vantage will tend to substitute more quickly to gain a given advantage than those that are not.
Generic Strategy. The RVP of a substitute will have different significance depending on the com-petitive advantage that industrial, commercial, or institutional buyers are seeking or the value of time and particular performance needs of the household buyer. A substitute that offers a cost saving will tend to be of more interest to a cost leader than a differentiator, for example.
Many of these factors that shape the buyer's propensity to substitute will be a function of the particular decision maker who is involved in the purchase decision.
Porter, Michael E.. Competitive Advantage: Creating and Sustaining Superior Performance (p. 278-289). Free Press. Kindle Edition.
Reference:
LO 2, AC 2.2
NEW QUESTION # 56
Aldar Properties is a property developer in UAE. In last month, it spent $2,160 for 10 tons of steel. In this month, it had planned 10% increment in budget for steel comparing to last month. But the number of orders boosted and total spend on steel reached $1,992.1 while Aldar has imported 11 tons. What is the main cost driver of steel budget?
- A. Price variance
- B. Inflation
- C. Both price and quantity variances
- D. Quantity variance
Answer: A
Explanation:
In this question, you have to calculate price variance and quantity variance.
Last month, 1 tonne of steel costed $216. This month, the price decreases to $181.1. Price variance = (P1 - P2)*Q2 = ($216-$181.1)*11 = $383.9 Quantity variance = (Q1-Q2)*P1 = -$216 Price variance is greater than quantity variance, therefore, price variance is the main cost driver.
LO 1, AC 1.4
NEW QUESTION # 57
EV Inc is facing the following challenges:
1. The capital investment is enormous.
2. Most of company's working capital is in form of inventories, which include raw materials, work-in-progress and finished goods.
3. Competitors are increasingly deploying robotics and automation to boost productivity.
Which of the below business sectors does EV Inc belong to?
- A. Construction
- B. Retails
- C. Financial services
- D. Manufacturing
Answer: D
Explanation:
Every sector among the options requires intensive capital investment. However, only manufacturing and retails bury much of their working capital in form of inventory. Raw materials and WIP only present in manufacturing sector.
The manufacturing industry is undergoing massive change, rivaling the Industrial Revolution that began in England and continued on Detroit's assembly lines. But today's revolution is "smart," thanks to factories using artificial intelligence and robots.
A new trend is the "cobot" - a collaborative robot designed to work with humans. One company called Moduform uses them to make furniture in the U.S. The company credits using cobots for reducing their staffing turnover, since the robots do mundane repetitive tasks that bore humans, while people can now do cognitive tasks requiring judgment and diversified responsibilities. Other innovations include 3D printing, Artificial Intelligence and automation.
Today's artificial intelligence manufacturing revolution improves performance in two key areas of manufacturing: productivity and quality control.
Reference:
- The Key Characteristics of Manufacturing (bizfluent.com)
- CIPS study guide page 74-76
LO 2, AC 2.1
NEW QUESTION # 58
Which of the following indicates types of waste that procurement department concentrates on when adopting Lean methods?
- A. OWN-IT
- B. SCAMPER
- C. VA/VE
- D. DOWNTIME
Answer: D
Explanation:
Copious amounts of waste can occur in the workplace, particularly in a manufacturing process, but do you know what the eight most commons wastes are and how they impact your organization?
Taiichi Ohno, considered the father of Toyota Production System, created a lean manufacturing framework, which was based on the idea of preserving (or increasing) value with less work. Any-thing that doesn't increase value in the eye of the customer must be considered waste, or "Muda", and every effort should be made to eliminate that waste. The following 8 lean manufacturing wastes, mostly derived from the TPS, have a universal application to businesses today. The acro-nym for the eight wastes is DOWNTIME. Downtime stands for:
- Defects
- Overproduction
- Waiting
- Not utilizing talent
- Transportation
- Inventory excess
- Motion waste
- Excess processing
OWN-IT is the acronym for the process of collecting and analysing the data and information needed in any field SCAMPER is acronym for options addressing the underlying issues and achieving target VA/VE is value analysis and value engineering LO 3, AC 3.4
NEW QUESTION # 59
Which of the following are most likely to increase the buyer's bargaining power?
1. Buyers are price sensitive
2. High set-up cost for new entrants
3. Threat of forward integration is high
4. Threat of backward integration is significant
- A. 3 and 4 only
- B. 2 and 3 only
- C. 1 and 4 only
- D. 2 and 4 only
Answer: C
Explanation:
Price sensitivity is the degree to which the price of a product affects consumers' purchasing behaviours. Buyer power will be stronger if buying organisation are price sensitive and vice versa.
Backward integration is a form of vertical integration in which a buying organisation expands its role to fulfil tasks formerly completed by businesses up the supply chain. Buyer power is strong if threat of backward integration is high.
Set-up cost is a determinant of threat of new entry. Some industries require very expensive assets in order to make products. The financial risk of entering the industry and not succeeding can deter many potential new entrants. The fewer new entrants, the fewer available substitutes, then the bar-gaining power of buyer can be negatively affected.
Forward integration is a business strategy that involves a form of vertical integration whereby business activities are expanded to include control of the direct distribution or supply of a compa-ny's products. Threat of forward integration is a determinant of supplier's bargaining power.
Reference:
LO 2, AC 2.2
NEW QUESTION # 60
Which of the following are considered as direct costs in a construction company? Select TWO op-tions
- A. The materials and supplies needed for the company's day-to-day operations.
- B. An employee is hired to work on a project, either exclusively or for an assigned number of hours
- C. Raw materials
- D. Clerical assistants who maintain the office
- E. Advertising and marketing communication
Answer: B,C
Explanation:
Direct costs are directly associated with the production of a good or service. In this question, 'An employee is hired to work on a project, either exclusively or for an assigned number of hours' and 'Raw materials' are directly related to producing the product.
Indirect costs are the general costs of the organisation - these costs cannot easily be attributed to specific products or services (also known as overheads). 'The materials and supplies needed for the company's day-to-day operations' or 'Clerical assistants who maintain the office' or 'Advertising and marketing communication' is example of indirect cost.
Reference:
LO 1, AC 1.2
NEW QUESTION # 61
Which of the following specific markets is most likely to have product shortage by nature?
- A. Agriculture
- B. Construction
- C. Services
- D. Retail
- E. Financial
Answer: A
Explanation:
Products used in agriculture can be subject to shortage due to natural disasters.
Reference:
LO 2, AC 2.1
NEW QUESTION # 62
Which of the following are most likely to negatively affect the suppliers' bargaining power in a specific market? Select TWO that apply:
- A. Buyers incur high cost when they change their suppliers
- B. There are no differences among suppliers' products
- C. There are almost no threats of backward integration
- D. Many suppliers are intent on integrating buyers into their business
- E. Substitute products are readily available in the market
Answer: B,E
Explanation:
The bargaining power of supplier is a major determinant of the structure of an industry and also how much profit is available to organisation operating in that industry. Supplier is weak if:
- Substitutes are available and easy to access
- Suppliers are small and fragmented
- The industry is important to the seller
- The sellers' product or service is not an important of the industry's value chain
- The sellers' product or service is undifferentiated
- There are no significant switching costs
- There is no threat of forward integration.
Suppliers may have more power:
- If they are in concentrated numbers compared to buyers.
- If there are high switching costs associated with a move to another supplier.
- If they are able to integrate forward or begin producing the product themselves.
- If they have specific expertise or technology needed to manufacture goods.
- If their product is highly differentiated.
- If there are many buyers and none make up significant portions of sales.
- If there are no substitutes available.
- If there are strong end users who can exert power over the organization in favor of a supplier (This can be the case in labor situations).
In all of these cases, the bargaining power of suppliers is high to demand premium prices and set their own timelines.
LO 2, AC 2.2
NEW QUESTION # 63
GSC Ltd is a manufacturer of car parts. To accommodate growing demands of electric cars, the company is developing a new component which requires different type of steel. The project team estimates that the component will be ready for production in 1.5 years. Until then, they need to keep the production busy.
After checking the inventory records, the production team sees that the company has 3 months of stock. The lead time for each batch is two months. Which of the following should be a priority ac-tion of the company?
- A. Create new specification to current supplier
- B. Standardise the specification
- C. Make a call-off order to current supplier
- D. Create new specification to new supplier
Answer: C
Explanation:
The scenario is very long with many distracting data. Students need to read carefully and use their experience to solve this problem.
The company is developing a new component which requires different type of material. But this component will not be available for mass production in 1.5 years. This means the company still needs to produce the current components with current materials until the development is finished. They must continue purchase the materials from current supplier through call-off orders. This situation is an example of straight re-buy.
Reference:
LO 1, AC 1.1
NEW QUESTION # 64
Which of the following are the causes of material cost variance?
1. The buyer updates purchase-to-pay system to track payment and delivery
2. An unprocessed goods received note is missing
3. The employees must work overtime to catch up with the customers' orders
4. The purchase is made in emergency
- A. 2 and 4 only
- B. 1 and 4 only
- C. 2 and 3 only
- D. 1 and 3 only
Answer: A
Explanation:
The difference between the standard cost of direct materials specified for production and the actual cost of direct materials used in production is known as Direct Material Cost Variance. Material Cost Variance gives an idea of how much more or less cost has been incurred when compared with the standard cost. Thus, Variance Analysis is an important tool to keep a tab on the deviations from the standard set by a company.
Material Cost Variance can be due to less purchase price being paid than the standard or because of change in the quantity of material used. Thus, Material Cost Variance is made up of two components namely; Material Price Variance and Material Usage Variance.
Among the 4 options:
- 'The buyer updates purchase-to-pay system to track payment and delivery': The use of e-procurement system can increase the productivity and create labour cost variance, not material cost variance.
- 'An unprocessed goods received note is missing': If a goods received note is missing, the buyer won't pay for that batch, which create quantity variance.
- 'The employees must work overtime to catch up with the customers' orders': Overtime salary can cause labour variance, not material cost variance.
- 'The purchase is made in emergency': Normally, the price in emergency situation is higher than usual. This can cause price variance.
Reference:
- CIPS study guide page 57-59
- Material Variance | Cost, Price, Usage Variance Formula, Example - eFM (efinancemanage-ment.com) LO 1, AC 1.4
NEW QUESTION # 65
Which of the following are typical environmental considerations throughout the contract life cycle? Select the TWO that apply.
- A. Inequality
- B. Health and safety
- C. Waste management
- D. Modern slavery
- E. Pollution control
Answer: C,E
Explanation:
All procurement has some level of impact on the environment that needs to be minimised to ensure sustainable procurement practices.
The greatest opportunity to influence environmental outcomes is by selecting products and services with the least ongoing environmental impacts, such as use of water, electricity and fuel, waste/disposal management, and impact on human health over the life of the product or service.
Lifecycle stages that impact on the environment:
Most goods and services will have an element of environment impact in a number of areas. The five main impact areas are listed in the following table.
Source: Buying for Victoria
Reference:
LO 3, AC 3.2
NEW QUESTION # 66
Which of the following are typical social considerations throughout the contract life cycle? Select the TWO that apply.
- A. Health and safety
- B. Support small local businesses
- C. Managing waste
- D. Using recycled materials
- E. Minimizing use of non-renewable resources
Answer: A,B
Explanation:
The following are typical social criteria in procurement:
* Reducing unemployment
* Preventing the use of child labour
* Preventing discrimination on the grounds of race, religion, disability, sex or sexual orientation
* Encouraging good employment practice
* Reducing local unemployment
* Reducing social exclusion
* Promoting training opportunities for the young or disadvantaged
* Encouraging access to work for people with disabilities
Reference:
LO 3, AC 3.2
NEW QUESTION # 67
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?
- A. 227.4 tonnes
- B. 172.6 tonnes
- C. 282.2 tonnes
- D. 117.8 tonnes
Answer: A
Explanation:
The quantity of aluminium Apple needs to buy is calculated as follows:
Quantity needed for production + the inventory needed at the end of the year - inventory at start of the year That formula is quantified as: 200 + 54.8 - 27.4 = 227.4 Reference:
LO 2, AC 2.3
NEW QUESTION # 68
Which of the following are likely to be disadvantages of using outcome-based specifications? Select THREE that apply
- A. Long time delay between action and result
- B. Stifling innovation
- C. Ambiguity of outcome
- D. Time consuming to produce
- E. Responsibility for product failure falling to buyer
- F. Difficulty to measure performance
Answer: A,C,F
Explanation:
An Outcome Based Specification (OBS) focuses on the desired outcome of a service in business terms, rather than a detailed technical specification of how the service is to be provided; this allows providers scope to propose innovative solutions that might not have occurred to the procurement team. Outcome should be distinguished from output, which is the measurable results of a set of inputs. The example of difference between outcome and output is written at the bottom of page 123 in the study guide.
Outcomes should be the starting point in making new specification. However, using outcome-based specification has some setbacks:
- First, it is not easy to measure the outcomes. Usually, outcome of a project is a statement like 'increase customer satisfaction', 'maintain ambient temperature' or 'provide a convenient way to do something'. They are not easy to measure as output.
- Second, sometimes the desired outcomes require time to be materialised
- Third, outcomes can be ambiguous
Reference:
LO3, AC 3.1
NEW QUESTION # 69
......
L4M2 exam dumps with real CIPS questions and answers: https://www.actualcollection.com/L4M2-exam-questions.html
L4M2 Exam in First Attempt Guaranteed: https://drive.google.com/open?id=1sFxbXIW1q_r5Y7vvS0lCtVcJqgDi1LCZ