Exam L4M2 Certification Cost | Latest Defining Business Needs 100% Free Visual Cert Exam

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Preparing for the CIPS L4M2 Exam requires a significant amount of study and preparation. Candidates are advised to review the exam syllabus in detail and to ensure that they have a good understanding of the key concepts and principles. They should also familiarize themselves with the case study format and practice answering case study questions to build their confidence and improve their skills.

The Chartered Institute of Procurement and Supply (CIPS) is a globally recognized professional body that provides training and certification in the field of procurement and supply chain management. One of the certifications offered by CIPS is the Level 4 Managing Procurement and Supply qualification. Within this qualification, one of the modules that professionals can take is Defining Business Needs (L4M2).

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CIPS Defining Business Needs Sample Questions (Q125-Q130):

NEW QUESTION # 125
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?

A. No, the organisation should run competitive biddings to exploit the competition
B. No, there is no way to escape this dependency
C. Yes, the organisation needs to reduce the supply risks
D. Yes, this action will dramatically increase the supplier's bargaining power

Answer: C

Explanation:
According to Kraljic portfolio matrix, the low-value items with high supply risk are bottleneck items.

The purchasing strategy that is commonly recommended for these products is primarily based on acceptance of the dependence and reduction of the negative effects of the unfavourable position. An alternative strategy suggested by purchasing practitioners is to find other suppliers and move towards the non-critical quadrant.
- Accept dependence, reduce negative consequences: The main focus of this strategy is to assure supply, if necessary even at additional cost. Examples of this strategy are keeping extra stocks of the materials concerned or developing consigned stock agreements with suppliers. By performing a risk analysis firms can identify the most important bottleneck products and consider the implications. A possible action for dealing with unexpected bad dependence positions for certain products is to employ contingency planning.
- Reduce dependence and risk, find other solutions: This strategy is geared towards reducing the dependence on the supplier. The most common way to achieve this is to broaden the specifications of the product or to search for new suppliers.
The procurement team in the scenario has selected reducing dependency by finding alternatives. This is a right strategy for bottleneck item.

NEW QUESTION # 126
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?

A. Procurement team
B. IT team
C. Executive team
D. Finance team

Answer: B

Explanation:
Internal stakeholders may contribute to defining needs and drafting the specification by using their technical expertise. In this scenario, IT team may consult procurement team on the technical specification of the software, including compatibility with company's current IT system.

NEW QUESTION # 127
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?

A. Variance calculation
B. Open-book costing
C. Total cost of ownership
D. Line of best fit

Answer: D

Explanation:
Public annual reports can be a source of information that helps the procurement professional to analyse an industry's cost and revenue using the line of best fit. Line of best fit is one of the most important outputs of regression analysis. Regression refers to a quantitative measure of the relationship between one or more independent variables and a resulting dependent variable. Regression is of use to professionals in a wide range of fields from science and public service to financial analysis.
In this case, by collecting and analysing 17 annual reports, the procurement manager can find the line of best fit which goes approximately through the middle of the data points with an equal num-ber of data points above and below it.
The slope of the line of best fit is the approximate variable costs the industry. The easiest way to calculate it is to take a point at the right-hand end of the line of best fit and note its cost and output levels. Divide the cost by the output and this gives and approximate figure for the cost per unit of output or variable cost. This gives an approximate value for the industry fixed and variable costs.

NEW QUESTION # 128
Gaskins Caskets (GC) is a manufacturing company that wants to identify new suppliers for a number of current parts. GC no longer has technical drawings for the parts and none of the engineers currently working for them have enough knowledge of the parts to write a specification. What could GC do to get accurate pricing from suppliers for these parts to compare to the existing parts?

A. GC's engineers could estimate the specification and drawings that are sent to prospective suppliers
B. GC could allow suppliers to develop and use their own specification as part of their cost proposal
C. GC could communicate a cost to the suppliers that must be met regardless of the final specification
D. GC could send samples of the parts to prospective suppliers as part of the request for quotation

Answer: D

NEW QUESTION # 129
To strengthen its market presence, ABC Group decided to develop a new product. A cross-functional team was formed to discuss the scope and the functions of the product. They will also survey the potential customers to see what they like, what they love, and what they dislike. What is this process called?

A. Product standardisation
B. Value analysis
C. Value engineering
D. Cash flow analysis

Answer: C

Explanation:
As you can see from the scenario, ABC Group is developing the new product. It might be using value engineering. The latter sentences confirm this: the cross-functional team in ABC is mapping the functions and surveying the customers. Their method is known as Kano model.

NEW QUESTION # 130
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Exam L4M2 Certification Cost | Latest Defining Business Needs 100% Free Visual Cert Exam

Visual L4M2 Cert Exam, Latest L4M2 Real Test

CIPS Defining Business Needs Sample Questions (Q125-Q130):

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