CIPS L4M2 Defining Business Needs Online Training
CIPS L4M2 Online Training
The questions for L4M2 were last updated at Apr 03,2025.
- Exam Code: L4M2
- Exam Name: Defining Business Needs
- Certification Provider: CIPS
- Latest update: Apr 03,2025
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 . Line of best fit
- B . Variance calculation
- C . Total cost of ownership
- D . Open-book costing
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…?
- A . Negative budget
- B . Positive variance
- C . Negative variance
- D . Positive budget
Which of the following can directly affect labour variance? Select TWO that apply:
- A . Wage rate per hour
- B . Inflation
- C . Company’s budget
- D . Overhead expenditure
- E . Overtime
Which of the following areas is specified by ISO/IEC 27001 family?
- A . The dimensions and associated tolerances for a series of housings for piston seals
- B . The requirements for an information security management system
- C . Evaluation and assessment of mutual agreed customer food safety requirements
- D . The requirements for an environmental management system
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?
- A . Performance specification
- B . Tolerance
- C . Statement of work
- D . Design specification
Which of the following is the technology that disrupts traditional retail?
- A . Self-Driving Cars
- B . Blockchain
- C . E-commerce
- D . Robotics
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
- A . Standard terms and conditions
- B . Name cards
- C . Industry standards
- D . Suppliers’ know-how
- E . Constitution
Which of the following is the best definition of target costing?
- 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.
Which of the following might be the consequences of under-specification? Select TWO that apply:
- A . Few suppliers can supply the full range of features
- B . Additional cost to rework
- C . Unfit products or services
- D . Poor competition between suppliers
- E . Higher cost due to inessential features
Which of the following might be the consequences of under-specification? Select TWO that apply:
- A . Few suppliers can supply the full range of features
- B . Additional cost to rework
- C . Unfit products or services
- D . Poor competition between suppliers
- E . Higher cost due to inessential features
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