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CIPS L4M2 Exam is designed to be challenging and comprehensive. It covers a wide range of topics related to business needs analysis, including business strategies, stakeholder analysis, requirements gathering, gap analysis, and solution evaluation. Candidates must demonstrate a thorough understanding of each of these topics and their practical application in real-world business scenarios.
CIPS Defining Business Needs Sample Questions (Q116-Q121):
NEW QUESTION # 116
Which type of specification is less time-consuming to develop?
- A. Technical drawings
- B. Design specification
- C. Conformance specification
- D. Outcome-based specification
Answer: D
Explanation:
There are two major types of specification: conformance and performance specifications. They have the following characteristics:
Table Description automatically generated

Since performance specification is often a list of outputs or outcomes, it usually takes less time to develop than conformance specification.
Reference: CIPS study guide page 116-124
NEW QUESTION # 117
A buyer in Housing Authority is considering using performance specification in upcoming social housing project. What should buyer be aware when using this type of specification?
- A. The buyer must be able to clearly define the performance metrics to ensure that the of-fered solution will achieve the desired outcome
- B. In performance specification, specific brands and preferred suppliers must be appointed to avoid the competition
- C. The buyer must be able to define the materials to be used, the execution and installation methods required and the specific design of the building
- D. Using performance specification means that the buyer will bear all the risks regarding the fitness for purpose of the facility.
Answer: A
Explanation:
In construction, specifications are written documents that describe the materials and workmanship required for a development. They do not include cost, quantity or drawn information but need to be read alongside other contract documentation such as quantities, schedules and drawings.
Specifications vary considerably depending on the stage to which the design has been developed, ranging from performance (open) specifications that require further design by a contractor or sup-plier, to prescriptive (closed) specifications where the design is already complete when the project is tendered.
Prescriptive specifications give the client more certainty about the end product when they make their final investment decision (i.e. when they appoint the contractor), whereas a performance specification gives the contractor and suppliers more scope to innovate and adopt cost effective methods of work, potentially offering better value for money.
Typically, performance specifications are written on projects that are straight-forward, standard building types, whereas prescriptive specifications are written for more complex buildings, or buildings where the client has requirements that might not be familiar to contractors and where certainty regarding the exact nature of the completed development is more important to the client.
Performance specification has some disadvantages:
- Well-defined performance metrics are needed to ensure that the specified performance will achieve the desired outcome
- Require reliable, practical, economical tests of performance
- Evaluations are subjective and require additional time and effort to complete Therefore, if a performance specification is used, the buying organisation will have to ensure that they are able to define and conduct tests on whether supplier's solution can deliver the desired out-come.
NEW QUESTION # 118
When procuring a machinery, at which stage buyer must check whether it is working to the stand-ards set out in the design specification?
- A. Installation
- B. Manufacture
- C. Customer support
- D. Maintenance and repair activities
Answer: A
Explanation:
Through-life Management involves the life-cycle management of the products, services and activities required to deliver a fully integrated capability to the customer, while reducing the cost of ownership for the customer.
Diagram, table Description automatically generated

Source: Andrew Graves
The installation stage occurs in In-Service Operations. At this stage, the machinery is shipped and installed on the buyer's premises and check to ensure that it is working to the standards set out in the design specification.
Reference: CIPS study guide page 130
LO 3, AC 3.2
NEW QUESTION # 119
Why should the buying organisation require the supplier to carry out acceptance testing?
- A. To compare between the account payables and account receivables
- B. To see whether the supplier engages in unethical business practice
- C. To check whether the product matches the specification
- D. To get the approval from the senior management
Answer: C
Explanation:
Acceptance testing, in the context of the engineering and software industries, is a functional trial performed on a product or prototype before it is put on the market or delivered, to decide whether the specifications or contract have been met. It also makes sure the quality and design of the product meet both contractual and regulatory obligations in terms of functionality, usability, durability, and safety.
If a product is found to be unacceptable at this stage, it can be sent back for modification, debug-ging, repair, or re-design before it can become a costly undertaking for the producer, as would be the case in a product recall.
Reference:
- CIPS study guide page 134-135
- Acceptance Testing (investopedia.com)
LO 3, AC 3.2
NEW QUESTION # 120
The buyer's database is regarded as a primary data source. Which of the following is also a source of primary data?
- A. Published economic indices such as the retail price index (RPI)
- B. Financial and trade press, including journals published by professional bodies
- C. Price lists collected from suppliers' representatives at trade fairs
- D. Price listings on comparison websites and market exchanges
Answer: C
NEW QUESTION # 121
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