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CIPS L4M2 Exam Syllabus Topics:

SectionObjectives
Understand market management in procurement and supply- Contrast direct costs and indirect costs
  • 1. Sources of information to estimate costs and prices
- Compare the competitive forces that influence markets
  • 1. Bargaining strength of suppliers and buyers
  • 2. Availability of substitutes and threat of new entrants
Understand the use of specifications in procurement and supply
Understand how to develop a business case for requirements to be sourced from external suppliers- Analyse how market factors affect procurement

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CIPS Defining Business Needs Sample Questions (Q163-Q168):

NEW QUESTION # 163
Procurement provides the following information to a business case ...

Answer: C


NEW QUESTION # 164
Aircraft Category Manager, Harpal Patel, is purchasing several aircraft engines. He is seeking to determine which category of specification will be most appropriate. He decides on using a conformance-based specification. A conformance-based specification is most appropriate in which one of the following instances?

Answer: A


NEW QUESTION # 165
Which of the following are typical environmental considerations throughout the contract life cycle? Select the TWO that apply.

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:
Diagram Description automatically generated

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.
Graphical user interface, text, application, email Description automatically generated

Source: Buying for Victoria


NEW QUESTION # 166
A buyer is undertaking an analysis of the market. This analysis has focused on the relative power of the main buyers in the market. It has also focused on the changes in capacity available amongst the key suppliers in this market. Which of the following describes this analysis?

Answer: D


NEW QUESTION # 167
Which of the following are likely to be disadvantages of using outcome-based specifications? Select THREE that apply

Answer: B,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


NEW QUESTION # 168
......

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