L4M2 Real Dump, L4M2 Exam Tests

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CIPS L4M2 Exam Syllabus Topics:

SectionObjectives
Topic 1: 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
Topic 2: Understand the use of specifications in procurement and supply
Topic 3: 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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The CIPS L4M2 is available in three easy-to-use forms. The first one is CIPS L4M2 dumps PDF format. It is printable and portable. You can print Defining Business Needs (L4M2) questions PDF or access them via your smartphones, tablets, and laptops. The PDF format can be used anywhere and is essential for students who like to learn on the go.

CIPS Defining Business Needs Sample Questions (Q144-Q149):

NEW QUESTION # 144
Which of the following are the fair and reasonable comparators in price analysis? Select TWO that apply:

Answer: A,D

Explanation:
Price Analysis is the process of deciding if the asking price for a product or service is fair and rea-sonable, without examining the specific cost and profit calculations the vendor used in arriving at the price. It is basically a process of comparing the price with known indicators of reasonableness. When adequate price competition does not exist, some other form of analysis is required. Some reasons that could affect adequate price competition are: specifications are not definitive, tolerances are restrictive, or production capacity limits those eligible to bid.
Examples of other forms of price analysis information include:
* Analysis of previous prices paid
* Comparison of vendor's price with the in-house estimate
* Comparison of quotations or published price lists from multiple vendors
* Comparisons with government agencies (such as GSA in the US) published prices A strike price is the set price at which a derivative contract can be bought or sold when it is exercised. For call options, the strike price is where the security can be bought by the option holder; for put options, the strike price is the price at which the security can be sold. Strike price is also known as the exercise price.
A cost driver is the direct cause of a cost and its effect is on the total cost incurred. For example, if you are to determine the amount of electricity consumed in a particular period, the number of units consumed determines the total bill for electricity. In such a scenario, the number of units of electricity consumed is a cost driver.
Reference:
LO 1, AC 1.2


NEW QUESTION # 145
A procurement manager is writing a conformance specification for a non-core component. She thinks that if the requirements in specification are higher than ISO standards, her company can achieve greater cost- savings. Is the procurement manager's opinion correct?

Answer: B

Explanation:
The specification that is produced too detailed will incur unnecessary cost because it does not allow suppliers to use their expertise in finding the most efficient way to produce it.
'No, because higher requirements in specification, the greater bargaining power of buying organi-sation': more detailed specifications could tighten the supplier base and potentially leave buying organisation with fewer potential supplier. This may reduce buyer's bargaining power in negotia-tion.
'Yes, because higher requirements will help buying organisation find the best supplier': in some circumstances, higher requirements will lead to smaller supplier base. In the worst scenario, there is no supplier who has capability to carry out those requirements
'Yes, because optimising the specification is the only method to achieve value for money': There are other methods to achieve cost saving and value for money, inter alia, volume concentration, relationship restructuring, etc.
Reference: CIPS study guide page 118-119
LO 3, AC 3.1


NEW QUESTION # 146
Which of the following are considered as direct costs in a construction company? Select TWO op-tions

Answer: D,E

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 # 147
Which of the following statements describes a correct example of an indirect cost?

Answer: C


NEW QUESTION # 148
Which of the following agencies can produce a technical standard?

Answer: B

Explanation:
Technical standards are often produced by a national or international body such as British Standard Institute (BSI) LO 3, AC 3.1


NEW QUESTION # 149
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