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| Section | Objectives |
|---|---|
| Risk, sustainability, and compliance considerations | - Sustainability and ethical sourcing requirements - Legal and regulatory constraints affecting specifications - Managing procurement and supply risks |
| Understanding and defining business needs | - Role of procurement in identifying and defining needs - Alignment of procurement with organisational objectives |
| Demand management and value for money | - Balancing cost, quality, and risk - Demand analysis and forecasting - Whole life costing and total cost of ownership |
| Specification development | - Types of specifications (input, output, conformance) - Key performance indicators and measurable requirements - Stakeholder engagement in requirements definition |
The latest L4M2 exam prep is created by our IT experts and certified trainers who are dedicated to CIPS braindumps pdf for a long time. All questions of our L4M2 PDF VCE are written based on the real questions. Besides, we always check the updating of L4M2 exam questions to make sure exam preparation smoothly.
NEW QUESTION # 99
A company has a lists of items that make up 15% of total spend. These items also do not largely impact on quality of final product. The supply continuity is secured. Which of the following will be the most appropriate managing approach to purchase these items?
Answer: A
Explanation:
Those items make up small portion of spend and the supply risk is low. So it is tactical item according to Kraljic portfolio matrix. Procurement should bundle these items into larger contracts, simplify procurement process.
LO 2, AC 2.1
NEW QUESTION # 100
Azram, a procurement analyst, has been tasked with applying whole-life asset management when purchasing a piece of laboratory equipment. Was this the correct course of action?
Answer: C
Explanation:
Whole-life costing (WLC) is a key part of asset management. It focuses not only on purchase price, but also on operation, maintenance, energy use, training, and disposal.
As defined in the CIPS L4M2 Study Guide, Chapter 3: Whole-life costing:
"Whole-life asset management involves considering the total cost of ownership - from purchase through to disposal - ensuring that procurement decisions account for all associated costs, not just the initial purchase price." Assessment:
* A. Focus on price only - Incorrect. WLC considers more than just price.
* B. All associated costs - Correct. This is the definition of whole-life asset management.
* C. Costs of quality - Quality cost is one component but not the full scope of WLC.
* D. Transactional costs - These may be included, but WLC is broader.
Correct answer: B
CIPS Study Guide Reference:
* Module: L4M2 - Defining Business Needs
* Chapter 3: Whole-life costing and cost management
* Topic: Whole-life asset management
NEW QUESTION # 101
Which of the following statements is true about product life cycle?
Answer: D
Explanation:
A product's life cycle portrays the length of time a product is in the market; from the beginning of its introduction to consumers until it is removed from shelves and phased out. This cycle is often divided into four phases: introduction, growth, maturity, and decline. Depending on the relevant stage, companies will set an according strategy to achieve their desired targets. Pricing and promotions play a pivotal role in the design of these product life cycle strategies. Therefore, product life cycle management, the process of strategizing ways to continuously support and maintain a product, is seen more and more at pricing mature players and could bring real value to your company.
Introduction phase: during the introduction phase, the new product is introduced to consumers and a substantial amount of money is invested in advertising and marketing campaigns to bring awareness of the product to the customer. In this phase competition is low, but units sold will also correspondingly be quite low as well still. Consumers need to be convinced of the benefits of the product. Lots of articles never make it beyond this phase: e.g. 3D televisions.
Profits in the introduction stage tend to be low or there may even be a loss. This is because the cost of marketing to establish product awareness plus distribution costs can be far higher than the revenue received from sales. This can be offset to a degree by 'skimming' price in the very early stages. Skimming a price is where a business charges the highest price that it thinks the market will bear initially until product recognition brings in other buyers and then the price drop.
Growth phase: when it's shown there is proven demand for the product and consumers are buying it, the next stage will be its growth phase. This phase is punctuated by increasing demand, increas-ing production and an increase in the competitive landscape. Availability of the product is under-standably paramount during this phase, going out of stock is unthinkable during the growth period.
The electric car is an example of a product that is currently in the midst of the growth phase.
Maturity phase: normally the maturity phase is the phase that is characterized by declining production and marketing costs due to synergies and economies of scale. During this phase the first signs of market saturation occur and most consumers or households already own the product. Sales numbers still grow, but at a slower pace. In the maturity phase, price competition becomes intense, a broader range of distribution channels are deployed and competition is more focused on competitive pricing, marginal product differences or the difference in services or promotions. This period in the PLC is often said to be the 'cash-cow period'.
That being said, the idea of 'Maturity from the start' also exists. This occurs when a brand decides to launch a product extension and directly follows up the maturity phase of an earlier version of the product. For example, the iPhoneX followed up from the 'normal' iPhone-series and therefore the iPhoneX never had to undergo the introduction or growth phase, but immediately started in its maturity phase.
Decline phase: the final phase of the PLC is entered once the product loses market share to other, newer products and the competitive landscape becomes too hard to survive. During this stage, de-mand declines, companies are left with overstock with prices and margins getting depressed. Therefore retailers and brands normally start stunting with promotions during the decline of the PLC to sell their final stock.
A well-known example of a product that has been through the decline phase were the Nokia phones; sales results dramatically decreased after the introduction of the iPhone.
Reference:
- CIPS study guide page 90
- Adjusting your Pricing Strategy to the Product Life Cycle Stage (omniaretail.com)
- Price Skimming Definition (investopedia.com)
LO 2, AC 2.2
NEW QUESTION # 102
Which of the following are the focuses of ISO 14001:2015?
Answer: C
Explanation:
ISO 14001:2015 specifies the requirements for an environmental management system that an or-ganization can use to enhance its environmental performance. ISO 14001:2015 is intended for use by an organization seeking to manage its environmental responsibilities in a systematic manner that contributes to the environmental pillar of sustainability.
ISO 14001:2015 helps an organization achieve the intended outcomes of its environmental man-agement system, which provide value for the environment, the organization itself and interested parties. Consistent with the organization's environmental policy, the intended outcomes of an environmental management system include:
* enhancement of environmental performance;
* fulfilment of compliance obligations;
* achievement of environmental objectives.
ISO 14001:2015 is applicable to any organization, regardless of size, type and nature, and applies to the environmental aspects of its activities, products and services that the organization determines it can either control or influence considering a life cycle perspective. ISO 14001:2015 does not state specific environmental performance criteria.
ISO 14001:2015 can be used in whole or in part to systematically improve environmental manage-ment.
Claims of conformity to ISO 14001:2015, however, are not acceptable unless all its require-ments are incorporated into an organization's environmental management system and fulfilled without exclusion.
In conclusion, ISO 14001:2015 focuses on: management system (including roles, leadership and processes) and the life cycle of product or service. Life cycle is defined as "consecutive and inter-linked stages of a product (or service) system, from raw material acquisition or generation from natural resources to final disposal. [...] The life cycle stages include acquisition of raw materials, design, production, transportation/ delivery, use, end-of-life treatment and final disposal." The answer is process and life cycle.
NEW QUESTION # 103
A drawing is an example of...?
Answer: A
Explanation:
A technical specification details the standards that a product or service must meet. Drawings (often called engineering drawings or technical drawings) are complementary to technical specifications Reference:
LO 3, AC 3.1
NEW QUESTION # 104
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