2025 Vce L4M2 Format | Authoritative L4M2 100% Free Valid Test Objectives

The CIPS L4M2 certification exam is one of the hottest and career-oriented certifications in the market. This Defining Business Needs (L4M2) certification exam has been inspiring beginners and experienced professionals since its beginning. Over this long time period, countless Defining Business Needs (L4M2) exam candidates have passed their Defining Business Needs (L4M2) certification exam, and now they are offering their services to the top world brands.

CIPS L4M2 Exam is divided into two parts, A and B. Part A consists of 15 multiple-choice questions that test the candidate’s knowledge of procurement and supply chain management concepts, principles, and practices. Part B is a case study where candidates are required to analyze a real-life scenario and provide recommendations on how to address the business needs of the organization. This case study is designed to test the candidate’s ability to apply their knowledge and skills to practical situations.

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CIPS Defining Business Needs Sample Questions (Q208-Q213):

NEW QUESTION # 208
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?

A. Yes, because optimising the specification is the only method to achieve value for money
B. No, because higher specification may incur additional costs for the buyer
C. Yes, because higher requirements will help buying organisation find the best supplier
D. No, because higher requirements in specification, the greater bargaining power of buying organisation

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:
LO 3, AC 3.1

NEW QUESTION # 209
Which of these causes variances in budgets?
* Quantity discounts
* Substitute goods
* Loan repayments
* Corporation tax

A. 1 and 4 only
B. 1 and 2 only
C. 2 and 4 only
D. 2 and 3 only

Answer: B

Explanation:
Detailed Explanation:
* Quantity discounts: Changes in order quantities can lead to cost savings, impacting budget forecasts.
* Substitute goods: Using alternative products can alter planned expenses, causing budget deviations.
Loan repayments and taxes are fixed financial obligations and do not directly impact procurement budgeting. Reference: CIPS Level 4, Cost Management.

NEW QUESTION # 210
Datong is a defence and law enforcement equipment supplier. They are developing new product but largely concerns about the detailed specifications of components and the capability of supply market. Which of the following approach should Datong adopt in order to optimise the specification and shorten time to market?

A. Control the budget tightly
B. Early supplier involvement
C. Request for quotation from potential suppliers
D. Invite the supplier to tendering process

Answer: B

Explanation:
To improve production process and reduce supply risk, Datong should collaborate with suppliers early in procurement cycle. Collaborating with suppliers in this way is often referred as Early Supplier Involvement (ESI)
'Request for quotation from potential suppliers': Quotations should only be requested if the buyer know exactly what they need. In this scenario, Datong is not yet sure about the specifications of product's components, request for quotation is not a good idea.
'Mapping out business plan': A business plan, as defined by Entrepreneur, is a "written document describing the nature of the business, the sales and marketing strategy, and the financial back-ground, and containing a projected profit and loss statement." A business plan is not appropriate with improving production process and reducing supply risk.
'Budget controlling': Budget controlling largely concerns with dealing with budget variances. Tighter budget alone cannot lead to improved processes and fewer risks.
LO 3, AC 3.1

NEW QUESTION # 211
Which kind of these following costs belong to fixed costs? Select TWO that apply.

A. The packaging and distribution costs
B. The annual income tax charged by local authorities
C. Energy consumption in manufacturing
D. The costs of leasing or purchasing capital equipment
E. The depreciation of capital inputs

Answer: D,E

Explanation:
Based on variability, the costs has been classified into three categories, they are fixed, variable and semi variable. Fixed costs, as its name suggests, is fixed in total i.e. irrespective of the number of output produced. Variable costs vary with the number of output produced. Semi-variable is the type of costs, which have the characteristics of both fixed costs and variable costs (Source: Key Differences).
Among above costs, leasing and depreciation are relatively static and do not change if volume of business activities increase or reduce.
Packaging, utilities and annual business rate (tax) are variable costs.
Reference:
LO 1, AC 1.2

NEW QUESTION # 212
Which kind of these following costs belong to fixed costs? Select TWO that apply.

A. The packaging and distribution costs
B. The annual income tax charged by local authorities
C. Energy consumption in manufacturing
D. The costs of leasing or purchasing capital equipment
E. The depreciation of capital inputs

Answer: D,E

Explanation:
Based on variability, the costs has been classified into three categories, they are fixed, variable and semi variable. Fixed costs, as its name suggests, is fixed in total i.e. irrespective of the number of output produced.
Variable costs vary with the number of output produced. Semi-variable is the type of costs, which have the characteristics of both fixed costs and variable costs (Source: Key Differences).
Among above costs, leasing and depreciation are relatively static and do not change if volume of business activities increase or reduce.
Packaging, utilities and annual business rate (tax) are variable costs.

NEW QUESTION # 213
......

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2025 Vce L4M2 Format | Authoritative L4M2 100% Free Valid Test Objectives

Valid CIPS L4M2 Test Objectives | Demo L4M2 Test

CIPS Defining Business Needs Sample Questions (Q208-Q213):

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