Easy To Download CIPS L4M2 Exam Dumps Updated 147 Questions [Q66-Q88]

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Easy To Download CIPS L4M2 Exam Dumps Updated 147 Questions

New Updated L4M2 Exam Questions 2022

Q66. What is the output of regression analysis?

Forecasting process

Dependent variables

Line of best fit

Independent variables

Q67. Which of the following indicates types of waste that procurement department concentrates on when adopting Lean methods?

DOWNTIME

VA/VE

OWN-IT

SCAMPER

Q68. Aldar Properties is a property developer in UAE. In last month, it spent $2,160 for 10 tons of steel. In this month, it had planned 10% increment in budget for steel comparing to last month. But the number of orders boosted and total spend on steel reached $1,992.1 while Aldar has imported 11 tons. What is the main cost driver of steel budget?

Both price and quantity variances

Inflation

Quantity variance

Price variance

Q69. What is the document that defines the activities, deliverables and timelines a supplier must carry out during contract performance?

Statement of work

Project initial document

Framework agreement

Work instruction

Q70. Which type of specification is less time-consuming to develop?

Outcome-based specification

Design specification

Conformance specification

Technical drawings

Q71. A procurement manager includes provision on recovery from natural disaster into a through-life specification. Some suppliers suppose that provision is unnecessary. Is procurement manager’s action justified?

No, because with current technology, natural disaster can’t disrupt supply chain.

Yes, because natural disaster may cause risks in organisation’s supply chain

Yes, because the regulations require contract to have recovery provision

No, because this provision will incur unnecessary cost to supplier

Q72. Why should procurement professionals develop business case before seeking approval to purchase capital equipment?

Using business case will prevent new entrants from entering the supply market

A business case can be used as a replacement of purchase order

Business case is a tool that eliminates all risks associated with the project

Devising business case may prompt the procurement to consider different options

Q73. 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?

No, because higher specification may incur additional costs for the buyer

No, because higher requirements in specification, the greater bargaining power of buying organisation

Yes, because optimising the specification is the only method to achieve value for money

Yes, because higher requirements will help buying organisation find the best supplier

Q74. Facing fiercer competition at home and abroad, IKEA, the leading furniture retailer, needs to im-prove its competitiveness. In order to do this, IKEA must decrease operating costs and improve quality of current and new retail stores. The company establishes a project team. The job of the team is to collect data on performance from multiple stores in several countries, then select the best performing one. The team will work closely with best performing store and study its processes. After the research, the team will recommend best practices to other retail stores. IKEA management can also apply these practices to new stores in the future. Which of the following correctly describe the process undertaken by IKEA project team?

Internal benchmarking

Competitive benchmarking

Internal audit

Site visit

Q75. A charity is reviewing their spend and budget after an operation in flooded areas. They realise that the operators save money against the budgeting plan. This saving is known as…?

Negative budget

Positive variance

Negative variance

Positive budget

Q76. Which of the following factors are likely to be direct barriers to a new entrant in a supply market?

Threat of forward integration

Value to price

Brand identity

Availability of substitutes

Cost advantages

There are many types of barriers to entry into a market. Some of these include:
– Economies of Scale: When manufacturing or selling at a large scale, companies are able to avail cost advantages because per unit costs of the product fall. So the more the company produces in quantity the more the benefit. When existing companies have this advantage, it can act as a barrier to entry because a new entrant will have to try to match the scale to achieve the same cost ad-vantage as the existing company. This may not be possible at the initial stage.
– A Differentiated Product: If the product being sold by the existing company or companies is highly differentiated or enjoys strong brand loyalty, then this can act as a strong barrier to entry. The new entrant will have to invest in creating a product with newer and unique features and bene-fits that surpass those offered by the old company. In addition, there will need to be strong efforts to break existing brand loyalties and shift them to a new untested company.
– High Capital Costs: If an industry requires huge capital investments at the onset, then this will act as a barrier to entry for many of the potential entrants. Only those will attempt to enter the competitive fray who have the resources to make this high initial investment.
– Other Cost Advantages: Apart from those cost benefits that come from economies of scale, there are other advantages that an existing firm may enjoy. These include access to the best suppliers, an understanding of existing materials and knowledge of their quality, possession of any necessary and important patents, and proprietary information and technological knowledge. There are also learning advantages, achieved over years of business and experience.
– Cost of Switching: The cost associated with a consumer’s move from one company or product or another is called the switching cost. If there are significant switching costs, then a new entrant may not be able to create means of removing these. Or, they may have to offer significant advantage to counter these switching costs at their own expense.
– Distribution Network: Often, distribution relationships are well established and may prove to be a strong barrier to entry for a new company. A new entrant will obviously need access to these dis-tribution channels but will need to invest extra in order to engage distributors who have established relations with existing competitors.
– Suppliers: As with distributors, suppliers may be vital to the operations of a new business. Exist-ing suppliers may have contracts or loyalties with existing companies and may prove to be difficult to form relationships with.
– Legal and Government Created Barriers: Government and regulatory requirements such as permits and licenses may be a strong barrier to entry. There may also be laws governing ways to conduct business that may conflict with a company’s practices in other countries.
– Barriers to Exit: Interestingly, barriers to exit may act as a deterrent to entry by new companies. If a company is unable to easily leave a competitive environment in case business does not work out, then it will have to stay and compete even if that is a detrimental business practice. In this case, the company may choose to not enter the market in the first place.
Reference:
LO 2, AC 2.2

Q77. A procurement manager is requested to source a major component. She needs information on sup-pliers’ direct and indirect cost, fixed and variable costs to prepare for negotiations. Therefore, she collects 17 annual reports from potential suppliers who are competing in the same industry. In order to estimate an approximate value of fixed and variable costs in that industry, which of the following technique should be adopted by the procurement manager?

Line of best fit

Variance calculation

Total cost of ownership

Open-book costing

Q78. Bob is a new procurement specialist at XYZ Ltd. He is assigned to categorise the company’s sup-plies. After analysing, Bob realises that a group of low value products is sourced from a tiny geo-graphical area which is prone to flooding. What would be the best strategy to manage this category of products?

Source this group of products from only one supplier

Find an alternative source to secure supply

Assign some of procurement jobs to user department

Form partnership relationship with the current supplier

Q79. Which of the following are typically reasons why an organisation implements value analysis? Select TWO that apply:

To determine the value of each component used

To decide whether there will be sufficient surplus funds to reinvest in the business

To shape and manage supply market

To provide an outline business case for the specification

To find cost reduction opportunities by optimising the components used

Q80. After a project, the procurement team at CLK Ltd meets up and summarises on the performance. They see that they actually spent $5,000 less than planned budget. The team tries to identifies why there is such difference. This activity is known as…?

Cash flow analysis

Variance analysis

Rolling budget

Cost modelling

Q81. Which of the following are the focuses of ISO 14001:2015?

1. Life cycle
2. Process
3. Capacity
4. Information security
2 and 4 only

1 and 2 only

2 and 3 only

3 and 4 only

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.
Reference:
– ISO 14001:2015 Environmental management systems – Requirements with guidance for use LO 3, AC 3.1

Q82. Which of the following is the purpose of benchmarking?

To identify and adapt the best practices to improve organisation’s performance

To copy other organisation’s intellectual properties, processes and practices

To coerce all suppliers to sacrifice their profit

To resist continuous improvement

Q83. Which of the following factors is most likely to be a barrier to new entrant in agriculture?

High margins

Capital requirement

Reputation within the industry

Brand recognition

Q84. Which of the following problems may be identified as closed problems? Select TWO that apply:

A cyber attack takes down whole company’s IT system

Shortage of key medicines in healthcare industry

There are not enough data for procurement analytics

Logistics costs incur a large portion in wholesale prices

The suppliers don’t comply with the company’s policy on underage labour.

Q85. One of the disadvantages of using standards in specification is that…

Standards lengthen the time to produce a specification

Standards tend to be rigid and they often don’t encourage innovation

Standards don’t allow the buyers to add health and safety requirements into the specification

Standards tend to be inaccurate and ambiguous, causing confusion among suppliers

Q86. A CPO is analyzing whole life cycle costing of a machinery. He realises that cost elements are not specific but come from a range of values. Which whole-life costing model should the CPO use to get the most accurate total cost of ownership?

Simulation models

Optimisation models

Decision support models

Kraljic’s preferencing model

Q87. Company A sells a product for $100. The total unit variable costs are $60. Fixed costs as in its ac-count are $20,000. How many products does the company have to sell to achieve break-even point?

600

550

400

500

Q88. What will be the result of retaliation between business rivals in an industry?

Higher exit barrier

More new entrants

Lower profit

Greater bargaining power of suppliers

CIPS L4M2 Exam Syllabus Topics:

Topic	Details
Topic 1	Provide guidance to internal stakeholders on implementation Implications of the business needs on the types of purchase
Topic 2	Output or outcome, statement of work based specifications Types of market data that can provide information on costs and prices
Topic 3	Identify opportunities to regulate short and longer term specifications Procurement’s role in developing a business case
Topic 4	Approaches to total costs of ownership whole life cycle costing Interpret financial budgets for the control of purchases
Topic 5	Identify sections of specifications for through life contracts Identify how costs and prices can be estimated for procurement activities
Topic 6	Understand market management in procurement and supply Compare the competitive forces that influence markets

Updated Free CIPS L4M2 Test Engine Questions with 147 Q&As: https://www.vcedumps.com/L4M2-examcollection.html

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Easy To Download CIPS L4M2 Exam Dumps Updated 147 Questions [Q66-Q88]

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