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CIPS
CIPS Level 4 Diploma in Procurement and Supply
L4M2
Defining Business Needs Questions and Answers

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Viewing page 10 out of 10 pages

Viewing questions 91-100 out of questions

Questions # 91:

Which of the following are potential advantages of using a product performance specification?

It reduces the need for the buyer to produce a detailed design

It can widen the potential supply base

The buyer can specify the product's actual design in detail

Products are provided using the buyer's methodology

Options:

1 and 2

1 and 4

3 and 4

2 and 3

Answer

Explanation

Detailed Explanation:

1 (Reduces design need): Performance specifications focus on outcomes rather than detailed designs, saving buyer resources.

2 (Wider supply base): Allowing suppliers to propose their own solutions can attract a broader range of suppliers.Options 3 and 4 align with conformance specifications, not performance-based ones. Reference: CIPS Level 4, Specification Writing.

Questions # 92:

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

Options:

DOWNTIME

VA/VE

OWN-IT

SCAMPER

Answer

Explanation

Copious amounts of waste can occur in the workplace, particularly in a manufacturing process, but do you know what the eight most commons wastes are and how they impact your organization?

Taiichi Ohno, considered the father of Toyota Production System, created a lean manufacturing framework, which was based on the idea of preserving (or increasing) value with less work. Any-thing that doesn't increase value in the eye of the customer must be considered waste, or "Muda", and every effort should be made to eliminate that waste. The following 8 lean manufacturing wastes, mostly derived from the TPS, have a universal application to businesses today. The acro-nym for the eight wastes is DOWNTIME. Downtime stands for:

- Defects

- Overproduction

- Waiting

- Not utilizing talent

- Transportation

- Inventory excess

- Motion waste

- Excess processing

OWN-IT is the acronym for the process of collecting and analysing the data and information needed in any field

SCAMPER is acronym for options addressing the underlying issues and achieving target

VA/VE is value analysis and value engineering

LO 3, AC 3.4

Questions # 93:

The first step in developing a business case, according to the procurement cycle is ...

Options:

identify the need

contact the stakeholders

source the market

appraise suppliers

Answer

Questions # 94:

What would provide the best method to ensure a car manufacturer can make adjustments to vehicle production to meet future market demands, such as the inclusion of an additional battery to make a hybrid model?

Options:

Correct product specification in place to allow variations

Investment in innovation to predict future trends

Investment in versatile robotics to meet changing demand

Adequate labour contracts in place to meet changing demand

Answer

Questions # 95:

When analysing competitive forces in a market, which of the following can be seen as a supplier having low bargaining power? Select TWO that apply.

Options:

Low switching costs between products

A high number of substitutes available

Low competition in the marketplace

High quality products

Low levels of innovation

Answer

A, B

Questions # 96:

An example of a performance specification is a ...

Options:

Brand name

List of outputs

List of inputs

Technical drawing

Answer

Questions # 97:

Which of the following problems may be identified as open-ended problems? Select TWO that apply:

Options:

Shortage of key medicines in healthcare industry

A cyber attack takes down whole company’s IT system

Engine failures cause flight cancellations.

Logistics costs incur a large portion in wholesale prices

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

Answer

D, E

Explanation

Open-ended problem is something stopping the achievement of an objective or blocking progress. To solve this type of problems, procurement professional should find a way to unblock the block-age. In the above question, high logistics cost is an obstacle to cost cutting objective while suppli-er’s incompliance prevents the company to achieve its sustainable objective.

[Reference: CIPS study guide page 11, LO 1, AC 1.1]

Questions # 98:

Halfords is a major bicycle and car parts retailer with long history in the market. Its suppliers are plentiful and there is no threat of forward integration. Some other smaller retailers are applying 3D-printing technology to make personalized bicycle parts but their market share is relatively low. 3D-printing technology is an example of which competitive force?

Options:

Bargaining power of buyer

Threat of substitute

Rivalry within the industry

New entrants may enter the market

Answer

Explanation

3D-printed parts can replace traditional metal parts. They are also more easily customised to fit customer's needs. This technology is an example of threat of substitute in Porter's Five Forces model.

Substitute goods or services that can be used in place of a company's products or services pose a threat. Companies that produce goods or services for which there are no close substitutes will have more power to increase prices and lock in favorable terms. When close substitutes are available, customers will have the option to forgo buying a company's product, and a company's power can be weakened.

[Reference:, - CIPS study guide page 85-96, - Porter's 5 Forces Definition: Analyzing Businesses (investopedia.com), LO 2, AC 2.2]

Questions # 99:

Which of the following bodies provides standards for the products and services in the US?