CIPS Defining Business Needs - L4M2 Exam Questions

QUESTION NO: 1
One of the disadvantages of using standards in specification is that...

QUESTION NO: 2
OMK is a Russian steel firm that is expanding market abroad. It plans to build a steel plant in a foreign country. Due to intricate technical requirements, the plant design will be very complex. Procurement department or technical department alone cannot draft the specification. OMK senior management decides that this task must be treated as a project. Which of the following should be done before writing the specification for new steel plant?

QUESTION NO: 3
A buying organisation may not have technical capability to produce a highly complex specification. Which of the following are sources of information that can be used to create the specification? Select TWO that apply

QUESTION NO: 4
Rachel has issued a specification for spare parts out to global suppliers. Rachel has asked for these parts to carry a standard from the International Organisation for Standardisation. Is Rachel right to do this?

QUESTION NO: 5
Which of the following might be the consequences of under-specification? Select TWO that apply:

QUESTION NO: 6
A procurement manager is seeking to control costs for his organisation. His predecessor constantly spent more money than budgeted, so he has decided to start this budget from scratch and ignore the previous periods.
Which type of budget is this?

QUESTION NO: 7
A procurement manager decided to use a conformance specification in a request for quotation (RFQ) for the manufacturing of a specialist item designed by their company. The company does not have the capability to manufacture the item in-house, but requires the item to be made to their detailed specification. Was this the correct thing to do?

QUESTION NO: 8
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?

QUESTION NO: 9
Which of the following is a tool to define roles and responsibilities of a project team?

QUESTION NO: 10
Which of the following would be an example of direct costs for a decorating contractor?

QUESTION NO: 11
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...?

QUESTION NO: 12
Which of these purchases by a furniture manufacturing company are direct costs to the company? Select.
TWO that apply.

QUESTION NO: 13
Apple's CPO is planning a budget for purchasing carbon-free aluminium next year. There are 27.4 tonnes of aluminum in stock, while Apple will need 200 tonnes for production next year and double inventory for production in the following year. How much aluminum will Apple need to purchase in next year?

QUESTION NO: 14
GSC Ltd is a manufacturer of car parts. To accommodate growing demands of electric cars, the company is developing a new component which requires different type of steel. The project team estimates that the component will be ready for production in 1.5 years. Until then, they need to keep the production busy.
After checking the inventory records, the production team sees that the company has 3 months of stock. The lead time for each batch is two months. Which of the following should be a priority ac-tion of the company?