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CIPS L4M2 - Defining Business Needs

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Total 268 questions

A company is considering buying a new computer system to handle large amounts of personal data and expects the system to perform in a particular way. Which of the following should be included in the performance specification? Select TWO that apply.

System operating conditions

A.

List of outputs

B.

Brand name

C.

List of inputs

D.

Technical drawings

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.

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

B.

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

C.

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

D.

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

Which of the following is part of a conformance specification?

A.

Material, dimensions, tolerances, and drawings

B.

Material, innovation, performance, and descriptions

C.

Ideas, dimensions, tolerances, and output

D.

Ideas, innovation, tolerances, and descriptions

Avram is carrying out a competitive tendering exercise for a security service provider, is this a straight re-buy?

A.

Yes, as the specification for the purchase has been modified

B.

No, as he is sourcing the market for a potential new supplier

C.

No, as he has an existing preferred supplier already sat up

D.

Yes, as market research is required before the purchase

Which of the following factors would mean a buyer had high bargaining power in a competitive market? Select TWO that apply.

A.

Many substitute products are available

B.

Buyers are procuring a low volume of products

C.

High switching costs for the buyer

D.

Buyers are demanding large volumes

E.

Products are highly differentiated

To strengthen its market presence, ABC Group decided to develop a new product. A cross-functional team was formed to discuss the scope and the functions of the product. They will also survey the potential customers to see what they like, what they love, and what they dislike. What is this process called?

A.

Value analysis

B.

Cash flow analysis

C.

Product standardisation

D.

Value engineering

Which of the following are criteria that the ISO 14000 series covers?

1. Life-cycle analysis

2. Continuous improvement

3. Financial information

4. Climate change

A.

1 and 4 only

B.

2 and 3 only

C.

3 and 4 only

D.

1 and 2 only

Over the life of a product, which of the following would be considered non-value-adding costs?

    Rework costs

    Production costs

    Maintenance costs

    Waste disposal costs

A.

1 and 2

B.

2 and 3

C.

3 and 4

D.

1 and 4

Sam has recently joined Spahn Farm Foods (SFF) as a procurement manager. She has instructed her team to develop and distribute a standard specification template for business stakeholders to use when requesting purchases. How would this benefit SFF?

A.

Use of a standard template would prevent fraudulent purchases from being made by stakeholders

B.

Use of a standard template would allow buyers to quickly identify any missing information

C.

Use of a standard template would reduce the amount of negotiation required on the terms and conditions of the contract

D.

Use of a standard template would mean suppliers will be more willing to negotiate on the cost of the product

Which of these purchases by a furniture manufacturing company are direct costs to the company? Select.

TWO that apply.

A.

Salary of the office accountant

B.

Purchase of the wood for furniture production

C.

Utility bill from the electricity provider

D.

Wages paid to the production line employees

E.

Advertising in a home interiors magazine