Amazon
Avaya
Checkpoint
Cisco®
CompTIA
CrowdStrike
EC-Council
EXIN
Fortinet
Google
ISC
ISC2
ITIL®
Juniper
Microsoft
Okta
Palo Alto Networks
Salesforce
All Vendors
  1. Home
  2. CIPS
  3. L4M2

CIPS L4M2 Exam (page: 2)
CIPS Defining Business Needs
Updated on: 25-Dec-2025

Viewing Page 2 of 30
L4M2 PDF 238 Questions

Thani Ltd is a fast growing logistics company with a fleet of 20 tractors. To meet Net Zero objec-tive, the company needs to electrify its fleet. Angelica is assigned to investigate the market price of electrifying services. After the investigation, she realises that the current market price is very expensive and unsustainable for her company. She decides to break down the costs before negotiating with the suppliers.
Which internal stakeholders may help Angelica estimate the breakdown of costs? Select 2 that apply.

  1. Sales and Marketing department
  2. Engineering department
  3. Finance department
  4. Commercial agency
  5. Suppliers

Answer(s): B,C

Explanation:

Despite of its importance, cost analysis is often a daunting task for procurement professionals. In order to analyse supplier's costs effectively, procurement may need the input from other depart- ments. Normally, technical (or engineering) department may help them to identify the direct costs of the product/service (how much material is required to make the product, or how many people are needed to perform the job, etc), while finance (or accounting) department may have ideas on the overheads of the supplier.
In this scenario, engineering department may provide insights on the components needed and the tasks to perform. Similarly, finance may know how much supplier pays for the overheads. On the other hand, while commercial agency and suppliers are external stakeholders, Sales and marketing is unlikely to provide valuable information in this case.


Reference:

CIPS study guide page 102
LO 2, AC 2.3



Which of the following are the causes of material cost variance?
1. The buyer updates purchase-to-pay system to track payment and delivery
2. An unprocessed goods received note is missing
3. The employees must work overtime to catch up with the customers' orders
4. The purchase is made in emergency

  1. 2 and 4 only
  2. 1 and 4 only
  3. 1 and 3 only
  4. 2 and 3 only

Answer(s): A

Explanation:

The difference between the standard cost of direct materials specified for production and the actual cost of direct materials used in production is known as Direct Material Cost Variance. Material Cost Variance gives an idea of how much more or less cost has been incurred when compared with the standard cost. Thus, Variance Analysis is an important tool to keep a tab on the deviations from the standard set by a company.
Material Cost Variance can be due to less purchase price being paid than the standard or because of change in the quantity of material used. Thus, Material Cost Variance is made up of two components namely; Material Price Variance and Material Usage Variance.

Among the 4 options:
- 'The buyer updates purchase-to-pay system to track payment and delivery': The use of e- procurement system can increase the productivity and create labour cost variance, not material cost variance.
- 'An unprocessed goods received note is missing': If a goods received note is missing, the buyer won't pay for that batch, which create quantity variance.
- 'The employees must work overtime to catch up with the customers' orders': Overtime salary can cause labour variance, not material cost variance.
- 'The purchase is made in emergency': Normally, the price in emergency situation is higher than usual. This can cause price variance.


Reference:

- CIPS study guide page 57-59

- Material Variance | Cost, Price, Usage Variance Formula, Example - eFM (efinancemanage- ment.com)
LO 1, AC 1.4



What does the acronym RAQSCI stand for?

  1. Relationship, Ability, Quality, Service, Cost, Innovation
  2. Regulatory, Availability, Quality, Service, Cost, Innovation
  3. Regulatory, Availability, Quantity, Sustainability, Inventory
  4. Regulatory, Ability, Quality, Service, Cost, Inventory
  5. Relationship, Availability, Quantity, Sustainability, Cost, Innovation

Answer(s): B

Explanation:

RAQSCI stands for Regulatory, Availability, Quality, Service, Cost, Innovation.
LO 1, AC 1.1



Which of the following standards specifies requirements for a quality management system?

  1. ISO 27001
  2. ISO 9001:2015
  3. ISO 22000:2018
  4. ISO 14001:2015

Answer(s): B

Explanation:

ISO 9001:2015 specifies requirements for a quality management system. 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 22000:2018 specifies food safety management systems -- Requirements for any organization in the food chain
ISO 27001 provides requirements for an information security management system.
LO 3, AC 3.1



Housing Ltd is inviting a number of contractors to a tender for the construction of a commercial building. In the attachment to the invitation to tender, there is a document which describes the re- quired materials and installation methods. This document is known as...?

  1. Functional specification
  2. Prescriptive specification
  3. Drawings
  4. Performance specification

Answer(s): B

Explanation:

This question mentions about specification in construction. In this sector, specifications are written documents that describe the materials and workmanship required for a development. They do not include cost, quantity or drawn information and need to be read alongside other contract documentation such as quantities, schedules and drawings. Specifications vary considerably depending on the stage to which the design has been developed, ranging from performance (open) specifications that require further development by a contractor or supplier, to prescriptive (closed) specifications for which the design is already complete when the project is tendered.
Prescriptive specifications typically contain detailed descriptions of the following components:
- General requirements relating to regulations and standards.
- The type of products and materials required.
- The execution and installation methods required.
Prescriptive specifications give the client much more certainty about the end product when making investment decisions (such as when they appoint the contractor), and place a greater burden on the designer to ensure proper installation rather than the contractor.


Reference:

- CIPS study guide page 116-120
- Prescriptive specification - Designing Buildings Wiki LO 3, AC 3.1



Viewing Page 2 of 30



Share your comments for CIPS L4M2 exam with other users:

Tshepang 8/18/2023 4:41:00 AM

kindly share this dump. thank you
Anonymous