UPDATED L4M2 PRACTICE EXAM QUESTIONS

Updated L4M2 Practice Exam Questions

Updated L4M2 Practice Exam Questions

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The CIPS L4M2 exam questions are designed and verified by experienced and qualified CIPS L4M2 exam trainers. So you rest assured that with Defining Business Needs (L4M2) exam dumps you can streamline your L4M2 exam preparation process and get confidence to pass Defining Business Needs (L4M2) exam in first attempt.

One of the primary objectives of the CIPS L4M2 Exam is to equip learners with the skills and knowledge to define business needs accurately. This involves understanding the needs of the business, identifying gaps, and developing strategies to address those gaps. L4M2 exam also covers the importance of engaging with stakeholders to ensure that the business needs are fully understood and that solutions are developed collaboratively.

CIPS L4M2 (Defining Business Needs) Certification Exam is a professional certification exam that is designed for individuals who are looking to advance their career in the field of business analysis. Defining Business Needs certification exam is offered by the Chartered Institute of Procurement and Supply (CIPS), which is a leading global professional body that provides certification, training, and networking opportunities to individuals working in procurement and supply chain management.

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CIPS Defining Business Needs Sample Questions (Q185-Q190):

NEW QUESTION # 185
Due to the growth of consumer electronics market, semiconductor industry develops exponentially. However, the industry is dominated by a dozens of manufacturer. Chipset need to be built in factories with highly controlled environments. New chip factories cost billions of dollars and can take two years to build. Right now, factories are running at full capacity, which produce almost perfect yields, meaning basic chipset can be made for less than a dollar and more advanced versions for not much more. What are the barriers to new entrants in the semiconductor industry?
1. Poor industry growth
2. High set-up costs
3. Economies of scale
4. Low switching costs

  • A. 1 and 4 only
  • B. 2 and 3 only
  • C. 3 and 4 only
  • D. 2 and 4 only

Answer: B

Explanation:
Barriers to entry is an economics and business term describing factors that can prevent or impede newcomers into a market or industry sector, and so limit competition. The most obvious barriers to entry are high start-up costs and regulatory hurdles which include the need for new companies to obtain licenses or regulatory clearance before operation. Also, industries heavily regulated by the government are usually the most difficult to penetrate. Other forms of barrier to entry that prevent new competitors from easily entering a business sector include special tax benefits to existing firms, patent protections, strong brand identity, customer loyalty, and high customer switching costs.
In the scenario, the new factory for chipset manufacturing costs billions of dollars, which indicates high set-up costs. Also, the incumbent manufacturers have reached economies of scale, allowing them to produce the components at optimal price.
The above descriptions are compiled from recent reports on current chip shortage (2021).


NEW QUESTION # 186
A procurement team is categorising their purchased items into four quadrants of Kraljic's supply chain portfolio matrix. They realise that there are some low-value items which come from very few suppliers in the market. The organisation is critically dependent on these suppliers. The team plans to reduce the dependence by finding alternative sources. Is this a right course of action?

  • A. Yes, this action will dramatically increase the supplier's bargaining power
  • B. No, there is no way to escape this dependency
  • C. No, the organisation should run competitive biddings to exploit the competition
  • D. Yes, the organisation needs to reduce the supply risks

Answer: D

Explanation:
According to Kraljic portfolio matrix, the low-value items with high supply risk are bottleneck items.

The purchasing strategy that is commonly recommended for these products is primarily based on acceptance of the dependence and reduction of the negative effects of the unfavourable position. An alternative strategy suggested by purchasing practitioners is to find other suppliers and move towards the non-critical quadrant.
- Accept dependence, reduce negative consequences: The main focus of this strategy is to assure supply, if necessary even at additional cost. Examples of this strategy are keeping extra stocks of the materials concerned or developing consigned stock agreements with suppliers. By performing a risk analysis firms can identify the most important bottleneck products and consider the implications. A possible action for dealing with unexpected bad dependence positions for certain products is to employ contingency planning.
- Reduce dependence and risk, find other solutions: This strategy is geared towards reducing the dependence on the supplier. The most common way to achieve this is to broaden the specifications of the product or to search for new suppliers.
The procurement team in the scenario has selected reducing dependency by finding alternatives. This is a right strategy for bottleneck item.


NEW QUESTION # 187
Buyers in the same industry with the same understanding of relative value and price may still make different decisions about whether to switch. Which of the following factors may prompt a buying organization to incline toward substitute products?
1. There is potential for backward integration
2. Access to financial resources
3. The switching cost is high
4. The substitute fits organisation's strategy

  • A. 1 and 4 only
  • B. 1 and 2 only
  • C. 2 and 4 only
  • D. 3 and 4 only

Answer: C

Explanation:
The threat of substitution is a function of three factors:
* The relative value/ price of a substitute compared to an industry's product
* The cost of switching to the substitute
* The buyer's propensity to switch
Buyers with different circumstances and in different industries do not all have equal propensities to substitute when faced with a comparable economic motivation. Differences in their circumstances lead buyers to respond to a given relative value to price (RVP) and switching cost differently. While such differences might be treated as factors that modify RVP or switching costs, it is more helpful in practice to isolate them.
Resources. Substitution often involves up-front investments of capital and other resources. Access to such resources will differ from one buyer to another.
Risk Profile. Buyers often have very different risk profiles, the result of such things as their past history, age and income, ownership structure, background and orientation of management, and nature of competition in their industry. Buyers prone to risk taking are more likely to substitute than buyers that are risk-averse.
Technological Orientation. Buyers experienced with technological change may be less concerned with some kinds of substitution risks, while extremely aware of others that a less technologically sophisticated buyer would be oblivious to.
Previous Substitutions. The second substitution may be easier for a buyer than the first, unless the first substitution has been a failure. The buyer's uncertainties over undertaking a substitution may have diminished if a past substitution has been successful, or risen if a past substitution has led to difficulties. In the soft drink industry, this seems to have worked to the benefit of aspartame.
Intensity of Rivalry. Buyers under intense competitive pressure and searching for competitive ad-vantage will tend to substitute more quickly to gain a given advantage than those that are not.
Generic Strategy. The RVP of a substitute will have different significance depending on the com-petitive advantage that industrial, commercial, or institutional buyers are seeking or the value of time and particular performance needs of the household buyer. A substitute that offers a cost saving will tend to be of more interest to a cost leader than a differentiator, for example.
Many of these factors that shape the buyer's propensity to substitute will be a function of the particular decision maker who is involved in the purchase decision.
Porter, Michael E.. Competitive Advantage: Creating and Sustaining Superior Performance (p. 278-289). Free Press. Kindle Edition.


NEW QUESTION # 188
Which of the following are typical social considerations throughout the contract life cycle? Select the TWO that apply.

  • A. Using recycled materials
  • B. Managing waste
  • C. Minimizing use of non-renewable resources
  • D. Support small local businesses
  • E. Health and safety

Answer: D,E

Explanation:
The following are typical social criteria in procurement:
* Reducing unemployment
* Preventing the use of child labour
* Preventing discrimination on the grounds of race, religion, disability, sex or sexual orientation
* Encouraging good employment practice
* Reducing local unemployment
* Reducing social exclusion
* Promoting training opportunities for the young or disadvantaged
* Encouraging access to work for people with disabilities


NEW QUESTION # 189
Which of the following methods will enable a company to eliminate waste, lost time and lost material from its processes?

  • A. Lean principles
  • B. Tendering process for routine items
  • C. Over specification
  • D. Agile principles

Answer: A

Explanation:
Lean design is about maximising the value that a customer receives and at the same time minimis-ing waste in delivering that value.
For an organisation to be 'lean' it must have had all non-essential resources removed (ie. anything that does not add value, see below). This is efficient and cost effective, in that the value/supply chain can theoretically do exactly what is needed of it and no more, but requires sound forecasting and planning of demand and supply. It is most suitable for industries with stable product specifications, long lead times and few impulse purchases.
Organisations which are 'agile' react as quickly as is practicable to provide a cost effective response to customer demand. This is based on flexibility in design, supply, production and distribution. It is most appropriate for products such as fast fashion and foodstuffs which must be on display and available when wanted by the customer.


NEW QUESTION # 190
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