Latest L4M2 Actual Free Exam Questions Updated 147 Questions
Free L4M2 Exam Braindumps certification guide Q&A
NEW QUESTION 10
Which of the following factors is most likely to be a barrier to new entrant in agriculture?
- A. Brand recognition
- B. Capital requirement
- C. Reputation within the industry
- D. High margins
Answer: B
Explanation:
Barriers to Entry to Agriculture: If stakeholders are going to address the need for new, conserva-tion-minded farmers, they must understand the barriers these farmers encounter when transitioning into the profession. A review of the literature revealed a number of barriers-most of them structural-to entry to agriculture. While each barrier is distinct, they are all interconnected. Though not an exhaustive list, the following barriers are ones that were most frequently mentioned in the literature:
- Access to Affordable Land
- Startup Capital
- Lack of Agricultural Knowledge and Experience
- Lack of Knowledge about Farm Business Planning
- Discrimination
- Student Loans
- Limited Access to Markets
- Affordable Housing and Affordable Healthcare
...
Source: Exploring the Barriers to Entry to Agriculture: Challenges Facing Beginning Farmers in North Carolina - Kelley Robbins-Thompson Reference:
LO 2, AC 2.2
NEW QUESTION 11
Which of the following problems may be identified as closed problems? Select TWO that apply:
- A. Shortage of key medicines in healthcare industry
- B. A cyber attack takes down whole company's IT system
- C. Logistics costs incur a large portion in wholesale prices
- D. The suppliers don't comply with the company's policy on underage labour.
- E. There are not enough data for procurement analytics
Answer: A,B
Explanation:
Closed problem is something happens that should not have happened. To solve this type of prob-lem, procurement professional should find a way to correct the situation or try to adapt to it. On the other hand, open ended problem is a obstacle to your short-term objective. You will need to overcome this obstacle.
Shortage of key medicines is a situation in which procurement must find a substitution or try to save the current stock.
In case of cyber attack, procurement should find a way to recover the IT system as soon as possible.
Otherwise, 'There are not enough data for procurement analytics' is an open-ended problem be-cause it prevents company to conduct procurement analytics (an objective).
'Logistics costs incur a large portion in wholesale prices': In this situation, logistics costs are hur-dles that prevent companies to reach lower wholesale.
'The suppliers don't comply with the company's policy on underage labour': In this situation, pro-curement should seek ways to help supplier comply with the company's labour policy.
LO 1, AC 1.1
NEW QUESTION 12
Which of the following are likely to be disadvantages of using outcome-based specifications? Select THREE that apply
- A. Ambiguity of outcome
- B. Difficulty to measure performance
- C. Long time delay between action and result
- D. Time consuming to produce
- E. Responsibility for product failure falling to buyer
- F. Stifling innovation
Answer: A,B,C
Explanation:
An Outcome Based Specification (OBS) focuses on the desired outcome of a service in business terms, rather than a detailed technical specification of how the service is to be provided; this allows providers scope to propose innovative solutions that might not have occurred to the procurement team. Outcome should be distinguished from output, which is the measurable results of a set of inputs. The example of difference between outcome and output is written at the bottom of page 123 in the study guide.
Outcomes should be the starting point in making new specification. However, using outcome-based specification has some setbacks:
- First, it is not easy to measure the outcomes. Usually, outcome of a project is a statement like 'increase customer satisfaction', 'maintain ambient temperature' or 'provide a convenient way to do something'. They are not easy to measure as output.
- Second, sometimes the desired outcomes require time to be materialised
- Third, outcomes can be ambiguous
Reference:
LO3, AC 3.1
NEW QUESTION 13
What will be the result of retaliation between business rivals in an industry?
- A. Lower profit
- B. More new entrants
- C. Greater bargaining power of suppliers
- D. Higher exit barrier
Answer: A
Explanation:
Industry rivalry-or rivalry among existing firms-is one of Porter's five forces used to deter-mine the intensity of competition in an industry. Other factors in this competitive analysis are:
- Barriers to entry
- Bargaining power of buyers
- Bargaining power of suppliers
- Threat of substitutes
Industry rivalry usually takes the form of jockeying for position using various tactics (for example, price competition, advertising battles, product introductions). This rivalry tends to increase in intensity when companies either feel competitive pressure or see an opportunity to improve their position.
In most industries, one company's competitive moves will have a noticeable impact on the competition, who will then retaliate to counter those efforts. Companies are mutually dependent, so the pattern of action and reaction may harm all companies and the industry.
Some types of competition (for example, price competition) are very unstable and negatively influence industry profitability. Other tactics (for example, advertising battles) may positively influence the industry, as they increase demand or enhance product differentiation.
References
Porter, M. (1998). Competitive Strategy. New York: Free Press. pp. 17-23.
CIPS study guide page 86-87
LO 2, AC 2.2
NEW QUESTION 14
Which of the following are typically included in a conformance specification? Select TWO that apply.
- A. Product functions
- B. Product dimensions
- C. Packaging requirements
- D. List of outcome
- E. Brand name
Answer: B,C
Explanation:
A conformance specification is a specification that defines the technical and physical characteristics and/or measurements of a product, such as physical aspects (e.g. dimensions, colour, and surface finish), design details, material properties, energy requirements, processes, maintenance requirements and operational requirements.
On the other hand, performance specification typically includes list of output or outcome or func-tional requirements. Brand name can be a part of performance specification because brand is a re-minder of quality that customers remember. For example, when talking about Roll Royce, people will think about an elegant car.
Reference:
LO 3, AC 3.1
NEW QUESTION 15
Aldar Properties is a property developer in UAE. In last month, it spent $2,160 for 10 tons of steel. In this month, it had planned 10% increment in budget for steel comparing to last month. But the number of orders boosted and total spend on steel reached $1,992.1 while Aldar has imported 11 tons. What is the main cost driver of steel budget?
- A. Inflation
- B. Price variance
- C. Quantity variance
- D. Both price and quantity variances
Answer: B
Explanation:
In this question, you have to calculate price variance and quantity variance.
Last month, 1 tonne of steel costed $216. This month, the price decreases to $181.1. Price variance = (P1 - P2)*Q2 = ($216-$181.1)*11 = $383.9 Quantity variance = (Q1-Q2)*P1 = -$216 Price variance is greater than quantity variance, therefore, price variance is the main cost driver.
LO 1, AC 1.4
NEW QUESTION 16
Which of the following statements is the best definition of 'value engineering?
- A. Value achieved by an engineering department
- B. Building value into a new product from design stage onwards
- C. Analysing perceived value after the product is available for sale
- D. Producing good value products right first time.
Answer: B
Explanation:
Value Engineering (VE) is concerned with new products. It is applied during product development. The focus is on reducing costs, improving function or both, by way of teamwork-based product evaluation and analysis. This takes place before any capital is invested in tooling, plant or equipment.
This is very significant, because according to many reports, up to 80% of a product's costs (throughout the rest of its life-cycle), are locked in at the design development stage. This is under-standable when you consider the design of any product determines many factors, such as tooling, plant and equipment, labour and skills, training costs, materials, shipping, installation, maintenance, as well as decommissioning and recycle costs.
LO 3, AC 3.4
NEW QUESTION 17
Why should the buying organisation require the supplier to carry out acceptance testing?
- A. To get the approval from the senior management
- B. To see whether the supplier engages in unethical business practice
- C. To compare between the account payables and account receivables
- D. To check whether the product matches the specification
Answer: D
Explanation:
Acceptance testing, in the context of the engineering and software industries, is a functional trial performed on a product or prototype before it is put on the market or delivered, to decide whether the specifications or contract have been met. It also makes sure the quality and design of the product meet both contractual and regulatory obligations in terms of functionality, usability, durability, and safety.
If a product is found to be unacceptable at this stage, it can be sent back for modification, debug-ging, repair, or re-design before it can become a costly undertaking for the producer, as would be the case in a product recall.
Reference:
- CIPS study guide page 134-135
- Acceptance Testing (investopedia.com)
LO 3, AC 3.2
NEW QUESTION 18
Which of the following specific markets is most likely to have the lowest entry barrier?
- A. Services
- B. Agriculture
- C. Financial
- D. Retail
- E. Manufacturing
Answer: A
Explanation:
Start-up costs are generally low in service industries, and the main requirement is a level of knowledge and skill in that particular service.
LO 2, AC 2.1
NEW QUESTION 19
Despite of better improvement rates than other types of benchmarking, functional benchmarking still has downsides. Which of the following is most likely to be a disadvantage of functional benchmarking?
- A. Benchmarking can only be undertaken within an industry
- B. Unfair competition
- C. Legal issues regarding intellectual property
- D. Difference of corporate cultures across companies
Answer: D
Explanation:
Functional benchmarking is a comparison to similar or identical practices (e.g., the picking process for assembling customer orders, maintaining inventory controls of spare computer parts, logistics to move operational forces, etc.) within the same or similar functions outside the immediate industry. Functional benchmarking might identify practices that are superior in your functional areas in whatever industry they may exist. Functional benchmarking would be accomplished at the federal level by comparing the IRS collections process against those of American Express. Comparing copper mining techniques to coal mining techniques is an example in the private sector.
Benefits
- Provides industry trend information
- Quantitative comparisons
- Better improvement rate
Challenges
- Diverse corporate cultures
- Great need for specificity
- Not invented here. syndrome
- Common functions can be difficult to find
- Takes more time than internal or percent
- Must be able to visualize how to adapt the best practices
Source: USN Benchmarking Handbook
LO 1, AC 1.3
NEW QUESTION 20
Ymira is asked to develop the specification for water purifier which will be used at the company headquarter. She believes that the specification can be drafted based on the information available on the Internet, such as blog posts, comparison websites, how-to websites, life hacks, etc. Which of the following traits will make the information more useful?
- A. Written by inexperienced author
- B. Objectivity
- C. Trustworthy sources
- D. Promotional information
- E. Subjectivity
Answer: B,C
Explanation:
Internet is a great source of information, however, information from the Internet needs to be tested for accuracy and reliability. To check the information from the Internet, a buyer can use the criteria with acronym SAMOA:
Source (of the information)
Audience (intended as the recipient of the information)
Methodology (used to collect and analyse the data)
Objectivity (of the information - there should be no bias)
Accuracy
Reference:
LO 3, AC 3.1
NEW QUESTION 21
Which of the following are most likely to increase the buyer's bargaining power?
1. Buyers are price sensitive
2. High set-up cost for new entrants
3. Threat of forward integration is high
4. Threat of backward integration is significant
- A. 2 and 4 only
- B. 1 and 4 only
- C. 3 and 4 only
- D. 2 and 3 only
Answer: B
Explanation:
Price sensitivity is the degree to which the price of a product affects consumers' purchasing behaviours. Buyer power will be stronger if buying organisation are price sensitive and vice versa.
Backward integration is a form of vertical integration in which a buying organisation expands its role to fulfil tasks formerly completed by businesses up the supply chain. Buyer power is strong if threat of backward integration is high.
Set-up cost is a determinant of threat of new entry. Some industries require very expensive assets in order to make products. The financial risk of entering the industry and not succeeding can deter many potential new entrants. The fewer new entrants, the fewer available substitutes, then the bar-gaining power of buyer can be negatively affected.
Forward integration is a business strategy that involves a form of vertical integration whereby business activities are expanded to include control of the direct distribution or supply of a compa-ny's products. Threat of forward integration is a determinant of supplier's bargaining power.
Reference:
LO 2, AC 2.2
NEW QUESTION 22
When procuring an IT equipment, at which stage the buyer's expectations are translated into a technical specification?
- A. Installation
- B. In-service support
- C. Customer support
- D. Design
Answer: D
Explanation:
IT equipment is typically linked with through-life contracts. This type of contract not only deal with the specification and the price of a machinery, but also other stages such as design, manufacture, installation, in-service support, decommission and disposal. Among these stages, the design stage is when buyer's requirements are translated into technically correct specification.
Reference:
LO 3, AC 3.2
NEW QUESTION 23
Which of the following are recognised competitive strategies?
1. Winning new business at all cost
2. Getting more customers' attention
3. Creating stand-out products and brands
4. Focusing on niche market
5. Acquiring competitors
- A. 3 and 4 only
- B. 3 and 5 only
- C. 2 and 5 only
- D. 1 and 2 only
Answer: A
Explanation:
"A firm's relative position within its industry determines whether a firm's profitability is above or below the industry average. The fundamental basis of above average profitability in the long run is sustainable competitive advantage. There are two basic types of competitive advantage a firm can possess: low cost or differentiation. The two basic types of competitive advantage combined with the scope of activities for which a firm seeks to achieve them, lead to three generic strategies for achieving above average performance in an industry: cost leadership, differentiation, and focus." (Reference: Porter, Michael E., "Competitive Advantage". 1985, Ch. 1, pp 11-15. The Free Press. New York.) Creating stand-out products and brands is considered as Differentiation. An organisation that is not clear about which of these three strategies to use is described as 'stuck in the middle' LO 2, AC 2.1
NEW QUESTION 24
One of the disadvantages of using standards in specification is that...
- A. Standards lengthen the time to produce a specification
- B. Standards tend to be rigid and they often don't encourage innovation
- C. Standards don't allow the buyers to add health and safety requirements into the specification
- D. Standards tend to be inaccurate and ambiguous, causing confusion among suppliers
Answer: B
Explanation:
Using standards in specification is very convenient. They reduce the time and effort to produce. They tend to be very accurate with correct technical terminologies. They are well recognised and accepted by a wide range of suppliers and buyers. However, since a standard is very specific, complex and lengthy, it requires a lot of time to be drafted and approved. Therefore, standard tends to be static and don't encourage innovation. It may also not accommodate latest technology and trends.
Reference:
LO 3, AC 3.1
NEW QUESTION 25
Which of the following is the disadvantage of embedding standards in a specification?
- A. Standards are too flexible and may cause ambiguity in the specification
- B. Standards are too static and discourage innovation
- C. Embedding standards into specification requires enormous time and effort
- D. Standards do not improving buyer's bargaining power
Answer: B
Explanation:
"Standards are often produced by professional bodies (maybe national or international bodies). Standards tend to be stable for a period of time, therefore, they are likely to be static and discourage innovation." Reference:
LO 3, AC 3.1
NEW QUESTION 26
......
L4M2 Certification Overview Latest L4M2 PDF Dumps: https://www.passreview.com/L4M2_exam-braindumps.html
Top CIPS L4M2 Exam Audio Study Guide! Practice Questions Edition: https://drive.google.com/open?id=1uWwN-47uzEvp5Pnx_MPQ_pfTyP0YZUqH