[Feb 24, 2025] Fully Updated CIPS Level 4 Diploma in Procurement and Supply (L4M2) Certification Sample Questions [Q37-Q61]

NEW QUESTION 37
Which of the following are typical social considerations throughout the contract life cycle? Select the TWO that apply.

Using recycled materials

Minimizing use of non-renewable resources

Support small local businesses

Managing waste

Health and safety

NEW QUESTION 38
Which of the following provides in-depth detail for both functional and non-functional require-ments and covers assumptions, constraints, performance, dimensions, weights and reliability of a product?

Performance specification

Tolerance

Statement of work

Design specification

NEW QUESTION 39
What is the contribution of marketing function to the development of specification?

Marketing ensures that conformance specification will never be used

Marketing ensures that procurement function doesn’t involve in developing specification

Marketing provides ideas on customer’s taste and market trends

Marketing consults on technical requirements of the product

NEW QUESTION 40
When should procurement professional tolerate a risk?

When the risk may disrupt the production

When the risk imposes an existential threat

When the risk causes some trivial annoyance

When the risk breaks the relationship with the strategic supplier

NEW QUESTION 41
A company department is writing a business case to justify the purchase of an expensive piece of capital equipment. Which of the following should be included in the business case?
* Terms and conditions of contract
* Tender evaluation criteria
* Degree of added value
* Financial plan

1 and 2 only

2 and 3 only

3 and 4 only

1 and 4 only

NEW QUESTION 42
A CPO is analyzing whole life cycle costing of a machinery. He realises that cost elements are not specific but come from a range of values. Which whole-life costing model should the CPO use to get the most accurate total cost of ownership?

Simulation models

Optimisation models

Decision support models

Kraljic’s preferencing model

NEW QUESTION 43
Warwickshire Ambulance Service (WAS) is an NHS Trust. It operates throughout Warwickshire and the neighbouring areas. It has three core areas of activity, namely the provision of Emergency Ambulance Services, routine Patient Transport Services, and Logistic Medical Services. The agency is working towards higher service level through benchmarking. Which of the following is the benefit of benchmarking to WAS?

Benchmarking is a panacea for all WAS’s problems

It will help WAS create performance standards derived from an analysis of the best in business

It helps WAS identify better ways to deliver service through a cookbook process

It will help WAS analyse the competitors in the industry

NEW QUESTION 44
A procurement manager consolidates the company expense on printing and office supplies into broader range of spend category. Other senior managers are concerned that it may increase company’s spend. Is that concern justified?

No, because the broader range of spend category can increase the value of the contract and the buyer may get volume discount

Yes, because the consolidation may create a large contract that costs more than placing each purchase order

No, because the consolidation will help the supplier to shorten deliver time.

Yes, because the suppliers can’t provide a broader range of products and they will fail to deliver

NEW QUESTION 45
Which of the following might be the consequences of under-specification? Select TWO that apply:

Unfit products or services

Few suppliers can supply the full range of features

Poor competition between suppliers

Additional cost to rework

Higher cost due to inessential features

NEW QUESTION 46
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

2 and 4 only

3 and 4 only

2 and 3 only

1 and 4 only

NEW QUESTION 47
Why is the specification considered as the most important document in procurement?

It provides a mean to appraise the performance of supplier

It helps the buyer to gain at supplier’s loss

It eliminates all possible supply risks

It always shifts the balance of bargaining power in favour of the buyer

NEW QUESTION 48
Which of the following is the process for improving the value of a new product or service?

Value engineering

Porter’s Five Forces

Planning and design

Value analysis

NEW QUESTION 49
Which of the following methods will enable a company to eliminate waste, lost time and lost material from its processes?

Lean principles

Over specification

Agile principles

Tendering process for routine items

NEW QUESTION 50
One of the disadvantages of using standards in specification is that…

Standards lengthen the time to produce a specification

Standards tend to be rigid and they often don’t encourage innovation

Standards don’t allow the buyers to add health and safety requirements into the specification

Standards tend to be inaccurate and ambiguous, causing confusion among suppliers

NEW QUESTION 51
Category buyer Raheem has been tasked with receiving innovative bids from coaching and development service providers. How can he achieve this? Select TWO that apply.

Apply early supplier involvement

Invite a small group of suppliers

Use a conformance-based specification

Use an outcome-based specification

Apply standards within the specification

NEW QUESTION 52
In Kano model, which of the following types of requirement should be excluded from the product or service?

Must-be requirements

Performance requirements

Attractive requirements

Reverse requirements

Kano model of excitement and basic quality (Kano et al, 1984; Berger et al, 1993; Matzler et al, 1996) brings a different perspective for the analysis of improvement opportunities in products and services because it takes in consideration the asymmetrical and non-linear relationship between performance and satisfaction. The Kano model classifies customers requirements in three categories (figure 3):
a) Basic Requirements (or Must-be requirement). The basic requirements fulfill the basic func-tions of a product. If they are not present or their performance is insufficient, customers will be extremely dissatisfied. On the other hand, if they are present or have sufficient performance, they don’t bring satisfaction. Customers see them as prerequisites. For instance, for luxury automobiles, “air bags” are considered basic. A customer won’t feel satisfied if the automobile has “air bag”, however he/she will not buy it if “air bag” is not present.
b) Performance Requirements (or One-dimensional requirements). As for these requirements, satisfaction is proportional to the performance level – the higher the performance, the higher the customer’s satisfaction will be and vice-versa. Gas consumption in automobiles is an example of these requirements. Usually customers explicitly demand performance requirements.
c) Excitement Requirements (or Attractive requirements). These requirements are key to cus-tomer satisfaction. If they are present or have sufficient performance, they will bring superior satisfaction. On the other hand, if they are not present or their performance is insufficient, customers will not get dissatisfied. For instance, a surprise gift at the end of a dinner in a restaurant will certainly bring satisfaction, but it will not cause dissatisfaction if not offered. These requirements are not demanded nor expected by customers.
Two other types of requirements may be identified in the Kano model: neutral and reverse ones. Neutral requirements do not bring either satisfaction or dissatisfaction. Reverse require-ments bring more satisfaction if absent than if present.

Reference:
– Integrating Kano model and QFD for Designing New Products
– CIPS study guide page 171-172

NEW QUESTION 53
According to Porter’s value chain, which of the following activities is categorised as support activity?

Product warranties and special services

Storage of raw materials

Distribution of products from factory to retailer

Supervising the production line

Develop digital SRM technology to manage suppliers better

NEW QUESTION 54
The procurement team of a global supermarket has created a business case for a corporate social responsibility (CSR) sourcing strategy to meet the corporate objective of sustainability. This would require sourcing only from suppliers who meet ethical standards, a reduction in plastic, and using recycled material where possible. Which of the following business benefits would be mentioned in the business case? Select TWO that apply:

Fulfilment of a business objective

Increased capacity

Leverage of technology

Improved brand equity

Reduced cost

NEW QUESTION 55
Facing fiercer competition at home and abroad, IKEA, the leading furniture retailer, needs to im-prove its competitiveness. In order to do this, IKEA must decrease operating costs and improve quality of current and new retail stores. The company establishes a project team. The job of the team is to collect data on performance from multiple stores in several countries, then select the best performing one. The team will work closely with best performing store and study its processes. After the research, the team will recommend best practices to other retail stores. IKEA management can also apply these practices to new stores in the future. Which of the following correctly describe the process undertaken by IKEA project team?

Internal benchmarking

Competitive benchmarking

Internal audit

Site visit

NEW QUESTION 56
Which of the following are typical examples of secondary sources of market data? Select TWO that apply.

Communication with suppliers

Published market analysis

Trade fairs and exhibitions

Price comparison websites

Supplier marketing publications

NEW QUESTION 57
Which of the following statements is the best definition of ‘value engineering?

Analysing perceived value after the product is available for sale

Building value into a new product from design stage onwards

Producing good value products right first time.

Value achieved by an engineering department

NEW QUESTION 58
To improve the productivity, Plantation Ltd is planning to purchase a tractor, which it has never bought before. The project must be quick to catch up with the next growing season. Leanne, a jun-ior procurement staff at the company, assumes that she could skip market analysis stage to save time. Is this assumption reasonable?

No, the company assesses supplier’s performance solely based on market analysis

Yes, Leanne just needs to purchase the tractor from her friend’s company

No, market analysis will inform the company of the pricing as well as latest technology trends

Yes, the company has extensive experience in purchasing tractor

NEW QUESTION 59
Which of the following is the best definition of target costing?

The net present cost of the purchase or project and all future revenues flowing from it discounted back to the present time.

The total of all costs in acquiring goods or services from the inception of the demand for them until their safe and satisfactory delivery at the point required.

The cost of a product after analysing its components step by step

A product cost estimate derived from a competitive market price.

NEW QUESTION 60
Which of the following activities are considered as primary activities of an organization according to Porter’s value chain? Select TWO that apply:

Maintenance

Picking and delivery components

Sourcing transportation services

Trainees recruitment

Assembly design