[Q92-Q108] Use the best ways of preparing for L4M2 Exam Dumps with PrepAwayExam CIPS L4M2 PDF Dumps [2025]

QUESTION 92
Company A sells a product for $100. The total unit variable costs are $60. Fixed costs as in its ac-count are $20,000. How many products does the company have to sell to achieve break-even point?

600

550

400

500

QUESTION 93
A purchaser is looking for alternative supplies if there is a major disruption to their supply chain, including logistics, manufacturing and all support services. Which of the following method is that purchaser applying?

Treat the risk

Terminate the risk

Tolerate the risk

Transfer the risk

QUESTION 94
Builder Inc is a rapidly expanding business in construction sector. Due to an increase in projects, it cannot manage the flow of materials by Excel spreadsheets but by more dedicated software. Who would be a key internal stakeholder in defining software compatibility with company’s current system?

Procurement team

IT team

Executive team

Finance team

QUESTION 95
Which of the following activities would apply to a straight rebuy procurement?
* Reviewing existing specifications and arrangements
* Engaging in extensive purchasing research
* Engaging in proactive value engineering
* Optimising inventory replenishment methods

1 and 4 only

2 and 3 only

1 and 3 only

2 and 4 only

QUESTION 96
Which of the following problems may be identified as open-ended problems? Select TWO that apply:

Shortage of key medicines in healthcare industry

A cyber attack takes down whole company’s IT system

Engine failures cause flight cancellations.

Logistics costs incur a large portion in wholesale prices

The suppliers don’t comply with the company’s policy on underage labour.

QUESTION 97
A consulting firm in London had previously had static budgets. They were set once and locked in for the year. This resulted in departments meeting their budgets early and doing virtually nothing the rest of the accounting period. To address this imbalance, the company tossed out the static budget and developed a new one for each department of the next 18 months. And each month, real sales figures are analyzed against the plan and the budget is adjusted accordingly. Then the company adds another month into the budgeting plan. What type of budget this company is using?

Activity-based budget

Rolling budget

Incremental budget

Zero-based budget

QUESTION 98
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?

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

Yes, the company has extensive experience in purchasing tractor

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

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

QUESTION 99
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?

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

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

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

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

QUESTION 100
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

QUESTION 101
What are the direct risks that can result from procurement receiving inadequate specifications from a research and development department?

Increased business size

Under or over delivery of goods

Increased labour costs

Under or over statement of need

QUESTION 102
Total cost of ownership of a solar panel is $5,000 and it is expected that the panel will make a sav-ing of $1,000 each year. So it would take 5 years for the benefits to repay the investment. Therefore, the firm plans to keep the solar panel for at least 5 years. Is payback period calculation right for making the business decision?

Yes, because it takes everything into account

No, because payback period can be only used to calculate the depreciation of a fixed asset

No, because payback period doesn’t take into account price fluctuations

Yes, because payback period shows how long the firm recovers the investment

QUESTION 103
Andrew is responsible for procurement of capital assets at Lumber Ltd. He is devising new business case for the purchase of a new band saw. The purchase price of the saw is $50,000. Andrew estimates that the machine will generate $10,000 per year of net cash flow. What is the payback period of this band saw?

10 years

5 years

3 years

4 years

QUESTION 104
Dana is an automobile manufacturer. It has a new electrification strategy that aims at making eco-friendly electric pick-up trucks. To implement this strategy, the procurement department must source new categories of parts that make motors, sensors, solenoids and stators. He starts to analyse the market by identifying specific supply market segments for those parts and finding suppliers who have the best capabilities in those segment. He intends to segment the market based on specific features of the products. Which variable is used by Dana procurement manager to shape and manage supply market?

Buyer segments

Channel segments

Geographical segments

Product segments

QUESTION 105
A market has a considerable number of buyers and suppliers. Analysis of the market reveals that loyalty from buyers is relatively low and switching to alternative providers is commonplace. Which of the following market characteristics is supporting this type of buyer behaviour?

Supplier bargaining strength

Barriers to market entry

Increasing use of technology

The availability of substitute products

QUESTION 106
Which of the following bodies provides standards for the products and services in the US?

ISO

ANSI

AFNOR

BSI

QUESTION 107
OMK is a Russian steel firm that is expanding market abroad. It plans to build a steel plant in a foreign country. Due to intricate technical requirements, the plant design will be very complex. Procurement department or technical department alone cannot draft the specification. OMK senior management decides that this task must be treated as a project. Which of the following should be done before writing the specification for new steel plant?

Develop the performance framework for the supplier

Draft the terms and conditions for plant construction contract

Invite suppliers to the tendering process

Develop project initial document

The writing of a complex specification should be treated as a project because it requires the brain power from different stakeholders. Many tools and processes of project management can be applied to complex specification development. Before engaging with the stakeholders and implementing the project, the project initial document should developed.
A Project Initiation Document (PID) is one of the most important components of project manage-ment, which forms the foundation for a company project. It is a reference point during the entire project, for the client as well as for the project team.
A PID bundles documentation into a logical reference work that collects all important information needed to start and run a project from a good foundation. After that, Project Initiation Document must be transferred to all stakeholders, including business sponsors.
This forms the basis for the project management. The documentation from which the PID is com-posed include the business case in which the project’s justification can be found, the communica-tion plan and the project plan.
The PID is composed out of collected information and includes, among others, the following com-ponents:
– Project goal(s); what do you want to achieve with the project?
– Project size; how large is the project, how long does it take and how many people are involved?
– Project organisation; who are involved in the project, what are their tasks, responsibilities and authority?
– Limits and risks; what can cause a project to stagnate and are there risks related to the project?
– Stakeholders; who has a stake in the success of the project?
– Project checks and frame reporting; by carefully taking into account evaluation moments, it is clear to everyone what sample tests can be carried out during the process.
In addition, it is important that the Project Initiation Document also contains the following infor-mation:
– The background and occasion of the project, which together provide information about the con-text.
– The project organisational structure, which describes who has which management responsibility in the project.
– The project quality plan, describing who controls the quality of the products to be delivered and how it will take place.
– The total project planning, including the duration of all activities.
– The exception process, which describes how exceptions are dealt with and the steps of the escalation procedure.
– The risk log, including the measures that will be taken when there are unforeseen risks.
– The documentation structure of the project, in which the encoding and storage of all documents and products to be provided by the project has been recorded in advance.

QUESTION 108
Which of the following are ‘secondary sources’ of data for costs and prices?
* Industry press
* Published economic indices
* Trade fairs
* Buyer’s database on market data

1 and 2 only

2 and 3 only

1 and 4 only

3 and 4 only

Prepaway Exam Dumps

[Q92-Q108] Use the best ways of preparing for L4M2 Exam Dumps with PrepAwayExam CIPS L4M2 PDF Dumps [2025]

Leave a Reply Cancel reply