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Title: Exam Dumps L4M2 Demo & New L4M2 Test Objectives [Print This Page]
Author: craigbo369    Time: 1/15/2026 10:25
Title: Exam Dumps L4M2 Demo & New L4M2 Test Objectives
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CIPS Defining Business Needs Sample Questions (Q255-Q260):NEW QUESTION # 255
After a project, the procurement team at CLK Ltd meets up and summarises on the performance. They see that they actually spent $5,000 less than planned budget. The team tries to identifies why there is such difference. This activity is known as...?
Answer: D
Explanation:
The procurement team in the scenario is analysing the difference between the plan and actual spend. This activity is known as variance analysis. The sum of all variances gives a picture of the overall over-performance or under-performance for a particular reporting period. For each item, companies assess their favorability by comparing actual costs to standard costs in the industry.
For example, if the actual cost is lower than the standard cost for raw materials, assuming the same volume of materials, it would lead to a favorable price variance (i.e., cost savings). However, if the standard quantity was 10,000 pieces of material and 15,000 pieces were required in production, this would be an unfavorable quantity variance because more materials were used than anticipated.
Reference:
- CIPS study guide page 57-58
- Variance Analysis - Learn How to Calculate and Analyze Variances (corporatefinanceinsti-tute.com) LO 1, AC 1.4

NEW QUESTION # 256
Buyer power may make a supply market more competitive. Which of the following are examples of buyer power? Select TWO that apply.
Answer: B,E

NEW QUESTION # 257
The procurement team of an IT hardware manufacturer has been set a target by senior management to reduce the rates paid to the sole supplier of a new and innovative power-saving battery. Which action should the procurement team first consider?
Answer: B
Explanation:
Detailed Explanationual or multiple sourcing introduces competition, reducing the sole supplier's bargaining power and leading to cost reductions. Framework agreements (A) or economies of scale (D) may not address the immediate need to reduce rates. Reference: CIPS Level 4, Sourcing Strategies.

NEW QUESTION # 258
Which of the following are typically reasons why an organisation implements value analysis? Select TWO that apply:
Answer: E
Explanation:
Value analysis is a systematic review of the production, purchasing and product design processes to reduce overall product costs. This can be accomplished through a variety of activities, including the following:
- Designing products to use lower-tolerance parts that are less expensive
- Switching to lower-cost components
- Standardizing parts across product platforms in order to achieve volume discounts
- Altering production processes to minimize the amount of production cycle time, thereby reducing labor costs
- Introducing automation to strip labor costs out of the production process
- Altering product packaging to lower its cost while still protecting the product The process is not a wholesale attack on costs. Costs are only reduced when the result will not im-pact the perceived level of quality experienced by customers, or the level of customer satisfaction.

NEW QUESTION # 259
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?
Answer: A
Explanation:
Break even point = Fixed costs/(Price-variable cost). In this case, break even point = 20,000/(100-60) = 500 Reference: CIPS study guide page 28-29 LO 1, AC 1.2

NEW QUESTION # 260
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