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Pass Guaranteed 2025 Unparalleled L4M2: Defining Business Needs Study Plan

Nowadays in this talented society L4M2 professionals are very popular, but the ICIPS area are also very competitive. So many CIPS professionals through passing difficult L4M2 Certification exams to stabilize themselves. ActualTestsIT is websites specifically provide convenience for candidates participating in the L4M2 certification exams.

CIPS L4M2 Certification Exam is suitable for professionals who are involved in the procurement and supply chain management field, including procurement officers, supply chain managers, business analysts, and project managers. L4M2 exam is designed to assess the candidate's ability to identify and define business needs, and to develop effective strategies to meet those needs. L4M2 Exam consists of 60 multiple-choice questions, and candidates have two hours to complete it. Successful candidates will be awarded the CIPS L4M2 Certification, which is a valuable credential that demonstrates their expertise in defining business needs and developing effective procurement strategies.

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CIPS Defining Business Needs Sample Questions (Q234-Q239):

NEW QUESTION # 234
Which of the following can cause overhead variance? Select TWO that apply:

A. Decrease in production volume
B. Decreasing packaging costs
C. Rising production worker's wage rate per hour
D. Spike in monthly leasing fee
E. Spike in material price

Answer: A,D

Explanation:
Overhead variances arise when the actual overhead costs incurred differ from the expected amounts. Managers want to understand the reasons for these differences, and so should consider computing one or more of the overhead variances described below. Each of these variances applies to a different aspect of overhead expenditures. It is not necessary to calculate these variances when a manager cannot influence their outcome.
Fixed Overhead Spending Variance
The fixed overhead spending variance is the difference between the actual fixed overhead expense incurred and the budgeted fixed overhead expense. An unfavorable variance means that actual fixed overhead expenses were greater than anticipated. The formula for this variance is:
Actual fixed overhead - Budgeted fixed overhead = Fixed overhead spending variance The amount of expense related to fixed overhead should (as the name implies) be relatively fixed, and so the fixed overhead spending variance should not theoretically vary much from the budget.
Fixed Overhead Volume Variance
The fixed overhead volume variance is the difference between the amount of fixed overhead actually applied to produced goods based on production volume, and the amount that was budgeted to be applied to produced goods. For example, a company budgets for the allocation of $25,000 of fixed overhead costs to produced goods at the rate of $50 per unit produced, with the expectation that 500 units will be produced. However, the actual number of units produced is 600, so a total of $30,000 of fixed overhead costs are allocated. This creates a fixed overhead volume variance of $5,000.
Variable Overhead Efficiency Variance
The variable overhead efficiency variance is the difference between the actual and budgeted hours worked, which are then applied to the standard variable overhead rate per hour. The formula is:
Standard overhead rate x (Actual hours - Standard hours)
= Variable overhead efficiency variance
A favorable variance means that the actual hours worked were less than the budgeted hours, resulting in the application of the standard overhead rate across fewer hours, resulting in less expense being incurred. However, a favorable variance does not necessarily mean that a company has incurred less actual overhead, it simply means that there was an improvement in the allocation base what was used to apply overhead.
Variable Overhead Spending Variance
The variable overhead spending variance is the difference between the actual and budgeted rates of spending on variable overhead. The variance is used to focus attention on those overhead costs that vary from expectations. The formula is:
Actual hours worked x (Actual overhead rate - standard overhead rate)
= Variable overhead spending variance
A favorable variance means that the actual variable overhead expenses incurred per labor hour were less than expected.
In the study guide, CIPS splits overhead variance into volume and expenditure variance. They can be understood as variable and fixed overhead variance respectively.
Reference:
- CIPS study guide page 59
- What are overhead variances? - AccountingTools
LO 1, AC 1.4

NEW QUESTION # 235
Which of the following is the disadvantage of embedding standards in a specification?

A. Embedding standards into specification requires enormous time and effort
B. Standards do not improving buyer's bargaining power
C. Standards are too flexible and may cause ambiguity in the specification
D. Standards are too static and discourage innovation

Answer: D

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 # 236
What are the direct risks that can result from procurement receiving inadequate specifications from a research and development department?

A. Increased labour costs
B. Increased business size
C. Under or over statement of need
D. Under or over delivery of goods

Answer: D

NEW QUESTION # 237
What will be the result of retaliation between business rivals in an industry?

A. Higher exit barrier
B. More new entrants
C. Lower profit
D. Greater bargaining power of suppliers

Answer: C

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 # 238
Which of the following activities are considered as primary activities of an organization according to Porter's value chain? Select TWO that apply:

A. Picking and delivery components
B. Trainees recruitment
C. Maintenance
D. Assembly design
E. Sourcing transportation services

Answer: A,C

Explanation:
Primary activities consist of inbound logistics, operations, outbound logistics, sales & marketing, service.
Second activities consist of firm infrastructure, human resource management, technology development and procurement The following graph illustrate the value chain (Source: Smartsheet) Graphical user interface, diagram Description automatically generated

Picking and delivery components is inbound logistics.
Maintenance is an example of operations activity.
Sourcing transportation services is an activity of procurement
Assembly design is an activity in research and development (Technology) Recruiting is an activity of human resource management

NEW QUESTION # 239
......

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