CIPS L4M2 Exam Topics

CIPS L4M2 Exam

Defining Business Needs

Total Questions: 145

Last Updated : 19-04-2024

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CIPS L4M2 Exam Overview :

Exam Name	Defining Business Needs
Exam Code	L4M2
Official Information	https://www.cips.org/qualifications/diploma-in-procurement-supply/def%C4%B1ning-business-need
See Expected Questions	CIPS L4M2 Expected Questions in Actual Exam
Take Self-Assessment	Use CIPS L4M2 Practice Test to Assess your preparation - Save Time and Reduce Chances of Failure

CIPS L4M2 Exam Topics :

Section	Objectives
1.0 Understand how to devise a business case for requirements to be sourced from external suppliers	1.1 Analyse how business needs influence procurement decisions Type of purchase such as new purchase, modified rebuy, straight re-buy Implications of the business needs on the types of purchase Procurement’s role in developing a business case 1.2 Identify how costs and prices can be estimated for procurement activities Types of market data that can provide information on costs and prices Direct and indirect costs Producing estimated costs and budgets Approaches to total costs of ownership/whole life cycle costing 1.3 Analyse the criteria that can be applied in the creation of a business case Examples of criteria typically applied in the production of a business case: costs, benefits, options, alignment with organisational needs and timescales Benchmarking requirements 1.4 Interpret financial budgets for the control of purchases The purpose of financial budgets Cost entries and timings of cash flows Performance and control of budgets Dealing with variances to budget
2.0 Understand market management in procurement and supply	2.1 Analyse the different types of markets utilised by procurement and supply Such as: Manufacturing Construction Retail Financial Agriculture Services 2.2 Compare the competitive forces that influence markets Bargaining strength of suppliers and buyers, Availability of substitutes and threat of entry 2.3 Contrast the breakdown between direct and indirect costs and the types of data that can provide information on cost and price Collate sources of information to estimate the breakdown of costs between direct and indirect costs for purchased goods and services Use information to prepare budgets or to negotiate prices Research market data and use to estimate and negotiate current and future prices and costs for purchased goods and services
3.0 Understand the use of specifications in procurement and supply	3.1 Analyse different types of specifications used in procurement and supply and sources of information that can be used to create specifications Drawings, samples, branded, technical Conformance specifications Output or outcome, statement of work based specifications Standards The internet Suppliers Directories 3.2 Identify sections of specifications for through life contracts Scope Definition Description of requirement Testing and acceptance Change control mechanisms and remedies Social and environmental criteria 3.3 Identify the risks that can result from inadequate specifications and mitigation approaches Under or over specified need Monitor specification creation by colleagues and other internal stakeholders 3.4 Identify opportunities to regulate short and longer term specifications Implement standardisation Value analysis Value engineering Provide guidance to internal stakeholders on implementation

Section

Objectives

1.0 Understand how to devise a business case for requirements to be sourced from external suppliers

1.1 Analyse how business needs influence procurement decisions

Type of purchase such as new purchase, modified rebuy, straight re-buy
Implications of the business needs on the types of purchase
Procurement’s role in developing a business case

1.2 Identify how costs and prices can be estimated for procurement activities

Types of market data that can provide information on costs and prices
Direct and indirect costs
Producing estimated costs and budgets
Approaches to total costs of ownership/whole life cycle costing

1.3 Analyse the criteria that can be applied in the creation of a business case

Examples of criteria typically applied in the production of a business case: costs, benefits, options, alignment with organisational needs and timescales
Benchmarking requirements

1.4 Interpret financial budgets for the control of purchases

The purpose of financial budgets
Cost entries and timings of cash flows
Performance and control of budgets
Dealing with variances to budget

2.0 Understand market management in procurement and supply

2.1 Analyse the different types of markets utilised by procurement and supply Such as:

Manufacturing
Construction
Retail
Financial
Agriculture
Services

2.2 Compare the competitive forces that influence markets

Bargaining strength of suppliers and buyers,
Availability of substitutes and threat of entry

2.3 Contrast the breakdown between direct and indirect costs and the types of data that can provide information on cost and price

Collate sources of information to estimate the breakdown of costs between direct and indirect costs for purchased goods and services
Use information to prepare budgets or to negotiate prices
Research market data and use to estimate and negotiate current and future prices and costs for purchased goods and services

3.0 Understand the use of specifications in procurement and supply

3.1 Analyse different types of specifications used in procurement and supply and sources of information that can be used to create specifications

Drawings, samples, branded, technical
Conformance specifications
Output or outcome, statement of work based specifications
Standards
The internet
Suppliers
Directories

3.2 Identify sections of specifications for through life contracts

Scope
Definition
Description of requirement
Testing and acceptance
Change control mechanisms and remedies
Social and environmental criteria

3.3 Identify the risks that can result from inadequate specifications and mitigation approaches

Under or over specified need
Monitor specification creation by colleagues and other internal stakeholders

3.4 Identify opportunities to regulate short and longer term specifications

Implement standardisation
Value analysis
Value engineering
Provide guidance to internal stakeholders on implementation

Updates in the CIPS L4M2 Exam Topics:

CIPS L4M2 exam questions and practice test are the best ways to get fully prepared. Study4exam's trusted preparation material consists of both practice questions and practice test. To pass the actual Level 4 Diploma in Procurement and Supply L4M2 exam on the first attempt, you need to put in hard work on these questions as they cover all updated CIPS L4M2 exam topics included in the official syllabus. Besides studying actual questions, you should take the CIPS L4M2 practice test for self-assessment and actual exam simulation. Revise actual exam questions and remove your mistakes with the Defining Business Needs L4M2 exam practice test. Online and Windows-based formats of the L4M2 exam practice test are available for self-assessment.

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