Ace CIPS L4M2 Certification with Actual Questions Sep 27, 2025 Updated [Q65-Q85]

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Ace CIPS L4M2 Certification with Actual Questions Sep 27, 2025 Updated

2025 The Most Effective L4M2 with 239 Questions Answers

CIPS L4M2 exam is designed for individuals who have experience in business analysis or related fields. It is also suitable for those who wish to develop their skills and knowledge in this area. L4M2 exam is ideal for those who wish to enhance their career prospects by demonstrating their expertise in defining business needs. It is also valuable for organizations that wish to ensure that their business analysis professionals have the necessary skills and knowledge to effectively define business needs.

NEW QUESTION 65
Which kind of these following costs belong to fixed costs? Select TWO that apply.

Energy consumption in manufacturing

The annual income tax charged by local authorities

The packaging and distribution costs

The depreciation of capital inputs

The costs of leasing or purchasing capital equipment

NEW QUESTION 66
The bargaining strength of suppliers is likely to be high in which of the following situations? Select TWO that apply:

The buyer is educated on supply markets

There is a limited number of suppliers in relation to buyers

The buyer is large in size relative to the supplier

The buyer spend is a high proportion of a supplier’s revenue

The buyer requirement is urgent

NEW QUESTION 67
At which stage of through-life contract management, procurement team needs to identify sources of risk and the ways to mitigate them?

Specification stage

Supplier relationship stage

Tendering stage

Contracting stage

NEW QUESTION 68
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 69
Which of the following are typically reasons why an organisation implements value analysis? Select TWO that apply:

To determine the value of each component used

To decide whether there will be sufficient surplus funds to reinvest in the business

To shape and manage supply market

To provide an outline business case for the specification

To find cost reduction opportunities by optimising the components used

NEW QUESTION 70
Which of the following market sectors is largely commodity-dependent, impacted by food standards and public health, impacted by climate change and population change, and driven by technology to improve production yield?

Finance

Services

Agriculture

Retail

NEW QUESTION 71
Bob is a new procurement specialist at XYZ Ltd. He is assigned to categorise the company’s sup-plies. After analysing, Bob realises that a group of low value products is sourced from a tiny geo-graphical area which is prone to flooding. What would be the best strategy to manage this category of products?

Source this group of products from only one supplier

Find an alternative source to secure supply

Assign some of procurement jobs to user department

Form partnership relationship with the current supplier

NEW QUESTION 72
Which of the following is the technology that disrupts traditional retail?

Self-Driving Cars

Blockchain

E-commerce

Robotics

NEW QUESTION 73
Why should the buying organisation require the supplier to carry out acceptance testing?

To get the approval from the senior management

To check whether the product matches the specification

To compare between the account payables and account receivables

To see whether the supplier engages in unethical business practice

NEW QUESTION 74
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

NEW QUESTION 75
Buyers in the same industry with the same understanding of relative value and price may still make different decisions about whether to switch. Which of the following factors may prompt a buying organization to incline toward substitute products?
1. There is potential for backward integration
2. Access to financial resources
3. The switching cost is high
4. The substitute fits organisation’s strategy

1 and 4 only

3 and 4 only

1 and 2 only

2 and 4 only

The threat of substitution is a function of three factors:
* The relative value/ price of a substitute compared to an industry’s product
* The cost of switching to the substitute
* The buyer’s propensity to switch
Buyers with different circumstances and in different industries do not all have equal propensities to substitute when faced with a comparable economic motivation. Differences in their circumstances lead buyers to respond to a given relative value to price (RVP) and switching cost differently. While such differences might be treated as factors that modify RVP or switching costs, it is more helpful in practice to isolate them.
Resources. Substitution often involves up-front investments of capital and other resources. Access to such resources will differ from one buyer to another.
Risk Profile. Buyers often have very different risk profiles, the result of such things as their past history, age and income, ownership structure, background and orientation of management, and nature of competition in their industry. Buyers prone to risk taking are more likely to substitute than buyers that are risk-averse.
Technological Orientation. Buyers experienced with technological change may be less concerned with some kinds of substitution risks, while extremely aware of others that a less technologically sophisticated buyer would be oblivious to.
Previous Substitutions. The second substitution may be easier for a buyer than the first, unless the first substitution has been a failure. The buyer’s uncertainties over undertaking a substitution may have diminished if a past substitution has been successful, or risen if a past substitution has led to difficulties. In the soft drink industry, this seems to have worked to the benefit of aspartame.
Intensity of Rivalry. Buyers under intense competitive pressure and searching for competitive ad-vantage will tend to substitute more quickly to gain a given advantage than those that are not.
Generic Strategy. The RVP of a substitute will have different significance depending on the com-petitive advantage that industrial, commercial, or institutional buyers are seeking or the value of time and particular performance needs of the household buyer. A substitute that offers a cost saving will tend to be of more interest to a cost leader than a differentiator, for example.
Many of these factors that shape the buyer’s propensity to substitute will be a function of the particular decision maker who is involved in the purchase decision.
Porter, Michael E.. Competitive Advantage: Creating and Sustaining Superior Performance (p. 278-289). Free Press. Kindle Edition.
Reference:
LO 2, AC 2.2

NEW QUESTION 76
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 77
Which of the following problems may be identified as closed problems? Select TWO that apply:

There are not enough data for procurement analytics

A cyber attack takes down whole company’s IT system

Shortage of key medicines in healthcare industry

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

Logistics costs incur a large portion in wholesale prices

NEW QUESTION 78
Aldar Properties is a property developer in UAE. In last month, it spent $2,160 for 10 tons of steel. In this month, it had planned 10% increment in budget for steel comparing to last month. But the number of orders boosted and total spend on steel reached $1,992.1 while Aldar has imported 11 tons. What is the main cost driver of steel budget?

Both price and quantity variances

Inflation

Quantity variance

Price variance

NEW QUESTION 79
Which of the following are typical environmental considerations throughout the contract life cycle? Select the TWO that apply.

Modern slavery

Health and safety

Inequality

Waste management

Pollution control

NEW QUESTION 80
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

NEW QUESTION 81
Thani Ltd is a fast growing logistics company with a fleet of 20 tractors. To meet Net Zero objec-tive, the company needs to electrify its fleet. Angelica is assigned to investigate the market price of electrifying services. After the investigation, she realises that the current market price is very expensive and unsustainable for her company. She decides to break down the costs before negotiating with the suppliers. Which internal stakeholders may help Angelica estimate the breakdown of costs? Select TWO that apply.

Sales and Marketing department

Engineering department

Finance department

Commercial agency

Suppliers

NEW QUESTION 82
A company is evaluating two investment projects: Project A and Project B. Project A has a high initial cost but generates substantial cash flows over time. Project B has a lower initial cost but generates modest cash flows consistently. The company’s cost model indicates a payback period of three years for Project A and a payback of four years for Project B. Which of the following statements is correct regarding the cost models and cash flow profiling for these projects?

Project A has a shorter payback period, making it a quicker return on investment compared to Project B

Project A’s higher initial cost is a disadvantage, and its payback period should be extended for better profitability

Project B’s lower initial cost allows for faster profit realisation, making it the better investment choice

Project B’s modest and consistent cash flows make it a risky investment option due to a longer payback period

NEW QUESTION 83
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

NEW QUESTION 84
Which of the following is an useful tool for value engineering?

SAMOA

Kraljic Portfolio Matrix

Star-burst method

Kano model

NEW QUESTION 85
Which of the following areas is specified by ISO/IEC 27001 family?

The dimensions and associated tolerances for a series of housings for piston seals

The requirements for an information security management system

Evaluation and assessment of mutual agreed customer food safety requirements

The requirements for an environmental management system

CIPS L4M2 (Defining Business Needs) certification exam is an excellent opportunity for business analysts and other professionals to demonstrate their expertise in defining business needs and requirements. By earning this credential, they can enhance their career prospects and contribute more effectively to the success of their organization.

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