CIPS : L4M2 Questions & Answers
Updated: Nov 10, 2026
No. of Questions: 320 Questions & Answers with Testing Engine
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CIPS L4M2 Exam Syllabus Topics:
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Reference: https://www.cips.org/qualifications/diploma-in-procurement-supply/def%C4%B1ning-business-need
CIPS Defining Business Needs Sample Questions:
A company buys components from its supplier. However, the supplier has not sent the invoice to the buyer and the buyer will not pay until next month. How will that amount of money be shown in the financial statements of the buying organization?
- A. Tax liabilities
- B. Accrued interest
- C. Accrued expense
- D. Accounts payable
Correct Answer: C 🗳️
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Facing fiercer competition at home and abroad, IKEA, the leading furniture retailer, needs to im-prove its competitiveness. In order to do this, IKEA must decrease operating costs and improve quality of current and new retail stores. The company establishes a project team. The job of the team is to collect data on performance from multiple stores in several countries, then select the best performing one. The team will work closely with best performing store and study its processes. After the research, the team will recommend best practices to other retail stores. IKEA management can also apply these practices to new stores in the future. Which of the following correctly describe the process undertaken by IKEA project team?
- A. Internal benchmarking
- B. Site visit
- C. Competitive benchmarking
- D. Internal audit
Correct Answer: A 🗳️
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Which of the following are the focuses of ISO 14001:2015?
- A. 1 and 2 only
- B. 3 and 4 only
- C. 2 and 3 only
- D. 1. Life cycle2. Process3. Capacity4. Information security2 and 4 only
Correct Answer: A 🗳️
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You are a senior buyer in a large manufacturing company. The engineering team is looking for a product that will assist them in a new innovative project. The technology is evolving and the product supplied is likely to be bespoke to the supplier. You are suggesting the use of a performance specification as a part of the tender. What is the main reason for this?
- A. The cost of the product is likely to be cheaper
- B. The tender process is likely to be faster
- C. This places the responsibility for success with the supplier
- D. This will allow a comprehensive description of the product
Correct Answer: C 🗳️
A hospital extensively spends on medical and implantable devices, medical, surgical and pharma-ceutical supplies, costs of supplies related to buildings and maintenance operations. Hospital's procurement manager suggests that the hospital has an opportunity to reduce operational costs by reducing variation of medical devices and pharmaceutical supplies. Which of the following best describe the procurement manager ' s suggestion?
- A. Value engineering
- B. Process re-engineering
- C. Process standardisation
- D. Product standardisation
Correct Answer: D 🗳️
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