L4M2

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The dumps for L4M2 exam was last updated on May 07,2025 .

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Question#1

XYZ Ltd is a large supermarket chain which operates mainly in the UK and Europe. Their customers are increasingly concerned about sustainability. Therefore, procurement manager is required to source the products from suppliers who have good environmental performance.
Which of the following can be an assurance that the supplier has procedures and policies to enhance its environmental performance?

A. ISO 14001:2015 certificate

B. ISO 13485:2016 certificate

C. ISO 22716:2007 certificate

D. ISO 9001:2015 certificate

Explanation:
ISO 9001:2015 specifies requirements for a quality management system.
ISO 14001:2015 specifies the requirements for an environmental management system that an organization can use to enhance its environmental performance. ISO 14001:2015 is intended for use by an organization seeking to manage its environmental responsibilities in a systematic manner that contributes to the environmental pillar of sustainability.
ISO 22716:2007 gives guidelines for the production, control, storage and shipment of cosmetic products. These guidelines cover the quality aspects of the product, but as a whole do not cover safety aspects for the personnel engaged in the plant, nor do they cover aspects of protection of the environment.
ISO 13485:2016 specifies requirements for a quality management system where an organization needs to demonstrate its ability to provide medical devices and related services that consistently meet customer and applicable regulatory requirements.
Reference: CIPS study guide page 125
LO 3, AC 3.1

Question#2

Buyers are more powerful than the supplier when they are purchasing from monopoly market. Is this statement true?

A. False, the buyer will be unable to track and manage supplier's performance

B. False, buyer will lack negotiating power on cost if the supplier has a monopoly in the market

C. True, suppliers in monopoly market produce homogenous products

D. True, in monopoly market, buyer's switching costs from the incumbent supplier to an-other are relatively low

Explanation:
A monopoly is a market with a single seller (called the monopolist) but with many buyers. In this market, the bargaining power of supplier is higher than of buyer since the supplier is the only seller.
Reference: - CIPS study guide page 88-92
- Bargaining Power of Suppliers - Factors that Give Suppliers Power (corporatefinanceinsti-tute.com)
- Monopoly - Understanding How Monopolies Impact Markets (corporatefinanceinstitute.com)
LO 2, AC 2.2

Question#3

To calculate the estimated annual payback period, a buyer will need to know the estimated annual savings made from implementing the option, and also the estimated costs.
Is this statement correct?

A. Yes, the calculation will be the estimated total costs divided by the estimated annual savings

B. No, the calculation will be the estimated total costs multiplied by twelve

C. Yes, the calculation will be the estimated annual savings added to the estimated total costs

D. No, the calculation will be the estimated annual savings multiplied by the rate of inflation

Question#4

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

A. SAMOA

B. Kraljic Portfolio Matrix

C. Star-burst method

D. Kano model

Explanation:
Value Engineering (VE) is concerned with new products. It is applied during product development. The focus is on reducing costs, improving function or both, by way of teamwork-based product evaluation and analysis. This takes place before any capital is invested in tooling, plant or equipment. This is very significant, because according to many reports, up to 80% of a product’s costs (throughout the rest of its life-cycle), are locked in at the design development stage. This is understandable when you consider the design of any product determines many factors, such as tooling, plant and equipment, labour and skills, training costs, materials, shipping, installation, maintenance, as well as decommissioning and recycle costs.
The Kano model is a theory for product development and customer satisfaction developed in the 1980s by Professor Noriaki Kano, which classifies customer preferences into five categories. Both Kano model and Value Engineering aims at optimising new product, so they can be combined together. CIPS L4M2 study guide consider Kano model is a tool of Value Engineering

Example of Kano model (source: Wikipedia)
Reference: CIPS study guide page 171-172
LO 3, AC 3.4