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CIPS L4M2 Exam
Defining Business Needs (Page 3 )

Updated On: 30-Jan-2026
Page 3 of 30
PDF with 238 Questions

Department for Transport (DfT) needs to buy new locomotives to expand the capacity of trains fleet. In 2009, they were criticized for beginning the procurement "without any clear idea of how many trains would be needed, which routes they would run on and what form of power would be required".
What should procurement manager of DfT do first to manage risk in making the specification?

  1. Identify the possible risks
  2. Monitor the potential risks
  3. Implement mitigating actions
  4. Assess the potential risks

Answer(s): A

Explanation:

There are 4 steps to risk managing process:
Step 1: Identify hazards
Step 2: Assess the risk
Once a risk has been identified, a risk assessment should be conducted. You should carry out a risk assessment for any manual tasks identified as being hazardous, unless the risk is well known and you know how to control it. A risk assessment can help you determine, which postures, movements and forces of the task pose a risk, where during the task they pose a risk, why they are occurring and what needs to be fixed.
Step 3: Control the risk
The ways of controlling risks are ranked from the highest level of protection and reliability to the lowest, which is known as the hierarchy of control. You must always aim to eliminate the hazard, which is the most effective control.
Step 4: Review risk control
Control measures that have been implemented must be reviewed, and, if necessary, revised to make sure they work as planned and to maintain a work environment that is without risks to health and safety.
Source: WorkCover Queensland


Reference:

CIPS study guide page 142-146
LO 3, AC 3.3



Synergy Ltd is a fast-growing tool and hardware retailer. The company's customer services team has been using Excel worksheets to manage customer relationships.
When the company is expend-ing its market presence, this way of working leads to poorer customer services as the database is scattered around in spreadsheet, leading to patchy and inconsistent conversations with customers. The company decides to purchase a CRM system.
What requirement should Synergy's procurement team take into account in the specification for CRM system?

  1. Total number of the supplier's employees
  2. The ability to import bulk data from Excel spreadsheets
  3. The relative size of the potential suppliers to Synergy
  4. The form and reference number of the purchase order

Answer(s): B

Explanation:

The purpose of this Question:
to actionable requirements before communicating with the suppliers. The scenario suggests that Synergy Ltd's customer services team is using Excel spreadsheets, they lack a centralised customer database. This leads to problems in communications with customers. A CRM system can solve the communication problem. Will the previous data be imported? If the CRM system can support bulk import from Excel tables, it will save a lot of time.


Reference:

CIPS study guide page 10-18
LO 1, AC 1.1



One of the disadvantages of using standards in specification is that...

  1. Standards lengthen the time to produce a specification
  2. Standards tend to be rigid and they often don't encourage innovation
  3. Standards don't allow the buyers to add health and safety requirements into the specification
  4. Standards tend to be inaccurate and ambiguous, causing confusion among suppliers

Answer(s): B

Explanation:

Using standards in specification is very convenient. They reduce the time and effort to produce. They tend to be very accurate with correct technical terminologies. They are well recognised and accepted by a wide range of suppliers and buyers. However, since a standard is very specific, complex and lengthy, it requires a lot of time to be drafted and approved. Therefore, standard tends to be static and don't encourage innovation. It may also not accommodate latest technology and trends.


Reference:

CIPS study guide page 125
LO 3, AC 3.1



A company is analysing its existing product's components and aims at reducing costs without damaging customer value proposition. They want to check which components are critical and which are unnecessary.
Which of the following should be adopted by the company?

  1. Under specification
  2. Value engineering
  3. Value analysis
  4. Variety reduction

Answer(s): C

Explanation:

In marketing, a customer value proposition (CVP) consists of the sum total of benefits which a vendor promises a customer will receive in return for the customer's associated payment (or other value- transfer).
Value analysis is concerned with existing products. It involves a current product being analysed and evaluated by a team, to reduce costs, improve product function or both. Value Analysis exercises use a plan which step-by-step, methodically evaluates the product in a range of areas. These include costs, function, alternative components and design aspects such as ease of manufacture and assembly.
Value engineering 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 evalua- tion and analysis. This takes place before any capital is invested in tooling, plant or equipment. In this scenario, the company's objective is cost reduction, then value analysis or value engineering is more likely to be applied. The products are existing, so value analysis is the best option.
LO 3, AC 3.4



Which of the following is an assumption of Kano model?

  1. The relationship between product functionality and customer satisfaction is always linear
  2. Different types of customer requirements have different impact on customer satisfaction
  3. All types of customer requirements have the same impact on customer satisfaction
  4. All customer requirements are basic requirements

Answer(s): B

Explanation:

Kano model of excitement and basic quality (Kano et al, 1984; Berger et al, 1993; Matzler et al, 1996) brings a different perspective for the analysis of improvement opportunities in products and services because it takes in consideration the asymmetrical and non-linear relationship between performance and satisfaction. The Kano model classifies customers requirements in three categories (figure 3):
a) Basic Requirements. The basic requirements fulfill the basic functions of a product. If they are not present or their performance is insufficient, customers will be extremely dissatisfied. On the other hand, if they are present or have sufficient performance, they don't bring satisfaction. Customers see them as prerequisites. For instance, for luxury automobiles, "air bags" are considered basic. A customer won't feel satisfied if the automobile has "air bag", however he/she will not buy it if "air bag" is not present.
b) Performance Requirements. As for these requirements, satisfaction is proportional to the performance level ­ the higher the performance, the higher the customer's satisfaction will be and vice-versa. Gas consumption in automobiles is an example of these requirements. Usually customers explicitly demand performance requirements.
c) Excitement Requirements. These requirements are key to customer satisfaction. If they are pre- sent or have sufficient performance, they will bring superior satisfaction. On the other hand, if they are not present or their performance is insufficient, customers will not get dissatisfied. For instance, a surprise gift at the end of a dinner in a restaurant will certainly bring satisfaction, but it will not cause dissatisfaction if not offered. These requirements are not demanded nor expected by customers.
Two other types of requirements may be identified in the Kano model: neutral and reverse ones. Neutral requirements do not bring either satisfaction or dissatisfaction. Reverse requirements bring more satisfaction if absent than if present.


Reference:

- Integrating Kano model and QFD for Designing New Products
- CIPS study guide page 171-172



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