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CIPS L4M2 Exam Syllabus Topics:

TopicDetails
Topic 1
  • Understand how to develop a business case for requirements to be sourced from external suppliers: This section of the exam measures the skills of Procurement Analysts and focuses on understanding how business needs influence sourcing decisions. It covers identifying different types of purchases such as new, modified, and straight rebuys, and analyzing their implications on procurement strategies. Learners are expected to understand how procurement contributes to developing a strong business case by assessing costs, prices, and market data. It also includes estimating direct and indirect costs, applying whole-life asset management principles, and using financial models and budgets to control purchasing activities.
Topic 2
  • Understand the use of specifications in procurement and supply: This part of the exam assesses the capabilities of Procurement Officers and focuses on how specifications are developed and used in procurement. It involves understanding various types of specifications, such as conformance and performance specifications, and identifying key information sources including internal expertise, external standards, and sustainability factors. The section highlights the importance of structuring specifications with clear scope, definitions, testing, acceptance, and change control mechanisms, while integrating environmental, social, and governance criteria. Additionally, it covers the risks of poor specification design and how to mitigate them through monitoring, review, and improvement. Candidates are also expected to recognize opportunities for standardization, value analysis, and value engineering to enhance specification quality and support long-term procurement performance.
Topic 3
  • Understand market management in procurement and supply: This section of the exam evaluates the expertise of Supply Chain Managers in managing and analyzing different markets. It includes understanding procurement considerations across sectors such as manufacturing, construction, retail, financial, agriculture, and services. Candidates are tested on their ability to compare competitive forces that influence markets, including supplier and buyer bargaining power, threats from substitutes, and new entrants. The section also focuses on differentiating between direct and indirect costs, identifying reliable sources of market data, and using this information to estimate costs, prepare budgets, and analyze potential cost variability.

Reference: https://www.cips.org/qualifications/diploma-in-procurement-supply/def%C4%B1ning-business-need

CIPS Defining Business Needs Sample Questions:

A department is writing a business case for an expensive capital purchase. What should be included?
Terms and conditions of contract
Tender evaluation criteria
Degree of added value
Financial plan

  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 3 and 4 only
  • D. 1 and 4 only
Reveal Solution  Discussion  0

Correct Answer: C  🗳️

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Which type of specification is less time-consuming to develop?

  • A. Outcome-based specification
  • B. Conformance specification
  • C. Technical drawings
  • D. Design specification
Reveal Solution  Discussion  0

Correct Answer: A  🗳️

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What is the output of regression analysis?

  • A. Dependent variables
  • B. Forecasting process
  • C. Independent variables
  • D. Line of best fit
Reveal Solution  Discussion  0

Correct Answer: D  🗳️

Explanation: Only visible for PassLeader members. You can sign-up / login (it's free).

A company is building a new two-storey office block and will need to purchase new desks and chairs. There will not be much space available. What should be included in the specification for these desks and chairs?

  • A. Key performance indicators
  • B. A brand name
  • C. Technical drawings
  • D. A list of inputs
Reveal Solution  Discussion  0

Correct Answer: C  🗳️

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?

  • A. Barriers to market entry
  • B. Increasing use of technology
  • C. The availability of substitute products
  • D. Supplier bargaining strength
Reveal Solution  Discussion  0

Correct Answer: C  🗳️

Explanation: Only visible for PassLeader members. You can sign-up / login (it's free).

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