Free Defining Business Needs Exam L4M2 Exam Practice Test

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

Robert is a senior buyer at MMC Construction Ltd. His company is doing multiple development projects in the country, which increases procurement workload significantly. Meanwhile, most of the tasks are handled manually, which causes bottlenecks in the workflows. The procurement team is overwhelmed by the workload and complains from other departments. From previous experience, Robert knows that electronic system may help his procurement team. He writes a business case to submit to the senior management, in which he insists on the possible productivity improvement by adopting e-system in procurement. Is Robert's action reasonable?

• No, there's no need to make a business case for new purchase
• Yes, productivity improvement is a mandatory element in every business case
• No, adopting e-system may make procurement department jobless
• Yes, his reason may appeal the senior management

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

• False, the buyer will be unable to track and manage supplier's performance
• False, buyer will lack negotiating power on cost if the supplier has a monopoly in the market
• True, suppliers in monopoly market produce homogenous products
• True, in monopoly market, buyer's switching costs from the incumbent supplier to an-other are relatively low

Which of the following is a challenge of making a business case for straight re-buys?

• Terms and conditions
• Research of procurement process
• Effective inventory control
• Identifying suitable suppliers

To strengthen its market presence, ABC Group decided to develop a new product. A cross-functional team was formed to discuss the scope and the functions of the product. They will also survey the potential customers to see what they like, what they love, and what they dislike. What is this process called?

• Value analysis
• Cash flow analysis
• Product standardisation
• Value engineering

A drawing is an example of...?

• Statements of work
• Technical specifications
• Output specifications
• Outcome specifications

ABC Ltd has enormous investment in facilities and machinery. It also employs skilled workforce. To be profitable, the company has to produce at massive quantity. Which sector does ABC Ltd belong to?

• Manufacturing
• Retail
• Construction
• Agriculture
• Finance

To improve the productivity, Plantation Ltd is planning to purchase a tractor, which it has never bought before. The project must be quick to catch up with the next growing season. Leanne, a jun-ior procurement staff at the company, assumes that she could skip market analysis stage to save time. Is this assumption reasonable?

• No, the company assesses supplier's performance solely based on market analysis
• Yes, Leanne just needs to purchase the tractor from her friend's company
• No, market analysis will inform the company of the pricing as well as latest technology trends
• Yes, the company has extensive experience in purchasing tractor

Which of the following may allow suppliers free to choose the materials, manufacturing process or delivery process?

• Performance specification
• Design specification
• Technical specifications
• Conformance specification

Which of the following activities are considered as secondary activities of an organization? Select TWO that apply

• Component fabrication
• Training
• Information system development
• Shipping
• Service response