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CIPS Defining Business Needs Sample Questions (Q119-Q124):

NEW QUESTION # 119
A food manufacturer wants to predict the pricing point for a new and innovative health drink. Which method of market research would be beneficial to receive the most accurate information?

A. Focus groups
B. Internet searches
C. Sales trends
D. Consumer data

Answer: D

Explanation:
Detailed Explanation:
Consumer data provides specific, measurable insights into purchasing behavior, preferences, and willingness to pay. This is the most accurate method for setting a pricing strategy, as it uses real-world data rather than subjective opinions or generic trends. Reference: CIPS Level 4, Market Research Techniques.

NEW QUESTION # 120
Which of the following events would increase the number of suppliers in a particular market?

A. Requirement for all companies to have 10,000 or more employees
B. High and increasing levels of investment required to enter the market
C. De-regulation of a previously government-run industry
D. Introduction of minimum wage regulations

Answer: C

Explanation:
Detailed Explanation:
De-regulation removes barriers to entry, encouraging new suppliers to enter the market. Other factors, like high investment or stringent requirements, limit supplier participation. Reference: CIPS Level 4, Market Entry and Supply Chain Factors.

NEW QUESTION # 121
GSC Ltd is a manufacturer of car parts. To accommodate growing demands of electric cars, the company is developing a new component which requires different type of steel. The project team estimates that the component will be ready for production in 1.5 years. Until then, they need to keep the production busy.
After checking the inventory records, the production team sees that the company has 3 months of stock. The lead time for each batch is two months. Which of the following should be a priority ac-tion of the company?

A. Create new specification to new supplier
B. Standardise the specification
C. Create new specification to current supplier
D. Make a call-off order to current supplier

Answer: D

Explanation:
The scenario is very long with many distracting data. Students need to read carefully and use their experience to solve this problem.
The company is developing a new component which requires different type of material. But this component will not be available for mass production in 1.5 years. This means the company still needs to produce the current components with current materials until the development is finished. They must continue purchase the materials from current supplier through call-off orders. This situation is an example of straight re-buy.
Reference: CIPS study guide page 3
LO 1, AC 1.1

NEW QUESTION # 122
When procuring an IT equipment, at which stage the buyer's expectations are translated into a technical specification?

A. Installation
B. Customer support
C. Design
D. In-service support

Answer: C

Explanation:
IT equipment is typically linked with through-life contracts. This type of contract not only deal with the specification and the price of a machinery, but also other stages such as design, manufacture, installation, in- service support, decommission and disposal. Among these stages, the design stage is when buyer's requirements are translated into technically correct specification.
Reference: CIPS study guide page 131
LO 3, AC 3.2

NEW QUESTION # 123
A company assembles its finished products from a wide selection of components. It is analysing these components to see which features are needed and whether any features can be removed to save costs. The.
eventual aim is to purchase fewer components but in larger quantities to lower price and reduce costs. Which of the following could result from this process?
1. Variety reduction
2. Value engineering
3. Ratio analysis
4. Standardisation

A. 3 and 4 only
B. 2 and 3 only
C. 1 and 2 only
D. 1 and 4 only

Answer: D

NEW QUESTION # 124
......

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