Free CIPS L4M2 Exam Dumps July 2026

Comprehensive and Detailed Explanation (from CIPS L4M2 -- Market Structure and Barriers to Entry)

De-regulation removes government controls and barriers, allowing new competitors to enter, thereby increasing supplier numbers and competition.

The other options raise barriers to entry (more costs or requirements), thus reducing potential entrants.

Relevant L4M2 references:

''Barriers to market entry and exit''

''Impact of deregulation on supply market dynamics''

Comprehensive and Detailed Explanation (from CIPS L4M2: Cost Management)

CIPS teaches that effective buyers conduct cost breakdowns that include both direct and indirect costs, using data from:

Supplier financial reports,

Benchmarking,

Industry cost models.

Thus, buyers can analyse indirect costs (e.g. overheads, utilities, admin) to strengthen negotiation positions.

Relevant CIPS L4M2 Sections:

Cost analysis and supplier price build-up

Using cost data to negotiate value

Comprehensive and Detailed Explanation (from CIPS L4M2 -- Cost Management and Analysis)

CIPS teaches that indirect costs (e.g. overheads, admin, factory costs) can be estimated by using:

Supplier financial statements,

Benchmarking,

Industry cost models.

Analysing these supports negotiations by revealing true cost drivers.

Therefore, Option B is correct --- buyers can and should assess indirect costs when evaluating total cost and negotiating.

Relevant L4M2 references:

''Understanding direct and indirect cost elements''

''Cost analysis and should-cost models in business case preparation''

Explanation

Acceptance testing, in the context of the engineering and software industries, is a functional trial performed on a product or prototype before it is put on the market or delivered, to decide whether the specifications or contract have been met. It also makes sure the quality and design of the product meet both contractual and regulatory obligations in terms of functionality, usability, durability, and safety.

If a product is found to be unacceptable at this stage, it can be sent back for modification, debug-ging, repair, or re-design before it can become a costly undertaking for the producer, as would be the case in a product recall.

- CIPS study guide page 134-135

- Acceptance Testing (investopedia.com)

LO 3, AC 3.2

This questions is intended to ask students about types of waste in Lean principles.

Lean was born out of manufacturing practices but in recent time has transformed the world of knowledge work and management. It encourages the practice of continuous improvement and is based on the fundamental idea of respect for people. Womack and Jones defined the five principles of Lean manufacturing in their book ''The Machine That Changed the World''. The five principles are considered a recipe for improving workplace efficiency and include: 1) defining value, 2) mapping the value stream, 3) creating flow, 4) using a pull system, and 5) pursuing perfection.

Lean principles aim to eliminate waste in processes. The eight wastes of Lean principles are:

- Defects

- Over-production

- Waiting

- Not using talent

- Transport and handling

- Inventory

- Motion waste

- Excess processing

In the scenario, the component is processed more than necessary. The engineers try to make them as accurate as possible with very little tolerance. In fact, the component does not need to be that precise. This excesses buyer's requirements and incurs costs for both buyer and supplier. The scenario is an example of over processing (or excess processing).

Overprocessing is one of the seven wastes of lean manufacturing (or 7 mudas); Overprocessing is adding more value to a product than the customer actually requires such as painting areas that will never be seen or be exposed to corrosion.

Overprocessing as one of the seven wastes is caused by having unclear standards and specifications, many operators will try to do the best job possible and will not always be aware of what truly adds value to the product or even the end use. They will therefore often expend time polishing and finishing components that do not require it.

- CIPS study guide page 153-156

- Waste of Overprocessing; causes, costs, examples solutions, symptoms (leanmanufactur-ingtools.org)

LO 3, AC 3.4