L4M2 - CIPS: Defining Business Need
UPDATED ACTUAL Exam Questions and
CORRECT Answers
Acceptance Testing - CORRECT ANSWER - A form of testing used to determine if the
requirements of a specification or contract are met
Accrual - CORRECT ANSWER - An adjustment made to a set of financial accounts to
reflect activity that has occurred but for which cash has not yet been received or paid
Annual Planning Cycle - CORRECT ANSWER - Planning involves a number of activities,
such as analysis of opportunities, setting aims, exploring options, producing detailed plans and
reviewing the plan against expectations. A cycle of activities as the result where each activity
might need the previous activity revised before the final plan is accepted
Approved Supplier List - CORRECT ANSWER - A list of approved suppliers who have
the skills (for example, technical, functional or financial) to undertake the work
Arms-length Relationship - CORRECT ANSWER - The relationship between two parties
each whom has no obligation to the other
Asset Value - CORRECT ANSWER - The value of everything an organisation owns
Bargaining Power - CORRECT ANSWER - The ability of a company or individual to
influence another
Benchmarked Prices - CORRECT ANSWER - The price paid for a product or service
either in the past or by other users in order to set a standard for future reference
Bill of Materials - CORRECT ANSWER - A comprehensive list of components, items,
materials and parts to create a product, essentially a recipe for the production of an item
, Break-Even Point - CORRECT ANSWER - The level of output of output of a business at
which revenue equals total costs
Breakthrough Result - CORRECT ANSWER - The achievement of a particularly
important and significant result
Business Case - CORRECT ANSWER - A document that sets out the justification for
undertaking a project on commercial grounds
Business Requirement - CORRECT ANSWER - The activities that meet the need of, and
provide value to, the business (also called business need)
Business Requirement Definition (BRD) - CORRECT ANSWER - Sets out what the
product or service needs to achieve if all stakeholders are to be satisfied
Buying Off-Contract - CORRECT ANSWER - The purchase of an item without a contract
when a contract for that item already exists
Call Off - CORRECT ANSWER - The purchase of an item using a framework agreement
that has already been through a procurement process
Capability - CORRECT ANSWER - The ability of a supplier to meet an organisations
specific business requirements
Capacity - CORRECT ANSWER - The output of a business
Cash Flow - CORRECT ANSWER - The net amount of cash received and spent by an
organisation in a given period of time.
UPDATED ACTUAL Exam Questions and
CORRECT Answers
Acceptance Testing - CORRECT ANSWER - A form of testing used to determine if the
requirements of a specification or contract are met
Accrual - CORRECT ANSWER - An adjustment made to a set of financial accounts to
reflect activity that has occurred but for which cash has not yet been received or paid
Annual Planning Cycle - CORRECT ANSWER - Planning involves a number of activities,
such as analysis of opportunities, setting aims, exploring options, producing detailed plans and
reviewing the plan against expectations. A cycle of activities as the result where each activity
might need the previous activity revised before the final plan is accepted
Approved Supplier List - CORRECT ANSWER - A list of approved suppliers who have
the skills (for example, technical, functional or financial) to undertake the work
Arms-length Relationship - CORRECT ANSWER - The relationship between two parties
each whom has no obligation to the other
Asset Value - CORRECT ANSWER - The value of everything an organisation owns
Bargaining Power - CORRECT ANSWER - The ability of a company or individual to
influence another
Benchmarked Prices - CORRECT ANSWER - The price paid for a product or service
either in the past or by other users in order to set a standard for future reference
Bill of Materials - CORRECT ANSWER - A comprehensive list of components, items,
materials and parts to create a product, essentially a recipe for the production of an item
, Break-Even Point - CORRECT ANSWER - The level of output of output of a business at
which revenue equals total costs
Breakthrough Result - CORRECT ANSWER - The achievement of a particularly
important and significant result
Business Case - CORRECT ANSWER - A document that sets out the justification for
undertaking a project on commercial grounds
Business Requirement - CORRECT ANSWER - The activities that meet the need of, and
provide value to, the business (also called business need)
Business Requirement Definition (BRD) - CORRECT ANSWER - Sets out what the
product or service needs to achieve if all stakeholders are to be satisfied
Buying Off-Contract - CORRECT ANSWER - The purchase of an item without a contract
when a contract for that item already exists
Call Off - CORRECT ANSWER - The purchase of an item using a framework agreement
that has already been through a procurement process
Capability - CORRECT ANSWER - The ability of a supplier to meet an organisations
specific business requirements
Capacity - CORRECT ANSWER - The output of a business
Cash Flow - CORRECT ANSWER - The net amount of cash received and spent by an
organisation in a given period of time.
