CIPS L4M2 Defining Business Need questions with 100% correct answers 2024/2025

CIPS L4M2 Defining Business NeedFixed Cost (FC) - correct answer Costs that remain the same irrespective of business activity or volume Variable Cost (VC) - correct answer Costs that vary with the level of output Market Factors - correct answer Objectives Drivers Governance Ownership Commodity or Non-Commodity Break-Even Point (BEP) - correct answer When total costs are equivalent to sales revenue (after this, it is profit) Solving a Problem - correct answer SCAMPER Substitute Combine Adapt Modify Put to other uses Eliminate Reverse 3 Stages of the Priceberg - correct answer 1. TCA 2. Maintenance 3. Disposal Identifying Business Needs - RAQSCI - correct answer Regulatory Availability Quality Service Requirements Cost Innovation Direct Costs - correct answer Directly associated with the production of a good or service e.g. a component Indirect Costs - correct answer General running costs/Overheads Costs not easily attributed to specific goods or services e.g. electricity Semi-Variable Costs - correct answer Made up of fixed and variable costs An industry is defined by... - correct answer A seller A market is defined by... - correct answer A buyer Straight Re-Buy - correct answer The purchase of an item that was purchased last time there was a need rather than considering an alternative E.g. Utilities, Raw Materials or Maintenance, Repair and Operational (MRO) items Modified Re-Buy - correct answer The purchase of an item that was purchased previously but with changes to the specification or supplier New Purchase - correct answer The purchase of an item for the first time