CIPS Exam L4M2 Topic 1 Question 40 Discussion

Actual exam question for CIPS's L4M2 exam

Question #: 40
Topic #: 1

[All L4M2 Questions]

SET Group are a start-up company trying to estimate the direct costs of materials for a project. The organisation has limited procurement records available. Would using general industry averages as a benchmark provide an accurate estimation of the project costs?

AYes, industry benchmarks are always kept up to date to consider real-time market conditions

BNo, the organisation will not have access to industry benchmarks as they are a new organisation

CNo, industry benchmarks do not consider specific specifications, quality requirements, or real-time market conditions

DYes, cost predictions do not need to be accurate as they are just an initial guess

Show Suggested Answer

Suggested Answer: B

Those items make up small portion of spend and the supply risk is low. So it is tactical item according to Kraljic portfolio matrix. Procurement should bundle these items into larger contracts, simplify procurement process.

LO 2, AC 2.1

by Cammy at Jul 15, 2024, 01:49 AM

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Florencia

1 months ago

I'm going with Option C. Industry benchmarks? More like industry smoke and mirrors. Real-time market conditions? Good luck keeping up with that rollercoaster.

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Ronna

3 days ago

We need more accurate estimations than just general industry averages.

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Elly

10 days ago

Exactly, they don't consider specific specifications or quality requirements.

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Carol

16 days ago

Option C. Industry benchmarks? More like industry smoke and mirrors.

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Iesha

1 months ago

Option D all the way! Cost predictions are just a fancy way of saying 'wild guess.' Accuracy is overrated when you're trying to get a project off the ground.

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Avery

1 months ago

Option C is the way to go. Industry benchmarks are about as reliable as a broken calculator. Gotta consider the nitty-gritty to get a true picture.

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Salley

2 days ago

Using general industry averages may not give us an accurate estimation of the project costs.

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Gearldine

4 days ago

We need to take into account the unique specifications and quality requirements of our project.

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Ernestine

16 days ago

I agree, industry averages can be misleading when it comes to specific project requirements.

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Benton

2 months ago

As a new startup, they should just throw a dart at the wall and call it a day. Accurate cost estimates? That's for the big guys with deep pockets.

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Lisbeth

13 days ago

B) No, the organisation will not have access to industry benchmarks as they are a new organisation

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Franklyn

14 days ago

C) No, industry benchmarks do not consider specific specifications, quality requirements, or real-time market conditions

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Omer

18 days ago

A) Yes, industry benchmarks are always kept up to date to consider real-time market conditions

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Nicolette

2 months ago

Industry benchmarks? More like industry fairy tales! Real-time market conditions? More like a never-ending game of catch-up.

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Stefan

1 months ago

It's true, using general industry averages as a benchmark may not provide an accurate estimation of project costs.

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Desirae

2 months ago

Industry benchmarks are not always accurate, they don't consider specific specifications or real-time market conditions.

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Odette

2 months ago

I agree with Pedro, industry benchmarks may not consider all factors.

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Pedro

2 months ago

I disagree, we need more specific data for accurate estimation.

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Samira

2 months ago

I think using industry averages could be helpful.

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