2025 100% FREE L6M9–PROFESSIONAL 100% FREE ORIGINAL QUESTIONS | L6M9 GUARANTEED SUCCESS

2025 100% Free L6M9–Professional 100% Free Original Questions | L6M9 Guaranteed Success

2025 100% Free L6M9–Professional 100% Free Original Questions | L6M9 Guaranteed Success

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CIPS Supply Network Design Sample Questions (Q35-Q40):

NEW QUESTION # 35
Asimple supply chainconsists of threecommercial roles. What are these?

  • A. Manufacturer
  • B. Supplier
  • C. Buyer
  • D. Organisation
  • E. Distributor

Answer: B,C,D

Explanation:
Abasic supply chainconsists ofthree key roles:
* Supplier# Provides materials or products to the organisation
* Organisation# The business that processes/manages the product
* Buyer# The final customer who purchases the product
Distributor and Manufacturerexist in morecomplex supply networks, but they are not part of the simplest supply chain model. (See LO 1.1, p.3)


NEW QUESTION # 36
Andrea is the Chief Financial Officer at Big Corporation and is completing aVariance Analysis. She has reviewed the production costs of creating item B, and this month's costs show avariance to budget of £-200.
What does this mean?

  • A. More money was spent than expected
  • B. The organisation has lost £200
  • C. The organisation has gained £200
  • D. Less money was spent than expected

Answer: D

Explanation:
Anegative varianceto budget means that the companyspent £200 less than expected, which is apositive outcome. While it may seem counterintuitive, a negative variance inthis context indicates cost savings rather than overspending.Option D is incorrectbecause the organisation has saved £200, not gained it. (See p.198)


NEW QUESTION # 37
The operations department of ABC Ltd has recently launched a new product. The product is manufactured within a large factory and then sent to retailers for sale. The department has a system in place which details the components required for the product and the quantities required to fulfil customer demand. The system works online and links to other areas of the business including HR and finance.
So far, several large orders have been placed for the product from different retailers. The Chief Operations Officer (COO) has decided to programme the completion of the orders based on when the orders were placed.
The benefit of this strategy is that it will give each customer a similar lead time. Thus far no buffer stock has been created as products are only created when orders are received.
Three teams are required to make the product and the product flows from team one to team two to team three, each team adding a component to the product. Unfortunately, team two are short staffed and are completing their work at a slower rate than the other two teams. This is a huge consideration for the COO as it will impact upon the capacity of the organisation.
The retailers have all signed contracts with ABC Ltd and the COO is extremely happy that they are long term contracts. Contract 1 is with retailer X and the price is set for three years. Contract 2 is with retailer Y and is a five year contract where the price will be reviewed annually in line with CPI. Contract 3 has a variable pricing mechanism based on the volume of products ordered.
What pricing mechanism is being used with supplier Y?

  • A. Gain share
  • B. Indexation
  • C. Variable price
  • D. Fixed price

Answer: B

Explanation:
Indexationis the correct pricing mechanism because the price is adjusted based onCPI (Consumer Price Index), which is a form of indexed pricing. This ensures that prices fluctuate in response to inflation or other economic indicators. (See LO 3.3)


NEW QUESTION # 38
A cupcake manufacturing organisation uses a 'management by exception' technique when it comes to planning and control. What does this mean?

  • A. Exceptional performance is rewarded, for example through staff bonus schemes
  • B. Plans and control activities are created based on historical performance
  • C. Reporting only takes place when non-compliance occurs
  • D. Audits and other control activities are completed by an outsourced company to ensure there is no bias in the investigations

Answer: C

Explanation:
Management by exception means that reporting only occurs when non-compliance happens or when results are outside the norm. In the case of a cupcake factory, there might be no quality control measures in place, but if an issue arises (e.g., food poisoning complaint), an investigation would be conducted. This is a risky strategy for such an organisation. (See p. 189)


NEW QUESTION # 39
Which of the following examples of a supplier would be suitable forStrategic Supplier BusinessReviews?
Select ALL that apply.

  • A. Supplier of direct components
  • B. Short-term bottleneck supplier
  • C. Sole sourcing
  • D. A partnership arrangement
  • E. A top-tier supplier in a tiered supply chain

Answer: C,D,E

Explanation:
Strategic Supplier Business Reviewsare used for long-term and important suppliers. The study guide states that this type of review is more commonly seen where an organisation has significantsole sourcing, tiering, or partnership relationships, particularly those spanning a long time scale. Sharing future plans and incorporating developments in each organisation is important for maintaining strategic integrity.
* Option D (short-term bottleneck supplier)is incorrect because strategic reviews are for long-term supplier relationships.
* Option E (supplier of direct components)is incorrect because it does not specify that the supplier is of strategic importance. (See p.190)


NEW QUESTION # 40
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