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CIPS L6M9 Exam Syllabus Topics:
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CIPS Supply Network Design Sample Questions (Q26-Q31):
NEW QUESTION # 26
In a bottom-up process for planning and control, who would make the strategic plan?
- A. Middle managers
- B. Operational staff
- C. Stakeholders
- D. Senior managers
Answer: B
Explanation:
Operational staff would make the plan and pass this up to senior managers for approval. This is the opposite of a top-down approach, where senior managers make the plan and tell the operational staff what to do. (See p.
187)
NEW QUESTION # 27
According toFoster's Model of Operational Balance, how shouldbusiness strategybe developed?
- A. Select one member from each department to join a working group and represent the interests of that department
- B. Use both formal and informal groups across the organisation
- C. By senior leaders and filtered down through the company hierarchy
- D. Designed by senior leaders and updated once a year based on feedback from other members of the organisation
Answer: B
Explanation:
Foster'sland management-based approachsuggests thatbusiness strategy should not be dictated from the top down. Instead, it should involveboth formal and informal groupsthroughout the organisation. This helps preventartificial decision-making and misalignmentbetween leaders and employees.
(LO 2.1, See p.77)
NEW QUESTION # 28
Ajewelry manufacturerhas recently acquired themining companythat supplies the precious metals used in its jewelry production.
What is this an example of?
- A. Forward horizontal integration
- B. Forward vertical integration
- C. Backward horizontal integration
- D. Backward vertical integration
Answer: D
Explanation:
Backward vertical integrationoccurs when a companyacquires a supplier or producerthat is further upstreamin the supply chain. In contrast,forward vertical integrationhappens when a companybuys a retailer or distributorfurtherdownstream.
#Note:Forward horizontalandbackward horizontal integrationdo not exist-these are trick options. (See LO 1.2, p.42)
NEW QUESTION # 29
According toHays and Wheelwright, there arefour stages of operations functions, reflecting how an organisationapproaches its operational system.
Which of the following isStage 4, the stage that organisations should aspire to achieve?
- A. Externally Supportive
- B. Externally Neutral
- C. Internally Neutral
- D. Internally Supportive
Answer: A
Explanation:
#Externally SupportiveisStage 4, where an organisation's operations function is astrategic asset, driving competitive advantage.
#The four stages in order:1##Internally Neutral- Focus on avoiding mistakes2##Externally Neutral- Keeping up with industry standards3##Internally Supportive- Aligning operations with business strategy4## Externally Supportive- Operations function is acompetitive differentiator This model isimportant for the exam, somemorise the stages!(See LO 2.2, p.99)
NEW QUESTION # 30
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 capacity strategy is being used?
- A. Demand-led
- B. Capacity-led
- C. Capacity-lag
- D. Demand-lag
Answer: A
Explanation:
The company follows ademand-ledstrategy since production capacity is adjustedbased on actual customer orders. No stock is produced without confirmed demand. (See LO 2.2)
NEW QUESTION # 31
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