CIPS L5M7 Exam Questions Instant Access - No Installation Required

Question 1

Jerry works in product development at a clothing manufacturer. The company is discussing ways of adding value for customers. Jerry suggests reducing prices could be a form of added value. Is he correct?

AYes -- this is a form of added value but requires the ability of the supply chain to reduce costs.

BYes -- this will increase the company's profit margin.

CNo -- added value is only a form of innovation.

DNo -- as the customer is not offered anything additional to their purchase.

Answer : A

Added Value arises whenever the customer perceives extra benefit. Lowering prices can add value if the supply chain reduces costs to support it sustainably.

Short cited term: ''price reduction is a form of added value if supported by cost efficiencies.'' (L5M7 Study Guide, p. 35)

Question 2

Just-in-Time (JIT) manufacturing is a form of which organisational strategy?

ABusiness Process Re-engineering

BLean

CCost Leadership

DDifferentiation

Answer : B

JIT is a Lean technique to minimise inventory and produce ''only what is needed, when needed,'' thereby removing waste from processes. Short cited phrase: ''only when needed'' (L5M7 Study Guide, p.111).

Question 3

George, a property manager, agrees a cost-plus payment with a plumber. Which of the following will he need to know to calculate total price?

Select THREE.

ACost of materials

BCost of labour

CSupplier's overhead and profit

DSupplier's tax rate

ESupplier's pension contribution

Answer : A, B, C

Cost-plus pricing is based on actual material and labour costs plus an agreed margin for overheads and profit.

Short cited extract: ''Cost-plus = actual cost + agreed mark-up for profit/overheads.'' (L5M7 Study Guide, p.191)

Question 4

Farmer Joe sells wheat and barley. He charges more when demand is high and less when demand falls. What pricing strategy does he follow?

ACompetitive Pricing

BFlexible Pricing

CDynamic Pricing

DVariable Pricing

Answer : C

Dynamic Pricing adjusts prices in real time to reflect market demand and supply conditions, commonly used in commodities.

Short cited term: ''dynamic pricing -- prices adjust to demand fluctuation.'' (L5M7 Study Guide, p. 189)

Question 5

To analyse the value of inventory held, which data points must be collected? Select TWO.

ANumber of items sold

BNumber of items held in storage

CPurchase price

DExpiry date

Answer : B, C

Inventory valuation requires data on quantity in stock and unit purchase cost. These determine the total inventory value at any given time.

Short cited extract: ''Inventory value = number of items purchase cost.'' (L5M7 Study Guide, p.147)

Question 6

In a supply chain, can a downstream supplier influence all aspects of quality including customer perception?

AYes -- downstream suppliers have the most power in the chain

BYes -- customer perception is derived from the supplier's inputs and specification

CNo -- customer perception is influenced by other functions such as marketing

DNo -- a downstream supplier has no control over quality at all

Answer : C

A downstream supplier influences most aspects of quality but not customer perception, which is shaped by marketing and brand functions.

Short cited term: ''except customer perception, influenced by marketing'' (L5M7 Study Guide, p. 30).

Question 7

Which of the following can have a detrimental effect on supply-chain relationships? Select TWO.

AMistrust

BLow spend

CLack of feedback

DMarket segment

Answer : A, C

Relationship effectiveness is damaged by mistrust and poor feedback/communication. Spend level alone is not inherently harmful if expectations are aligned. Short cited terms: ''trust,'' ''communication/feedback'' (L5M7 Study Guide, p.93).

CIPS Achieving Competitive Advantage Through the Supply Chain L5M7 Exam Questions