CIPS L6M10 Exam Practice Test Instant Access

Question 1

The quarterly Global Supply Chain Risk Report measures strategic logistical risks across industry sectors using four key risk metrics. Which metric examines the impact of the exchange rate when transactions occur between the buying organization and supply partners who use different currencies?

AGlobal sourcing risk

BSupplier criticality

CSupplier financial risk

DForeign exchange risk

Answer : D

Foreign exchange risk measures the impact of currency fluctuations when conducting transactions in different currencies, affecting supply chain costs. [P-63]

Question 2

What historical communication method did international shipping companies use to communicate with their ships?

ATelegram

BFax

CElectronic data interchange (EDI)

DInternet

Answer : A

Historically, telegram was used for ship-to-shore communication before modern digital solutions were developed. [P-98]

Question 3

Why did corporations like General Motors and DuPont shift to relatively decentralized organizational structures?

ATo reduce the importance of technology

BTo increase economies of scale

CTo improve adaptability to local conditions

DTo enhance global competition

Answer : C

Corporations structured business units around products and geographic markets to enhance flexibility and local adaptability. [P-102]

Question 4

What is one approach Sarah, an experienced exporter, can take to minimize the risk of disputes over the interpretation of an international sales contract?

ARely solely on Incoterms without any variations or additions.

BExplicitly specify variations or additions to Incoterms relevant to the trade.

CAvoid specifying any terms in the contract to keep it flexible.

DMake small changes to Incoterms without notifying the buyer.

Answer : B

To minimize disputes, Sarah should explicitly specify variations or additions to Incoterms in her contract to ensure clarity. [P-123]

Question 5

A company is experiencing difficulties in managing supply chain complexity and information flow across multiple tiers of suppliers. Which strategy can help them address these challenges?

AEliminating all lower-tier suppliers

BImplementing layering and tiering in the supply chain network

CIncreasing the use of subcontractors

DFocusing on competitive relationships with suppliers

Answer : B

Layering and tiering help manage supply chain complexity by structuring supplier interactions and improving information flow. [P-34]

Question 6

A global organization is considering implementing a tiered supply chain network. What would be the primary benefit of this approach?

ATo centralize production facilities in one location

BTo eliminate competition among suppliers

CTo increase demand uncertainty

DTo reduce the complexity of the supply chain

Answer : D

A tiered supply chain network reduces complexity by structuring supplier relationships while maintaining consistent information flows and coordination. [P-34]

Question 7

In the context of logistics flows, what does the term "bi-directional" refer to?

AGoods flow from the point of origin to the point of consumption.

BInformation flows only from upstream to downstream.

CFlows of materials and financials are interconnected.

DFlows that can occur in both directions, from point of origin to point of consumption and vice versa.

Answer : D

Bi-directional flows involve movement in both forward (origin to consumption) and reverse (consumption to origin) directions, supporting processes like returns and feedback. [P-139]

CIPS L6M10 Global Logistics Strategy Exam Practice Test