Which of the following is a difference between a supply chain and a supply network? Select ALL that apply.
Answer : B, C, D
A supply chain is a simple, linear system where products move from A B C.
A supply network is multi-layered, with horizontal and vertical connections, making it more complex.
Dimension difference (B): Supply networks have larger dimensions, with multiple supply channels and flows.
Complexity (C): A supply network is more intricate than a single supply chain.
Number of players (D): Supply networks involve more entities than a simple supply chain.
Profit made (A) is incorrect, as both supply chains and supply networks can be profitable.
Location of players (E) is incorrect, as both supply chains and networks can be local or global.
(LO 1.1, See p.8)
Question 2
Risks are always present within organisational strategies, and it is important that they are assessed. Which of the following are strategies for dealing with risk?
Answer : A
The four risk management strategies are often remembered as TEAR:
Transfer: Shift the risk to another party (e.g., insurance, outsourcing).
Eliminate: Remove the risk entirely where possible.
Avoid: Choose not to engage in activities that introduce the risk.
Reduce: Take measures to minimize the impact or likelihood of the risk occurring.
(See p.200)
Question 3
Which of the following are typical objectives of Linear Programming (LP)? Select ALL that apply.
Answer : A, B, D, E
Linear Programming (LP) aims to optimise resource allocation by:
Maximising machine working hours (increase efficiency).
Minimising production costs (reduce expenses).
Maximising labour working hours (increase productivity).
Option C is incorrect---LP aims to minimise, not maximise, transportation costs.
(LO 1.3, See p.47)
Question 4
Strategic stocking decisions are likely to change under what circumstances? Select ALL that apply.
Answer : A, B
Strategic stocking decisions change when external factors shift, such as a competitor going out of business (leading to increased demand) or a vulnerability in raw material supply (e.g., a bad harvest). Short lead times and low demand do not necessarily change stocking decisions but rather influence how stock is currently managed. (See p. 159)
Question 5
LTL Ltd is a manufacturing organisation producing made-to-order equipment for the construction industry, such as bespoke windows and doors. The Head of Operations has received four large orders and is considering the sequencing of production. Which of the following should the company do?
Answer : C
Sequencing involves balancing logic, cost, and speed to optimise production. Prioritising orders purely by arrival time (Option A) or cost efficiency (Option B) might not be practical. Similarly, making sure all orders finish at the same time (Option D) isn't always necessary. (See p.183)
Question 6
Manuel has created an Efficient Frontier diagram mapping six options his organisation can take. Is it possible for there to be two curves on this diagram?
Answer : A
An Efficient Frontier diagram can have multiple curves. The first curve shows potential return on investment under current conditions, while the second curve models improvements if the organisation engages in continuous improvement. A third curve may represent a long-term vision, but this is less common. (See p.136)
Question 7
Zelda is the Head Consultant at Pirate Architects Ltd, which provides services to clients in the construction industry. She has a team of 20 consultants and is considering how many projects each team member should handle. In terms of capacity loading, which factors should Zelda consider when assigning projects? Select ALL that apply.
Answer : A, B, D, E
Capacity loading determines how much work each employee can handle. Key factors include experience, efficiency, time availability, and effectiveness. Salary is not relevant to determining workload capacity---though managers might mistakenly believe higher-paid employees should take on more. (See p.181)
All Official Question Types