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Details |
| Topic 1 |
- Understand operations strategy and its contribution to overall business success: Targeting Operations Directors, this section evaluates understanding of operations strategy's impact on organizations, including aligning with business goals, market requirements, and resource management.
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| Topic 2 |
- Assess the strategic value of resource planning and control: This part targets Resource Planners, focusing on evaluating strategic resource planning concepts such as forecasting, scheduling, monitoring, and controlling resources effectively within the operational framework.
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| Topic 3 |
- Understand and apply leadership skills and behaviors appropriate for strategically improving the procurement and supply chain function: This section of the exam measures the skills of Supply Chain Managers and covers understanding leadership behaviors that enhance procurement processes. It assesses how to strategically improve supply chain functions, focusing on a key skill like "Strategic Decision Making".
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CIPS Supply Network Design Sample Questions (Q11-Q16):
NEW QUESTION # 11
Which of the following arecontract pricing arrangementsused to control costs?Select ALL that apply.
- A. Variable price
- B. Gain-share agreement
- C. Use of price index
- D. Fixed price
- E. Open book
Answer: B,C,D,E
Explanation:
* Fixed price: The supplier cannot change the price, ensuring cost control.
* Use of price index: Prices can only change based on an agreed index, preventing arbitrary cost increases.
* Gain-share agreement: The supplier is incentivized to save costs as they share in the profits, reducing the likelihood of overcharging.
* Open book: The buyer has full visibility of the supplier's pricing, preventing overcharging.
Variable price (D) is incorrectbecause it allows the supplier to change prices freely, making cost control difficult. (See p.199)
NEW QUESTION # 12
What is the purpose ofsupplier development?
- A. To ensure that there are no logistics or delivery issues within the supply chain
- B. To reduce the number of suppliers upon which a business would become dependent
- C. To add value to the supply chain
- D. To lower prices, which will increase the profit margin
Answer: C
Explanation:
The primary goal ofsupplier developmentis toadd valueto the supply chain, not just to reduce costs.
* Option A is incorrectbecause supplier development is not solely about cost reduction-it also focuses onquality and efficiency.
* Option B is incorrectbecause reducing suppliers is not always the goal; sometimes businesses want a widersupplier base.
* Option D is incorrectbecause no system caneliminatelogistics risks entirely-there will always be uncertainties.
(See LO 1.1, p.2)
NEW QUESTION # 13
What would the Boston Consulting Group Matrix help an organisation decide?
- A. The break-even point
- B. The desirable size of the supply network
- C. The optimum number of suppliers
- D. Which product mix should be invested in
Answer: D
Explanation:
TheBoston Consulting Group (BCG) Matrixidentifies four categories of products based on market size and growth rate. It is a useful tool for evaluating whether a product is performing well and whether it's worth investing in. Organisations use this matrix to determine which products to invest in and which ones to discontinue. (See p.130)
NEW QUESTION # 14
Giant Gymsis a fitness chain where clientspay a monthly subscriptionfor full access to gym facilities. The company typically experiences ahuge spike in new memberships in Januarydue to New Year's fitness resolutions. However, toreduce this seasonal surge, Giant Gyms introduces apricing structure that makes it cheaper to sign up in November, which is typically itsslowest month.
What is this strategy called?
- A. Optimal Capacity
- B. Capacity Expansion
- C. Lead Strategy
- D. Demand Smoothing
Answer: D
Explanation:
Demand smoothingattempts toinfluence customer behaviorto balancedemand fluctuations. Giant Gyms wants more customers inNovemberrather than inJanuary, preventingseasonal peaks and troughs.
#Note:
* Lead Strategy= expanding capacitybefore demand increases
* Capacity Expansion= increasing production ability
* Optimal Capacity= achieving thebest cost-to-production ratio
(See LO 1.3, p.55)
NEW QUESTION # 15
Strategic stocking decisions are likely to change under what circumstances? Select ALL that apply.
- A. There is a short lead time for the product
- B. Changes in competitor activity
- C. Customer demand is low
- D. Raw materials are vulnerable
Answer: B,D
Explanation:
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)
NEW QUESTION # 16
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