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CIPS Supply Network Design Sample Questions (Q54-Q59):
NEW QUESTION # 54
Of the following, which areexamples of disintermediation?Select ALL that apply.
Answer: B,C
Explanation:
* Disintermediationrefers toremoving intermediariesfrom a supply chain, meaning companies deal directly with consumers or suppliers.
* Option B (selling without an estate agent)removes thereal estate broker.
* Option C (farm selling directly to the public)removes theretailer/middleman.
* Option A is incorrectbecausebuying a forestisbackward vertical integration.
* Option D is incorrectbecause relocating a call centre isoffshoring.
* Option E is incorrectbecause hiring an external company for services isoutsourcing, not disintermediation.
(LO 1.2, See p.23)
NEW QUESTION # 55
Which of the following are examples of investment appraisal techniques? Select ALL that apply.
Answer: A,B,C
Explanation:
Investment appraisal techniques help assess whether an investment, such as purchasing new machinery, is financially viable.Return on investment, cash flow impact, and payback periodare all investment appraisal methods.Liquidity and gearingassess financial health but do not determine whether to make an investment.
(See p.160)
NEW QUESTION # 56
Gill runs the operations department of amanufacturing organisationin Wales. The departmentemulates best practicesfrom competitors throughbenchmarkingand has recently introducedSix Sigmato prevent operational problems. Which of the following best describes Gill's approach to operations function?
Answer: B
Explanation:
This aligns withexternally neutral, which includes:
* Benchmarking against competitors
* Adopting best practices(Lean, Six Sigma, BPR, TQM)
* Emulating successful industry models
(LO 2.1, See p.99)
NEW QUESTION # 57
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 toteam 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 is the nature of the COO's consideration?
Answer: D
Explanation:
This is an issue related to theTheory of Constraints, as Team 2 is thebottleneckaffecting overall production efficiency. TheTheory of Constraintsfocuses on identifying and managing the most critical limitation in a system. (See LO 3.3)
NEW QUESTION # 58
What is the purpose ofsupplier development?
Answer: B
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 # 59
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