Supply Network Design - L6M9 Exam Practice Test

Question 1

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?

A. Variance analysis

B. Corporate strategy

C. Theory of Constraints

D. Push technique

Correct Answer: C

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Question 2

Scenario:
Blue Bear Ltd is amultifunctional manufacturing organisationwith aglobal supply chainand customers in over30 different countries. Each function within the company hasdifferent supply networksand relationships.
For eachfunction, select the correctValue Chain ActivityandSupply Network Typefrom the given options.

Correct Answer:

Explanation:
Function 1:This function is asupport activityresponsible for ensuring other functions have the right resources to complete work. It has acomplex structurewithhorizontal and verticalreporting lines, and each employee has clear objectives.#Correct answer:HR|Bureaucratic Function 2:This function ensures that theFive Rightsare achieved. It makeskey strategic decisionsthat other departments follow.Power is centralised, and staff support other business areas as needed.#Correct Answer:
Procurement|Centralised
Function 3:Staff describe themselves as the"people that get stuff done". This is aPrimary Activityin the Value Chain, responsible for turning raw materials intofinished products. The function has ahighly valued supply network, bothupstream and downstream, withjoint decision-making.#Correct answer:Operations| Symmetrical Function 4:Although aPrimary Activity, this function isnot well-organised. It relies ontrust-based relationshipsrather than formal contracts. Information is shared informally. It is responsible forwarehousing and transportation.#Correct Answer:Outbound Logistics|Social Function 5:This function has aone-sided supply network. It is aPrimary Activityanddeals directly with customers.#Correct Answer:Marketing and Sales|Asymmetrical A screenshot of a white sheet AI-generated content may be incorrect.

Question 3

Which of the following is atechnique for continuous improvementthat employs afull-time specialist improvement team?

A. Value stream mapping

B. Six Sigma

C. Kaizen

D. Employee suggestion scheme

Correct Answer: B

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Question 4

Mabel, theOperations Directorat a hotel, is engaged in a debate abouttrade-offs. The CFO believes that efficiency and effectiveness cannot be achieved together. Is this correct?

A. Yes - engaging in trade-offs means that continuous improvement methodologies are no longer required

B. No - the concept of trade-offs means that the organisation can position itself to achieve both effectiveness and efficiency

C. Yes - the hotel must make a trade-off between efficiency or effectiveness, it cannot have both

D. No - with improvements to technology and communications, there is no need for trade-offs

Correct Answer: B

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Question 5

In aResource-Based View (RBV)of strategic management, which characteristics make aresource strategically valuableto an organisation? SelectALLthat apply.

A. Scarcity

B. Optimisable

C. Originality

D. Replicable

E. Immovability

Correct Answer: A,C,E

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Question 6

Keisi is the new Operations Manager at Warehousing Logistics Corporation. She is reviewing several products sold by the organisation and deciding on the best warehousing options available. Keisi is looking at item 56283. This item is low cost, not sold in high volumes, but important to customers. Which of the following stocking policies should be used for this item?

A. Never be out of stock

B. Maintain an average of 3 days stock

C. Stock reviewed monthly

D. No stock held locally

Correct Answer: B

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Question 7

Linear Programming (LP) can be adopted bymany business functions. Who out of the following could use LP modelling?Select ALL that apply.

A. The marketing manager who is deciding how many social media posts to create

B. An operations director who needs to choose between two products to manufacture

C. The logistics coordinator who is planning delivery routes

D. The HR manager who needs to plan work schedules for the staff

E. A financial assistant who needs to create a budget for the manufacturing department

Correct Answer: A,C,D

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Question 8

Dan is an Operations Manager at a retail organisation. He is keen to understand more about the types of customers his organisation serves and has therefore devised new KPIs (key performance Indicators) with a customer-centric focus. He is particularly keen to understand which customersegments are providing the organisation with the highest ROI (return on investment). Which customer-centric performance measure should Dan look to introduce?

A. Customer Retention Rate

B. Churn Rate

C. Customer Lifetime Value

D. Net Promoter Score

Correct Answer: C

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Question 9

An organisation may haveseveral different business-level strategies. Is thisTRUE?

A. Yes-different parts of the business may operate indifferent marketplacesor have different services
/portfolios

B. Yes-the different business-level strategies will contradict each other

C. No-effective vertical alignment between operations strategy and corporate strategy means there must only beoneorganisation-wide operations strategy

D. No-an organisation should only haveonestrategy, which can be likened to a 'master plan' with high- level ambitions

Correct Answer: A

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CIPS Supply Network Design - L6M9 Exam Practice Test

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