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CIPS Supply Network Design Sample Questions (Q50-Q55):

NEW QUESTION # 50
What is the purpose ofsupplier development?

A. To lower prices, which will increase the profit margin
B. To ensure that there are no logistics or delivery issues within the supply chain
C. To add value to the supply chain
D. To reduce the number of suppliers upon which a business would become dependent

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 # 51
Greg is the manager at a car wash and is trying to work out the break-even point of his business. Which of the following pieces of information will he need to consider to understand his break-even point?Select ALL that apply.

A. Variable costs
B. Number of customers
C. Number of employees
D. Price per car wash
E. Fixed costs

Answer: A,D,E

Explanation:
Greg needs to know hisfixed costs, variable costs, and price per car washto determine his break-even point.
For example, if:
* Fixed costs(rent, bills) = £100/day
* Variable cost per car wash(soap, sponges) = £5
* Price per car wash= £10
Thebreak-even pointis when revenue = costs, which means washing20 cars per day(£10 × 20 = £200 revenue, covering fixed and variable costs).
* Number of customers (C) is incorrect, as this iscalculated from the break-even formula, not an input.
* Number of employees (E) is incorrect, as it isnot a direct factorin the break-even calculation (only their wages as part of fixed costs).
(LO 1.3)

NEW QUESTION # 52
Risks are always present within organisational strategies, and it is important that they are assessed. Which of the following arestrategies for dealing with risk?

A. Track, control, mitigate, reduce
B. Terminate, escape, eliminate, destroy
C. Escape, eliminate, evade, end
D. Avoid, eliminate, reduce, transfer

Answer: D

Explanation:
Thefour risk management strategiesare often remembered asTEAR:
* 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)

NEW QUESTION # 53
Which of the following are Porter's strategies that can help an organisation create competitive advantage in the marketplace?Select ALL that apply

A. Become a specialised provider
B. Become an organisation that is meaningfully different from competitors
C. Ensure a large product range
D. Be a low-cost provider
E. Provide exceptional customer service

Answer: A,B,D

Explanation:
Porter's three strategies are low-cost, differentiation, and niche. These options are just worded slightly differently but align with Porter's competitive strategies. (See p.151)

NEW QUESTION # 54
Which of the following statements aboutDemand Chain Management (DCM)areTRUE? SelectALLthat apply.

A. Demand chain management focuses on cost minimisation
B. An organisation can be effective or efficient, but not both
C. Key drivers of demand chain management are cash flow and profitability
D. The supply chain uses forecasts and plans to understand customer demand
E. There is a long-term focus
F. Demand chain management is a strengths-based approach

Answer: C,D,E,F

Explanation:
#Correct statements about DCM:
* (C)Cash flow and profitabilityarekey drivers.
* (D)It is astrengths-basedapproach, focusing onleveraging competitive advantages.
* (E)There is along-term focusrather than just short-term efficiency.
* (F)Usesforecasts and planningto understand customer demand.
#Incorrect statements:
* (A)False - A companyCANbe bothefficient and effective.
* (B)False -Supply Chain Management (SCM)focuses oncost minimisation, whileDemand Chain Management (DCM)focuses oncustomer value.
(See LO 2.3, p.125)

NEW QUESTION # 55
......

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