Free PDF Quiz 2025 Efficient L6M9: Supply Network Design Reliable Braindumps Book
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CIPS Supply Network Design Sample Questions (Q29-Q34):
NEW QUESTION # 29
Maxi Ltd is a medium-sized manufacturing organisation in the automotive industry that creates engines for cars. It has traditionally worked well with its suppliers, with strong relationships and regular meetings. There are currently around 15 suppliers who provide parts to Maxi Ltd.
Due to changing customer demands, Maxi Ltd will, from next month, modify the manufacturing of some of its products. Product X is being made more environmentally friendly, with output of CO2 being reduced by 32%. The product will take longer to produce, but there will be no additional cost to customers for this.
Maxi ltd are considering outsourcing the manufacturing of Product Y as it is not a product which is routinely ordered by customers. This will allow Maxi Ltd to focus on other products which generate higher revenues for the company. The concern within the Board of Directorsis that if demand increases for this product, an outsourced company may not be able to cope with higher numbers of orders.
Product Z is an extremely popular item and oftentimes Maxi Ltd does not have the capacity to fulfil all orders. Consideration has been given to increasing the size of the factory, but this has been discarded as risky as demand is not guaranteed. The product has been available on the marketplace for a short amount of time and sales are continuing to increase, but the company believes this will soon plateau. To deal with current demand, the marketing team is working on campaigns to invite customers to make orders for this product at certain times of the year when product X is not being created in the factory.
This means resources can be reallocated to the creation of product Z.
What is themain concernregarding the option to outsource the manufacturing of product Y?
Answer: C
Explanation:
The main concern with outsourcingproduct Yis whether theoutsourced companycanhandle a potential increase in demand. This issue is related toscalability, as an external supplier may struggle to ramp up production if demand rises. (LO 1.2)
NEW QUESTION # 30
XYZ Ltd is aretail organisationselling various hair care products. Themarketing teamis reviewingsales figuresfrom the past year and wants to determinewhich products should receive extra marketing.
One product haslow market sharebut exists in ahigh-growth market.
According to theBoston Consultancy Group (BCG) Matrix, which category does this product fall under?
Answer: B
Explanation:
#Problem Child(also calledQuestion Mark) refers to a product withlow market sharein ahigh-growth market.
#BCG Matrix Categories:
* Dog##Low market share, low market growth
* Cash Cow##High market share, low market growth
* Star##High market share, high market growth
* Problem Child (Question Mark)##Low market share, high market growth
#Exam Tip:The BCG Matrix is frequently tested. Be aware that "Problem Child" is sometimes called
"Question Mark"in other versions of the matrix!
(See LO 2.3, p.130)
NEW QUESTION # 31
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 to team 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 system is used by ABC Ltd?
Answer: C
Explanation:
The system used isERP (Enterprise Resource Planning)since it links multiple business functions such as HR and finance.MRP and MRPIIare primarily used formanufacturing/operations, andKPIrefers to performance measurement rather than a system. (See LO 3.3)
NEW QUESTION # 32
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?
Answer: C
Explanation:
The item described is a 'regular seller'-important to customers but not sold in high volumes. Keepingan average of 3 days' stockbalances demand with the effort required for stock management. "Never be out of stock" is only for high-demand, critical items, while "monthly stock review" might lead to lost sales. (See p.
158)
NEW QUESTION # 33
Megan, theDirector of Operationsat Orange Windows Ltd, is concerned aboutovercapacity. Should she be worried?
Answer: B
Explanation:
* Overcapacitymeans the organisationhas more production than demand, leading towaste and inefficiency.
* Customer orders will still be fulfilled(eliminating option B).
* Under capacity (D) is incorrect, asovercapacity, not undercapacity, leads to excess stock.
(LO 2.2, See p.115)
NEW QUESTION # 34
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