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CIPS Supply Network Design Sample Questions (Q72-Q77):

NEW QUESTION # 72
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 capacity strategy is being used?

A. Capacity-lag
B. Capacity-led
C. Demand-lag
D. Demand-led

Answer: D

Explanation:
The company follows ademand-ledstrategy since production capacity is adjustedbased on actual customer orders. No stock is produced without confirmed demand. (See LO 2.2)

NEW QUESTION # 73
Which of the following appear in the concept ofTheory of Constraints? Select ALL that apply.

A. Rope
B. Buffer
C. Drum
D. Boat
E. Safe harbour

Answer: A,B,C

Explanation:
TheTheory of Constraints (TOC)includes theDrum, Buffer, and Ropeapproach. This method helps manage constraints in production by synchronising workflow. TheDrumsets the pace, theBufferprotects against variability, and theRopeensures efficient scheduling.Boat and safe harbourare not part of TOC. (See p.204) For further reading onDrum-Buffer-Rope, refer to this resource:#Theory of Constraints - Fortelabs

NEW QUESTION # 74
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?

A. Externally supportive
B. Internally neutral
C. Internally supportive
D. Externally neutral

Answer: D

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 # 75
The Improvement Gap Analysis can be utilised to manage trade-offs in operational strategy. Which of the following is measured by the IGA? Select ALL that apply.

A. Profit margin
B. Customer return rate
C. Churn rate
D. Customer dissatisfaction levels
E. Return on investment

Answer: D

Explanation:
The Improvement Gap Analysis measures customer dissatisfaction levels. It describes the current state of an organisation and what needs to be done to reach the desired state. The gap between these states represents customer dissatisfaction. The IPA matrix by Piccolo et al categorises dissatisfaction into four quadrants, helping organisations determine whether action is needed. (See p. 137)

NEW QUESTION # 76
What does a forcefield diagram show?

A. The flow of information through a supply network
B. The sequencing of events within an operational strategy
C. People in favour of change and against it
D. The potential causes of an issue that has occurred

Answer: C

Explanation:
Aforcefield diagramidentifies forces (e.g., people or factors) that support or oppose change. This model, developed byKurt Lewin, helps organisations assess and manage resistance to change. (See p.196)

NEW QUESTION # 77
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