Free CIPS Supply Network Design L6M9 Exam Questions

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?

In a Resource-Based View (RBV) of strategic management, which characteristics make a resource strategically valuable to an organisation? Select ALL that apply.

Which of the following are disadvantages of the small-capacity strategy in capacity planning? Select ALL that apply.

Paul is the Operations Manager at a button factory. Buttons are incorporated into many different fashion garments, and as they are currently 'on trend,' there is a high demand for more buttons. Paul is concerned that the factory cannot produce the number of buttons that is being demanded in the marketplace. He has calculated that each team within the factory only has the capacity to create 1,000 buttons per day, and he will decline any requests for buttons that exceed this amount. In terms of Capacity Loading, what is this called?

Which of the following are benefits of optimising the supply chain? Select ALL that apply.

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 Directors is 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.

Which of the following is the trade-off in the modification of product X?

Which of the following are examples of investment appraisal techniques? Select ALL that apply.

Manuel has created an Efficient Frontier diagram mapping six options his organisation can take. Is it possible for there to be two curves on this diagram?

When designing a supply network, which of the following stages should be completed first?

Which of the following are examples of Linear Programming (LP) solvers? Select ALL that apply.