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CIPS Supply Network Design Sample Questions (Q77-Q82):

NEW QUESTION # 77
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. Net Promoter Score
B. Customer Retention Rate
C. Churn Rate
D. Customer Lifetime Value

Answer: D

Explanation:
#Customer Lifetime Value (CLV)measures the total amount a customer is expected to spend over their lifetime with a company, helping identify themost profitable customer segments.
#Other KPIs are not suitable for Dan's needs:
* Churn Rate: Measurescustomer lossover time.
* Net Promoter Score: Measurescustomer satisfaction and loyalty.
* Customer Retention Rate: Focuses onhow many customers stay with the companybut does not indicate ROI.
For more insights onCLV, visit:#Customer Lifetime Value - WallStreetMojo (See LO 2.2, p.97)

NEW QUESTION # 78
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. Push technique
B. Variance analysis
C. Corporate strategy
D. Theory of Constraints

Answer: D

Explanation:
This is an issue related to theTheory of Constraints, as Team 2 is thebottleneckaffecting overall production efficiency. TheTheory of Constraintsfocuses on identifying and managing the most critical limitation in a system. (See LO 3.3)

NEW QUESTION # 79
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. Internally neutral
B. Externally supportive
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 # 80
LTL Ltd is a manufacturing organisation producing made-to-order equipment for the construction industry, such as bespoke windows and doors. The Head of Operations has received four large orders and is considering the sequencing of production. Which of the following should the company do?

A. Sequence the orders in the way that will be the cheapest to produce, creating the highest profit margin
B. Start manufacturing the order that has the longest completion time first so all orders are ready at the same time
C. Use a First Come, First Serve system to prioritise the orders that were made first, ensuring customer satisfaction
D. Create the orders in the most logical, economic, and fastest pattern. This may mean that the first order received is the last to be produced

Answer: D

Explanation:
Sequencinginvolves balancinglogic, cost, and speedto optimise production. Prioritising orders purely by arrival time (Option A) or cost efficiency (Option B) might not be practical. Similarly, making sure all orders finish at the same time (Option D) isn't always necessary. (See p.183)

NEW QUESTION # 81
Which of the following are examples of investment appraisal techniques? Select ALL that apply.

A. Return on investment
B. Cash flow impact
C. Payback period
D. Gearing
E. Liquidity

Answer: A,B,C

Explanation:
Investment appraisal techniques help assess whether an investment, such as purchasing new machinery, is financially viable.Return on investment, cash flow impact, and payback periodare all investment appraisal methods.Liquidity and gearingassess financial health but do not determine whether to make an investment.
(See p.160)

NEW QUESTION # 82
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