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CIPS Supply Network Design Sample Questions (Q79-Q84):
NEW QUESTION # 79
Of the following, which areexamples of disintermediation?Select ALL that apply.
- A. A business sells a property to a buyer without the use of an estate agent or broker
- B. A farm sells its products directly to the public
- C. A factory hires an external organisation to provide cleaning and security services
- D. A furniture manufacturer buys a forest to produce the wood which it will chop down to make the furniture
- E. A company relocates its call centre to another country to save on costs
Answer: A,B
Explanation:
* Disintermediationrefers toremoving intermediariesfrom a supply chain, meaning companies deal directly with consumers or suppliers.
* Option B (selling without an estate agent)removes thereal estate broker.
* Option C (farm selling directly to the public)removes theretailer/middleman.
* Option A is incorrectbecausebuying a forestisbackward vertical integration.
* Option D is incorrectbecause relocating a call centre isoffshoring.
* Option E is incorrectbecause hiring an external company for services isoutsourcing, not disintermediation.
(LO 1.2, See p.23)
NEW QUESTION # 80
According toFoster's Model of Operational Balance, how shouldbusiness strategybe developed?
- A. Use both formal and informal groups across the organisation
- B. By senior leaders and filtered down through the company hierarchy
- C. Designed by senior leaders and updated once a year based on feedback from other members of the organisation
- D. Select one member from each department to join a working group and represent the interests of that department
Answer: A
Explanation:
Foster'sland management-based approachsuggests thatbusiness strategy should not be dictated from the top down. Instead, it should involveboth formal and informal groupsthroughout the organisation. This helps preventartificial decision-making and misalignmentbetween leaders and employees.
(LO 2.1, See p.77)
NEW QUESTION # 81
Sandeep is the Chief Financial Officer at Brass Knuckles Ltd. He has attended a meeting with the Head of Operations who has shown him several options of potential changes that can be made to the operations department of the business. These options have been plotted on the Efficiency Frontier. What is the purpose of using the Efficiency Frontier to evaluate these options?
- A. This will identify the option that has a better return on investment with the same level of risk
- B. This will identify the options which have potential for market growth
- C. This will estimate the success rate of each option
- D. This will list the options in order of return on investment
Answer: A
Explanation:
The Efficiency Curve plots options (or trade-offs) on a graph based on the level of risk and ROI. The options that are closest to the curve are the best-these ones represent the best ROI with the same level of risk. (See p.
133)
NEW QUESTION # 82
Joy is a Senior Accountant at Big Fish Ltd. The organisation is a manufacturing company that specialises in sporting and camping goods such as tents, fishing rods, and archery equipment. These items are produced using imported raw materials from a variety of suppliers, many of whom arebased in low-cost countries. Joy is assessing the extent to which the organisation may be vulnerable to cost increases and fluctuating currency values. What is Joy completing?
- A. Investment Appraisal
- B. Background Check
- C. Sensitivity Analysis
- D. Gearing Ratio
Answer: C
Explanation:
This is a sensitivity analysis-checking how sensitive the organisation is to changes in finance caused by price rises or currency fluctuations. (See p.165)
NEW QUESTION # 83
XYZ Ltd is a manufacturing organisation that buys raw materials from ABC Ltd, including rare materials such as rubies and gold. XYZ Ltd acceptsallorders from ABC Ltd as the materials are rare, making the relationshipone-sided. Which type of network best describes this relationship?
- A. Centralised
- B. Asymmetric
- C. Symmetric
- D. Proprietary
Answer: B
Explanation:
This is anasymmetric relationship, meaning it isone-sided-one company has more power in the supply relationship.
* Asymmetric supply networksoccur when one party is dependent on the other (e.g., XYZ Ltd relies on ABC Ltd for rare materials).
* Symmetric networksinvolvemutual negotiation and equal dependence.
Since XYZ Ltdmust accept whatever ABC Ltd supplies, the relationship isasymmetric. (LO 1.1, See p.4)
NEW QUESTION # 84
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