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NEW QUESTION # 37
Which of the following aretypical objectives of Linear Programming (LP)?Select ALL that apply.
- A. Minimising inventory levels
- B. Maximising transportation costs
- C. Maximising machine working hours
- D. Maximising labour working hours
- E. Minimising production costs
Answer: A,C,D,E
Explanation:
* Linear Programming (LP) aims to optimise resource allocationby:
* Minimising inventory levels(reduce storage costs).
* Maximising machine working hours(increase efficiency).
* Minimising production costs(reduce expenses).
* Maximising labour working hours(increase productivity).
* Option C is incorrect-LPaims to minimise, not maximise, transportation costs.
(LO 1.3, See p.47)
NEW QUESTION # 38
According toFoster's Model of Operational Balance, how shouldbusiness strategybe developed?
- A. Select one member from each department to join a working group and represent the interests of that department
- B. Designed by senior leaders and updated once a year based on feedback from other members of the organisation
- C. Use both formal and informal groups across the organisation
- D. By senior leaders and filtered down through the company hierarchy
Answer: C
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 # 39
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?
- A. Finance
- B. Cost
- C. Scalability
- D. Competence
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 # 40
Which of the following appear in the concept ofTheory of Constraints? Select ALL that apply.
- A. Boat
- B. Drum
- C. Rope
- D. Safe harbour
- E. Buffer
Answer: B,C,E
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 # 41
A car manufacturing organisation organises formal, regular meetings with itstier one suppliersfor the purpose of collaborating on improvements and changes to the final product. What is this arrangement known as?
- A. Supplier focus group
- B. Supplier association
- C. Supplier improvement project
- D. Supplier forum
Answer: B
Explanation:
This is asupplier association-the key clue in the question is "formal, regular meetings."
* Asupplier improvement projectwould be aone-offinitiative rather than ongoing formal meetings.
* Asupplier forumismore informalthan what is described in the question.
* Asupplier focus groupmeets to discuss specific topics rather than engaging in regular collaboration on improvements.
(See p.191)
NEW QUESTION # 42
Which of the following statements aboutDemand Chain Management (DCM)areTRUE? SelectALLthat apply.
- A. An organisation can be effective or efficient, but not both
- B. Demand chain management is a strengths-based approach
- C. There is a long-term focus
- D. Key drivers of demand chain management are cash flow and profitability
- E. Demand chain management focuses on cost minimisation
- F. The supply chain uses forecasts and plans to understand customer demand
Answer: B,C,D,F
Explanation:
#Correct statements about DCM:
* (C)Cash flow and profitabilityarekey drivers.
* (D)It is astrengths-basedapproach, focusing onleveraging competitive advantages.
* (E)There is along-term focusrather than just short-term efficiency.
* (F)Usesforecasts and planningto understand customer demand.
#Incorrect statements:
* (A)False - A companyCANbe bothefficient and effective.
* (B)False -Supply Chain Management (SCM)focuses oncost minimisation, whileDemand Chain Management (DCM)focuses oncustomer value.
(See LO 2.3, p.125)
NEW QUESTION # 43
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 pricing mechanism is being used with supplier Y?
- A. Gain share
- B. Fixed price
- C. Indexation
- D. Variable price
Answer: C
Explanation:
Indexationis the correct pricing mechanism because the price is adjusted based onCPI (Consumer Price Index), which is a form of indexed pricing. This ensures that prices fluctuate in response to inflation or other economic indicators. (See LO 3.3)
NEW QUESTION # 44
Strategic stocking decisions are likely to change under what circumstances? Select ALL that apply.
- A. Customer demand is low
- B. Changes in competitor activity
- C. Raw materials are vulnerable
- D. There is a short lead time for the product
Answer: B,C
Explanation:
Strategic stocking decisions change when external factors shift, such as a competitor going out of business (leading to increased demand) or a vulnerability in raw material supply (e.g., a bad harvest). Short lead times and low demand do not necessarily change stocking decisions but rather influence how stock is currently managed. (See p. 159)
NEW QUESTION # 45
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?
- A. Complete loading
- B. Process loading
- C. Finite loading
- D. Maximum loading
Answer: C
Explanation:
This isfinite loading. There is a finite amount of buttons that can be produced. Finite means there is a limit.
This is the opposite ofinfinite loading, where a team can take on additional tasks/orders without any issues.
Maximum loadingis similar to finite loading, but the difference is subtle-maximum is the amount of work that is possible in a given time period, but no limits are placed on this. Infinite loading, a strict limit is placed.
(See p.181)
NEW QUESTION # 46
Scenario:
Five manufacturing organisations are working withdifferent productsand usingvarious operational strategies. Each product aligns with acategory from the Boston Consultancy Group (BCG) Matrix, and each organisation is implementing aspecific operational strategy.
For eachorganisation, select thecorrect Product TypeandOperational Strategy.
Answer:
Explanation:
Explanation:
A screenshot of a product description AI-generated content may be incorrect.
NEW QUESTION # 47
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?
- A. Never be out of stock
- B. No stock held locally
- C. Maintain an average of 3 days stock
- D. Stock reviewed monthly
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 # 48
Greg is the manager at a car wash and is trying to work out the break-even point of his business. Which of the following pieces of information will he need to consider to understand his break-even point?Select ALL that apply.
- A. Variable costs
- B. Price per car wash
- C. Fixed costs
- D. Number of customers
- E. Number of employees
Answer: A,B,C
Explanation:
Greg needs to know hisfixed costs, variable costs, and price per car washto determine his break-even point.
For example, if:
* Fixed costs(rent, bills) = £100/day
* Variable cost per car wash(soap, sponges) = £5
* Price per car wash= £10
Thebreak-even pointis when revenue = costs, which means washing20 cars per day(£10 × 20 = £200 revenue, covering fixed and variable costs).
* Number of customers (C) is incorrect, as this iscalculated from the break-even formula, not an input.
* Number of employees (E) is incorrect, as it isnot a direct factorin the break-even calculation (only their wages as part of fixed costs).
(LO 1.3)
NEW QUESTION # 49
When designing a supply network, which of the following stages should be completedfirst?
- A. Track information flow
- B. Determine the approach for managing material flow
- C. Analyse potential risks
- D. Confirm the network scope
Answer: D
Explanation:
The correct sequence fordesigning a supply networkis:
* Determine strategic objectives
* Confirm the network scope
* Analyse potential risks
* Determine the approach for managing material and information flow
* Track material and information flow
Sincenetwork scopedefines theboundaries, scale, and overall structureof the network, it must be confirmed first. (LO 1.1, See p.3)
NEW QUESTION # 50
Megan, theDirector of Operationsat Orange Windows Ltd, is concerned aboutovercapacity. Should she be worried?
- A. Yes - overcapacity means that the organisation has wasted resources
- B. No - undercapacity will lead to unsold products
- C. Yes - overcapacity means that some customer orders may not be fulfilled
- D. No - overcapacity means there are unused resources within the operations department
Answer: A
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 # 51
What does a forcefield diagram show?
- A. People in favour of change and against it
- B. The flow of information through a supply network
- C. The sequencing of events within an operational strategy
- D. The potential causes of an issue that has occurred
Answer: A
NEW QUESTION # 52
Which of the following examples of a supplier would be suitable forStrategic Supplier BusinessReviews?
Select ALL that apply.
- A. Short-term bottleneck supplier
- B. A top-tier supplier in a tiered supply chain
- C. A partnership arrangement
- D. Supplier of direct components
- E. Sole sourcing
Answer: B,C,E
Explanation:
Strategic Supplier Business Reviewsare used for long-term and important suppliers. The study guide states that this type of review is more commonly seen where an organisation has significantsole sourcing, tiering, or partnership relationships, particularly those spanning a long time scale. Sharing future plans and incorporating developments in each organisation is important for maintaining strategic integrity.
* Option D (short-term bottleneck supplier)is incorrect because strategic reviews are for long-term supplier relationships.
* Option E (supplier of direct components)is incorrect because it does not specify that the supplier is of strategic importance. (See p.190)
NEW QUESTION # 53
Zelda is the Head Consultant at Pirate Architects Ltd, which provides services to clients in the construction industry. She has a team of 20 consultants and is considering how many projects each team member should handle. In terms of capacity loading, which factors should Zelda consider when assigning projects? Select ALL that apply.
- A. Staff member's efficiency
- B. Staff member's salary
- C. Staff member's time availability
- D. Staff member's experience
- E. Staff member's effectiveness
Answer: A,C,D,E
Explanation:
Capacity loadingdetermines how much work each employee can handle. Key factors includeexperience, efficiency, time availability, and effectiveness. Salary isnotrelevant to determining workload capacity- though managers might mistakenly believe higher-paid employees should take on more. (See p.181)
NEW QUESTION # 54
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. Customer Lifetime Value
- B. Net Promoter Score
- C. Churn Rate
- D. Customer Retention Rate
Answer: A
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 # 55
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