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CIPS Achieving Competitive Advantage Through the Supply Chain (L5M7) Sample Questions (Q26-Q31):
NEW QUESTION # 26
A strategy in which an organisation concentrates its resources on anarrow market or industry segmentis which ofPorter's Generic Strategies?
- A. Cost Leadership
- B. Focus
- C. Differentiation
- D. Cost Certainty
Answer: B
Explanation:
Porter'sFocus Strategyinvolvestargeting a niche marketto meet unique needs better than competitors.
Short cited term: "focus - targeting a narrow market segment" (L5M7 Study Guide, p. 52).
Reference:CIPS L5M7 Study Guide, p. 52.
NEW QUESTION # 27
Which of the following is an example of aCapital Expenditurefor a private healthcare facility?
- A. Medicine
- B. MRI Machine
- C. Cleaning Products
- D. Nurse's Salary
Answer: B
Explanation:
Capital expenditure (CapEx)coverslong-term investmentssuch as equipment or infrastructure that deliver value over time-e.g., MRI scanners. Operating costs (OpEx) include salaries and consumables.
Short cited extract: "CapEx - major assets and equipment; OpEx - running costs such as wages." (L5M7 Study Guide, Domain 3.2) Reference:CIPS L5M7 Study Guide, Domain 3.2.
NEW QUESTION # 28
Which of the following areincentivesfor suppliers to perform well on a contract? Select TWO.
- A. Outcome-based pricing
- B. Quality-based pricing
- C. Market-based pricing
- D. Revenue-based pricing
Answer: A,D
Explanation:
Revenue-basedandOutcome-basedpricing share financial benefits and performance gains, motivating suppliers to excel.
Short cited term: "gainshare, revenue and outcome pricing as supplier incentives." (L5M7 Study Guide, p.
198)
Reference:CIPS L5M7 Study Guide, p. 198.
NEW QUESTION # 29
To analyse thevalue of inventory held, which data points must be collected? Select TWO.
- A. Number of items held in storage
- B. Purchase price
- C. Expiry date
- D. Number of items sold
Answer: A,B
Explanation:
Inventory valuation requires data onquantity in stockandunit purchase cost. These determine the total inventory value at any given time.
Short cited extract: "Inventory value = number of items × purchase cost." (L5M7 Study Guide, p.147) Reference:CIPS L5M7 Study Guide, p.147.
NEW QUESTION # 30
What are some disadvantages to a multi-sourcing strategy in a supply chain? Select TWO.
- A. Inconsistency in quality
- B. Relationships are more transactional
- C. Less dependency on one supplier
- D. Possibility of having surplus stock
Answer: A,D
Explanation:
Multi-sourcing canincrease inventory/duplicationand createquality inconsistencybetween sources. Reduced dependency (C) is anadvantage, and (D) is a neutral characteristic rather than a disadvantage. Short extract: " multiple sources may lead to duplication/stock and variable quality." (L5M7 Study Guide, p.6) Reference:L5M7 Study Guide, p.6.
NEW QUESTION # 31
......
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