Free Supply Network Design Exam L6M9 Exam Practice Test

Of the following, which are examples of disintermediation? Select ALL that apply.

• A furniture manufacturer buys a forest to produce the wood which it will chop down to make the furniture
• A business sells a property to a buyer without the use of an estate agent or broker
• A farm sells its products directly to the public
• A company relocates its call centre to another country to save on costs
• A factory hires an external organisation to provide cleaning and security services

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 shortstaffed 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 system is used by ABC Ltd?

• MRP
• Lean
• ERP
• KPI

Salgo Ltd is an oil refinery organisation that has been in operation for 30 years. It has made increasing profits each year, with the most recent year's takings in excess of £20m. Salgo Ltd uses an Emergent Strategy principle when it comes to resource planning. What are the characteristics of this approach? Select ALL that apply.

• There is a lot of forward planning
• The strategy is based on historical patterns
• The strategy is effective at creating change
• A new strategy is created each year to replace the old one
• The organisation responds to market changes

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 marketplacefor 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?

• Environment
• Quality
• Flexibility
• Speed

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.What area of the product lifecycle is product Z in?

• Introduction
• Growth
• Maturity
• Decline

XYZ Ltd is a perfume manufacturer based in France. They have created a new perfume and research has shown that demand for the perfume will outstrip supply. The Chief Operating Officer (COO) and the Chief Financial Officer (CFO) are meeting to discuss this. The COO believes that the organisation needs to reallocate resources in order to meet demand. Are there any exceptions to when this may be the case?

• No - organisations should always aim to meet customer demand or resources will be underutilised
• No - this would negatively affect the profit the organisation could make
• Yes - there are occasions when an organisation would choose not to fulfil customer demand
• Yes - there are exceptions, but these are always outside of the organisation's control

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?

• Demand-led
• Demand-lag
• Capacity-led
• Capacity-lag

Which of the following can be used to pre-assess the consequences of a network member not meeting the control requirements set by the organisation?

• Escalation strategy
• Operations strategy
• KPIs
• Corporate strategy

Andrea is the Chief Financial Officer at Big Corporation and is completing a Variance Analysis. She has reviewed the production costs of creating item B, and this month’s costs show a variance to budget of £-200. What does this mean?

• More money was spent than expected
• Less money was spent than expected
• The organisation has lost £200
• The organisation has gained £200

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 are based 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?

• Background Check
• Gearing Ratio
• Sensitivity Analysis
• Investment Appraisal