CIPS L4M1 Exam Questions with Verified
Correct Answers
What is a SC?
A network of materials and information and service processes which link with supply and
demand
What Are Supply Chain Characteristics?
- Building/managing relationships
- Efficiency through optimised order processes
- Flexibility with holding alt suppliers and flexible contracts
What Is Added Value?
The additional benefits an organisation gains from effective purchasing strategies or
enhanced relationships such as cost saving in negotiation
What Is Logistics?
Operational link between supplier and buyer covering the physical delivery of goods and
services such as warehousing or inventory management
What Is A Closed Loop SC?
- Circular supply chain where product usually returns back to source
+Environmental and cost saving due to little waste
- Refurbished/recycled products may vary in quality
What Is A Linear SC?
,- Traditional process where materials are procured, made, distributed used then discarded
+Simpler to run due to lex complexities compared to CL and low ST costs
- High environmental impact and resource inefficiency
What Is Supplier Tiering?
- Supplier organised into tiers based on performance, importance and role
+Strategic focus as can focus on the more high risk high reward suppliers
- Requires continuous evaluation and maintenance
What Are The 3 Tiers In Supplier Tiering?
- Tier 1 supply critical materials such as engines for automakers
- Tier 2 are important but not critical such as supplying components to Tier 1
- Tier 3 are non critical and provide indirect items such as raw materials
What Is Stock Take?
The counting of on hand inventory within an organisation which can be periodic or
continuous
What Is Material Requirements Planning (MRP)?
A computerised technique aimed at minimising inventory and maintaining delivery schedules
What Are The Inputs of MRP?
, - Master schedule determines what materials are required and when
- Bill of materials identifies specific items that need purchasing
- Inventory Records holds inventory data to avoid overstock or shortages
What Is Enterprise Resource Planning (ERP)?
A digital system connecting business functions such as finance and inventory to ensure right
materials bought at the right time from right supplier for right cost
What Are Key Functions Within ERP?
- PO which generates and tracks PO's online
-Supplier management which stores contracts and details
- Analytics which provide insight to supplier performance and KPI's
What Is Total Cost Of Ownership?
The sum of all costs incurred throughout the lifecycle of a product or service
What Is The CIPS Procurement Cycle?
A model made up of 13 stages which outlines the procurement process within each step
What Is The Kraljic Matrix?
- Strategic: High risk and impacts, Critical to operation and difficult to source (engines)
- Bottleneck: Low impact + High risk, Hard to source but low spend (specialised item)
Correct Answers
What is a SC?
A network of materials and information and service processes which link with supply and
demand
What Are Supply Chain Characteristics?
- Building/managing relationships
- Efficiency through optimised order processes
- Flexibility with holding alt suppliers and flexible contracts
What Is Added Value?
The additional benefits an organisation gains from effective purchasing strategies or
enhanced relationships such as cost saving in negotiation
What Is Logistics?
Operational link between supplier and buyer covering the physical delivery of goods and
services such as warehousing or inventory management
What Is A Closed Loop SC?
- Circular supply chain where product usually returns back to source
+Environmental and cost saving due to little waste
- Refurbished/recycled products may vary in quality
What Is A Linear SC?
,- Traditional process where materials are procured, made, distributed used then discarded
+Simpler to run due to lex complexities compared to CL and low ST costs
- High environmental impact and resource inefficiency
What Is Supplier Tiering?
- Supplier organised into tiers based on performance, importance and role
+Strategic focus as can focus on the more high risk high reward suppliers
- Requires continuous evaluation and maintenance
What Are The 3 Tiers In Supplier Tiering?
- Tier 1 supply critical materials such as engines for automakers
- Tier 2 are important but not critical such as supplying components to Tier 1
- Tier 3 are non critical and provide indirect items such as raw materials
What Is Stock Take?
The counting of on hand inventory within an organisation which can be periodic or
continuous
What Is Material Requirements Planning (MRP)?
A computerised technique aimed at minimising inventory and maintaining delivery schedules
What Are The Inputs of MRP?
, - Master schedule determines what materials are required and when
- Bill of materials identifies specific items that need purchasing
- Inventory Records holds inventory data to avoid overstock or shortages
What Is Enterprise Resource Planning (ERP)?
A digital system connecting business functions such as finance and inventory to ensure right
materials bought at the right time from right supplier for right cost
What Are Key Functions Within ERP?
- PO which generates and tracks PO's online
-Supplier management which stores contracts and details
- Analytics which provide insight to supplier performance and KPI's
What Is Total Cost Of Ownership?
The sum of all costs incurred throughout the lifecycle of a product or service
What Is The CIPS Procurement Cycle?
A model made up of 13 stages which outlines the procurement process within each step
What Is The Kraljic Matrix?
- Strategic: High risk and impacts, Critical to operation and difficult to source (engines)
- Bottleneck: Low impact + High risk, Hard to source but low spend (specialised item)
