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Pass the CIPS Level 5 Advanced Diploma in Procurement and Supply L5M7 Questions and answers with Dumpstech

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CIPS Level 5 Advanced Diploma in Procurement and Supply
L5M7
L5M7 Questions and Answers

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Viewing questions 11-20 out of questions

Questions # 11:

Which of the following is an example of aclosed-loopsupply chain?

Options:

A farm supplying milk to a dairy manufacturer

The extraction of diamonds from a mine sold to a jewellery manufacturer

The sale of second-hand cars at a retail outlet

A retailer which accepts old phones to be given back to the manufacturer

Answer

Explanation

Aclosed-loop supply chainreturns used products to the chain forreuse/recycling/remanufacture. Short extract: “closed loop – products/materials re-enter the supply chain.” (L5M7 Study Guide, pp.5–7)

[Reference:L5M7 Study Guide, pp.5–7., ]

Questions # 12:

Deborah discovers her company uses amulti-sourcing strategy. Which could be a reason for this?

Options:

It shows loyalty to the supplier

It ensures prices are low

It maintains competition between suppliers

It provides flexibility to suppliers

Answer

Explanation

Multi-sourcingmaintainscompetitionand reduces dependency, promoting better pricing and performance from suppliers.

Short cited extract: “Multi-sourcing maintains competitive tension between suppliers.” (L5M7 Study Guide, p. 70)

[Reference:CIPS L5M7 Study Guide, p. 70., ]

Questions # 13:

In a typical supply chain, in which direction doesvalue-addtravel?

Options:

From the customer to the distributor

From the first supplier to the customer

From the OEM to the retailer

From the retailer to the supplier

Answer

Explanation

Value flowsdownstream, originating with suppliers and moving toward the end customer. A typical chain is tiered suppliers → OEM/producer → distributors/retailers → customer. Short cited term: “value moves downstream” (L5M7 Study Guide, p.4).

[Reference:CIPS L5M7 Study Guide, p.4., ]

Questions # 14:

SRT Ltd, a national construction firm, has acentralised procurement function. What is an advantage of this?

Options:

Increased flexibility

Stakeholder management

Closer to stakeholders

Coordination of cost-reduction initiatives and bulk ordering

Answer

Explanation

Centralised procurementenables bettercost coordination, standardisation, and leverage through bulk purchasing, ensuring consistency across sites.

Short cited extract: “Centralised structures coordinate savings and achieve economies of scale.” (L5M7 Study Guide, p. 69)

[Reference:CIPS L5M7 Study Guide, p. 69., ]

Questions # 15:

AResource-Based Review(RBR) focuses on which aspect of competitive advantage?

Options:

Internal environment as a driver of competitive advantage

Achieving cost leadership through lower prices

Narrowing the supply chain to create efficiencies

Using the external environment to create value

Answer

Explanation

TheResource-Based View(RBV) argues thatunique internal resources and capabilitiesare the key to sustainable competitive advantage.

Short cited extract: “Competitive advantage stems from internal resources and capabilities.” (L5M7 Study Guide, p.52)

[Reference:CIPS L5M7 Study Guide, p.52., ]

Questions # 16:

Why would a company use aProcess Mapping Technique? Select TWO.

Options:

To increase market share

To assist with budgeting

To identify where waste and inefficiency exist

To establish what is currently happening and why

Answer

C, D

Explanation

Process mappingvisually defineshow processes operate, revealinginefficiencies, duplication, and waste, and clarifies thecurrent process flow and responsibilities.

Short cited term: “identifies inefficiencies and highlights process waste” (L5M7 Study Guide, p. 73).

[Reference:CIPS L5M7 Study Guide, p. 73., ]

Questions # 17:

Which of the following is an example of aCapital Expenditurefor a private healthcare facility?

Options:

MRI Machine

Nurse’s Salary

Cleaning Products

Medicine

Answer

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., ]

Questions # 18:

Total Quality Management (TQM)is a long-term strategy. Is this TRUE?

Options:

Yes – effort is required in the short and medium term; results may not be immediate

Yes – TQM requires at least one year to implement

No – TQM is a short-term efficiency strategy

No – TQM makes a firm more Lean short-term

Answer

Explanation

TQMis along-term philosophydemanding sustained commitment; benefits emerge gradually through continuous improvement.

Short cited extract: “TQM is a long-term commitment where results may not be immediate.” (L5M7 Study Guide, p. 118)

[Reference:CIPS L5M7 Study Guide, p. 118., ]

Questions # 19:

Trust is a dynamic concept required in partnership relationships. Which of the following are part of thefive trust componentsimportant in supply chains?

Options:

Integrity

Competence

Loyalty

Power

Charm

Answer

A, B, C

Explanation

Trust in supply chains is built on components includingintegrity,competence,loyalty,openness, andfairness. Short extract: “key trust components: integrity, competence, loyalty, openness, fairness.” (L5M7 Study Guide, Domain 3.4 section)

[Reference:L5M7 Study Guide, Domain 3.4 (Relationship/Trust components)., ]

Questions # 20:

Just-in-Time (JIT)manufacturing is a form of which organisational strategy?

Options:

Business Process Re-engineering

Lean

Cost Leadership

Differentiation

Answer

Explanation

JIT is aLeantechnique to minimise inventory and produce “only what is needed, when needed,” thereby removing waste from processes. Short cited phrase: “only when needed” (L5M7 Study Guide, p.111).

[Reference:CIPS L5M7 Study Guide, p.111., ]

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