Pass the CIPS Level 6 Professional Diploma in Procurement and Supply L6M9 Questions and answers with ExamsMirror

Fixed price: The supplier cannot change the price, ensuring cost control.

Use of price index: Prices can only change based on an agreed index, preventing arbitrary cost increases.

Gain-share agreement: The supplier is incentivized to save costs as they share in the profits, reducing the likelihood of overcharging.

Open book: The buyer has full visibility of the supplier’s pricing, preventing overcharging.

Variable price (D) is incorrectbecause it allows the supplier to change prices freely, making cost control difficult. (See p.199)

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AProprietary Networkis aprivately owned and controlled group.

Option Brefers to aSocial Network

Option Cdescribes aBureaucratic Network

Option Drefers to anAsymmetric Network

Tip:Learn these definitions well, as they frequently appear in exam questions! (See LO 1.1)

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The key term in this question is"pre-assess."Anescalation strategyidentifies risks in the supply network and outlines how to manage disruptions before they escalate. It ensures control issues are handled efficiently by escalating them to senior management when necessary. (See p.194)

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)

Actual capacityaccounts forreal-life factors, includingstaff absences, supply chain delays, and other disruptions.

Design capacity (A)is themaximumproduction level in an ideal scenario (no disruptions).

Effective capacity (B) and available capacity (C) are the same, accounting forplanned stoppages, butnot unplanned losses.

(LO 2.2, See p.115)

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Start to startmeans two different organisations at different levels of the supply chainbegin their work simultaneouslyrather than sequentially. This is the opposite of astart to finishsystem, where the next process starts only when the previous one is completed. (See LO 1.2, p.19)

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Six Sigmaemploysdedicated full-time teamsfocused oncontinuous improvement.

Kaizen (A)is anongoing improvement philosophybut does not require aspecialist team.

Employee suggestion schemes (B)are informal.

Value stream mapping (D)is a tool, not a full-time methodology.

(LO 2.3, See p.121)

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A Gantt chart is used for scheduling. It's a visual way of showing what activities are completed and when. (See p.175)

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The statement is TRUE, so we can immediatelyeliminate A and B.

Option C is correctbecauselarge organisations often have multiple business-level strategiesdepending onmarket conditions.

Example:McDonald’shasdifferent menusandmarketing strategiesin different countries.

Option D is incorrect—business-level strategiesdo not necessarily contradicteach other.

(See LO 2.1, p.75)

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