Free CIPS L5M7 Practice Exam with Questions & Answers

AClosed Loop Supply Chainreintroduces used products into the supply process forreuse, recycling, or remanufacturing, closing the product’s lifecycle.

Short cited term: “closed loop – materials re-enter supply chain” (L5M7 Study Guide, pp. 5–6).

Cost-plus pricingis based onactual material and labour costs plus an agreed marginfor overheads and profit.

Short cited extract: “Cost-plus = actual cost + agreed mark-up for profit/overheads.” (L5M7 Study Guide, p.191)

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)

ThePareto Principlestates that approximately80% of outcomesarise from20% of causes, applied in supply chain analysis to identify key value contributors.

Short cited extract: “Pareto (80/20) – a small number of causes create the majority of effects.” (L5M7 Study Guide, p.141)

Supply chains are characterised bythree primary flows– materials, information, and finance. “Decision flow” is not a recognised category.

Short cited term: “three main flows: material, information, finance.” (L5M7 Study Guide, p. 155)

On the relationship spectrum,arm’s-lengthis alow-collaborationstyle (onlyadversarialis lower), characterised by limited information sharing and short-term focus. Short cited term: “relationship spectrum … arm’s-length (low collaboration)” (L5M7 Study Guide, p.80).

The hierarchy extendsbeyond Black Belt, includingMaster Black BeltsandChampions, who provide leadership and strategic direction.

Short cited term: “Master Black Belt and Champion above Black Belt.” (L5M7 Study Guide, p. 153)

TheTheory of Swift Even Flowstates that organisational efficiency improves as the flow of materials, information, and cash becomessmooth and consistentthrough the chain.

Short cited term: “balancing demand and inventory to achieve swift, even flow.” (L5M7 Study Guide, p. 37)

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)

ARed Oceanmarket ishighly competitivewith many firms fighting for market share, leading to price wars and reduced margins.

Short cited term: “red ocean = intense competition and saturated market.” (L5M7 Study Guide, p. 179)