Free Practice Questions for CIPS L5M7 Exam

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).

JIT removes stockholding benefits, meaning firmslose economies of scalefrom bulk ordering. Each order is small and frequent.

Short cited term: “JIT limits bulk economies due to reduced inventory.” (L5M7 Study Guide, p. 159)

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)

Variable Pricingchanges the unit price based onquantity purchased; larger volumes trigger discounts.

Short cited term: “price varies with quantity ordered.” (L5M7 Study Guide, pp. 188–191)

In supplier preferencing,nuisancecustomers havelow value/attractivenesswithlimited growth potential. Short cited terms: “nuisance,” “low attractiveness/low value” (L5M7 Study Guide, p.86).

Porter’sFocus Strategyinvolvestargeting a niche marketto meet unique needs better than competitors.

Short cited term: “focus – targeting a narrow market segment” (L5M7 Study Guide, p. 52).

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)

The guide distinguishes a simple chain from a“supply network,”emphasisingmulti-tier interdependencies. Short extract: “supply networks reflect multiple interdependent tiers.” (L5M7 Study Guide, p.4)

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)

Six Sigma is adata-driven methodologyaimed ateliminating defectsand reducing variation to improve quality and performance. Short cited terms: “data-driven,” “eliminate defects” (L5M7 Study Guide, p.110).