L5M9 Sample exam

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Question 1 of 5

1 A manufacturing firm wants to avoid excess capacity costs but still meet seasonal demand spikes by hiring temporary workers and subcontracting. Which capacity strategy is being used?

Outsourcing strategy Level capacity strategy Chase demand strategy Hybrid capacity strategy

✅ Correct Answer: Chase demand strategy

Explanation:
Chase demand strategies adjust capacity in line with fluctuating demand by using methods like temporary labour, overtime, or subcontracting.

Why the other options are wrong:
❌ Level capacity – keeps output constant, leading to stock build-up or shortages.
❌ Hybrid capacity – combines level and chase methods, not purely chasing demand.
❌ Outsourcing strategy – can be part of chase, but the question emphasises demand-driven adjustments.

🧠 Summary: Chase demand adjusts output to match seasonal demand swings.
📖 Source: CIPS L5M9 Study Guide – Capacity management (pp. 35–40).

2 A project manager uses a tool that identifies the longest sequence of dependent tasks in a project, determining the minimum completion time. Which tool is this?

Drum-Buffer-Rope Value stream mapping Critical Path Method (CPM) Gantt chart

✅ Correct Answer: Critical Path Method (CPM)

Explanation:
CPM identifies the critical path in a network of activities, showing the minimum time required and where delays will impact the entire project.

Why the other options are wrong:
❌ Gantt chart – displays timelines visually but does not calculate dependencies.
❌ Value stream mapping – is a lean tool for waste reduction, not scheduling.
❌ Drum-Buffer-Rope – is part of Theory of Constraints scheduling.

🧠 Summary: CPM reveals which tasks are critical for project completion.
📖 Source: CIPS L5M9 Study Guide – Scheduling tools (pp. 48–53).

3 A food manufacturer adopts Kaizen in its production system. What is the main benefit of this approach?

Radical process redesign Using advanced automation technologies Continuous small improvements Eliminating all risks in operations

✅ Correct Answer: Continuous small improvements

Explanation:
Kaizen focuses on ongoing, incremental changes driven by employees at all levels to improve efficiency, quality, and waste elimination.

Why the other options are wrong:
❌ Radical redesign – describes Business Process Re-engineering (BPR).
❌ Eliminating all risks – unrealistic; Kaizen reduces inefficiencies, not all risks.
❌ Advanced automation – may improve processes, but Kaizen is about people-driven improvement.

🧠 Summary: Kaizen = continuous incremental improvements in operations.
📖 Source: CIPS L5M9 Study Guide – Continuous improvement (pp. 62–68).

4 An operations manager introduces ISO 9001 certification. What is the main purpose of this standard?

To improve energy efficiency To strengthen quality management systems To manage occupational health and safety To reduce transport emissions

✅ Correct Answer: To strengthen quality management systems

Explanation:
ISO 9001 is an internationally recognised standard that sets requirements for quality management systems, focusing on customer satisfaction, continuous improvement, and process control.

Why the other options are wrong:
❌ Energy efficiency – linked to ISO 50001, not ISO 9001.
❌ Transport emissions – addressed in environmental standards like ISO 14001.
❌ Occupational health and safety – covered by ISO 45001.

🧠 Summary: ISO 9001 ensures quality management and customer-focused improvement.
📖 Source: CIPS L5M9 Study Guide – Quality management (pp. 70–75).

5 A logistics provider wants to calculate the real profitability of serving different customer segments by allocating overhead costs more accurately. Which costing method should be used?

Marginal costing Activity-Based Costing (ABC) Break-even analysis Standard costing

✅ Correct Answer: Activity-Based Costing (ABC)

Explanation:
ABC allocates indirect and overhead costs to specific products, services, or customers based on activities, giving a clearer picture of profitability.

Why the other options are wrong:
❌ Marginal costing – measures costs of producing one more unit, not overhead allocation.
❌ Standard costing – sets cost benchmarks, not actual allocations.
❌ Break-even analysis – determines when revenues cover costs, not segment profitability.

🧠 Summary: ABC costing shows the true cost-to-serve and profitability of operations.
📖 Source: CIPS L5M9 Study Guide – Operations costs and analysis (pp. 90–96).

L5M9 Sample exam

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