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CIPS L5M7 Exam
Achieving Competitive Advantage Through the Supply Chain (Page 7 )

Updated On: 1-Feb-2026
Page 3 of 19
PDF with 88 Questions

Which of the following can have a detrimental effect on supply-chain relationships? Select TWO.

  1. Mistrust
  2. Low spend
  3. Lack of feedback
  4. Market segment

Answer(s): A,C

Explanation:

Relationship effectiveness is damaged by mistrust and poor feedback/communication. Spend level alone is not inherently harmful if expectations are aligned. Short cited terms: "trust," "communication/feedback" (L5M7 Study Guide, p.93).


Reference:

CIPS L5M7 Study Guide, p.93.



Where two organisations at different levels of the supply chain share responsibilities, resources, and performance information to serve similar end customers, what is this known as?

  1. Vertical collaboration
  2. Horizontal collaboration
  3. Tight supply chain collaboration
  4. Loose supply chain collaboration

Answer(s): A

Explanation:

Vertical collaboration occurs between different tiers (e.g., buyer­supplier) to coordinate capabilities for customer value. Short cited term: "vertical collaboration ... different levels/tiers" (L5M7 Study Guide, p.90).


Reference:

CIPS L5M7 Study Guide, p.90.



Electro Bob is a wholesaler of electrical equipment. One of its customers, RoostyFace, spends very little and is unlikely ever to increase its spend.
What type of customer is RoostyFace to Electro Bob (Supplier Preferencing Model)?

  1. Core
  2. Annoying
  3. Exploitative
  4. Nuisance

Answer(s): D

Explanation:

In supplier preferencing, nuisance customers have low value/attractiveness with limited growth potential. Short cited terms: "nuisance," "low attractiveness/low value" (L5M7 Study Guide, p.86).


Reference:

CIPS L5M7 Study Guide, p.86.



For items viewed as Strategic/Critical (high supply risk and high value), which sourcing strategy is best?

  1. Competitive bidding
  2. Outsourcing
  3. Partnership or alliance approach
  4. Arm's-length relationship with supplier

Answer(s): C

Explanation:

The Kraljic Matrix recommends partnership/alliances for strategic items to secure continuity, innovation, and joint value creation. Short cited term: "strategic items ... partnership" (L5M7 Study Guide, p.84).


Reference:

CIPS L5M7 Study Guide, p.84.



Which of the following relationship styles is the least collaborative?

  1. Strategic alliance
  2. Arm's-length
  3. Transactional
  4. Outsourced

Answer(s): B

Explanation:

On the relationship spectrum, arm's-length is a low-collaboration style (only adversarial is 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).


Reference:

CIPS L5M7 Study Guide, p.80.



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