CIPS L5M10 Practice Exam - 91 Unique Questions
Latest Questions L5M10 Guide to Prepare Free Practice Tests
NEW QUESTION # 26
Which of the following is an example of aJust-in-Time (JIT) IIinventory system?
- A. A company places orders only when items are required
- B. A two-bin system is used whereby a supplier delivers new stock when one bin is empty
- C. A supplier is implanted within a customer organisation and places orders to their own company
- D. A manufacturer holds zero inventory
Answer: C
Explanation:
Comprehensive and Detailed Explanation From Exact Extract:
JIT IIintegrates suppliers directly within the customer's premises, allowing them tomanage replenishment themselves using the customer's systems - enhancing responsiveness and coordination.
(Reference:CIPS L5M10 Study Guide, JIT and JIT II methods, p. 11)
NEW QUESTION # 27
What is the purpose of the 'drop ship' customer fulfilment strategy? Select TWO.
- A. To reduce costs
- B. To save time
- C. To avoid import duty
- D. To simplify billing
Answer: A,B
Explanation:
Comprehensive and Detailed Explanation From Exact Extract:
Drop shippingdelivers goods directly from the manufacturer or wholesaler to the customer, bypassing retailer warehouses. This savestime(faster delivery) andcost(less handling and storage). Billing remains unchanged; import duty avoidance is not a design aim.
(Reference:CIPS L5M10 Study Guide, Customer fulfilment strategies, p. 7)
NEW QUESTION # 28
Strategic planning is long-term planning, usually over 5-10 years in the future. Is this sentence correct?
- A. Yes - strategic plans have more detail than short-term plans
- B. No - long-term plans are tactical rather than strategic
- C. No - strategic plans detail the objectives of the organisation over the upcoming year
- D. Yes - the longer the strategic plan, the less detail it will include
Answer: D
Explanation:
Comprehensive and Detailed Explanation From Exact Extract:
Strategy deals with long-term direction and typically contains broad objectives with lower detail; tactical (mid- term) and operational (short-term) plans add specificity and detail. Therefore, longer-horizon strategic plans contain less operational detail than short-term plans. (Reference: CIPS L5M10 Study Guide, Planning horizons-strategic/tactical/operational, pp. 99-100)
NEW QUESTION # 29
In which of the following examples is capacity expressed as aninputcapacity measure?
- A. A factory makes 1,000 cupcakes a day
- B. A worker sews 10 buttons per hour
- C. A machine produces 100 widgets per day
- D. An oil refineryprocesses 800 barrels of crude oil per day
Answer: D
Explanation:
Comprehensive and Detailed Explanation From Exact Extract:
Capacity can be measured asinput(amount of input resource the system can accept) oroutput(units produced).
Refinerythroughput stated in barrels of crude oilis aninput-basedexpression; the other options express output. (CIPS L5M10 Study Guide, p. 107)
NEW QUESTION # 30
Which of the following areadvantages of using an ERP systemover an MRP system? Select TWO.
- A. No inputs are required
- B. System is multi-lingual
- C. Centralised databases
- D. Cheaper to implement
Answer: B,C
Explanation:
Comprehensive and Detailed Explanation From Exact Extract:
ERP extends the MRP concept across the whole enterprise. It centralises data (reducing duplication and error) and supports multiple languages and currencies for global operations. It is, however, more complex and costly to implement than MRP.
(Reference: CIPS L5M10 Study Guide, ERP evolution from MRP, pp. 175-176)
NEW QUESTION # 31
What is the name of the common indicator, often expressed as a percentage of time when an organisation's core resource (equipment or people) is engaged in production or transformation activities?
- A. Waiting rate
- B. Utilisation rate
- C. Downtime rate
- D. Production rate
Answer: B
Explanation:
Comprehensive and Detailed Explanation From Exact Extract:
Utilisation ratemeasures the proportion of available capacity that is actually used for productive activity. It is calculated as:
This indicator helps managers understand how efficiently facilities or resources are being used. High utilisation may indicate efficiency but could also suggest limited flexibility. (Reference:CIPS L5M10 Study Guide, Capacity utilisation and performance measures, p. 132)
NEW QUESTION # 32
Cleo Manufacturing has introduced a new Electronic Data Interchange (EDI) system. Which of the following is an advantage of using this technology?
- A. It replaces emails
- B. It is cheap to introduce
- C. It allows humans to check the work for accuracy
- D. It simplifies the supply chain
Answer: A
Explanation:
Comprehensive and Detailed Explanation From Exact Extract:
EDI automates structured, computer-to-computer exchange of business documents (e.g., POs, ASNs, invoices), replacing manual, error-prone channels such as emails and paper and reducing rekeying/latency. It typically requires investment and integration effort; it does not remove the underlying supply chain complexity, and by design reduces-not adds-manual human checking. (Reference: CIPS L5M10 Study Guide, EDI-purpose and benefits, p. 81)
NEW QUESTION # 33
Harry is a Project Manager at a logistics organisation and is planning long-term for the development of his department. Harry should focus his strategic long-term plan on control measures that should be put in place. Is this true?
- A. Yes - control is the process adopted by an organisation to cope with changes in plans
- B. Yes - control measures should be considered as part of all plans
- C. No - strategic plans have little emphasis on control measures and focus on resource requirements
- D. No - Harry should focus on contingencies at the strategic planning stage
Answer: C
Explanation:
Comprehensive and Detailed Explanation From Exact Extract:
Inlong-term (strategic) planning, the emphasis is on direction andresource requirements, withlittle emphasis on detailed control measures; contingency details are typically considered attactical/mid-term levels. (CIPS L5M10 Study Guide, p. 104)
NEW QUESTION # 34
In transportation terminology, what type of cargo would be considered "less than carload" (LTC)?
- A. Inventory that is worth less than the price of an average car
- B. A shipment that is less than a full truckload
- C. A shipment that fills half a rail carriage in volume
- D. A small box of components that would fit on the back seat of a car
Answer: C
Explanation:
Comprehensive and Detailed Explanation From Exact Extract:
"Less than carload" refers to rail freight shipments smaller than a full railcar load (i.e., not filling an entire rail carriage). The term relates to railway "cars," not road vehicles. (Reference: CIPS L5M10 Study Guide, transport terminology-LTC/LCL/FTL, p. 6)
NEW QUESTION # 35
Whether a company should implement a Lean or Agile supply chain should be considered as part of which organisational document?
- A. Logistic plan
- B. Tactical plan
- C. Operational plan
- D. Strategic plan
Answer: D
Explanation:
Comprehensive and Detailed Explanation From Exact Extract:
ChoosingLean vs. Agileis a long-term, structural design decision and is addressed instrategic planning.
Tactical and operational plans translate strategy into mid- and short-term actions. (CIPS L5M10 Study Guide, p. 100)
NEW QUESTION # 36
What is the name given to an additional file attached to an inventory file that links a requirement to the specific order or component that triggered it?
- A. Bill of materials
- B. CSV file
- C. Peg record
- D. Requirement record
Answer: C
Explanation:
Comprehensive and Detailed Explanation From Exact Extract:
Apeg recordprovides "pegging," i.e., a traceable link betweendemand(e.g., a customer order/MPS line) and the specificsupplycreated to satisfy it. (CIPS L5M10 Study Guide, p. 186)
NEW QUESTION # 37
Miranda is updating the Business Strategy for her company. It is important she aligns the Business Strategy with which of the following?
- A. Cost strategy
- B. Functional strategy
- C. Service strategy
- D. Corporate strategy
Answer: D
Explanation:
Comprehensive and Detailed Explanation From Exact Extract:
Corporate Strategy sets the organisation's overarching mission and goals. Business Strategy derives from it, outlininghowthose goals will be achieved. Functional strategies (like procurement or logistics) then support the Business Strategy. Therefore, Business Strategy alignment must be upward with Corporate Strategy.
(Reference:CIPS L5M10 Study Guide, Strategic alignment hierarchy, p. 52)
NEW QUESTION # 38
Claudio uses aRe-Order Point (ROP)system for stock replenishment. What is one disadvantage compared with an MRP system?
- A. Suppliers are unable to view current stock levels
- B. It is a manual system that takes longer to raise orders
- C. It does not work with forecasts
- D. It cannot be used with independent demand items
Answer: C
Explanation:
Comprehensive and Detailed Explanation From Exact Extract:
ROP systems trigger replenishment when inventory hits a set minimum. They are reactive and do not account for forecasted changes in demand (e.g., seasonality). MRP, by contrast, is proactive-factoring in future demand forecasts and production schedules.
(Reference: CIPS L5M10 Study Guide, Re-Order Point systems and limitations, pp. 170-171)
NEW QUESTION # 39
Bilal has implemented a new production system using 5S and Value Stream Mapping. Which continuous improvement approach has he applied?
- A. Lean
- B. Total Quality Management
- C. Six Sigma
- D. Theory of Constraints
Answer: A
Explanation:
Comprehensive and Detailed Explanation From Exact Extract:
5S (Sort, Set, Shine, Standardise, Sustain) and Value Stream Mapping are signature Lean tools focused on waste elimination and process flow efficiency. Six Sigma focuses on variability reduction; TQM is a broader philosophy.
(Reference: CIPS L5M10 Study Guide, Lean manufacturing tools and comparisons, p. 138)
NEW QUESTION # 40
Which of the following sentences is true about NVOCC (Non-Vessel Operating Common Carrier) operators?
- A. They are generally cheaper to use than traditional logistics companies
- B. They own all of their own shipping vessels
- C. They provide documentation such as the Bill of Lading
- D. They undertake transportation by air, land, or water
Answer: C
Explanation:
Comprehensive and Detailed Explanation From Exact Extract:
An NVOCC functions as a legal carrier issuing Bills of Lading but doesnotown or operate vessels. They arrange shipping with vessel operators on behalf of clients. Their role focuses on consolidation, documentation, and legal responsibility for the cargo. (Reference:CIPS L5M10 Study Guide, Maritime logistics and NVOCC, p. 43)
NEW QUESTION # 41
Which of the following is anEU Directiveaimed at reducing the amount of electronic waste going to landfill?
- A. Environment Act 2021
- B. WEEE
- C. ISO14001
- D. Extended Producer Responsibility
Answer: B
Explanation:
Comprehensive and Detailed Explanation From Exact Extract:
WEEE(Waste Electrical and Electronic Equipment) is the EU directive targeting collection, treatment, and recycling of electrical/electronic waste to reduce landfill. (CIPS L5M10 Study Guide, p. 194)
NEW QUESTION # 42
Apart from customers, which of the following areexternal stakeholdersinvolved in reverse logistics operations? Select TWO.
- A. Government agencies
- B. Suppliers
- C. Banks and creditors
- D. Drivers of logistics vehicles
Answer: A,B
Explanation:
Comprehensive and Detailed Explanation From Exact Extract:
External stakeholders in reverse logistics includesuppliers, who may receive returned goods or components, andgovernment agencies, who regulate waste handling, recycling, and environmental compliance. Banks and creditors are financial stakeholders, not operational ones, and logistics drivers are internal or connected stakeholders.
(Reference: CIPS L5M10 Study Guide, Reverse logistics stakeholders, p. 192)
NEW QUESTION # 43
Dasap Group Ltd has hired a third-party logistics organisation (3PL) to manage some aspects of their business. Which of the following business functions would you expect a 3PL company to manage on behalf of Dasap Group Ltd? Select THREE.
- A. Operation of the distribution centre
- B. Management of customer complaints
- C. Production of sales reports
- D. Manage the delivery of items through a transport fleet
- E. Management of the receipt of customer orders
Answer: A,D,E
Explanation:
Comprehensive and Detailed Explanation From Exact Extract:
A3PL (Third-Party Logistics)provider can manage operational logistics functions such asorder receipt and processing,distribution centre operations, andtransport management(fleet, routing, delivery). Customer complaints and sales reports remain the client's responsibility.
(Reference: CIPS L5M10 Study Guide, Outsourced logistics and 3PL services, p. 33)
NEW QUESTION # 44
Which of the following are types of Auto-Identification and Data Capture (AIDC) technology used in logistics? Select THREE
- A. Voice recognition
- B. Smartphones
- C. Electronic data interchange
- D. Biometrics
- E. Barcodes
Answer: A,D,E
Explanation:
Comprehensive and Detailed Explanation From Exact Extract:
AIDC encompasses technologies that automatically identify items and capture data with minimal human intervention. Examples include barcodes/QR, RFID, biometrics, magnetic stripes, and voice recognition.
Smartphones are devices that may host AIDC apps but are not a technology class themselves; EDI is a system- to-system messaging standard, not AIDC. (Reference: CIPS L5M10 Study Guide, AIDC overview and examples, p. 83)
NEW QUESTION # 45
What is the name of the type of barcode that uses 12 numeric digits and is typically used for tracking items in store?
- A. Aztec Code
- B. PDF417
- C. QR Code
- D. UPC
Answer: D
Explanation:
Comprehensive and Detailed Explanation From Exact Extract:
UPC (Universal Product Code) is a linear barcode symbology using 12 numeric digits, widely used in retail point-of-sale and in-store item identification. QR, PDF417, and Aztec are different symbologies (2D or stacked) with different use cases and data capacities. (Reference: CIPS L5M10 Study Guide, Barcode types overview, pp. 75-76)
NEW QUESTION # 46
PLM manages large distribution centres. Goods are not stored when delivered but are prepared immediately for shipment to retail outlets. What type of system is this?
- A. Cross docking
- B. Distribution channelling
- C. Pull-through distribution
- D. Distribution resource planning
Answer: A
Explanation:
Comprehensive and Detailed Explanation From Exact Extract:
Cross docking (XDK)involves transferring inbound goods directly to outbound transport without long-term storage, reducing handling, time, and warehousing costs. It requires tight coordination between transport and order schedules.
(Reference:CIPS L5M10 Study Guide, Cross docking and distribution centre operations, p. 24)
NEW QUESTION # 47
In an organisation that has implemented the Theory of Constraint in manufacturing, which of the following is true?
- A. Inventory is not held
- B. Inventory is held by the customer
- C. Inventory is seen as a liability
- D. Inventory is seen as an asset
Answer: C
Explanation:
Comprehensive and Detailed Explanation From Exact Extract:
WithinTOC,inventory is treated as a liability(it ties up cash and can hide flow problems), contrasting with traditional accounting that books inventory as an asset. (CIPS L5M10 Study Guide, pp. 141-142)
NEW QUESTION # 48
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