Pass the CIPS CIPS Level 5 Advanced Diploma in Procurement and Supply L5M7 Questions and answers with CertsForce

Outsourcing can improvequalitywhen a specialist provider performs the activity better than in-house teams.

Short cited extract: “Outsourcing to specialist providers can enhance quality and performance.” (L5M7 Study Guide, p. 94)

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).

Differentiation Strategyinvolves offering products withunique attributesthat customers value and are willing to pay more for, thus achieving competitive advantage.

Short cited term: “differentiation – unique product features at premium price.” (L5M7 Study Guide, p. 177)

Technology enhancesbuyer access to data, broadening supplier choice and transparency, whichreduces supplier power.

Short cited term: “technology has reduced suppliers’ bargaining power” (L5M7 Study Guide, p. 66).

TheBullwhip Effectdescribes amplified demand fluctuations up the supply chain;buffer stockmitigates shortages caused by sudden demand changes.

Short cited term: “buffer stock helps counter demand fluctuation” (L5M7 Study Guide, p. 4).

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)

BPRbegins byappointing a process owner—a responsible individual to lead and oversee change before analysis or redesign begins.

Short cited extract: “Step one of BPR – appoint a process owner to take accountability.” (L5M7 Study Guide, p.169)

Added Valuearises whenever the customer perceives extra benefit.Lowering pricescan add value if thesupply chain reduces coststo support it sustainably.

Short cited term: “price reduction is a form of added value if supported by cost efficiencies.” (L5M7 Study Guide, p. 35)

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).

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)