[Jan-2026] Pass L5M7 Exam in First Attempt Updated L5M7 Exam Questions [Q16-Q40]

[Jan-2026] Pass L5M7 Exam in First Attempt Updated L5M7 Exam Questions

CIPS Level 5 Advanced Diploma in Procurement and Supply Dumps L5M7 Exam for Full Questions - Exam Study Guide

CIPS L5M7 Exam Syllabus Topics:

Topic	Details
Topic 1	Understand Measures Required to Achieve Competitive Advantage in Supply Chains: This section of the exam measures the skills of Strategic Sourcing Specialists and focuses on achieving and maintaining competitive advantage through strategic supply chain practices. It assesses knowledge of how organizations can leverage cost leadership or differentiation strategies to outperform competitors. Candidates are expected to understand pricing mechanisms such as fixed and variable pricing, open book costing, and risk reward arrangements that drive efficiency and transparency. The section also includes cost reduction techniques like supplier rationalization, value analysis, and negotiation strategies that enhance profitability. Finally, it examines collaborative approaches such as partnership sourcing, building supplier trust, and managing relationship life cycles to ensure long-term strategic advantages within the supply chain.
Topic 2	Understand Improvement Methodologies that Can Be Used in Supply Chains: This section of the exam measures the skills of Procurement Managers and focuses on the tools and methodologies used to enhance supply chain performance and efficiency. It highlights the principles of total quality management (TQM), including quality assurance and inspection, and their role in ensuring product and process consistency. Candidates must understand how to use statistical methods such as KPIs, data analysis, and Six Sigma to drive continuous improvement. The section also explores lean thinking, agile processes, Just-in-Time (JIT) systems, and the 5S methodology as frameworks for optimizing operations. Furthermore, it covers the application of business process re-engineering (BPR) and benchmarking to evaluate and redesign supply processes for better performance and competitiveness.
Topic 3	Understand the Dynamics of Supply Chains: This section of the exam measures the skills of Supply Chain Analysts and covers the foundational understanding of how supply chains operate, interact, and add value to organizations. It examines the differences between supply chains, supply networks, and supply chain management while exploring the concept of supplier tiering and network sourcing. Candidates are expected to understand how effective supply chain management improves quality, reduces costs and lead times, and fosters innovation while mitigating risks. Additionally, this section emphasizes the connection between an organizational infrastructure, culture, and process management in achieving efficient supply chains. It also compares various improvement approaches, including collaborative and competitive models, outsourcing, offshoring, and global procurement.

 

NEW QUESTION # 16
A supply chain that has evolved to includemultiple layers of interdependenceon members both upstream and downstream is commonly known as what?

• A. A Supply Network
• B. A Supply Stream
• C. A Supply Net
• D. A Supply Web

Answer: A

Explanation:
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) Reference:L5M7 Study Guide, p.4.

NEW QUESTION # 17
Anagilesupply chain focuses on the elimination of waste. Is this true?

• A. No - it focuses on responsiveness to changing customer demand
• B. Yes - an agile supply chain reduces waste and defects
• C. Yes - it introduces TQM to remove inefficiencies
• D. No - it incorporates continuous improvement until errors cease

Answer: A

Explanation:
Agilesupply chains prioritiseflexibility and responsivenessto change, whereasLeanfocuses on waste elimination.
Short cited term: "agile = responsive to demand; lean = waste removal." (L5M7 Study Guide, p. 155) Reference:CIPS L5M7 Study Guide, p. 155.

NEW QUESTION # 18
Where two organisations atdifferent levelsof the supply chain share responsibilities, resources, and performance information to serve similar end customers, what is this known as?

• A. Horizontal collaboration
• B. Tight supply chain collaboration
• C. Vertical collaboration
• D. Loose supply chain collaboration

Answer: C

Explanation:
Vertical collaborationoccursbetween different tiers(e.g., buyer-supplier) 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.

NEW QUESTION # 19
In a typicalSupply Chain Quality Framework (SCQF), which of the following characteristics is likely to feature?
Select THREE.

• A. Marketing
• B. Sustainability
• C. Procurement
• D. Continuous Improvement
• E. Information

Answer: B,D,E

Explanation:
TheSCQFintegrates factors that promote long-term excellence across the chain:leadership, stakeholder commitment, sustainability, information management, and continuous improvement. These underpin effective quality and performance.
Short cited term: "key features include sustainability, information and continuous improvement." (L5M7 Study Guide, p. 34) Reference:CIPS L5M7 Study Guide, p. 34.

NEW QUESTION # 20
Which of the following statements aboutsupply chain knowledgeis correct? Select TWO.

• A. Where supply chain knowledge is low, there is high collaboration with partners.
• B. Where technology utilisation is low, systems and policies are consistent.
• C. Where there is high readiness to use technology, IT use is deliberate and structured.
• D. Where supply chain knowledge is low, members tend to operate independently of others.

Answer: C,D

Explanation:
Whenknowledge is low, members workindependently; highertechnological readinesscreates deliberate and structured IT use.
Short cited term: "low knowledge # independent working; high tech readiness # structured IT use." (L5M7 Study Guide, p. 51) Reference:CIPS L5M7 Study Guide, p. 51.

NEW QUESTION # 21
Open-Book Costingrelies on which of the following? Select TWO.

• A. Finding the lowest cost
• B. Good communication
• C. Transparency of costs and justifications
• D. Splitting profit 50:50

Answer: B,C

Explanation:
Open-Book Costingfosterstrust and collaborationby ensuring both parties share detailed cost data and maintain open, transparent communication.
Short cited extract: "Open-book costing requires transparency and communication between partners." (L5M7 Study Guide, p.193) Reference:CIPS L5M7 Study Guide, p.193.

NEW QUESTION # 22
Which of the following can have adetrimental effecton supply-chain relationships?Select TWO.

• A. Mistrust
• B. Lack of feedback
• C. Market segment
• D. Low spend

Answer: A,B

Explanation:
Relationship effectiveness is damaged bymistrustand poorfeedback/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.

NEW QUESTION # 23
Which of the following is an example ofexceedingcustomers' expectations? Select TWO.

• A. Providing the item desired in a different colour
• B. Providing a free gift when a purchase is made
• C. A customer orders an item online and it is delivered on the expected day
• D. The price is lower than the customer expected to pay

Answer: B,D

Explanation:
Meeting expectations (B) is not exceeding them. Exceeding is demonstrated byunexpected extra valuesuch as lower-than-expected priceora free add-on. Short extract: "exceeding expectations-delighting customers with additional/unexpected value." (L5M7 Study Guide, p.121) Reference:L5M7 Study Guide, p.121.

NEW QUESTION # 24
Ahierarchically orientated organisationwould have which of the following characteristics?

• A. Stability and control
• B. Equality among employees
• C. Integration focus
• D. Flexibility and discretion

Answer: A

Explanation:
Ahierarchical culturevaluesstability, control, and formal structure, with defined authority levels.
Short cited extract: "Hierarchy culture - stability, rules, and control mechanisms." (L5M7 Study Guide, p. 60) Reference:CIPS L5M7 Study Guide, p. 60.

NEW QUESTION # 25
Kerry is a new department manager at XYZ Ltd. The company has several manufacturing divisions that serve different market segments. She is considering introducingTotal Quality Management (TQM)only in her division. Is this a good idea?

• A. No - TQM is not suitable in a manufacturing company
• B. Yes - staff will respond positively to the change
• C. No - TQM is a holistic approach and should be implemented company-wide
• D. Yes - TQM will ensure her division outperforms the other divisions

Answer: C

Explanation:
TQM is aholisticphilosophy requiringorganisation-wideadoption and leadership commitment; partial
/isolated adoption undermines results. Short cited terms: "holistic," "organisation-wide commitment" (L5M7 Study Guide, p.118).
Reference:CIPS L5M7 Study Guide, p.118.

NEW QUESTION # 26
InSix Sigma, aBlack Beltis the highest level that can be achieved. Is this correct?

• A. No - Green Belt is the highest
• B. No - there are higher levels such as Master Black Belt and Champion
• C. Yes - a Black Belt implements Six Sigma full-time
• D. Yes - a Black Belt trains project teams

Answer: B

Explanation:
The hierarchy extendsbeyond Black Belt, includingMaster Black BeltsandChampions, who provide leadership and strategic direction.
Short cited term: "Master Black Belt and Champion above Black Belt." (L5M7 Study Guide, p. 153) Reference:CIPS L5M7 Study Guide, p. 153.

NEW QUESTION # 27
For which of the following supply examples istrustin the supplierleast important?

• A. A non-critical item with low supply risk
• B. A strategic item with high supply risk
• C. A leverage item with high profit impact
• D. A bottleneck item critical to production

Answer: A

Explanation:
Non-critical itemsinvolve low value and low risk, usually managed viatransactional or arm's-length relationships where trust plays a minor role.
Short cited term: "non-critical = low trust required." (L5M7 Study Guide, p. 221) Reference:CIPS L5M7 Study Guide, p. 221.

NEW QUESTION # 28
Which of the following could be consideredadded valuewithin a supply chain? Select THREE.

• A. Time to market
• B. Marketing
• C. Profit
• D. Quality
• E. Innovation

Answer: A,D,E

Explanation:
The guide listsquality,innovation, andtime-to-marketamong ways supply chains createadded value(others include price/cost reduction and risk reduction). Short extract: "added value may be created through quality, innovation and time-to-market." (L5M7 Study Guide, p.27) Reference:L5M7 Study Guide, p.27.

NEW QUESTION # 29
Plastic Fantastic Ltd manufactures plastic homeware. Customers can return used products to the retailer, who passes them back to the manufacturer for reprocessing. What type ofsupply chainis this?

• A. Open Loop Supply Chain
• B. Manufacturing Supply Chain
• C. Forward Loop Supply Chain
• D. Closed Loop Supply Chain

Answer: D

Explanation:
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).
Reference:CIPS L5M7 Study Guide, pp. 5-6.

NEW QUESTION # 30
An organisation with amarket-orientated approachto competitive advantage would have which feature?

• A. The customer comes first
• B. Large workforce
• C. Detailed specifications
• D. High expectations of staff

Answer: A

Explanation:
Amarket-oriented approachcentres oncustomer needs, designing offerings around satisfaction and experience rather than internal operations.
Short cited extract: "Market-oriented - focus on customer satisfaction and value creation." (L5M7 Study Guide, p.55) Reference:CIPS L5M7 Study Guide, p.55.

NEW QUESTION # 31
Which of the following is adisadvantageofJust-In-Time (JIT) Manufacturing?

• A. You cannot obtain economies of scale
• B. There is less waste produced
• C. It is expensive to implement
• D. Inventories are wasteful and expensive

Answer: A

Explanation:
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) Reference:CIPS L5M7 Study Guide, p. 159.

NEW QUESTION # 32
Which of the following tactics helps organisations in the middle of a supply chain protect themselves from the Bullwhip Effect?

• A. Trade in a strong currency
• B. Conduct due diligence on lower-tier suppliers
• C. Employ a younger workforce
• D. Have buffer stock

Answer: D

Explanation:
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).
Reference:CIPS L5M7 Study Guide, p. 4.

NEW QUESTION # 33
Mark, a logistics procurement manager, describes his chain astightly coupled. What does this mean?

• A. There is flexibility in the supply chain
• B. The supply chain is strong
• C. There are many organisations in the supply chain
• D. There is a high level of interdependency in the supply chain

Answer: D

Explanation:
Atightly coupledsupply chain exhibitshigh interdependencebetween members; decisions by one partner affect all others.
Short cited extract: "Tightly coupled = high interdependence between supply-chain partners." (L5M7 Study Guide, p. 82) Reference:CIPS L5M7 Study Guide, p. 82.

NEW QUESTION # 34
Which is the correct order that ensures quality is achieved in a business process?

• A. Check, Do, Act, Plan
• B. Plan, Do, Check, Act
• C. Plan, Check, Do, Act
• D. Check, Act, Plan, Do

Answer: B

Explanation:
ThePDCA Cycle-Plan, Do, Check, Act-provides a structured approach tocontinuous quality improvement. It begins with planning, implementing, monitoring, and then acting to refine the process.
Short cited extract: "The PDCA cycle - Plan, Do, Check, Act - underpins continuous improvement." (L5M7 Study Guide, p.129) Reference:CIPS L5M7 Study Guide, p.129.

NEW QUESTION # 35
Which type of relationship seeksgreater commitment and preferential treatmentthrough exclusivity?

• A. Single-sourcing
• B. Partnership
• C. Outsourcing
• D. Adversarial

Answer: A

Explanation:
Single-sourcingbuildsexclusive, strategic relationshipswith one supplier to secure priority service and joint improvement opportunities.
Short cited extract: "Single-sourcing - exclusivity to gain stronger commitment and collaboration." (L5M7 Study Guide, p. 81) Reference:CIPS L5M7 Study Guide, p. 81.

NEW QUESTION # 36
Which of the following is an example ofVariable Pricing?

• A. A wholesaler offers a discount when a customer buys more than 100 units.
• B. A restaurant offers student discounts.
• C. A retailer holds a January sale.
• D. A cleaning firm charges more when demand increases.

Answer: A

Explanation:
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) Reference:CIPS L5M7 Study Guide, pp. 188-191.

NEW QUESTION # 37
What are some disadvantages to a multi-sourcing strategy in a supply chain? Select TWO.

• A. Possibility of having surplus stock
• B. Relationships are more transactional
• C. Less dependency on one supplier
• D. Inconsistency in quality

Answer: A,D

Explanation:
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) Reference:L5M7 Study Guide, p.6.

NEW QUESTION # 38
To analyse thevalue of inventory held, which data points must be collected? Select TWO.

• A. Number of items sold
• B. Number of items held in storage
• C. Expiry date
• D. Purchase price

Answer: B,D

Explanation:
Inventory valuation requires data onquantity in stockandunit purchase cost. These determine the total inventory value at any given time.
Short cited extract: "Inventory value = number of items × purchase cost." (L5M7 Study Guide, p.147) Reference:CIPS L5M7 Study Guide, p.147.

NEW QUESTION # 39
Farmer Joe sells wheat and barley. He charges more when demand is high and less when demand falls. What pricing strategy does he follow?

• A. Variable Pricing
• B. Competitive Pricing
• C. Flexible Pricing
• D. Dynamic Pricing

Answer: D

Explanation:
Dynamic Pricingadjusts prices in real time to reflectmarket demand and supply conditions, commonly used in commodities.
Short cited term: "dynamic pricing - prices adjust to demand fluctuation." (L5M7 Study Guide, p. 189) Reference:CIPS L5M7 Study Guide, p. 189.

NEW QUESTION # 40
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