CIPS L6M9 Exam - Topic 3 Question 13 Discussion

Actual exam question for CIPS's L6M9 exam

Question #: 13
Topic #: 3

[All L6M9 Questions]

The operations department of ABC Ltd has recently launched a new product. The product is manufactured within a large factory and then sent to retailers for sale. The department has a system in place which details the components required for the product and the quantities required to fulfil customer demand. The system works online and links to other areas of the business including HR and finance.

So far, several large orders have been placed for the product from different retailers. The Chief Operations Officer (COO) has decided to programme the completion of the orders based on when the orders were placed. The benefit of this strategy is that it will give each customer a similar lead time. Thus far no buffer stock has been created as products are only created when orders are received.

Three teams are required to make the product and the product flows from team one to team two to team three, each team adding a component to the product. Unfortunately, team two are short staffed and are completing their work at a slower rate than the other two teams. This is a huge consideration for the COO as it will impact upon the capacity of the organisation.

The retailers have all signed contracts with ABC Ltd and the COO is extremely happy that they are long term contracts. Contract 1 is with retailer X and the price is set for three years. Contract 2 is with retailer Y and is a five year contract where the price will be reviewed annually in line with CPI. Contract 3 has a variable pricing mechanism based on the volume of products ordered.

What system is used by ABC Ltd?

AMRP

BLean

CERP

DKPI

Show Suggested Answer

Suggested Answer: C

The system used is ERP (Enterprise Resource Planning) since it links multiple business functions such as HR and finance. MRP and MRPII are primarily used for manufacturing/operations, and KPI refers to performance measurement rather than a system. (See LO 3.3)

by Laurel at Jul 31, 2025, 09:03 AM

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Portia

2 months ago

Wait, no buffer stock? That seems risky!

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Weldon

2 months ago

Sounds like MRP to me!

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Cheryll

2 months ago

ABC Ltd uses an online system that links to HR and finance.

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Keith

3 months ago

Totally agree, lean operations can be tricky without a backup plan.

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Edward

3 months ago

I thought ERP was more common for this kind of setup?

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Denny

3 months ago

Given the online system and the integration mentioned, I lean towards ERP as the correct answer, but I wish I had more confidence in my choice.

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Cristy

3 months ago

This scenario reminds me of a practice question where we discussed lean principles, but I don't think that's the right fit here.

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Rebbeca

4 months ago

I'm not entirely sure, but I remember something about MRP being related to managing materials and components. Could that be it?

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Youlanda

4 months ago

I think the system used by ABC Ltd is ERP since it integrates various departments like HR and finance.

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Susana

4 months ago

The details about the component requirements and the way they're fulfilling orders based on when they were placed makes me think this is probably an MRP (material requirements planning) system. I'll go with that for now.

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Vi

4 months ago

I'm not totally sure about this one. There are a lot of moving parts with the online system, HR and finance integration, and the order fulfillment process. I might need to do a quick review of the different operations management frameworks before answering.

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Linette

4 months ago

Okay, the part about the three teams and the bottleneck in team two is a clear indicator that they're using a lean manufacturing approach. I'm pretty confident that's the right answer.

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Justine

5 months ago

Hmm, I'm a bit confused by all the different contract details. I'll need to carefully read through that part again to make sure I understand the pricing mechanisms they're using.

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Dorsey

5 months ago

This seems like a pretty straightforward operations management question. I think the key is to identify the system they're using based on the details provided in the scenario.

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Patrick

5 months ago

But wouldn't Lean be more efficient for their manufacturing process?

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Alyce

5 months ago

I agree with Francisca, ERP makes sense for their operations.

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Stephane

5 months ago

Hold up, did they say the system 'links to other areas of the business'? That's the textbook definition of ERP. A no-brainer!

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Devorah

1 month ago

Yeah, no doubt about it. ERP is the way to go!

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Alecia

2 months ago

Makes sense, especially with HR and finance involved.

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Ettie

2 months ago

Agreed! It’s all about integration.

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Jamika

2 months ago

Definitely ERP! It connects everything.

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Francisca

6 months ago

I think ABC Ltd uses ERP.

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Franchesca

6 months ago

ERP all the way! Although I do wonder if the COO knows how to actually program the completion of orders. Sounds like a job for the IT team.

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Pamella

5 months ago

I agree, ERP is definitely the way to go for a system like that. The COO might need some help from the IT team though.

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Kattie

6 months ago

I'm going with ERP as well. The fact that it's online and handles the whole supply chain process is a dead giveaway.

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Lavelle

7 months ago

ERP definitely seems like the right answer here. The integration of manufacturing, HR, and finance is a classic ERP setup.

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Bonita

7 months ago

The online system that links different areas of the business sounds like an Enterprise Resource Planning (ERP) system to me. It's the most comprehensive option mentioned.

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