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CIPS L6M9 Exam - Topic 3 Question 23 Discussion

XYZ Ltd is a perfume manufacturer based in France. They have created a new perfume and research has shown that demand for the perfume will outstrip supply. The Chief Operating Officer (COO) and the Chief Financial Officer (CFO) are meeting to discuss this. The COO believes that the organisation needs to reallocate resources in order to meet demand. Are there any exceptions to when this may be the case?
C) Yes - there are occasions when an organisation would choose not to fulfil customer demand
A) No - organisations should always aim to meet customer demand or resources will be underutilised
B) No - this would negatively affect the profit the organisation could make
D) Yes - there are exceptions, but these are always outside of the organisation's control

CIPS L6M9 Exam - Topic 3 Question 23 Discussion

Actual exam question for CIPS's L6M9 exam
Question #: 23
Topic #: 3
[All L6M9 Questions]

XYZ Ltd is a perfume manufacturer based in France. They have created a new perfume and research has shown that demand for the perfume will outstrip supply. The Chief Operating Officer (COO) and the Chief Financial Officer (CFO) are meeting to discuss this. The COO believes that the organisation needs to reallocate resources in order to meet demand. Are there any exceptions to when this may be the case?

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Suggested Answer: C

While organisations generally try to fulfil customer demand, there are times when they strategically choose not to. A common reason is maintaining a premium image---limiting supply can increase desirability and justify a higher price. For example, luxury brands often limit product availability. (See p.169)


by Bettyann at May 15, 2026, 04:06 PM

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Shanda
4 days ago
I think option C makes sense. Sometimes, quality matters more than quantity.
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Leota
9 days ago
Totally agree with the COO, reallocating resources is key!
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Renea
14 days ago
Really? I doubt they’d choose not to fulfill demand if it’s that high.
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Quentin
19 days ago
There are definitely exceptions, like if it compromises quality.
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Yuki
25 days ago
But what about profit margins? Sometimes it's better to hold back.
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Louann
30 days ago
I think they should always meet demand, it's basic business!
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Edwin
1 month ago
Exceptions exist, but they should be rare and well-justified.
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Agustin
1 month ago
Definitely agree with the COO, reallocating resources is key!
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Noah
2 months ago
Wait, are there really times when you wouldn't fulfill demand?
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Viva
2 months ago
I disagree, sometimes it's better to hold back for quality.
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Jeff
2 months ago
Always meet demand, or you're losing money!
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Derick
2 months ago
I recall that meeting demand isn't always the best move financially, so maybe B has some merit, but I still feel uncertain about it.
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Colby
2 months ago
I practiced a similar question where the focus was on resource allocation, and I think there are definitely exceptions, so I lean towards C or D.
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Josphine
2 months ago
I'm not entirely sure, but I think there are cases where fulfilling demand could lead to quality issues, which might support option C as well.
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Annamae
4 months ago
I remember discussing how sometimes companies might prioritize long-term strategy over immediate demand, so I think C could be right.
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