CIPS L6M9 Exam - Topic 3 Question 23 Discussion

Actual exam question for CIPS's L6M9 exam

Question #: 23
Topic #: 3

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?

ANo - organisations should always aim to meet customer demand or resources will be underutilised

BNo - this would negatively affect the profit the organisation could make

CYes - there are occasions when an organisation would choose not to fulfil customer demand

DYes - there are exceptions, but these are always outside of the organisation's control

Show Suggested Answer

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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