An Agile supply chain prioritises flexibility and responsiveness to customer and market changes—ideal for dynamic industries like electronics.

Short cited extract: “ Agility = rapid response to changing demand. ” (L5M7 Study Guide, p.155)

Capital expenditure (CapEx) covers long-term investments such as equipment or infrastructure that deliver value over time—e.g., MRI scanners. Operating costs (OpEx) include salaries and consumables.

Short cited extract: “ CapEx – major assets and equipment; OpEx – running costs such as wages. ” (L5M7 Study Guide, Domain 3.2)

Cost-plus pricing is based on actual material and labour costs plus an agreed margin for overheads and profit.

Short cited extract: “ Cost-plus = actual cost + agreed mark-up for profit/overheads. ” (L5M7 Study Guide, p.191)

Open-Book Costing fosters trust and collaboration by 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)

Risk management seeks to prevent and mitigate major risks , while tolerating low-impact risks when elimination isn’t feasible.

Short cited extract: “ Low-level risks can be tolerated if likelihood and impact are minimal. ” (L5M7 Study Guide, p.49)

The study guide describes how demand variability amplifies upstream in the chain—commonly termed the “bullwhip effect.” This is introduced when explaining basic supply-chain dynamics and flows. Short extract: “ demand changes become amplified upstream (bullwhip effect) .” (L5M7 Study Guide, p.4)