CSCP Practice Exam 1 Flashcards
1
Q
When working to extend risk management to supply chain partners, one best practice to generate lowest supply chain risk is to:
create business rules prioritizing suppliers and production and transportation routings.
create business rules prioritizing high-impact risks regardless of their probability.
transfer as much risk as possible to other partners.
transfer as much risk as possible from partners to the organization itself.
A
create business rules prioritizing suppliers and production and transportation routings.
2
Q
Refer to the risk metrics shown below, which are scored on a numeric scale from 1-5 (1 being the lowest and 5 being the highest). What is the risk level for the loss of a major contract up for negotiation this year?
Metric Scale Score Risk tolerance 2 Probability of occurrence 4 Magnitude of loss 5 Cost to mitigate 4
A
20
3
Q
Which of the following strategies should a company focus on to measure and improve customer service?
Forecast accuracy
Cash-to-cash cycle time
Productivity
Responsiveness
A
Responsiveness
4
Q
Which of the following metrics should a company use to measure supply chain responsiveness?
Order fill rate
Cash-to-cash cycle time
Order fulfillment cycle time
Inventory turns
A
Order fulfillment cycle time
5
Q
Which of the following areas in the collaborative planning, forecasting, and replenishment (CPFR) model corresponds to the order-to-cash cycle?
Logistics/distribution
Order fulfillment
Execution
Demand and supply management
A
Execution
6
Q
If safety stock levels are calculated using normal distributions related to historical demand and 68.27% of days will have demand within +/– 1 standard deviation, calculating safety stock as a function of +/– 2 standard deviations will:
have almost as good a customer service level as +/– 3 standard deviations at a lower cost.
have almost as good a customer service level as +/– 1 standard deviation at a lower cost.
still result in stockouts on average 15.87% of the time.
still result in stockouts on average 31.73% of the time.
A
have almost as good a customer service level as +/– 3 standard deviations at a lower cost.
7
Q
An organization implementing a balanced scorecard for a supply chain network would need to focus on which of the following perspectives?
Customer, supplier, internal processes, financial
Financial, customer, internal processes, workforce learning and growth
Financial, customer, supplier, operations
Supplier, workforce learning and growth, customer, financial
A
Financial, customer, internal processes, workforce learning and growth
8
Q
Realigning an organization from product-focused to customer-focused requires which of the following changes?
Lowering production and distribution costs in order to increase customer support and marketing expenditures
Focusing all changes on how the sales and customer service departments with direct customer contact do business
Analyzing each customer contact point to determine how key players can maximize the customer’s experience
Replacing the chief operations officer with a chief customer officer
A
Analyzing each customer contact point to determine how key players can maximize the customer’s experience
9
Q
When scheduling a constrained resource, which of the following actions should be taken?
Plan on less than 100% capacity at the constrained resource.
Ensure that there is a constant flow of work to the constrained resource.
Assign the best operators to the resource to maximize productivity.
Outsource the operation to a third party.
A
Ensure that there is a constant flow of work to the constrained resource.
10
Q
A firm striving to improve its liquidity should focus on which of the following metrics?
Net present value
Profit margins
Inventory turns
Cash-to-cash cycle time
A
Cash-to-cash cycle time
11
Q
Organizations implementing a six sigma strategy are attempting to:
measure capability.
improve productivity.
reduce variability.
eliminate bottlenecks.
A
reduce variability.
12
Q
The primary reason for an organization to implement a supplier relationship management (SRM) system is to:
streamline the procurement process.
identify new suppliers.
standardize supplier communication.
eliminate purchase orders.
A
streamline the procurement process
13
Q
Companies implementing sustainability often view it as a means to:
prevent lawsuits.
gain recognition in third-world countries.
stay ahead of environmental regulations.
gain a competitive edge and increase market share.
A
gain a competitive edge and increase market share.
14
Q
Which of the following elements of a cost justification for a warehouse management system should be made most conservatively?
Reductions in positions and resulting lower labor costs
Increased profit due to more efficient use of direct materials
More reliable quality assurance reducing return percentage
Days’ inventory reduction in cash-to-cash cycle
A
Reductions in positions and resulting lower labor costs
15
Q
A company keeps running out of several inexpensive items that are critical to production. The best solution for this problem is to:
standardize the components.
reclassify the items as A-level items.
increase the minimum inventory levels for the items.
provide an incentive to the supplier to keep extra in stock.
A
increase the minimum inventory levels for the items.
16
Q
Which of the following statements denotes a characteristic of Incoterms® trade terms (International Commercial Terms)?
They are used to define tariffs.
They correspond to the Global Trade Identification Number (GTIN).
The responsibilities of the buyer and the seller are defined in each term.
They are the same for all transportation modes.
A
The responsibilities of the buyer and the seller are defined in each term
17
Q
A company seeking improvement in its supply chain financial performance should concentrate on which of the following metrics?
Production flexibility
Inventory turns
After-sales costs
Takt time
A
Inventory turns
18
Q
Forecasts are more accurate for which of the following?
Individual items
End-use components
Long-term horizons
Product families
A
Product families
19
Q
Which of the following actions by trading partners would be most appropriate to protect against variability in supply and demand?
Reduce product complexity.
Increase inventory levels.
Increase information sharing.
Improve product quality.
A
Increase information sharing.
20
Q
A focus on economic sustainability places the most emphasis on which of the following elements?
Minimizing supply chain costs and maximizing current-period revenue and profit
Planning, mitigating, detecting, responding to, and recovering from supply chain risks
Designing a portfolio of products wide enough to appeal to even smaller segments
Sensing and responding to new and pending environmental laws at an orderly pace
A
Planning, mitigating, detecting, responding to, and recovering from supply chain risks
21
Q
To be most effective, design of a reverse logistics chain should begin during which of the following phases of the product life cycle?
Product design
Introduction
Maturity
Decline
A
Product design
22
Q
You receive an e-mail from a supply chain manager asking if you have any ideas about how to improve the bottom line. In order to impact the bottom line, your recommendations must affect:
the company’s net income (profit or loss).
the company’s cash flow.
cost savings from sustainability activities.
the company’s tax liability.
A
the company’s net income (profit or loss).
23
Q
Which of the following actions is an example of a reverse logistics strategy?
Supplying packaging to a consumer for returning goods
Minimizing the number of returned items
Setting up an automatic system for returning goods to a stocking location
Minimizing empty backhauls
A
Supplying packaging to a consumer for returning goods
24
Q
A retailer replenishes stock by placing orders for new goods from a manufacturer on a one-to-one replacement basis and provides the manufacturer with point-of-sale data for their own forecasting purposes. This describes which of the following inventory management models?
Distributor integration
Continuous replenishment
Vendor-managed inventory
Quick response program
A
Quick response program
25
A company's objective is to achieve best-in-class customer service performance. Which of the following indicators would be the most effective measure of the company's progress?
Order fill rate
Value fill rate
Line fill rate
Item fill rate
Order fill rate
26
The role of information technology in the supply chain is:
visibility to product information for all partners.
access to trading partner data.
vertical integration of partners.
analysis of partner performance.
visibility to product information for all partners
27
A men’s clothing retailer operates three chains of stores in a single country. Each of the chains serves a specific age group with very little overlap. The strategy of having each chain focus on a specific age group is an example of:
brand clarification.
strategic overlap.
market segmentation.
demand management.
market segmentation
28
In which stage of the continuous improvement model might it be necessary to rethink the goal or move the benchmark?
Process analysis
Process assessment
Project planning
Implementation and change management
Project planning
29
The most important factor in changing the supply chain strategy is:
projected profit margins.
competitive positioning.
customer perception of value.
global opportunities.
customer perception of value
30
Supply chain management optimization includes determining:
a sourcing strategy.
a distribution strategy.
staffing levels for each node.
the position of inventory in the network.
the position of inventory in the network.
31
The voluntary initiative for companies to embrace, support, and enact a set of core values in the areas of human rights, labor standards, the environment, and anticorruption is the:
United Nations Police.
United Nations Global Initiative to Fight Human Trafficking.
United Nations Global Compact.
United Nations Global Education First Initiative.
United Nations Global Compact.
32
When an operations manager starts describing the production problems with a particular product mix forecast, it reminds the supply chain manager of a similar situation at a prior job. By the time the operations manager is done speaking, the supply chain manager has recalled the details and is ready to share the story. This is an example of which of the following?
Good influencing skills
Poor listening skills
Poor decentralization skills
Good interpersonal affiliation skills
Poor listening skills
33
ISO 26000:2010 provides companies with guidance on being socially responsible. Which topics are covered in these guidelines?
Environment, consumer issues, labor practices, and human rights
Human rights, consumer issues, fair operating practices, and employee communication messages
Consumer issues, labor practices, human rights, and use of social media
Labor practices, human rights, consumer issues, and use of advertisements
Environment, consumer issues, labor practices, and human rights
34
Selecting decoupling points to minimize lead times in a manufacturing process is an example of which of the following types of decisions?
Tactical
Operational
Cross-functional
Strategic
Strategic
35
Which of the following approaches to production scheduling accurately incorporates the theory of constraints?
Speed up production in front of the bottleneck.
Decrease inventory after the bottleneck.
Slow the process down to the bottleneck's speed.
Speed up production after the bottleneck.
Slow the process down to the bottleneck's speed.
36
The ability to manage which of the following factors typically is critical for a firm moving from transaction-based relationships to cooperative relationships with trading partners?
Production plans
Contract terms and conditions
Uncertainty and risk
End-customer requirements
Uncertainty and risk
37
Effective change management requires which of the following approaches?
Hiring a change champion
Changing the core strategy
Determining the return on investment (ROI) from the change
Involving stakeholders early
Involving stakeholders early
38
The process of identifying, analyzing, and addressing an organization's exposure to uncertainty within the supply chain is known as:
risk management.
safety factor calculation.
the bullwhip effect.
buffer management.
risk management.
39
An organization has decided to reduce the number of distribution warehouses it uses to fulfill customer orders. What will be the most likely result?
In-transit inventory will decrease.
Replenishment lot sizes will decrease.
Total safety stock will decrease.
The order fill rate will decrease.
Total safety stock will decrease
40
An organization has pursued lean and Just-in-Time manufacturing and offshoring to a nearby low-labor-cost country. Which of the following is a significant consequence of these actions on the organization’s supply chain?
Reduced transportation costs
Higher total cost of ownership
Increased risk
More complex manufacturing processes
Increased risk
41
An appropriate use of an advanced planning and scheduling (APS) system is:
automatic replenishment of inventory.
optimization of transportation routes.
identifying constraints within a facility.
defining business rules when specific events occur.
identifying constraints within a facility
42
The transport of hazardous materials or dangerous goods requires:
identification and classification for shipping containers and some vehicles.
informal training of those who must handle hazmat and dangerous goods.
that they are concealed from view for security reasons.
signed documentation by the carrier that regulations were followed in cargo preparation.
identification and classification for shipping containers and some vehicles.
43
An organization automatically detects when a frequent purchaser calls. The customer is not placed on hold and is offered a purchase upgrade discount. Which type of customer segmentation is this organization using?
Segmentation by need
Segmentation by demographics
Segmentation by value
Segmentation by channel
Segmentation by value
44
A company is most likely to achieve which of the following benefits when implementing time fence policies?
Reducing lead time
Calculating available-to-promise inventory
Providing suppliers with a specific schedule
Reducing the number of schedule changes
Reducing the number of schedule changes
45
In the Supply Chain Operations Reference (SCOR®) model, which of the following metrics measures the reliability of a supply chain?
On-time delivery
Cash-to-cash cycle time
Upside production flexibility
Value added per employee
On-time delivery
46
A primary benefit of an enterprise resources planning (ERP) system to the supply chain is:
internet-enabled transactions across the supply chain.
mathematical models that support optimization.
visibility to real-time supply chain data.
coordinated planning within the organization.
visibility to real-time supply chain data.
47
Inside a demand time fence, can customer orders still be promised without needing higher authority approval?
Only when available-to-promise quantities exist
No, because the forecast is fully consumed by actual orders
Only when the forecast is not fully consumed by actual orders
Yes, because this fence defines what is available to be promised
Only when available-to-promise quantities exist
48
Firms that conduct business over the internet to become virtual organizations are using which of the following techniques?
Supply chain execution
Business process reengineering
Business-to-business commerce
Electronic data interchange
Business-to-business commerce
49
A chain of children’s clothing stores has implemented a frequent shopper reward program. The company has also implemented point-of-sale (POS) computer systems in each store, and the sales data from each store are transmitted to headquarters. The data for all stores are analyzed weekly by headquarters staff to determine the most popular styles and colors. This analysis of the data is an example of which of the following computer applications?
Selling products
Customer retention
Data mining
Demand generation
Data mining
50
Which of the following activities is not a component of demand planning?
Aggregating demand
Capturing actual demand
Measuring forecast accuracy
Promoting products
Promoting products
51
For the remanufacturing process to work, companies must take the remanufacturing of products into account beginning in which phase?
Distribution
Design
Production
Planning
Design
52
If an organization’s executives say they want to improve customer service from its current level of 95% to 100%, as measured by number of stockouts, the supply chain manager should:
increase safety stock by 5% to make the adjustment.
increase safety stock by 10% to make the adjustment.
postpone inventory deliveries to retailers to ensure low safety stock and perfect customer service.
explain that this level would be prohibitively expensive.
explain that this level would be prohibitively expensive.
53
Which of the following actions by a distributor is most likely to reduce the variability in demand seen by the manufacturers?
Reducing the delivery time to the retailers
Reviewing lot sizes with the manufacturers
Measuring the variability of incoming orders
Increasing the promotions offered to the retailers
Reducing the delivery time to the retailers
54
Which of the following warehouse ownership models can combine the benefits of economies of scale and scalability with lower long-term costs?
Fourth-party logistics (4PL) warehousing
Public warehousing
Contract warehousing
Private warehousing
Contract warehousing
55
A letter of credit offers security from which risk?
Acceptance of substandard goods
Counterparty risk
Refusal to accept delivery
Regulatory risk
Counterparty risk
56
Lean supply chains use which of the following actions to achieve their objectives?
Maximizing output
Optimizing inventory
Reducing costs
Reducing waste
Reducing waste
57
A large public utility understands that customer relationship (CRM) will be important in the future. It has committed to implementing the philosophy and supporting processes and information technology applications based on this future need. The factor most likely to inhibit success of the implementation is that the company:
is addressing the philosophy and applications concurrently.
will have to develop custom applications for its business.
will have to gather data about a large number of customers.
does not have documented objectives for the effort.
does not have documented objectives for the effort.
58
Which of the following types of carriers is the best choice for local transport of agricultural products?
Public
Private
Exempt
Contract
Exempt
59
The parent company of a chain of kitchen goods retailers is developing a website that will allow customers to view an online catalogue, locate stores near them, check the availability of specific items at stores, and order goods for pickup at a specific store. This website is an example of:
a business intelligence portal.
an outsourced application.
an internet-based portal.
an inventory optimization application.
an internet-based portal.
60
A salesperson makes a delivery promise that is prior to the customer’s delivery request date because this customer is in the most valuable customer segment. If the order arrives instead at the delivery request date, the customer will most likely be:
dissatisfied due to heightened customer expectations.
dissatisfied due to unacceptable speed of performance.
satisfied due to perfect order fulfillment.
atisfied due to the perfect fill rate.
dissatisfied due to heightened customer expectations.
61
Implementing customer relationship management (CRM) will enable a company to:
give customers access to real-time order information.
implement market segmentation.
offer a standardized sales approach to all of its customers.
align resources to manage new and existing customers.
align resources to manage new and existing customers.
62
The term used to describe the increased focus on integration and synchronization of the entire supply chain in pursuit of agility is:
design for the supply chain.
collaborative product commerce.
supply chain optimization.
design logistics.
design for the supply chain.
63
Which of the following may be necessary to get the most out of an organization’s sales and operations planning (S&OP) process?
Ensuring that attendees from each meeting are included in each subsequent meeting
Sharing some form of the results of the process with external partners
Engaging in collaborative demand planning with all direct suppliers
Hiring a demand manager to chair each S&OP meeting in the process
Sharing some form of the results of the process with external partners
64
According to the APICS definition of waste, which is a type of waste?
Any unique by-products requiring special management control
Any involvement of parties outside the supply chain
Wait time that makes a product more beautiful in the eyes of the customer
Any scrap that is not planned
Any unique by-products requiring special management control
65
An organization rewards its commodity suppliers up front by purchasing inventory in advance of need (up to the safety stock level) and paying those suppliers to warehouse and replenish that inventory as lot-size orders are filled. Which of the following aspects of a supplier relationship management strategy is important to verify at the start of this relationship and periodically thereafter?
Relative value of warehousing rent to supplier versus smooth flows to operations
Relative cost of transportation when orders are sent only to fill current demand
Relative value of safety stock versus the cost of stockouts and lost customers
Relative cost of warehousing rent versus ordering costs for in-house warehousing
Relative value of warehousing rent to supplier versus smooth flows to operations
66
Using primarily a pull system in the distribution network offers which of the following benefits to the supply chain as a whole?
Elimination of safety stock
Enhanced communication up the chain
Sensitivity to demands of the final customer
Enhanced visibility of future demand all along the chain
Sensitivity to demands of the final customer
67
A company analyzing a make-or-buy decision for one of its products should consider:
net present value.
vertical integration.
total cost of ownership.
vendor-managed inventory vs. consignment.
total cost of ownership.
68
If an organization primarily favors a push approach to managing a supply chain, which of the following production strategies would it be most likely to adopt?
Just-in-Time
Assemble-to-order
Make-to-order
Make-to-stock
Make-to-stock
69
An organization that has used lean philosophies to justify and simplify its processes should do which of the following on an ongoing basis to sustain the effort?
Start an emphasis on quality, because lean can reduce quality.
Emphasize job specialization and start reviewing quality.
Cross-train employees and continue looking for waste.
Move from a waste reduction effort to adaptability and throughput efforts.
Cross-train employees and continue looking for waste.
70
Use of a fixed order quantity model is most likely to be effective in which of the following cases?
When demand is highly unpredictable and light
When a shipper is looking for quantity discounts
When production is run on lean assumptions
When lead time is highly variable
When a shipper is looking for quantity discounts
71
A check cashing company has developed a strategic supply plan for opening a number of new stores. If a risk assessment shows that many organizations are considering converting from paychecks to providing payroll cards, avoiding the need for their service, the supply plan developer should:
minimize this risk because it will be part of a contingency plan.
call out this risk to decision makers.
adjust the supply plan to a new strategic direction prior to presentation.
assume that this risk was considered during corporate strategy development.
call out this risk to decision makers.
72
Supplier relationship management (SRM) structures and supports relationships with suppliers, thereby assisting in which of the following?
Focusing on cost of materials and components
Reducing procurement and excess inventory costs
Improving depth of purchased parts knowledge
Targeting suppliers for cross-selling and up-selling opportunities
Reducing procurement and excess inventory costs
73
An interorganizational supply chain visibility initiative is championed by the channel master's executives, and they provide the other companies with detailed project plans and change management steps. However, the project fails after partner employees resist or ignore the changes after the project ends. What would have best promoted success?
Invest in highly competent project managers.
Invest in highly competent change managers.
Involve executives from other companies as champions and decision makers.
Redesign contracts with partners to require compliance with this initiative.
Involve executives from other companies as champions and decision makers.
74
Which of the following types of information would be appropriate for a qualitative forecast?
Market research
Time-series data
Leading indicators
Sales order data
Market research
75
Which of the following is one basis for the lean philosophy elements of mapping production and fulfillment processes to expose any barriers to optimizing customer value and replacing “batch and queue” thinking with enabling a continuous flow of goods and services?
Queuing theory
Channel theory
Theory of constraints
Pareto theory
Theory of constraints
76
If you were a supply chain manager for IKEA, which strategy would you promote with your suppliers according to IKEA's IWAY initiative?
Encourage open bidding by suppliers to reduce pricing in exchange for volume purchases.
Create virtual communities of suppliers online to share their ideas about sustainability practices.
Use the code of conduct to encourage long-term relationships with a limited number of suppliers.
Provide training on sustainability practices to suppliers through local educational institutions.
Use the code of conduct to encourage long-term relationships with a limited number of suppliers.
77
Which of the following activities is an aspect of demand management?
Adjusting resources to support upcoming demand
Prioritizing demand when supply is constrained
Calculating gross demand requirements for master-scheduled items
Implementing a customer relationship management (CRM) system
Prioritizing demand when supply is constrained
78
The primary objective of a six sigma program is:
to reduce all forms of waste in production processes.
to continuously improve perceived product quality.
to produce no more than 3.4 defects in one million opportunities.
to reduce product and process variability.
to reduce product and process variability.
79
Which of the following decisions should include a consideration of landed costs?
Real property acquisitions
Transfer cost decisions
Warehouse safety stock level decisions
Purchase of a component domestically or offshore
Purchase of a component domestically or offshore
80
When communicating requirements and priorities for managing supply from internal resources, a best practice is to:
communicate comprehensive production plan details in person.
learn key engineering terminology for use in discussions with engineers.
provide as much information as possible to each stakeholder.
have key performance indicators be identical to ISO communications standards.
learn key engineering terminology for use in discussions with engineers.
81
A company wants to reduce the lead time of components and increase the on-time delivery performance of suppliers. Which of the following processes needs to be implemented?
Supplier relationship management (SRM)
Supplier performance evaluation
Business-to-business (B2B) integration
Collaborative planning, forecasting, and replenishment (CPFR)
Collaborative planning, forecasting, and replenishment (CPFR)
82
If an organization wants to gain access to the U.S. Customs-Trade Partnership Against Terrorism (C-TPAT) membership list of certified suppliers, it must:
not disclose the agreements made with C-TPAT to other supply chain partners.
be located in a country that has a mutual recognition security arrangement with the U.S.
spend funds on supply chain security enhancements as needed in accord with C-TPAT guidelines.
submit to customs verifications rather than self-policing its organization’s shipments.
spend funds on supply chain security enhancements as needed in accord with C-TPAT guidelines.
83
Triple bottom line (TBL) performance measures for corporate social responsibility comprise which of the following dimensions?
Economic, social, organizational
Financial, environmental, political
Economic, social, environmental
Social, environmental, cultural
Economic, social, environmental
84
When determining the transportation mode for servicing distribution warehouses, which of the following factors should be considered?
Capability, customer service, frequency
Cost, dependability, customer service
Speed, dependability, capability
Speed, proximity of headquarters, cost
Speed, dependability, capability
85
Pharmaceutical companies primarily design their reverse logistics systems to exhibit which of the following qualities?
Maximum efficiency
Lowest total cost
Lowest reclaim value lost
Maximum control
Maximum control
86
Which of the following benefits best supports the use of radio frequency identification (RFID) technology?
Tracking a product's life cycle
Improving visibility in the supply chain
Increasing forecast accuracy
Providing glocalization capabilities
Improving visibility in the supply chain
87
A company manufactures a wide range of industrial and commercial cleaning supplies that it sells to independent distributors that in turn sell to the end users. The market in which the company operates demands a variety of package sizes and short delivery times. The action by the company that is most consistent with its strategy and the demands of the marketplace in which it operates would be to:
advertise the products heavily in trade journals.
invest in highly automated production equipment.
focus on eliminating waste in the supply chain.
convince key distributors to share demand data.
convince key distributors to share demand data.
88
A customer has an advanced technology infrastructure. The most cost-effective mode of data exchange likely would be:
electronic data interchange.
application link enabling.
extensible markup language.
file transfer protocol.
extensible markup language.
89
Which of the following categories of cost would a retailer typically include in the cost of carrying inventory?
Store salaries
Material
Shipping
Spoilage
Spoilage
90
What will happen with a time-series forecast if strong seasonality is not removed prior to forecasting?
It will predict a downward swing in demand to keep on going down indefinitely.
It will contain more random variability.
It will lead changes in trend.
It will be more subject to the groupthink effect.
It will predict a downward swing in demand to keep on going down indefinitely.
91
An organization’s balance sheet shows €10 million in inventory in year 1 and €8 million in inventory in year 2. If the organization’s year 2 after-tax income (with depreciation added back) is €70 million and there are no changes in accounts receivable or payable, what is the organization’s net cash flow from operations in year 2 on its statement of cash flows?
€61 million
€68 million
€72 million
€79 million
€72 million
92
Organizational and supply chain strategies determine the measures of success and incentives for supply chain improvement initiatives. Those initiatives should be linked to which of the following?
The judgment of each participant's direct supervisor
The outcome of the change initiative
The four perspectives of the balanced scorecard
The approval of top management
The four perspectives of the balanced scorecard
93
A sustained increase in the perfect order metric is most likely caused by:
higher levels of safety stock.
shorter production cycle times.
better collaboration among the logistic functions.
increased forecast accuracy.
better collaboration among the logistic functions.
94
Which of the following objectives should a company use to improve delivery performance to customers?
Decrease cycle time.
Use qualitative forecasting.
Increase order fill rate.
Implement a pull system.
Increase order fill rate.
95
A company that has a main product that is a standard commodity would select which of the following competitive strategies to be most effective?
Best-cost leader
Focused differentiation
Broad differentiation
Low-cost leader
Low-cost leader
96
Companies and supply chain partners who are not members of a trading bloc might need to do which of the following to counteract the bloc’s impact?
Avoid any sales transactions with the bloc countries.
Establish premium tariffs for future transactions with bloc members.
Raise their prices to counter decreased demand for their exports.
Resort to protectionist tactics.
Resort to protectionist tactics
97
"The most profitable period but also the period most vulnerable to competitive inroads." This best describes what phase of the product life cycle?
Development
Introduction
Growth
Maturity
Maturity
98
Which of the following numbers (rounded to the nearest whole number) is the correct seasonal average demand for February using the table below?
```
Month
Monthly Demand Per Year
Seasonal Totals
Seasonal Average
Deseasonalized Demand
Seasonal Index
January 102 99 100 301 100 105 .95
February 101 101 105 307 105 .97
March 105 102 108 315 105 105 1.00
April 106 103 109 318 106 105 1.01
May 108 105 109 322 107 105 1.02
June 111 108 110 329 110 105 1.05
```
99
100
102
105
102
99
Which of the following best describes the first step of collaborative planning, forecasting, and replenishment (CPFR)?
Supply chain partners combine production facilities.
Supply chain partners develop a joint business plan.
Supply chain partners share inventory positions and demands.
Supply chain partners share material requirements planning (MRP) outputs.
Supply chain partners develop a joint business plan.
100
An implementation of an advanced planning system is scheduled to cost US$520,000 in the first year and US$80,000 each year for the next four years. It is expected to produce annual benefits in cost savings and efficiency gains of US$200,000 a year for five years. Which of the following is the correct result of an ROI analysis?
14%
19%
23%
43%
19%
101
Which of the following entities is responsible for issuing and updating Incoterms?
International Chamber of Commerce (ICC)
World Trade Organization
U.S. Department of Commerce
United Nations
International Chamber of Commerce (ICC)
102
Which of the following two warehouse functions share the same benefit of having consolidated, full-trailer shipments into and/or out of the facility?
Cross-dock and postponement
Stockpiling and mixing
Cross-dock and break-bulk
Break-bulk and spot-stocking
Cross-dock and break-bulk
103
Which of the following statements concerning the reorder point system is true?
Order point quantities vary based on demand.
Time intervals between orders are constant.
The reorder point is typically used for dependent items.
The order point equals the demand during lead time plus safety stock.
The order point equals the demand during lead time plus safety stock
104
Which of the following factors is most likely to increase as a result of a retail chain moving from central control of inventories to distributed control at the retail outlets if all other factors are held constant?
Item forecast accuracy
Replenishment order quantities
Total overhead costs
Delivery time to the retail outlets
Total overhead costs
105
A side effect of continuous improvement initiatives in an organization’s industry is a continued:
escalation of customers’ expectations.
increase in the organization’s market share.
improvement in customer satisfaction.
reduction in demand variability.
escalation of customers’ expectations.
106
If you are the supply chain manager, where should you be looking in the supply chain in order to get the best view of potential changes to the market?
Just at the consumer end of the chain
Just at the next stop upstream in the chain
Just at the next stop downstream in the chain
At the next stop downstream in the chain and at the consumer end
At the next stop downstream in the chain and at the consumer end
107
An advantage of cycle counting over annual physical inventory is:
ease of auditing.
timely detection of problems.
every item is counted at least once a year.
correction of inventory values.
timely detection of problems
108
Which of the following tools is frequently used to identify the wants and needs of customers with specific demographics?
Product profiling
Market targeting
Customer segmentation
Customer focus groups
Customer focus groups
109
A group of trading partners is collaborating to improve supply chain operations. Which of the following actions is most likely to reduce the variability of demand experienced by the manufacturers?
Increasing production lot sizes
Increasing retail store reorder frequency
Reducing total safety stock level
Reducing the frequency of retail promotions
Reducing the frequency of retail promotions
110
Prioritizing demand in which of the following situations is typically considered a component of demand management?
Supply is less than demand for a product family.
Demand comes from a very large number of customers.
Production lead times for products in a family are long.
Forecast error is large compared to average demand.
Supply is less than demand for a product family.
111
An organization negotiates a firm commitment decision point and a volume commitment decision point into its contract with a supplier related to when demand information becomes a commitment to order inventory from the supplier. Which of the following is the difference between these two points?
The zone outside either commitment point is a commitment to buy.
The zone between the two points allows for cancelling orders if demand is low.
The zone between the two points allows for shifting schedules or priorities.
The zone outside either commitment point has a time horizon equaling the remainder of the cumulative lead time of the product.
The zone between the two points allows for shifting schedules or priorities.
112
Software that is designed for remote and mobile exception reporting is likely to be more cost-effective if which licensing method is used?
License per user
License per device
Noncompliance until audited
Software as a service
License per user
113
Supply chain partners that are certified in ISO 9000 and ISO 14000 are conforming to which of the following standards?
Quality and environmental
Purchasing and quality
Quality and social responsibility
Environmental and social accountability
Quality and environmental
114
A make-to-stock manufacturing organization should do which of the following when demand forecasting predicts increased demand due to economic growth?
Increase in-transit inventory.
Increase safety stock.
Increase cycle stock.
Increase buffers in work-in-process inventory.
Increase cycle stock
115
The major purpose of the sales and operations plan (S&OP) is to:
provide a binding contract between sales and operations.
balance sales and output of end items.
obtain start-up financing from bankers and investors.
develop a single set of supply/demand numbers for all stakeholders.
develop a single set of supply/demand numbers for all stakeholders.
116
If you know the available time at a work center and want to calculate its rated capacity, you also need to know which of the following?
Efficiency and utilization
Utilization and number of workers/machines
Efficiency and number of workers/machines
Efficiency and manufacturing lead time
Efficiency and utilization
117
Capacity management is used primarily for:
prioritizing manufacturing orders.
balancing work center capacity and load.
calculating available capacity.
validating the master production schedule.
balancing work center capacity and load.
118
Which of the following measurements best describes performance related to sales and operations planning (S&OP)?
Balance of supply with demand within the demand time fence
Balance of supply with demand within the cumulative lead time
Balance of supply with demand over the planning horizon
Balance of current supply with next period's demand
Balance of supply with demand over the planning horizon
119
What is the minimum level of enterprise evolution in which a firm might use a logistics supplier to integrate with external members and also internally combine warehousing and transportation activities to optimize cost versus customer service?
Stage 1: Multiple dysfunction
Stage 2: Semifunctional enterprise
Stage 3: Integrated enterprise
Stage 4: Extended enterprise
Stage 3: Integrated enterprise
120
A service partner that provides product warehouse and delivery services is known as a:
freight broker.
third-party logistics (3PL) provider.
freight forwarder.
distribution partner.
third-party logistics (3PL) provider.
121
When investing in new capacity in an industry with ever shorter product life cycles, which of the following would represent the best investment?
Purchasing fast changeover general-purpose equipment
Purchasing high throughput general-purpose equipment
Upgrading existing specialized equipment for better throughput
Purchasing lowest-cost specialized equipment
Purchasing fast changeover general-purpose equipment
122
Which of the following activities is most likely to reduce the bullwhip effect?
Centralizing decision making
Reducing lead time
Improving the forecast
Increasing safety stock
Reducing lead time
123
When determining lot size, which of the following costs should be balanced?
Cost of goods sold and cost of quality
Carrying and ordering
Product and process
Direct and indirect labor
Carrying and ordering
124
Which of the following performance measures would be expected to increase with a successful sales and operations planning (S&OP) implementation?
Cost of goods sold
Cash-to-cash cycle time
Actual sales to forecast performance
Percentage of on-time deliveries
Percentage of on-time deliveries
125
An improvement in the flow of funds between trading partners is a benefit of:
integrating their information systems.
increasing the level of information sharing and collaboration.
initiating discount terms for quick payments.
using the same global bank for all transactions.
increasing the level of information sharing and collaboration.
126
Supply chain participant priorities often conflict. Which of the following groups sets a priority on product and feature variety and price reduction?
Customers
Retailers
Suppliers
Manufacturers
Customers
127
A virtual supply chain organization can best be characterized as:
supply chain partners communicating through use of the internet.
a coordinated supply chain where major strategic decisions are communicated by the channel master.
supply chain partners working in close collaboration while retaining independent ownership.
supply chain organizations who have empowered decision making at lower levels.
supply chain partners working in close collaboration while retaining independent ownership.
128
A company that is changing its business model to that of a lateral supply chain most likely would:
use internal resources.
use outsourcing.
increase direct labor.
invest in additional capital equipment.
use outsourcing.
129
The need for supply chain security typically would be the greatest for a company that:
performs finishing operations for catalogues created by local printers.
outsources its customer support call center operations.
distributes hardware items to retailers throughout country.
produces pharmaceutical products using ingredients sourced globally.
produces pharmaceutical products using ingredients sourced globally.
130
A company facing short product life cycles and rapidly changing customer demand would implement which of the following approaches?
Implementing sales and operations planning (S&OP)
Using customer segmentation
Developing agile operations
Bringing outsourced activities in house
Developing agile operations
131
A chain of grocery stores has implemented a customer loyalty program that includes sending customers coupons four times per year. The coupons are for items each customer has frequently purchased in the past but has not purchased in the past three months. This program would typically be considered an element of:
customer relationship management.
sales force automation.
cross-selling.
business-to-consumer sales.
customer relationship management.
132
According to the Pareto principle, a significant percentage of a company's revenue or profits is derived from:
less than 10% of the customer base.
about or less than 20% of the customer base.
about or less than 40% of the customer base.
about or less than 80% of the customer base.
about or less than 20% of the customer base.
133
A company has stated in its annual business report that its management philosophy is based on the principles of total quality management (TQM). In order to ensure that TQM is effectively implemented, the company should focus on:
meeting customer wants and needs.
complying with international standards.
ensuring conformance to specifications.
implementing statistical process control.
meeting customer wants and needs.
134
A company that provides consulting and educational services to government agencies is planning to reduce its supplier base significantly. Which of the following actions would be most appropriate to take as part of the supplier base reduction?
Implement a certification program for the remaining suppliers.
Define and agree on the requirements for each category of service.
Ensure that there are at least two suppliers for critical services.
Request price reductions from the remaining suppliers.
Implement a certification program for the remaining suppliers.
135
Volume growth is a key performance indicator for which of the following?
Supply chain variability
Replenishment
Product merchandizing
Customer service
Product merchandizing
136
Which of the following metrics is most appropriate for a company striving to measure the magnitude of the lack of product to meet customer requirements?
Perfect order
Fill rate
Stockout frequency
Lead time
Fill rate
137
Which of the following factors would most likely be considered in the social domain of the triple bottom line?
Treatment of employees when a facility is closed
Investment in upgrades to meet environmental regulations
Degree of transparency in corporate reports
Level and mix of pollutants released by a facility
Treatment of employees when a facility is closed
138
The make-or-buy decision typically would include considerations about:
profit margins as a result of vendor-managed inventory.
consignment time limitations.
total ownership costs.
cross-docking capabilities at supplier sites.
total ownership costs.
139
Which of the following outcomes is most likely to result when a group of regional supply chains evolves into a single integrated global supply chain?
Total supply chain risk will increase.
Profit margins for the manufacturers will decrease.
Interorganizational processes will be simplified.
Manufacturing will be done in low-wage countries.
Total supply chain risk will increase.
140
According to the functional and innovative product categories designated by Marshall L. Fisher, which of the following would be a proper performance indicator for a typical innovative product?
Design for maximum performance at minimal cost
Inventory reduction
Aggressively reducing lead times
High inventory turns
Aggressively reducing lead times
141
A company is beginning the process of defining market segments for its products and services. The most appropriate objective for this undertaking would be to identify groups of customers with similar:
service requirements.
geographical locations.
purchasing histories.
revenue potential.
service requirements.
142
A global supply chain has many partners, and inventory ownership along the chain is similarly fragmented. A company wanting to reduce the risk of theft, vandalism, or terrorism in this environment must:
rely on mandatory government security initiatives such as the U.S.’s C-TPAT.
minimize likely risks such as for theft but accept the risk of terrorism as it is unlikely.
establish minimum security protocols that all partners can agree to and uphold.
maximize incoming and outgoing security where their security obligations end.
establish minimum security protocols that all partners can agree to and uphold.
143
Which of the following approaches reduces lead times from supplier to customer using point-of-sale (POS) data?
Quick-response program
Continuous replenishment
Direct customer shipments
Vendor-managed inventory
Quick-response program
144
A firm produces a wide variety of coaxial cable assemblies to customer order. They have been commited to shipping orders within 96 hours of receipt of the customer order. However, the firm has now decided to produce the most common configurations to stock and ship within 24 hours of receipt of the order. Customers will still be able to request specific configurations of the product, but those orders will be shipped within ten business days of order receipt. This shift in strategy is an example of which of the following product design strategies?
Product standardization
Process standardization
Customer-focused
Industry-specialized
Product standardization
145
A firm is trying to harmonize supply and demand so as to minimize total product, transportation, and inventory costs. Which of the following would be the first step the company needs to take in this endeavor?
Reduce the number of stock keeping units (SKUs).
Understand the impact of promotions.
Improve forecast accuracy.
Collaborate with supply partners.
Improve forecast accuracy
146
A supply chain manager's superior asks her to draw up a project charter and be the project manager on a project to continually improve inventory levels by conducting ongoing audits. What should be clarified first?
Will we have sufficient budget for this project?
Who will be available to help on this project, and will they be full-time?
What will the end date for this project be?
How will funding for the project be proposed and approved?
What will the end date for this project be?
147
A company that currently manufactures and distributes its products in a single country is considering expanding sales into an adjoining country. The decision whether to proceed with the expansion would most likely be affected by the similarity in the two countries of the:
taxation systems.
legal frameworks.
cultural history.
transportation systems.
legal frameworks.
148
Which of the following is a management approach to supply chain success by meeting customer needs?
Total quality control (TQC)
Total quality management (TQM)
Total customer quality (TCQ)
Total quality engineering (TQE)
Total quality management (TQM)
149
End customer fill rate will most likely improve when members of a supply chain share which of the following information?
Manufacturing schedules
Inventory by location
Customer demand data
Intercompany processes
Customer demand data
150
Which could be used to produce a more accurate and useful SWOT analysis?
Voluntary use of ISO 31000 Series Standards
