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Which of the following factors is the most important driver of supply chain change?
Health and safety concerns
Competitor actions
Government regulations
Customer perceptions of value
A company is considering relocating production to a lower-wage country. Volatility in which of the following areas most likely would impact profitability without modifying product landed costs?
Labor costs
Currency exchange rates
Commodity prices
Product quality
Managing risk should be a strategic part of supply chain management because:
the occurrence of unanticipated risks essentially can be eliminated.
not all members of the supply chain consider and respond to the same types of risks.
substantial financial penalties can be assessed if legal requirements are not met.
it helps to reduce the occurrence and consequences of unplanned negative events.
The primary contribution from an enterprise resources planning system in building supply chain capability is:
real-time manufacturing planning
improved decision making.
ease of implementation
timely order tracking
Which of the following factors is most important to consider when deciding on offshore outsourcing of manufacturing to a supplier?
Size of the supplier organization
Total cost of ownership
Supplier performance history
Supplier certification
Which of the following actions is most appropriate when implementing a strategy to create customer-affordable value?
Use a more rapid transportation mode.
Increase safety stock.
Extend product warranty
Employ lean principles.
Which of the following factors should be considered when establishing an inventory policy?
Customer demand
Selling price history
Historical service levels
Number of customers
On-time delivery performance in the supply chain can best be improved by aligning required capacity with what type of capacity?
Demonstrated
Rated
Budgeted
Theoretical
Which of the following processes ensures that functional plans are consistent?
Strategic planning
Sales and operations planning
Project planning
Master scheduling
When evaluating several possible supply chain options, a firm considering the minimal total cost should:
ensure that the inventory levels are as low as possible to minimize holding costs while
still providing adequate customer service.
account for the combined costs of holding buffer inventory and incurring inventory
shortages
consider the costs of acquiring, holding, and transporting inventory, and of servicing
customers.
place buffer inventory in the lowest cost locations that meet lead time and service level
requirements from customers.
The benefit most likely to result from a collaborative forecasting process is:
improvement in forecast accuracy.
improvement in forecast responsiveness.
reduction of the coefficient of variation.
reduction of forecasting effort.
Which of the following tools is most important in developing strategic sourcing?
Price break analysis
Network analysis
Blanket purchase order
Spend analysis
A company discovers that several high-volume customers have very erratic ordering patterns. Which of the following actions is most likely to reduce variability?
Checking the demand status multiple times daily
Establishing Internet-enabled collaborative relationships
Implementing electronic data interchange transactions
Increasing safety-stock levels for items these customers order
A distributor has a network consisting of a central distribution center serving five regional distribution centers that ships to multiple retailers. The distributor wants to reduce inventory while maintaining product availability. Which of the following actions is most likely to produce the desired outcome?
Centralizing inventory for slow-moving items
Reducing the quoted price for slow-moving item
Implementing cross-docking at the central distribution center
Implementing continuous replenishment at the regional centers
A company understates current revenue forecasts and delays the delivery of orders to meet the forecast. The most likely result of this practice is that shipments will peak:
at the beginning of reporting periods.
randomly throughout reporting periods
at both the beginning and end of reporting periods.
at the end of reporting periods.
Which of the following techniques allows users to automate the notification of appropriate parties when exceptions to specific business rules occur?
Enterprise resources planning
Supply chain event management
Advanced planning and scheduling
Automatic identification and data capture
Which of the following costs is an example of ordering cost?
Inspection labor
Inspection labor
Cost of capital invested
Insurance
A distribution requirements planning system is implemented primarily to monitor or manage:
supplier capacity.
customer demand.
inventory replenishment.
demand variation.
Which of the following statements indicates an attribute of international commercial terms (Incoterms)?
They are required contract terms for international trade.
Each term implies the responsibilities of the buyer and seller.
Discounts and surcharges are identified by the terms.
The terms are reviewed annually by the International Chamber of Commerce
Which of the following factors are fundamental to transportation performance?
Full truck loads, maintenance, discounts
Quality, Just-in-Time, invoicing
Contract performance, order tracking, flexibility
Cost, speed, delivery consistency
Which of the following benefits should a supplier expect to receive by becoming a certified supplier?
Reduction in redundant processes with buyer
Increase in price of items sold
Increase in access to competitive information
Reduction in number of items utilizing vendor-managed inventory
A retailer sets service-level targets intended to maximize total profit. The retailer's service level target should be highest for items with a high profit margin and:
low variability of demand.
made to stock.
small replenishment lot size.
made to order.
Which of the following manufacturing strategies typically generates the lowest supply chain inventory?
Make to Stock
Assemble to Order
Make to Order
Engineer to Order
The theory of constraints (TOC) works best in an environment where the:
product mix for the operation changes daily.
constraint cannot be easily managed.
constraint cannot be easily identified.
constraint persists long enough to be managed effectively.
Which of the following activities is an important phase of product life-cycle management?
Developing supplier relationships
Implementing performance measurements
Designing supply chain logistics
Incorporating key design elements
Standardization of supply chain processes is most likely to facilitate achievement of which of the following activities?
Reducing the total cost of ownership
Tracking the effects of improvement initiatives
Creating project consensus
Understanding of operational metrics
Organizations that change from a traditional purchasing perspective to a supply chain perspective most likely will adopt techniques related to:
product pricing.
value stream analysis.
centralized decision making.
sourcing multiple suppliers.
Which of the following continuous improvement methodologies focuses on reduction of defects by reducing process variation?
Just-in-Time (JIT)
Kaizen
Six Sigma
Theory of constraints
Prioritizing customer needs is best accomplished by:
. sharing information with key customers.
installing a new enterprise resources planning system.
responding to customer requests in the order they are received.
establishing policies and procedures for honoring customer requests.
Which of the following actions by a group of trading partners is most likely to improve the flow of funds among them?
Increasing the level of information sharing and collaboration
. Negotiating a single set of terms for the trading partners
Reducing the time allowed for the timely payment discount
Implementing links among their information systems
A firm may use which of the following technologies to track the flow of inventory across its entire supply chain?
Distribution requirements planning
Radio frequency identification
Transportation management system
Warehouse management system
Which of the following strategies is most appropriate for managing unknown risks in a global supply chain?
Vertical integration
Technology integration with suppliers
Investing in redundancy
Strengthening supplier relationships
A firm has determined its cash-to-cash cycle time to be 60 days. The number of days' payables outstanding is 25, and number of days' sales outstanding is 35. If the firm reduces its inventory by 20%, the new cash-to-cash cycle time, in days, will be approximately:
48
50
60
88
Which of the following changes often leads to higher levels of inventory?
Decrease in customer service level
Decrease in vendor lead times
Increase in economies of scale
Increase in warehouse holding costs
A company that desires to implement a strategy for inventory management must define which of the following factors?
Reliability and maintainability requirements
Variability in the customer demand
Overall item effectiveness
Inventory carrying costs
Which of the following conditions is most likely to occur shortly after the introduction of an innovative product family?
Forecast errors will be low.
Production lead time will increase.
An inventory buffer will be required.
Demand will be stable.
A key assumption of the economic order quantity (EOQ) is that:
future demand cannot be projected.
the rate of demand is continuous and constant
reorder frequency is fixed.
as the lot size decreases, the setup cost per unit decreases.
Which of the following manufacturing strategies would run the greatest risk of increasing obsolete inventory costs?
Make-to-stock
Assemble-to-order
Make-to-order
Engineer-to-order