CSCP Exam
ERP software
a modularized suite of business applications that are seamlessly integrated to provide automated interactions and a common source of data for a company. Built around a large database with shared access to real time data
ROI (APICS)
a relative measure of financial performance that provides a means for comparing various investments by calculating the profits returned during a specified time period. In the theory of constraints, ROI is calculated as throughput minus operating expense divided by investment
Typical measures of success in the use of invested money and assets more generally are
return on investment (ROI), return on assets (ROA), return on owners equity (ROE)
A company has designed a new product family that enables stocking base and country specific components to be configured and shipped after receipt of the customer order. This approach is an example of:
risk pooling
Do in PDCA
second step- the plan is carried out, preferably on a small scale
Which two of the following factors are most important when considering whether to partner with a supplier?
shared visions and trusts
The primary output of sales and operations planning (S&OP) typically is
tactical plans to support the business strategies
The total cost of ownership measurement includes:
tangible and intangible costs
Advanced planning and scheduling (APS) refers to
techniques that deal with analysis and plannings of logistics and manufacturing over the short, immediate and long term time frames. It creates schedules for what should be produced, when and where production should occur, and the sequence of events that should occur. APS creates holistic supply chain plans that incorporate long range aggregate planning and short term detailed scheduling
Which of the following is a key information technology capability that can enable a supply chain to become more than just lean or adaptable, but demand-driven, meaning it can quickly sense and respond to actual customer demand changes?
technology to quickly determine profitable tradeoffs in response to unplanned events
SCEM provides users
the ability to flag the occurrence of certain supply chain events to trigger some form of alert or action within another supply chain application. It can be deployed to monitor supply chain business processes such as planning, transportation, logistics, or procurement. Can also be applied to supply chain business intelligence applications to alert user to any unplanned or unexpected event
Currency hedging
used to offset the risks associated with the changing value of current
Lean supply chains strive to achieve their objectives by using which of the following techniques?
value stream mapping
In supply chain management, a major benefit of an enterprise resources planning system is:
visibility to real time data
APICS definition of business strategy
a statement of long range strategy, and revenue, cost, and profit objectives usually accompanied by budgets, a projected balance sheet, and a cash flow (source and application of funds) statement. Usually stated in terms of dollars and grouped by product family. Translated into sy cbrinized tactical functional plans throughout the production planning process (or SOP). Although frequently stated in different terms (dollar vs units) these tactical plans should agree with each other and the business plan. A document consisting of the business details (organization, strategy, and financial), prepared by an entrepreneur to plan for a new business
Radio Frequency Identification (RFID)
a system using electronic tags to store data about items. Accessing these data is accomplished through a specific radio frequency and does not require close proximity or line-of-sight access for data retrieval. See: active tag, passive tag, semi-passive tag.
Which of the following actions is most effective in reducing variations in the relative profit of a product that is sold globally?
hedging by selling in multiple regions
WMS
improves workflow by continuously simplifying and optimizing operations, especially with warehouse personnel and equipment. It directs management attention to anticipated or existing problem areas in warehouse activity by continuously profiling performance and then creating exception reports for activity levels, productivity, warehouse order cycle time, storage density, shipment accuracy, and inventory accuracy
Which of the following characteristics of a supply chain is most desirable when measuring performance from a stockholder position?
it maximizes velocity and return on assets
What can CRM result to?
larger customer base and improved profitability
Action in PDCA
last step- results are studied to determine what was learned and what can be predicted
Elimination of non value added activities is the primary focus of
lean manufacturing
In relation to supply chain cost, which of the following factors is NOT considered when designing a product for market?
marketing information to the customer
Customer service represents the supply chain's role in fulfilling
marketing objectives
A company manufactures special products for select customers. When demand for these products drops, the manufacturer can switch the production line to a commodity-type product that can be sold on the open market at reduced terms to generate cash. The company is executing a corporate strategy that is based on:
multiple upstream supply chains
When a manufacturer is developing a new product to be sold in independent retail stores, the most critical task for the manufacturer's executives is to ensure:
mutual strategic goals are set for launch and positioning
Customer service is most appropriately defined as the ability of a company to address:
needs, inquiries, and requests of customers
ROA calculation
net income for the previous 12 months / total assets
Demand driven material requirements planning (DDMRP) APICS
"a method of planning material needs that enables a company to build more closely to actual market requirements."
scheduled receipt
An open order that has an assigned due date. See: open order.
If applications in the front end and in the back end could handle more traffic but the overall bandwidth of the system is still limited in some way, what should be investigated next?
Check the middle end to see if it is having trouble scaling upward.
Which of the following warehouse operations assumes no storage of incoming goods before reshipping?
Cross-docking
The labor-related principles of the United Nations Global Compact include which of the following?
Eradicate forced and mandatory labor.
Which carrier type is commonly used for unprocessed agricultural products?
Exempt
A bakery company buys an option for bushels of wheat for €20 per bushel, with a premium of €2 per bushel. When it comes time to purchase wheat, the market price is €21 per bushel. What should the organization do?
Exercise the option even though the net cost will be higher than the market price alone.
For an innovative product introduction at a new organization, which of the following would provide the best guidance for how many items to produce initially?
Expert opinion guided by purchased customer data
Effective change management requires which of the following approaches?
Involving stakeholders early
Which of the following statements about the role of supplier relationship management (SRM) in the supply chain model is correct?
It focuses on meeting demand.
Which is a constraint on risk responses?
Must be feasible
An organization that networks its enterprise resources planning (ERP) systems across corporate boundaries might do which of the following to reduce the bullwhip effect?
Send point-of-sale data directly to suppliers.
When segmenting suppliers, which is the best criterion to use in identifying the most important supplier segment?
Supplier's ability to advance strategic goals
Which of the following systems will automatically come up with an alternate plan based on defined business workflow rules whenever the specific situation triggers alert resolution logic?
Supply chain event management (SCEM)
microeconomics
The analysis of the behavior of individual economic decision makers (individuals and firms).
An organization is trying to perform a total cost of ownership analysis and many of its suppliers are cooperating, but in one category of supply, no suppliers have volunteered their cost information. What tool can be used as a workaround?
Should-cost estimate
Reducing the number of steps in a service to just those specified by the most recent core customer segment survey and offering a few other steps as options exemplifies which of the following design strategies?
Simplification and customization
design for service
Simplification of parts and processes to improve the after-sale service of a product. Syn: design for maintainability.
design for manufacturability
Simplification of parts, products, and processes to improve quality and reduce manufacturing costs.
market share
The actual portion of current market demand that a company or product achieves.
Trade disruption insurance
addresses property, marine, and political risk related to losses unrelated to an organization's assets. It addresses non-delivery, project cancellations, government appropriations, and other similar causes.
The master schedule shows inventory on hand of 150 items, scheduled production of 500 items, and booked orders of 400 items. Which of the following is the correct number of available-to-promise (ATP) items for the first period?
250 items
seasonality
A predictable repetitive pattern of demand measured within a year where demand grows and declines. These are calendar-related patterns that can appear annually, quarterly, monthly, weekly, daily and/or hourly. Syn: seasonal variation. See: base series.
Value stream map
paper-and-pencil sketches of the steps in a process overlaid with supporting information flows. They are used in lean projects to identify non-value-adding steps for elimination. (The first map shows all steps; a second map shows the process with all non-value-adding steps eliminated.)
Chain of custody
provides documentary evidence of each point of transfer or contact with a material.
Global Reporting Initiative (GRI)
strategic partnerships with the United Nations, UNGC, ISO, and the Organization for Economic Cooperation and Development. In effect, the GRI is helping businesses develop reverse logistics key performance indicators to assess and improve their environmental performance. It is doing so in advance of binding laws and regulations likely to be developed by governments.
Inputs to S&OP
strategic, business, and marketing plans
Total cost of ownership (TCO)
sum of all the costs associated with every activity of the supply stream. The main insight TCO offers to the supply chain manager is the understanding that the acquisition cost is often a very small portion of the TCO
Offer terms like 1/30 net 60. means
the buying organization will receive a 1% discount if payment is made within 30 days but has up to 60 days to make the full (net) payment with no late penalties
The U.S. Food and Drug Administration (FDA) has developed regulations requiring more thorough documentation of:
the chain of custody or audit trail of drugs.
Commercial invoice
the document that states the value of commodities in a shipment. (It does not include other amounts, such as freight.) It may be required for the letter of credit and by other entities that need to know the value of the goods for insurance or assessment of duties.
ATP (apics)
the uncommitted portion of a company's inventory and planned production maintained in the master schedule to support customer-order promising
A method to determine the best mode of transportation for shipping specific product types is to compare:
the value of an item per cubic foot or meter versus the amount packed per cubic foot or meter.
Order fill rate
tracks the % of orders delivered vs orders requested
Increased velocity reduces the expenses involved in ________ inventory
warehousing
ROI calculation
(throughput - operating expense) / investment
The standard gauge of most of the world's rails will measure a
(B) 4 feet 8 inches
Technology has allowed business to
- move from department centric spheres of control to a focus on business processes that spans not only departments but extended supply chains - as technology has evolved it has enable increasingly complex business strategies, metrics, and analysis which in turn have sped up the pace of business and given a business a global reach
CRM process strategy should focus on improving time to market by:
- reducing demand management tasks to just those that are value added - executing demand management tasks as quickly as is feasible - maximizing the number of tasks that can be performed concurrently rather than needing to be done sequentially
A company wants to calculate the tracking signal for a certain product. Over a 4-month period, the forecast errors were 0.87, 1.38, -1.48, and -1.36. The resulting MAD is 1.27 units. What is the tracking signal?
-0.46
A supply chain project could come in on budget, or it could be over budget by US$200,000. There is a 90% chance that it will come in on budget. What is the net expected monetary value (EMV) of this scenario's two options?
-US$20,000
Which of the following sequences of steps is correct for the process?
1. Define the nature of the problem 2. Measure existing performance and record data and facts that provide information about causes of the problem 3. Analyze information to determine root causes of the problem 4. Improve the process by effective solutions to the problem 5. Control the process until solutions become ingrained
Which is a reason why an organization's product portfolio management process (a product assessment) should be done early in demand management?
A change in product life cycle stage may not be obvious and the product may no longer be appropriate for the market.
glocalization
A combination of "globalization" and "localization." In a supply chain context, [this] is a form of postponement where a product or service is developed for distribution globally but is modified to meet the needs of a local market. The modifications are made to conform with local laws, customs, cultures, and preferences.
bias
A consistent deviation from the mean in one direction (high or low). A normal property of a good forecast is that it is not [affected by this]. See: average forecast error.
Master Production Schedule (MPS)
A line on the master schedule grid that reflects the anticipated build schedule for those items assigned to the master scheduler. The master scheduler maintains this schedule, and in turn, it becomes a set of planning numbers that drives material requirements planning. It represents what the company plans to produce, expressed in specific configurations, quantities, and dates. [This] is not a sales item forecast that represents a statement of demand. It must take into account the forecast, the production plan, and other important considerations such as backlog, availability of material, availability of capacity, and management policies and goals. See: master schedule.
standard deviation
A measurement of dispersion of data or of a variable. [It] is computed by finding the differences between the average and actual observations, squaring each difference, adding the squared differences, dividing by n
Under the theory of constraints, after a bottleneck is removed, what happens next?
A new bottleneck will form elsewhere.
fixed location storage
A method of storage in which a relatively permanent location is assigned for the storage of each item in a storeroom or warehouse. Although more space is needed to store parts than in a random-location storage system, fixed locations become familiar, and therefore a locator file may not be needed. See: random-location storage.
risk pooling
A method often associated with the management of inventory risk. Manufacturers and retailers that experience high variability in demand for their products can pool together common inventory components associated with a broad family of products to buffer the overall burden of having to deploy inventory for each discrete product.
risk register
A report that has summary information on qualitative risk analysis, quantitative risk analysis, and risk response planning. This register contains all identified risks and associated details.
exception report
A report that lists or flags only those items that deviate from the plan.
What is a basic check and balance in the receiving and payment process?
A separate party needs to approve a purchase requisition from the person who created it. (procurement manager needs to approve)
four Ps
A set of marketing tools to direct the business offering to the customer. [This includes] product, price, place, and promotion.
leading indicator
A specific business activity index that indicates future trends. [Housing starts is an example of this] for the industry that supplies builders' hardware.
random location storage
A storage technique in which parts are placed in any space that is empty when they arrive at the storeroom. Although this random method requires the use of a locator file to identify part locations, it often requires less storage space than a fixed-location storage method. Syn: floating inventory location system, floating storage location. See: fixed-location storage.
Which of the following often accompanies goods that are intended to travel in sealed containers across borders, including goods intended to be admitted only temporarily for use in events such as tradeshows?
ATA Carnet
Which of the following outcomes is one of the major benefits associated with customer relationship management performed in an e-business environment?
Ability to develop valued, lifetime customer relationships
Which of the following is a component of quality as defined by APICS?
Absence of defects
If the only plan an organization can devise to respond to a risk proactively would cost the organization more than the expected monetary value of the risk without any response, what should the organization do?
Accept the risk.
Which mode of carrying packaged goods requires the least durable packaging?
Air
risk tolerance
An organization's or stakeholder's readiness to accept a threat or potential negative outcome in order to achieve its objectives.
What is a key aspect of campaign management for vulnerable customer campaigns?
Analyzing the customer data to predict customer behaviors
A supply chain manager is working to align supply chain strategy with organizational strategy. After getting a solid understanding of organizational strategy and gathering information on the external environment, what is the next step?
Assess the current supply chain's actualized strategy
How can contract sourcing be categorized?
As a process change cost
If feedback from a prototype of a product has the strong potential to result in the customer altering requirements late in the project, how should this product development process occur?
As an agile project
An organization launched a product that failed to get to the growth stage. They want to phase the product out as soon as possible. How soon could they discontinue the services related to this product, assuming the services earn them no revenue?
As soon as the warranty period of the last products sold ends
Which of the following materials-handling devices would you purchase to get the maximum storage density per square foot of warehouse space?
Automated storage and retrieval system (AS/RS)
Which of the following will add to the cost of a warehouse management system initially but almost always costs less in the long run due to reduced error rates and more efficient processing?
Automatic identification technologies and paperless processing
Which is an independent demand item?
Automobile tires for stock in a tire shop
Which of the following is true of bar codes?
Bar codes are often integrated with RFID tags printed as a single label.
A manufacturer that uses material requirements planning wants to schedule all necessary orders for the materials needed to manufacture the products. Where can the list of components and quantities required for the product being manufactured be found?
Bill of material (BOM)
What is the term for a situation in which a warehouse takes in a shipment from one manufacturer and sends it immediately to a number of consignees?
Break-bulk
Which of the following activities should an organization perform for the extended supply chain prior to integration of external supply chain partner policies, work processes, and tasks and roles?
Business modeling, such as profit allocations
A warehouse is selecting a system for moving products. It wants to reduce the labor associated with picking but without incurring high acquisition costs. The warehouse stores and moves only small, lightweight electronics products. What option is the best choice?
Carousels
Which inventory costs are variable costs that increase as the level of inventory increases?
Carrying costs
Which of the following documents is used to bolster an importer's claims for favorable import duty rates granted by treaty to the exporter's country?
Certificate of origin
A supplier is resistant to certification. Which of the following would be the best argument to help convince the supplier to make the effort?
Certification can improve throughput and reduce costs.
What is needed to prove that hazardous waste was transported properly to an incinerator and incinerated?
Chain of custody
The purpose of supply chains is to be globally competitive. What are the basic elements in a supply chain that can impact its ability to respond competitively to changes in the global marketplace?
Collaboration, time, distance
A manufacturer has worked extensively with a single supplier over the past 15 years, building high levels of trust. They fully share goals, strategies, and tactics with each other and attempt to reflect the partner's plans in their own. Which type of relationship does this represent?
Collaboration/strategic alliance
Which of the following exemplifies a long-term arrangement in which suppliers are fully aware of the purchaser's goals and strategies and work with the purchaser to develop and implement tactics?
Collaboration/strategic alliance
A retailer decides to commission the creation of a line of shoes to sell as an accessory to designer evening gowns. Which of the following would be the most appropriate business strategy?
Collaborative design for a unique look
If an organization wants to gather and address concerns from customers who had negative interactions with it, what is the best option?
Collecting and responding to negative comments on the internet and social media
Which of the following documents is used for the valuation of goods for assessment of duties?
Commercial invoice
Which of the following documents would a banker consult for information about the value of export-import cargo in connection with a letter of credit?
Commercial invoice
A design team modifies an existing clothing line by making the buttons used on one item work for all the other items. This exemplifies which of the following?
Component commonality
Which of the following design strategies would most likely be responsible for the fact that only one screwdriver is needed to remove all the screws securing a computer case and to unfasten all components from the motherboard inside?
Component commonality
Which of the following would be included in a list of dependent demand items?
Computer hard drives delivered to the computer manufacturer for installation depending on customer request
A 3PL suspects that the company they purchased new software from made false promises about the software's abilities. What should the 3PL do first?
Conduct a technology audit.
Which of the following examples is a "voice of the customer" activity?
Conducting direct interviews and discussions
Which is a critical input to logistics capacity forecasting for warehouses, transportation, and materials handing needs?
Consensus view of supply and demand
design for environment (DFE)
Considering health, safety, and environmental aspects of a product during the design and development phase of product development.
A manufacturer enlists a marketing company to survey current and prospective customers to determine their perceptions of the manufacturer's brand and gauge their reactions when shown a series of new product concepts. What type of marketing research is being conducted?
Consumer research
According to the law of demand, what is likely to happen if the price of a good or service increases?
Consumption of substitute goods may increase.
In the purchasing process, what occurs at the end of the negotiation phase prior to the next step, order placement?
Contracting
joint replenishment
Coordinating the lot sizing and order release decision for related items and treating them as a family of items. The objective is to achieve lower costs because of ordering, setup, shipping, and quantity discount economies. This term applies equally to joint ordering (family contracts) and to composite part (group technology) fabrication scheduling. Syn: joint replenishment system.
Effective logistics strategy depends upon which of the following?
Coordination of transportation, warehousing, and packaging to create maximum value
Which of the following could have the unintended consequence of increasing demand variability for an organization's product or service?
Culture of optimism in demand forecasting
Which supply chain flow travels through the organization via orders, sales activity, and forecasts?
Customer information
Supply chain participant priorities often conflict. Which of the following groups sets a priority on product and feature variety and price reduction?
Customers
Which formula determines how long it will take to recoup an initial investment or break even?
Discounted payback period
What is a prerequisite for the process of managing risk in the supply chain?
Discover the organization's risk tolerance.
After a "buy" decision has been made, what is the next step in the process of offshoring some manufacturing to a country with low labor costs?
Do a detailed assessment of offshoring requirements.
What option for handling excess production of dog food would generate tax savings?
Donate to dog rescue programs.
At a time when manufacturers' orders for durable goods are declining and there is an inverted yield curve in the government treasuries market, what would be the best sustainability initiative?
Effectively reducing product packaging
What is a proactive benefit of risk planning for an organization?
Employees and supply chain partners are prepared.
For make-to-stock production, the master production schedule includes production dates for which of the following?
End items
mix forecast
Forecast of the proportion of products that will be sold within a given product family, or the proportion of options offered within a product line. Product and option mix as well as aggregate product families must be forecasted. Even though the appropriate level of units is forecasted for a given product line, [...] material shortages and inventory problems [can be created if this is inaccurate].
demand forecasting
Forecasting the demand for a particular good, component, or service.
An organization designing a new product is looking for a method that will result in fewer cost overruns and higher product quality for the price while increasing customer satisfaction with the product. What collaboration method should they use during the design process?
Formal collaboration
Corporate participants in the U.S. C-TPAT (Customs-Trade Partnership Against Terrorism) receive which of the following benefits?
Greater reliance on self-policing
Which of the following is a primary benefit of entering into a vendor-managed inventory (VMI) agreement?
Greater visibility of inventory management
If you are creating a production schedule using the lot-for-lot replenishment method, which of the following would you use to determine the planned order receipt (assuming you know the gross amount required and the amount of inventory on hand)?
Gross requirement minus projected amounts on hand and scheduled receipts
What is prompting many countries to adopt the International Financial Reporting Standards (IFRS)?
Growth in international shareholders and trade
Allowing suppliers to participate in improving the supply chain system helps supplier relationship management (SRM) participants in which of the following ways?
Higher customer satisfaction
Which of the following professionals should chair the demand planning phase meeting that is part of the sales and operations planning (S&OP) process?
Highest-ranking demand-side professional
If the overall economy of a country is in a trough but economic leading indicators show a healthy increase in demand for the next quarter, which would be a good strategic choice for a risk-seeking organization to make?
Hire high-quality new employees at reasonable salaries.
A manufacturer has a load that is exceeding current capacity due to an abnormally large one-time order. The manufacturer does not anticipate this imbalance to last more than the few weeks it will take to complete the order. Which option is the least efficient way to change capacity to match the load requirements?
Hire more workers.
When determining the importance of a supplier, what are two basic questions to ask?
How much do you need the supplier and how much does the supplier need you?
What are the four major areas addressed by the United Nations Global Compact?
Human rights, labour, environment, anti-corruption
A start-up manufacturer of cosmetics is selecting an inventory planning method. It wants to minimize inventory levels, minimize the bullwhip effect as much as possible, and remain responsive to local variations in demand. Which method would work best in this situation?
Hybrid
Which of the following is true of ISO standards for the EPC Gen 2 standard for radio frequency identification tags?
ISO 18000-6 covers the Gen 2 standard
The executive team of a 3PL has identified an organizational opportunity to create a better, consistent approach toward risk management. What tool should the 3PL start with to begin the process of creating and using a consistent approach?
ISO 31000
Which ISO supporting standard places emphasis on controls assessment, consequence analysis, likelihood analysis and probability estimation, preliminary analysis, and uncertainties and sensitivities?
ISO 31010
total cost concept
In logistics, the idea that all logistical decisions that provide equal service levels should favor the option that minimizes the total of all logistical costs and should not be used on cost reductions in one area (such as lower transportation charges) alone.
modularization
In product development, the use of standardized parts for flexibility and variety. Permits product development cost reductions by using the same item(s) to build a variety of finished goods. This is the first step in developing a planning bill of material process.
total cost of ownership (TCO) APICS
In supply chain management, the total cost of ownership of the supply delivery system is the sum of all the costs associated with every activity of the supply stream. The main insight that TCO offers to the supply chain manager is the understanding that the acquisition cost is often a very small portion of the total cost of ownership
Some organizations use safety lead time to address lead time variations in which of the following?
In-transit inventory
What is a method for disposal of hazardous waste that may require no transportation but does require special equipment and proof of compliance?
Incineration
What is used in foreign trade contracts to identify which parties incur the costs and at what specific points the costs are incurred?
Incoterms® trade terms
What preventive action can a manufacturer take to be prepared for a potential labor disruption at a major port?
Increase safety stock.
An organization is seeking to mitigate demand risks that occur in the form of inter-organizational communications. What is a potential root cause that it could address to mitigate risk in that area?
Internal attitudes that forecasts are trade secrets
Change in which of the following supply chain enablers has contributed most to building global relationships among suppliers and customers?
Information technology
Which of the following levels of technology integration is described as various systems that feed into each other, creating some capacity for integration of the data?
Interfacing technology
Which of the following entities is responsible for issuing and updating Incoterms®?
International Chamber of Commerce (ICC)
Which is true of ISO certification?
It is voluntary. It must be renewed every three years to remain valid
Why is quantum computing radically faster than a supercomputer at solving optimization problems?
It looks at all of the possible solutions simultaneously.
What makes blockchain so useful for track and trace?
It provides irrefutable evidence of transfer of goods between parties.
Which of the following statements about a trading partner agreement between strategic partners in a supplier relationship management (SRM) strategy is correct?
It should be mutually beneficial for both partners.
Organizations can use ISO 31010 to improve their risk management processes in which way?
It supplies information on the selection and application of risk assessment techniques.' 'how to select techniques based on what resources are available, how much uncertainty is present and its nature, and the relative complexity of the system.
How can a customer-focused business benefit from segmentation?
It will learn more about individual customers.
Which has the potential to reduce customs clearance delays?
Joining national trade partnerships
A value stream map is usually used in conjunction with which of the following improvement methods?
Lean
By asking bank customers to mail their deposits to a local address, bank management thought they were fulfilling a customer need. Instead, they were actually creating waste in terms of an extra step in a deposit process for their customers. Which of the following approaches does this situation exemplify?
Lean thinking
Suppliers involved in online marketplaces/exchanges may experience which of the following risks?
Less profitability
Planning and execution are:
Level 2 SCOR process types.
Logistics and marketing strategy roles in market segmentation
Logistics must make the product or service available to the customer at a time and place the customer segment finds convenient. This often involves developing multiple supply chains tailored to specific customer segments rather than developing a high customer service level for all segments in general at a much greater cost (some segments will not need or value this higher level of service, for example, preferring slower service at a lower cost)
An organization is looking to save money by outsourcing transportation to 3PLs. The organization currently has a highly effective system but wants to turn attention to other areas of the business. What is the potential negative outcome of this decision?
Loss of efficiency in the transportation system
Which is an objective of production activity control (PAC)?
Maintain customer service.
Which of the product categories designated by Marshall L. Fisher would be the most likely classification for a custom product that has a six-month lead time?
Make-to-order functional product
An organization wants to pursue the lowest total cost of ownership (TCO) with its offshore supply chain partners. Which of the following problems cannot be overcome by hiring local experts in the foreign country?
Management incentives rewarding organizational cost reductions
Which of the following statements about the challenges of implementing customer relationship management (CRM) and supplier relationship management (SRM) strategies is true?
Managers must acquire new skill sets.
What functional discipline can be used to enhance the IT discipline and during its plan phase, can make use of a common data model from a major enterprise resources planning, database, or cloud vendor to ensure the discipline uses best practices?
Master data management (MDM)
What fulfillment channel would be most appropriate for a manufacturer of inexpensive watches that does not allow for customer customization and that wants to retain control of the inventory until delivery to the retailer or customer?
Manufacturer to distribution center to retailer
Risk pooling
Manufacturers and retailers that experience high variability in demand for their products can pool together common inventory components associated with a broad family of products to buffer the overall burden of having to deploy inventory for each discrete product
In collaborative demand management, communicating demand may involve which of the following?
Manufacturers using retailers' demand data rather than their own Administrative processing of a customer's order for delivery from a specific warehouse Distributing a copy of the sales order to the customer
Redundancies between members of an extended supply chain could be discovered through which of the following processes?
Mapping the end-to-end supply chain processes
What is the focus of strategic and business planning?
Marshalling resources and determining actions to support the organizational mission and goals
Where in the planning process does the capacity requirements planning process occur?
Material requirements planning
"The most profitable period but also the period most vulnerable to competitive inroads." This best describes what phase of the product life cycle?
Maturity
Which of the following can happen when you customize an enterprise resources planning (ERP) system?
May unintentionally alter a different module
Which is an example of how McDonald's is vertically integrated to some degree?
McDonald's owns the land for all of its United States retail stores.
Which of the following is a benefit of a free trade zone (FTZ)?
Merchandise can be inspected before paying duties on it.
Which of the following is the least important goal of warehousing?
Minimizing the need for physical labor
An organization is using the Global Reporting Initiative comprehensive reporting option. What does it need to report about the "water and effluents" topic of the environmental series?
Nothing, if omitting it would have no effect on stakeholders' decisions.
Which of the following must champion the relationships to be formed across an extended supply chain?
Nucleus firm
An organization is contracting to sell products to a company in another state. The buying organization is negotiating to execute payment in two months. The selling organization hopes to be paid in one month instead of two but believes the buyer will walk away if they push to receive payment earlier than the buyer is requesting. What is the best method to encourage the buying company to pay early?
Offer terms like 1/30 net 60.
interplant demand
One plant's need for a part or product that is produced by another plant or division within the same organization. Although it is not a customer order, it is usually handled by the master production scheduling system in a similar manner. See: interplant transfer.
Which Chinese supplier would have the lowest customs risk?
One with an AA rating
What would be the best tool to use to balance a set of complex priorities for a supply chain that includes cost minimization, resilience, and time to market?
Operations research
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
Which inventory order system places orders at varying times based on the average demand during the lead time?
Order point system
Which of the following is a best practice for the creation of demand plans?
Organizations should include a mechanism for recording uncertainty in inputs.
When planning for change, what are the most important aspects to plan from a change management perspective?
People and relationships
Which of the following is a risk to an organization's recent bulk purchase of soft-wood shipping pallets from an international source?
Pest prohibitions
In which directions do the four basic flows within a supply chain move?
Physical materials and services flow downstream, cash and the reverse supply chain flow upstream, and information flows in both directions.
Which of the following has the highest fixed costs of any means of transporting petroleum?
Pipelines
When determining risk responses, how can an organization best prepare for unknown risks?
Place money in a reserve fund.
In a customer-driven marketing strategy, which of the following must include getting information about the product to the consumer and giving the consumer a sense of being listened to?
Placement
What strategy can be used to reduce the bullwhip effect?
Postponement
Which of the following sourcing categories would be the most likely fit for the following sourcing and timing requirements for delivery to a big box retailer: high quality, great delivery performance, long lead times, high capacity for bulk orders, acceptable sustainability, but no emphasis on design expertise or time to market.
Premium oak finish trim
A large organization is changing its structure to meet customers' changing demands. It works to determine success criteria and create plans for each area. It then conducts projects, training, and events related to the changes and follows that up by monitoring and controlling against new metrics that align incentives to strategic goals. However, resistance to the change ends up being high, and the change process misses performance expectations. What element of the change process did the organization fail to perform, causing the failure of the project?
Prepare for change.
During which part of the change management process do you explore the costs and benefits of a potential change?
Prepare for change.
Which will likely have the most impact on a customer's perceived value of a product or service and may impact other strategic decisions because customers tend to use it as an order qualifier?
Pricing
Which of the following are usually components of the market plan?
Pro forma profit and loss (P&L) statement, management controls, and opportunity and issue analysis
In which of the following stages of the continuous improvement model would a process map be used?
Process analysis
What needs to be heavily emphasized in technology solutions if the organization is to truly become consistent and systematic and achieve the orchestrated supply chain level of supply chain maturity?
Process and cross-organizational data sharing automation
When the demand manager serves as a communications focal point, who is he or she likely to communicate with regarding changes in tactics needed to meet demand or business objectives?
Product and brand managers
Risks to sustainable supply chain
Product complexity, regulatory requirements, resource availability, and security
According to the 40/30/30 rule, what plays the largest role in the generation of scrap, rework, and waste?
Product design
Which of the following is the primary focus of master scheduling (MS)?
Production amounts for individual products
Which is a fundamental marketing concept upon which customer-focused marketing is based?
Products and services have more than one market segment.
Design for remanufacture
Products developed in a manner that allows components to be used in other products. This process is associated with green manufacturing.
What is the correct order of activities in the waste hierarchy, starting from the top of the pyramid?
Reduce, reuse, recycle, recover energy, responsible disposal in landfill
What is a key tool that an organization can use when it wants to revise its supply plan as part of its sourcing process but doesn't want the scope of these changes to get out of control?
Project management
Which is a best practice for a person fulfilling a project manager role?
Project managers admit to mistakes and see them as learning opportunities.
An organization is preparing to undergo structural changes. It has set out a high-level plan containing all the proposed improvements in sequence. What other plan or plans are required before the organization can begin implementing change?
Project plans
Which of the following components of a customer-driven marketing strategy could be described as a variety of activities designed to position what the business is selling to the right people, at the right time, and in the right manner?
Promotion
What are typically the main external ties for a company at Stage 2 of supply chain network technology optimization, the semifunctional enterprise?
Providers of functions that are not core capabilities for the organization
Which of the following decisions should include a consideration of landed costs?
Purchase of a component domestically or offshore
Warehouse management system (WMS) based task interleaving combines:
Put-away and replenishment operations
What quality attribute of communications relates most to the need for efficiency?
Quantity of data provided
According to macroeconomic theory, as aggregate prices decrease, what happens to the real gross domestic product (GDP), and why?
Real GDP increases, because there is more real wealth.
Which of the following can be used to immediately improve an organization's inventory accuracy even if it doesn't reduce lead times?
Real-time point-of-sale data updates in the enterprise resources planning (ERP) system
Which of the following might cause cyclical movements in a time series of demand data?
Recession
An organization using mass customization has had complaints of defective products. The cause is a valve installed backward in final assembly at the distribution centers (DCs). Which of the following would address the root cause of the problem?
Redesign the product so the valve can be installed only one way.
Which of the following activities is most likely to reduce the bullwhip effect?
Reducing lead time
Supplier relationship management (SRM) structures and supports relationships with suppliers, thereby assisting in which of the following?
Reducing procurement and excess inventory costs
Which is a primary goal for reverse logistics for most organizations?
Reducing the volume of reverse logistics transactions
As part of a regular SWOT analysis, a manufacturer of luxury goods identifies a high likelihood of a national personal income tax increase in its primary market following sweeping electoral changes. What potential outcome should the manufacturer prepare for?
Reduction in demand
What is the current trend regarding the number of warehouses in a system?
Reduction in the total number in relation to product movement
An organization's business plan calls for directly competing in developing markets rather than working through intermediaries as before. Which of the following would identify a deficiency in capacity resulting from this change?
Resource planning
A metal stamping company produces multiple items in their thin steel processing area. At a recent sales and operations planning meeting, a need for an additional stamping press was identified through resource planning. Which of the following was an input to verify the need?
Resource profile
Which customer-focused metric is a measure of whether the response is on target and correct so that the customer does not require additional follow-up?
Response accuracy
Which of the following is sometimes overlooked when designing a supply chain?
Reverse supply chain flow
What are the top three factors, in order of importance, that influence most retail customers' decisions to purchase products?
Service, quality, price
A manufacturer used demand forecasting to determine how many products it would need to manufacture for the next quarter. Unfortunately, the demand forecast was inaccurate, and the manufacturer could not meet actual demand, due to lack of inventory. What is an action the manufacturer can take to mitigate this risk in the future?
Set safety stock using statistical forecasting.
What is a good use of a should-cost estimate?
Setting a value for a best alternative to a negotiated agreement
How can an organization use supply chain information networks to manage risk?
Share information with partners and internal locations to help minimize disruption caused by risk.
The supply chain manager has recently been told that he must increase the supply chain value to the external stakeholders. Which stakeholders should he focus on, and what should be done?
Shareholders; increase dividend income.
According to the Supply Chain Council (SCC) guidelines, which of the following has the most complete risk definition?
Skilled labor shortages of up to 10% at a Mexico plant for the first two quarters of the year SCC notes that each identified risk must also have a time dimension or a specific time horizon (e.g., day, month, year) and a specific perspective or view that defines the scope of the risk (e.g., boundaries, what's not included).
Which of the following loads constitutes the most appropriate shipment to send by truck?
Small, high-value items traveling a short distance
Which of the following best describes the first step of collaborative planning, forecasting, and replenishment (CPFR)?
Supply chain partners develop a joint business plan.
Which of the following phases or meetings in the sales and operations planning (S&OP) process might end with professionals recommending reducing the demand plan but only as a last resort?
Supply planning phase
An organization tells buyers that cost and environmental sustainability are key goals for materials ordered. Buyers are given bonuses only if they meet cost-of-goods-sold targets. What is the likely effect of this?
Sustainability goals will be partially met as buyers balance competing goals.
market research
Syn: marketing research.
Which of the following statements about implementing customer relationship management (CRM) technology is correct?
Systems should be measured against whether they increase efficiency and meet customer expectations.
Which of the following is a quality that supply chain risk management must have?
Systemwide focus
Which of the following statements regarding technology audits is true?
Technology audits are critical for determining the adequacy of financial reporting controls.
What is a characteristic of a project that distinguishes it from an operation?
Temporary in nature
warehousing
The activities related to receiving, storing, and shipping materials to and from production or distribution locations.
An organization that has a famous brand of cookies is considering approaching a famous ice cream company to co-produce a cookies and cream flavor. How best should this be positioned?
The brands add value to each other.
forecasting
The business function that attempts to predict sales and use of products so they can be purchased or manufactured in appropriate quantities in advance.
What group is the primary stakeholder in any business activity?
The business itself
A shipment of cash registers from Indonesia enters a bonded logistics park in China. When the cash registers are loaded on a container ship bound for South Africa, what is the appropriate customs procedure?
The cash registers can be immediately loaded, because they were considered to be offshore the whole time.
Which of these companies is practicing good risk management in terms of its suppliers?
The company develops detailed plans to shift work orders among several certified global suppliers in the event of labor disruptions in their countries.
price elasticity
The degree of change in buyer demand in response to changes in product price. Calculated by dividing the percentage of change in quantity bought by the percentage of change in price. Prices are considered elastic if demand varies with changes in price. If demand changes only slightly when the price changes, demand is said to be inelastic. For example, demand for most medical services is relatively inelastic, but demand for automobiles is generally elastic.
independent demand
The demand for an item that is unrelated to the demand for other items. Demand for finished goods, parts required for destructive testing, and service parts requirements are examples of independent demand. See: dependent demand.
macro environment
The environment external to a business including technological, economic, natural, and regulatory forces that marketing efforts cannot control.
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 four perspectives of the balanced scorecard
supply chain
The global network used to deliver products and services from raw materials to end customers through an engineered flow of information, physical distribution, and cash.
cumulative lead time
The longest planned length of time to accomplish the activity in question. It is found by reviewing the lead time for each bill of material path below the item; [this term is defined by whichever path adds up to the greatest number]. Syn: aggregate lead time, combined lead time, composite lead time, critical path lead time, stacked lead time. See: planning horizon, planning time fence.
risk management
The identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities.
parent item
The item produced from one or more components. Syn: parent.
A manufacturer of luxury boats gets a request from a customer to upgrade the seats on a boat in work-in-process inventory. They are inside the demand time fence for the hull and engines and inside the planning time fence for the furnishings. Which of the following is the minimum requirement to make this change?
The master scheduler should make the change if it doesn't delay the final schedule.
Which is the best method for communicating with remote stakeholders?
The method they say they prefer
What can end-of-life management prevent in a supply chain?
The old product being out of stock before the replacement product is available
order promising
The process of making a delivery commitment (i.e., answering the question, "When can you ship?"). For make-to-order products, this usually involves a check of uncommitted material and availability of capacity, often as represented by the master schedule available-to-promise. Syn: customer order promising, order dating. See: available-to-promise, order service.
In a process map, an oval shape is used to signify which of the following?
The start and end of a process
universality
The strategy of designing a product initially intended for one market in such a way that it can also be sold in other markets. A form of standardization.
modular design strategy
The strategy of planning and designing products so that components or subassemblies can be used in current and future products or assembled to produce multiple configurations of a product. [...].
supply chain risk
The variety of possible events and their outcomes that could have a negative effect on the flow of goods, services, funds, or information resulting in some level of quantitative or qualitative loss for the supply chain.
Which is one reason why suppliers will not increase supply past a given point even if the prices keep getting higher and there is more incentive to produce more supply?
There are diminishing returns.
An organization uses a method for planning material needs that enables it to build more closely to actual market requirements by taking into consideration the actual demand. It has reached its goal of moving the push-pull frontier to the first tier of its suppliers. What type of organizational strategy and ordering method is this organization using?
This is a demand-driven enterprise using demand-driven material requirements planning (DDMRP).
A control chart can be used to track which of the following?
Time, size, or percentages
What type of insurance should a manufacturer fulfilling a government contract seek if it is concerned about the project being cancelled for political reasons?
Trade disruption insurance
What level of communication would be expected in a successful small business still run with paper versions of the general ledger and with purchase orders once a month by telephone and is asked by its most important customer to accept EDI orders?
Transactional with information sharing
Which of the following is important in the selection of a decision support system (DSS)?
Transportation costs Inventory costs Changes in demand
A total cost of ownership (TCO) study can show that when pursuing offshore outsourcing to a country with low labor costs, the reduction in the total cost is usually partly offset by increases in which of the following?
Transportation costs and monitoring and controlling costs
A logistics manager works within a business where transportation capacity is near critical mass. Load planning is inefficient given the increasing volume of loads. Which of the following applications would enable better decision making and efficiency in planning loads?
Transportation management system (TMS)
Which is not considered waste in the Toyota Production System?
Underproduction
An organization wants to sell products overseas for the first time but is wary of the customs process. What can it do as a preventive action in regard to the risk involved?
Use 3PLs with customs experience.
Which of the following is a goal of design for manufacture and assembly (DFMA)?
Using concurrent and parallel processing to reduce work-in-process time
Which of the following would promote proper implementation of demand plans and reduce demand variability?
Using last year's sales data as a "sanity check" on this year's forecasts
A mining process produces a slurry of liquid and mineral debris as waste. Finding an asphalt manufacturer who can use it as an ingredient in new asphalt is an example of what?
Waste exchange
What has the potential to create a beneficial use for waste rather than having to pay for its disposal?
Waste exchange
A partner organization that restructures some of its internal methods to align with the supply chain network before automating has asked which of the following key business questions?
What business processes must change?
What can supply chain managers learn by reviewing their organization's business plan and financial statements?
What it has decided are not core competencies
A logistics chain may benefit from adding warehouses in which of the following instances?
When small-scale customers require fast, frequent shipments that are more readily accommodated by a decentralized system of warehouses
Under International Commercial Terms (Incoterms®), when is the risk of loss transferred from the seller to the buyer in a FOB contract?
When the seller duly delivers the inventory to the carrier and they are "on board."
When can sharing actual demand data and demand plans complicate a buyer-supplier relationship?
When the supplier disregards the information and does not develop sufficient capacity
In what way can Incoterms® be made to create an obligation?
When written in to international contracts for carriage
Private carrier
a firm must own or lease vehicles for its use, manage their operation, and not be primarily in the transportation business.
What does maximum velocity indicate?
a higher asset turnover for stockholders and faster order-to-delivery response for customers
Safety Stock (Master Production Scheduling)
additional inventory and capacity planned as protection against forecast errors and short term changes in the backlog. overplanning can be used to create safety stock
Noise
anything that distorts a message. Noise can take many forms, including background sounds, another person trying to enter into a conversation, or any other distractions that prevent the receiver from paying attention or accurately understanding what is being communicated. Similar to filters, noise interferes with and can inhibit the communication process.
Waste
anything that fails to add value in the eyes of the customer
Pipeline inventory is the products that:
are in transit between locations.
Contract carriers
are not required to make their services available to the general shipping public
Resource planning (APICS)
conducted at the business plan level. The process of establishing, measuring, and adjusting limits or levels of long-range capacity. Resource planning is normally based on the production plan but may be driven by higher level plans beyond the time horizon for the production plan (e.g., the business plan). It addresses those resources that take long periods of time to acquire
Companies outsourcing customer relationship management (CRM) should:
develop an exit strategy.
The steps for successfully implementing a strategic supplier alliance include:
developing employee negotiation and joint problem-solving skills.
Decision tree analysis
diagramming a decision point where chance may be involved in some decisions
In the majority of situations, the benefit-cost impact of a logistical failure is:
directly related to the importance of the service to the customer.
Master data management (MDM)
discipline that works alongside the IT discipline to coordinate the creating, updating, cleansing, and retiring of master data across an organization's systems
Consumer research involved
discovery and analysis of consumer attitudes, reactions and preferences
APICS Break bulk
dividing truckloads, railcars, or containers of homogeneous items into smaller, more appropriate quantities for use
trade credit
encourages sales because it allows the buyer time to convert the good / service into revenue themselves before making payment. a way to provide cash discounts on purchases
A manufacturing company with limited competence in logistics plans to expand into an international market. The most appropriate initial action the company should take to serve the international market is to:
engage a third-party logistics company
design for the supply chain (APICS)
enhancement of a firm's product design in consideration of the issues that will arise in the supply chain, from raw materials to the final stage of the product's life cycle
Design for the supply chain refers to
enhancement of a firms product design in consideration of the issues that will arise in the supply chain, from raw materials to the final stage of the products life cycle (APICS)
Which of the following approaches typically would be most effective in increasing inventory velocity in a supply chain?
ensuring less idle time for inventory
Resource profile
for each product family - identifies the setup and run hours needed of each critical resource
Many Japanese companies build keiretsu to:
form cooperative relationships, usually through ownership of stock in member companies.
Component commonality
form of design standardization where a single part is used to replace a variety of similar parts. Another example of component commonality is designing an assembly in such as way that the same size bolt will work for all purposes rather than using a variety of bolt sizes
Which of the following food products should be shipped directly from the manufacturer to the retailer?
fresh milk
Freight forwarders
function like "travel agents for cargo," arranging for transport but not operating their own carriers
Discounted payback period
how long it will take to recoup an initial investment or break even. It also discounts future cash flows to present value before applying them
Which is a lean principle?
identify all steps across a value stream
Reducing the time in which inventory is not moving by using Just-in-Time (JIT) delivery and lean manufacturing is an example of an effort aimed at:
increasing velocity.
In its simplest form, logistics
integrates inbound logistics with outbound logistics.
Globalization (APICS)
the interdependence of economies globally that results from the growing volume and variety of international transactions in goods, services, and capital, and also from the spread of new technology
In a supply chain management implementation effort, the channel master is:
the organization that drives the implementation process.
An automotive repair shop wants to implement an order system to correct issues with slow-moving inventory. Which ordering system would work best to address the issues?
Time-phased order point system
What can help define a project's scope more clearly and thus prevent stakeholders from adding unapproved work (scope creep)?
Clearly state what will not be done.
A supplier makes a "declaration of conformity to ISO 9000," provides signed documents to that effect, and shows the results of an internal audit that supports this conformance. What type of assessment is this?
First party
What is an essential trait for organizations with global supply chains?
Flexibility to withstand disruptions
What is a good brand strategy for a product that has just entered maturity?
Focus on a competitive price and dependability.
A new organization is looking to enter into an established market. They intend to compete by serving customers with unique requirements through innovation and focused marketing strategies. What is this an example of?
Focused differentiation
Before a firm starts outsourcing logistics to third- or fourth-party providers, it must determine its current costs. Costs can be determined by which of the following?
Potential savings in time
A website that can interface with an enterprise resources planning (ERP) system to provide available-to-promise (ATP) data to end customers is what type of e-commerce?
Sell-side
What does capacity requirements planning generally refer to?
Short-term assessment of labor, plant, and equipment availability
What is the key difference between the core option and the comprehensive option when preparing reports for the Global Reporting Initiative (GRI) Sustainability Reporting Standards?
The core option reports on at least one indicator per material aspect; the comprehensive option reports on all related indicators per material aspect.
To qualify as a private carrier, a firm must own or lease vehicles for its use and manage their operation. Which of the following is another characteristic of private carriers?
They must not be primarily in the transportation business.
What is true of common carriers?
They must take all legitimate business within the scope of their license, even at a loss.
order qualifiers
Those competitive characteristics that a firm must exhibit to be a viable competitor in the marketplace. For example, a firm may seek to compete on characteristics other than price, but in order to "qualify" to compete, its costs and the related price must be within a certain range to be considered by its customers. Syn: qualifiers. See: order losers, order winners.
How can IT be employed to aid supply chain management?
To deepen trust in existing relationships
Which of the following goals is the most compelling reason for a manufacturer to own its own warehouses rather than using a contractor's warehouses?
To increase control over warehouse design decisions
Which of these proactive reasons to form strategic alliances focuses on shared technology that can add to the skills base of both organizations?
To increase organizational expertise and to make implementation easier
What might be one reason to decentralize returns processing as opposed to centralizing it?
To increase the speed of processing
Which mode of transportation is most appropriate for carrying small, highly valuable, fragile or perishable cargo?
air
SRM Portals
allow individuals to view and react to the results of production changes on supplier product or service availability and see exception-based information and forecasts based on POS data
Spend analysis
allows the organization to identify who they are buying from, what they are purchasing from each supplier, and when and how it was purchased.
Waste exchange
an arrangement to the benefit of both parties in which the waste product of one company's process becomes the raw materials for another company's process
Third-party logistics provider (3PL)
an entity that provides product delivery services for a buyer and supplier team. Utilizing a 3PL is a growing trend that incorporates the supply chain management philosophy of concentrating on core competencies and partnering with other companies to perform in areas outside your competence
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:
an internet-based portal.
SKU (APICS) in distribution
an item at a particular geographic location ex: one product stocked at the plant and at six different DCs would represent 7 SKUs
horizontal marketplace (APICS)
an online marketplace used by buyers and seller from multiple industries the marketplace lowers prices by lowering transaction cost
Filter
any factor influencing how the communication is received or interpreted. Filters may take many forms, such as feelings and emotional states (mood), individual perceptions,experience, and culture. Because of filters, a message may not be received at all.
standard costing
assigns a should cost amount to all material, labor and overhead cost
road map
at a high level and contains all improvements in their current order of priority. It also identifies the end of implementation and the start of continuous improvement.
ISO 31000
at a high level, is an iterative process that starts with an executive-level mandate and commitment toward risk management. This leads to the customization and design of the framework itself, which is then implemented, monitored and reviewed, and continually improved based on review results, which leads back to further customization and design.
The primary objective of transportation is to carry goods/materials between partners and customers:
at an optimal cost in time, money, and environmental degradation.
A radio frequency tag is used to primarily
automatically capture product data
Middle end programmers are concerned with
automating data requests or data transmissions, and the key is to ensure that the interface is simple to program, simple to document, and simple to modify or scale upward
MAD
average amount by which the forecast differs from the actual demand "absolute" because numbers are stated without regard to positive or negative signs. Tracking the absolute deviation provides information for use in assessing the reliability of forecasts
What is an example of an inelastic product?
bread
What is an ongoing cost associated with an IT project?
bug fixes
The primary benefit of electronic business (e-business) is
business collaboration
Sales productivity
can be increased by using resources specific to customer channel preferences and purchasing patterns
Demand-driven material requirements planning (DDMRP)
can be used for dependent and independent demand items at any point in the supply chain. DDMRP strategically positions inventory to achieve all the benefits of modern supply chain management (reduce inventory, lead times to the customer, and the bullwhip effect and increase customer service and asset usage efficiency) without needing to rely on safety stocks of finished goods or a pure make-to-order environment
Carousels
can reduce order selection labor at a comparatively low acquisition cost compared to automated guided vehicle systems, automated towlines, and bridge and wagon cranes. The system should work given the small and lightweight products handled in the warehouse.
a technology audit.
can reveal if the software vendor made promises that were false or if the perceived software issues originate from resistance to change or inadequate training. Technology audits may include a post-implementation review that addresses whether the company got the expected return on investment. The other steps may be taken following the completion of the audit, depending on the recommendation from the auditor.
Interfacing technology
characterized by various systems feeding into each other
Which of the following items makes up the majority of rail cargo in the United States and Great Britain?
coal
If an organization outsources all of its production activities but continues to perform warehousing and distribution, then the inventory management role should:
collaborate with external inventory management at each level of production planning.
Proactively managing risk rather than being reactive provides which of these benefits to the organization?
competitive advantage
APICS Reverse Logistics
complete supply chain dedicated to the reverse flow of products and materials for the purpose of returns, repair, remanufacture, and/or recycling
blockchain
distributed ledger system in which it is nearly impossible to alter information once it has been recorded in the ledger. This benefits track and trace because it provides reliable (irrefutable) evidence of transfer of goods between parties, which in turn creates a chain of custody for goods and their source materials.
In an organization that uses cross-functional teams for managing supply from its external resources, the supply chain manager's role should involve:
educating functional team members on cultural sensitivities.
If a company looks internally to determine how a supply chain process can be done less expensively and in less time and use fewer resources, it is:
efficient.
The United Nations Global Compact was designed to:
encourage companies to integrate its principles into their global business activities.
Which of the following objectives would be most appropriate for trading partners implementing cooperative supply chain management?
ensuring that each trading partner is profitable
available to promise (ATP)
equals the inventory on hand plus scheduled production reduced by orders already on the books - it continues to decline as orders come in during the period
Leverage ratios measure
how much debt is being used to finance the business and thus help show whether it is likely to meet those debt payments
APICS 40/30/30 rule
identifies the sources of scrap, rework, and waste as 40 percent product design, 30 percent manufacturing processing, and 30 percent from suppliers
An Ishikawa diagram is used to:
identify all possible causes of an effect and then research the most likely ones. *** also known as cause and effect or fishbone diagram
A customer service strategy must
identify and prioritize all activities required to fulfill customer logistical requirements as well as - or better than- the competition does
Continuous process improvement is supposed to:
improve worker satisfaction by eliminating unnecessarily strenuous or stressful work.
An advantage of using quality function deployment (QFD) over design for quality is that, in QFD, quality of design is:
measured relative to competitor product features.
Inventory turnover ratio
measures the efficiency of inventory in supporting sales - a lower inventory turnover ratio results from decreasing sales and or increasing average inventory
Fill rate
measures the impact of stockouts over time
Inventory turnover
measures the relative speed at which inventory is produced and then sold and so is an important metric used to measure the effectiveness of design for the supply chain
Scaling upward example
middleware does not become the bottleneck when the front end and back end could handle more traffic
The demand management person wants to execute an inventory reduction strategy in part by first prioritizing sales of inventory nearing obsolescence. This person may best get buy-in from the sales department by finding ways to:
minimize order backlogs for other products.
A key role for supply chain managers when dealing with risks related to security and regulatory requirements imposed by countries and trading blocs is to:
minimize the financial impact of compliance.
pure cost-based contract
minimizes the risk for the supplier because cost overruns are charged to the customer. These types of contracts might be appropriate when it is impossible for either party to accurately assess costs in advance and there is a level of trust between the partners. Such contracts need to be audited regularly to ensure that all costs charged are reasonable and appropriate.
design for logistics is concerned with
minimizing supply chain costs by maximizing standardization among other methods
In a supplier relationship management (SRM) environment, a framework of performance metrics should be established to:
monitor and identify opportunities for improvement.
Automated storage and retrieval system (AS/RS)
moves both horizontally and vertically and it can make the max use of floor space by lifting items into and out of very high storage racks
multi-enterprise integrated technology
multiple business lines sharing store data internally
The activity network diagram, also known as the critical path method chart, can be used when a team needs to identify:
the required order of tasks and their respective time requirements in a process or project.
Return on assets measures
the return an organization receives on its invested capital supply chain fixed assets, which is a measure important to stakeholders
Check in PDCA
third step- the effects of the plan are observed
A service partner that provides product warehouse and delivery services is known as a:
third-party logistics (3PL) provider.
Score of less than ___ would be bankruptcy risk for public organization
1.8
What is one example of a preventive action plan for supplier availability risk?
Audit suppliers on capacity resilience.
An organization that is building a new warehouse wants to maximize the use of space and reduce labor as much as possible. Which materials-handling system would be the best for the organization?
Automated guided vehicle system
An organization is undertaking rough-cut capacity planning (RCCP) for a ceramic vase factory in order to examine a proposal for a small production target increase. The factory maintains a 30-day supply of raw materials to buffer against supply issues. It features three production lines for crafting the vases, which typically operate at 75% capacity, and has two large kilns for firing vases, which typically operate at 95% capacity. There are three inspection and packing lines, which also typically operate at 75% capacity. Which area is RCCP most likely to examine?
The kilns used to fire the vases
Which of the following describes customer-focused businesses?
They educate customers throughout the purchasing process.
standardized product
A product that can be made in large quantities, or continuously, because it has very few product designs.
Which of the following warehouse operations assumes that there will be costs for training or hiring staff with final production skills?
Postponement
Chase production method (APICS)
a production planning method that maintains a stable inventory level while varying production to meet demand
Incoterms® trade terms - APICS
a set of rules established by the International Chamber of Commerce that provides internationally recognized rules for the interpretation of the most commonly used trade terms in foreign trade and are routinely incorporated in the contracts for the sale of goods worldwide to provide guidance to all parties involved in the transaction. This may include specific points at which costs are incurred and which party incurs them.
ISO 31010
a supporting standard for ISO 31000 that places emphasis on controls assessment, consequence analysis, likelihood analysis and probability estimation, preliminary analysis, and uncertainties and sensitivities.
Matrix chart
a useful tool for showing the relationships between two to four groups of information, the strengths of those relationships, and how those variables interact and respond to each other. can be in a variety of shapes: L-, T-, Y-, C-, X-, and roof-shaped. The most commonly used is the L-shaped matrix, which illustrates how two groups of items relate to each other or one group to itself
pegging is
ability to track dependent demand for a component back to demand for the parent by referring to the material requirements plan
Forecast error
actual demand - forecasted demand / actual demand
Environmental risk
features rapidly changing legal standards pertaining to emissions and pollution, as governments react to new data on the impact that human activities have on the environment. Organizations must keep up to date on the newest regulations in order to avoid fines or other legal penalties.
Fundamental measures of basic customer service are
fill rates, lead time monitoring, order status monitoring, and customer satisfaction
Process of value stream mapping
first - completing a value stream map of current state with input and approval from all stakeholders second- draw a future state map that eliminates all wasteful activities
Random variation (APICS)
fluctuation in data that is caused by uncertain or random occurrences
Companies implementing sustainability often view it as a means to:
gain a competitive edge and increase market share.
Purpose of pre S&OP meeting
get stakeholders from both supply and demand planning in agreement prior to the main S&OP meeting presided over by executives
McDonald's, a global fast food chain, offers unique menus in different countries or regions that appeal to the tastes of local communities. This is an example of:
glocalization.
Demographic segmentation
groups customers by age, income, marital status or family size
the finish-to-order model is an effective inventory strategy when the product
has a limited set of features
Master scheduling process
has to disaggregate the product family data into numbers of individual products based on inventory levels, forecasts, demand plans, order backlogs, and other considerations used to decide what you need to produce and how much of each item to produce
Quality (APICS)
has two major components—quality of conformance... defined by the absence of defects, and quality of design... measured by the degree of customer satisfaction with a product's characteristics and features
feasibility study
help the organization better understand the scope of the changes, their costs, and the time line
Yield curve
line that results from plotting, at a certain time, the market interest rates of a financial instrument (for instance, a bond) over a range of maturity dates
What supply chain function do customers usually take for granted?
logistics
Business plan
long term plan that may specify certain long term capacity goals that require capital investments
Cooperative supply chain partners seek
long term relationships mutually benefit each other increase profitability
Strategic plan
long-term plan, extending over five to ten years or more, that focuses on how to marshal resources and determine actions to support the mission and goals of the organization.
Collaboration/strategic alliance
long-term relationship, characterized by full sharing of goals, strategies, and tactics and the attempt to reflect the partner's plans in their own
Risk checklists and documentation and assumption reviews
look at past risk identification processes conducted by the organization. Reviewing these sources can give a new risk identification process a jump start.
Design for reverse logistics
looks for ways to make products that can be easily reused, returned, or recycled. (Whether the beer bottles can be reused or not has little effect upon logistics in the forward chain. It primarily affects the reverse chain that brings the container back one or more times during its life cycle.)
Tangible benefits associated with IT investments
lower maintenance cost, improved scheduling, and lower overhead
objective of pac
maintain targeted customer service levels - ex by completing units for orders on schedule
the route sheet
maps the journey of a component from work center to work center, specifying all the operations it undergoes on the way to completion
A make-to-stock organization with stable demand is expanding plant capacity using an overlapping demand stepwise expansion strategy. When it has capacity in excess of demand, it should produce goods at:
maximum capacity.
Towline
may be equipped with scanners to read the bar codes of the goods being conveyed. They provide several advantages: efficient use of space (they fit into narrow aisles) and the potential to improve inventory identification and accuracy. They are also more flexible than roller conveyers. Although forklifts are more flexible, they do not have the potential to improve inventory identification and accuracy.
Response accuracy
measure of whether the response is on target and correct so that the customer does not require additional follow-up.
How is SRM successful
measured by various means, including time-to-market, cost efficiency, competitive advantage, and end customer satisfaction
Continuous replenishment (APICS)
process by which a supplier is notified daily of actual sales or warehouse shipments and commits to replenishing these sales (size, color) without stockouts and without receiving replenishment orders. the result is a lowering of associated costs and an improvement in inventory turnover
(APICS) joint replenishment
process of "coordinating the lot sizing and order release decision for related items and treating them as a family of items. The objective is to achieve lower costs because of ordering, setup, shipping, and quantity discount economies. This term applies equally to joint ordering (family contracts) and to composite part (group technology) fabrication scheduling.
risk management.
process of identifying, analyzing, and addressing an organization's exposure to uncertainty within the supply chain.
types of waste identified in the Toyota Production System
process, movement, methods, product defects, waiting time, overproduction, excess inventory, and unused people skills
Results of S&OP
product and brand management, marketing and sales reps issuing an updated medium term demand plan for current and new products. This consensus plan arrived at by the demand-side managers is used as the basis in both the supply planning phase and the financial reviews.
Which of the following activities typically is included in a warehouse management system?
product availability estimating
finish to order (FTO) / assemble to order (ATO)
products are partially manufactured and inventoried to await orders. This allows mass customization of products without long lead times and works well with products that can be tailored to customer taste by exchanging a limited number of modular components
Export packing company
provide specialized packaging that can help products survive the rough handling and adverse changes in climate that can occur when cargo travels long distances. The packing company can choose packaging materials that provide adequate protection with the least bulk and weight.
ISO 26000
provides companies with guidance for being socially responsible and covers the environment, consumer issues, labor practices, human rights, fair operating practices, and community involvement and development.
open order
1) A released manufacturing order or purchase order. Syn: released order. See: scheduled receipt. 2) An unfilled customer order.
Which of the following was a drawback in the early versions of material requirements planning (MRP) software?
Assumed infinite capacity
If the organization offers a corporate customer trade credit of 1/10 net 30, what does this encourage?
Buying in greater quantities, since payment is not due right away
How can a supply chain best demonstrate social value?
By avoiding or reducing negative environmental effects
life cycle analysis
A quantitative forecasting technique based on applying past patterns of demand data covering introduction, growth, maturity, saturation, and decline of similar products to a new product family.
A kaizen event would bring stakeholders together to design which of the following?
A short-term project to improve a process of limited scale
When developing a technology road map, what can help get the software elements of such a project become useful as fast as possible?
Develop just a minimum viable product (MVP) first.
An organization wanting to create supply chain resilience is make-to-order and lean. How can it follow these principles while becoming more resilient?
Develop response plans and methods of detecting red flags that trigger those actions.
You work on a continuous improvement (CI) team, and yesterday you attended the first team meeting. Which of the following comments that you heard at the meeting doesn't fit with what you know about CI?
"I'll bet money that it's the old die that's causing those scratches on that component."
A steel fabricator is figuring the component calculations for the cost of goods sold for a certain fabrication pattern during the last quarter. It purchased 300 tons of steel at $585 per ton and used 279 tons during the quarter. It used 1,011 standard hours of labor during the quarter at $18.75 per hour. What is the resulting value for direct materials used given this data?
$163,215
Inventory carrying costs generally include
(A) Inventory capital, storage, service, and risk costs.
logistics
1) In a supply chain management context, it is the subset of supply chain management that controls the forward and reverse movement, handling, and storage of goods between origin and distribution points. 2) In an industrial context, the art and science of obtaining, producing, and distributing material and product in the proper place and in proper quantities. 3) In a military sense (where it has greater usage), its meaning can also include the movement of personnel.
service industry
1) In its narrowest sense, an organization that provides an intangible product (e.g., medical or legal advice). 2) In its broadest sense, all organizations except farming, mining, and manufacturing. Includes retail trade; wholesale trade; transportation and utilities; finance, insurance, and real estate; construction; professional, personal, and social services; and local, state, and federal governments.
available to promise (ATP)
1) In operations, the uncommitted portion of a company's inventory and planned production maintained in the master schedule to support customer-order promising. [This] quantity is the uncommitted inventory balance in the first period and is normally calculated for each period in which an MPS receipt is scheduled. In the first period, [this] includes on-hand inventory less customer orders that are due and overdue. Three methods of calculation are used: discrete [...], cumulative [...] with look-ahead, and cumulative [...] without look-ahead. (2) In logistics, the quantity of a finished good that is or will be available to commit to a customer order based on the customer's required ship date. To accommodate deliveries on future dates, [this] is usually time-phased to include anticipated purchases or production receipts. See: discrete available-to-promise, cumulative available-to-promise.
push system
1) In production, the production of items at times required by a given schedule planned in advance. 2) In material control, the issuing of material according to a given schedule or issuing material to a job order at its start time. 3) In distribution, a system for replenishing field warehouse inventories where replenishment decision making is centralized, usually at the manufacturing site or central supply facility. See: pull system.
pull system
1) In production, the production of items only as demanded for use or to replace those taken for use. See: pull signal. 2) In material control, the withdrawal of inventory as demanded by the using operations. Material is not issued until a signal comes from the user. 3) In distribution, a system for replenishing field warehouse inventories where replenishment decisions are made at the field warehouse itself, not at the central warehouse or plant.
allocation
1) The classification of resources or item quantities that have been assigned to specific orders but have not yet been released from the stockroom to production. It is an ""uncashed"" stockroom requisition. 2) A process used to distribute material in short supply. Syn: assignment. See: reservation.
distribution requirements planning (DRP)
1) The function of determining the need to replenish inventory at branch warehouses. A time-phased order point approach is used where the planned orders at the branch warehouse level are "exploded" via MRP logic to become gross requirements of the supplying source. In the case of multilevel distribution networks, this explosion process can continue down through the various levels of regional warehouses (master warehouse, factory warehouse, etc.) and become input to the master production schedule. Demand on the supplying sources is recognized as dependent, and standard MRP logic applies. 2) More generally, replenishment inventory calculations, which may be based on other planning approaches such as period order quantities or "replace exactly what was used," rather than being limited to the time-phased order point approach.
safety factor
1) The ratio of average strength to the worst stress expected. It is essential that the variation, in addition to the average value, be considered in design. 2) The numerical value used in the service function (based on the standard deviation or mean absolute deviation of the forecast) to provide a given level of customer service. For example, if the item's mean absolute deviation is 100 and a .95 customer service level (safety factor of 2.06) is desired, then a safety stock of 206 units should be carried. This safety stock must be adjusted if the forecast interval and item lead times differ. Syn: service factor. See: service function.
product life cycle
1) The stages a new product goes through from beginning to end (i.e., the stages that a product passes through from introduction through growth, maturity, and decline). 2) The time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) The period of time during which a product can be produced and marketed profitably.
Which of the following smoothing constants would yield the same result as a naive forecast?
1.0 it would include the entire demand (100%) and none of the latest forecast amount (0%).
Score would need to be less than ___ for private organization to be at bankruptcy risk
1.1
Which Altman Z-score would indicate that a publicly financed organization is at risk of bankruptcy but would be just a watchlist score if it were for a private organization?
1.5
An organization is using a periodic review system to handle ordering. The organization uses 125 units per week over the course of 5 working days. It orders every 5 days, with a lead time duration of 2 days. It maintains a safety stock of 100 units. At the time of ordering, there are 170 units on hand. What is the order quantity?
105 units
An organization uses a periodic review system. At the review period, for one stock keeping unit (SKU) the organization currently has 40 units of cycle stock and 50 units of safety stock. The order lead time is one week. Average weekly sales are 30 units. Its maximum-level inventory is 200 units. How much inventory should the organization order?
110 units
Which of the following would be a typical time horizon for sales and operations planning?
12 to 18 months
A manufacturer is calculating the projected available balance (PAB) for a period before the demand time fence. The prior period PAB is 2,135 units, the master production schedule calls for 1,750 units, customer orders for the period currently number 1,061 units, and the forecast is for 1,545 units. What is the resulting PAB?
2,824 units
An organization implements a cloud computing solution to better address its needs. After two years, the total benefits are $85,000. The total cost to implement the system was $68,000. What is the return on investment (ROI)?
25%
A manufacturer is calculating the projected available balance (PAB) for a period after the demand time fence. The prior period PAB is 150 units, the master production schedule calls for 220 units, customer orders for the period currently number 103 units, and the forecast is for 107 units. What is the resulting PAB?
263 units
time fence
A policy or guideline established to note where various restrictions or changes in operating procedures take place. For example, changes to the master production schedule can be accomplished easily beyond the cumulative lead time, while changes inside the cumulative lead time become increasingly more difficult to a point where changes should be resisted. [It] can be used to define these points. See: demand time fence, hedge, planning time fence.
If customer demand for smartphones is running at 1,000 units per day and the available manufacturing capacity is 650 minutes per day, then takt time equals:
39 seconds.
What is the rated capacity for a work site that has 80 hours of available time, a utilization rate of 90%, an efficiency rating of 80%, and a demonstrated capacity of 63.4 hours?
57.6 standard hours
If an organization has the following sales and forecasting results over a three-month period, what is the mean squared error? (Assume a smoothing constant of 0.3 and exponential forecast rounding to the nearest whole unit.) April: Actual sales of 20 units, exponential forecast of 18 units May: Actual sales of 16 units, exponential forecast of 19 units June: Actual sales of 15 units, exponential forecast of 18 units
7.3
If a workstation rated at 81.2 standard hours of available capacity produced weekly performances of 81.0, 82.5, 78.5, 76.7, and 80.1 hours over the last five weeks, what is the demonstrated capacity?
79.8 hours
An organization forecasts demand for a given month to be 36.82 units. Actual demand for the month is 34 units. What is the forecast error as a percentage?
8.3%
For one product, one standard deviation (SD) in units equals 3.5 units. A 99.50 percent customer service level is desired. This is a safety factor of 2.57 for SD or of 3.20 for mean absolute deviation. How many units should the organization hold in safety stock (round up)?
9 units
Supplier performance index (SPI) calculation
= (Material Cost + Nonconformance Cost)/Material Cost
demand management process
A process that weighs both customer demand and a firm's output capabilities, and tries to balance the two. Demand management is made up of planning demand, communicating demand, influencing demand, and prioritizing demand.
design for quality
A product design approach that uses quality measures to capture the extent to which the design meets the needs of the target market (customer attributes), as well as its actual performance, aesthetics, and cost. See: total quality engineering.
Which customer listed is best aligned with its supplier's strategy?
A customer who buys the main product being sold and whose suggestions for product improvement have been incorporated.
multilevel bill of materials
A display of all the components directly or indirectly used in a parent, together with the quantity required of each component. If a component is a subassembly, blend, intermediate, etc., all its components and all their components also will be exhibited, down to purchased parts and raw materials.
random variation
A fluctuation in data that is caused by uncertain or random occurrences. See: random events.
keiretsu
A form of cooperative relationship among companies in Japan where the companies largely remain legally and economically independent, even though they work closely in various ways such as financial backing. A member of [this] generally owns a limited amount of stock in other member companies. [It] generally forms around a bank and a trading company, but "distribution" (supply chain) alliances [of this type] have been formed of companies ranging from raw material suppliers to retailers.
master schedule
A format that includes time periods (dates), the forecast, customer orders, projected available balance, available-to-promise, and the master production schedule. It takes into account the forecast; the production plan; and other important considerations such as backlog, availability of material, availability of capacity, and management policies and goals. See: master production schedule.
postponement
A product design, or supply chain strategy that deliberately delays final differentiation of a product (assembly, production, packaging, tagging, etc.) until the latest possible time in the process. This shifts product differentiation closer to the consumer to reduce the anticipatory risk of producing the wrong product. The practice eliminates excess finished goods in the supply chain. Sometimes referred to as delayed differentiation.
plan-do-check-action (PDCA)
A four-step process for quality improvement. In the first step[...], a plan to effect improvement is developed. In the second step[...], the plan is carried out, preferably on a small scale. In the third step[...], the effects of the plan are observed. In the last step[...], the results are studied to determine what was learned and what can be predicted. [This] cycle is sometimes referred to as the Shewhart cycle (because Walter A. Shewhart discussed the concept in his book, Statistical Method from the Viewpoint of Quality Control) or as the Deming circle (because W. Edwards Deming introduced the concept in Japan and the Japanese subsequently called it the Deming circle). Syn: plan-do-check-act cycle, Shewhart circle of quality, Shewhart cycle. See: Deming circle.
manufacturing resource planning (MRP II)
A method for the effective planning of all resources of a manufacturing company. Ideally, it addresses operational planning in units and financial planning in dollars, and has a simulation capability to answer what-if questions. It is made up of a variety of processes, each linked together: business planning, production planning (sales and operations planning), master production scheduling, material requirements planning, capacity requirements planning, and the execution support systems for capacity and material. Output from these systems is integrated with financial reports such as the business plan, purchase commitment report, shipping budget, and inventory projections in dollars. [It] is a direct outgrowth and extension of closed-loop MRP.
quality function deployment (QFD)
A methodology designed to ensure that all the major requirements of the customer are identified and subsequently met or exceeded through the resulting product design process and the design and operation of the supporting production management system. [It] can be viewed as a set of communication and translation tools. [It] tries to eliminate the gap between what the customer wants in a new product and what the product is capable of delivering. [This] often leads to a clear identification of the major requirements of the customers. These expectations are referred to as the voice of the customer (VOC). See: house of quality.
portal (APICS)
A multiservice website that provides access to data that may be secured by each user's role. Users can aggregate data and perform basic analysis. Portal ownership can be independent, private, or consortium-based. Business portals are often connected with a customer relationship management or supplier relationship management system. Portals can include structured data, such as ERP [enterprise resources planning] information, pictures, and documents. Unlike exchanges or marketplaces, portals generally can display and aggregate data without integration between application software
demand
A need for a particular product or component. The demand could come from any number of sources (e.g., a customer order or forecast, an interplant requirement, a branch warehouse request for a service part, or the manufacturing of another product). At the finished goods level, demand data is usually different from sales data because demand does not necessarily result in sales (i.e., if there is no stock, there will be no sale). There are generally up to four components of demand: cyclical component, random component, seasonal component, and trend component. See: booked orders.
Which of the following is true of e-business strategy?
A nucleus firm needs to upgrade its own systems and organization to the desired level of interorganizational connectivity before seeking partners.
Business strategy APICS
A plan for choosing how to compete. Three generic business strategies are (1) least cost, (2) differentiation, and (3) focus The business strategy drives the organizational strategy, which, in turn, drives the supply chain strategy.
design for manufacture and assembly (DFMA)
A product development approach that involves the manufacturing function in the initial stages of product design to ensure ease of manufacturing and assembly. See: early manufacturing involvement.
ISO 31000
A standard adopted by the International Organization for Standardization that outlines principles and a set of guidelines to manage risk in any endeavor. The standard includes guidelines for understanding risk, developing a risk management policy, integrating risk management into organizational processes (including accountability and responsibility), and establishing internal and external risk communication processes. [This] is not a management system standard and is not intended or appropriate for certification purposes or regulatory or contractual use.
multicountry strategy
A strategy in which each country market is self-contained. Customers have unique product expectations that are addressed by local production capabilities. Syn: multidomestic strategy.
product differentiation
A strategy of making a product distinct from the competition on a nonprice basis such as availability, durability, quality, or reliability.
What is the relationship of acquisition cost to the total cost of ownership for most items?
Acquisition cost is a very small portion of the total cost.
MAD
Acronym for mean absolute deviation.
An organization is preparing for organizational change in a customer relationship management (CRM) initiative. The organization's culture seems ready to embrace differentiation based on customer profitability as far as service packages go but seems resistant to providing a lower level of customer service to less-profitable customers. What should executives do about this?
Adapt the CRM program to minimize the difference in service between customers.
What are key qualities to look for in software for organizations wanting to remain at Stage 4 of supply chain network technology optimization, the extended enterprise?
Adaptability and scalability
A manufacturer decides to use a new fuse supplier for its production line but is concerned about the new supplier's reputation regarding quality defects. What action can the manufacturer take to minimize the risk to its manufacturing process?
Add penalty clauses to the contract.
The supply chain manager needs to better understand what is important to customers. Which of the following should be used to measure this?
Agility, reliability, and responsiveness
A midsize manufacturing firm works with a large retailer as its primary customer; the retailer is a dominant firm in the chain. The manufacturer has several sources of supply for each of its key materials and is trying to align its supply chain strategy with the retailer's corporate strategy. Which of the following must be the primary consideration when the manufacturer is setting corporate strategy?
Alignment with the retailer's corporate strategy to holistically maintain a profitable relationship
A supply chain manager can apply the SCOR model to which of the following?
All market interactions, including understanding aggregate demand via order fulfillment
For which of the following items should demand be calculated rather than forecast?
All steering wheels for new Chevrolet Bolts
The sales force out in the field is persisting in using manual methods for entering their hours and sales orders instead of using the new extranet web forms. Which of the following would be the best method of resolving this issue?
Allocate more funds and time to training.
An organization is conducting market research on a targeted set of supply categories. The research is relying on demand forecasts for the products that require these sourcing categories. What would improve the quality of this research?
Also find out about related new product introductions.
design for X (DFX)
Also referred to as design for excellence. A design process that ensures the outcome is manufacturable, maintainable, cost-effective, and of high quality.
Risk Appetite
Amount and type of risk that an organization is willing to pursue or retain.
Globally Harmonized System of Classification and Labeling of Chemicals (GHS) - APICS
An International standard, created by the United Nations Economic Commission for Europe (UNECE), for classifying chemicals according to their health, physical and environmental hazards. The system defines and classifies the hazards of chemical products, and communicates health and safety information on labels and material safety data sheets.Note that material safety data sheets are now called safety data sheets (SDS).
design for six sigma
An approach to designing products and processes that attempts to ensure the firm can provide products or services that meet six sigma quality levels. These quality levels correspond to approximately 3.4 defects per million opportunities.
customer order
An order from a customer for a particular product or number of products. It is often referred to as an actual demand to distinguish it from a forecasted demand. See: booked orders.
An organization should primarily determine sourcing and timing requirements at which of the following levels?
At the sourcing category level
During the initial design phase of a product, a manufacturer recognizes that a supplier may have specialized expertise regarding the design and construction of a unique part. How can the manufacturer best formally collaborate with the supplier to take advantage of that expertise?
Ask the supplier to design the subcomponent for the item.
Which of the following production strategies allows for mass customization without long lead times?
Assemble-to-order
Which of the following production strategies sometimes meets resistance from distribution centers because of the increased demands for skills training and capacity expansion?
Assemble-to-order
What risk management action would produce the best results in mitigation of the possibility that risk response plans will not be implemented?
Assign individual responsibilities.
In the qualitative risk analysis process, what is done with low priority risks?
Assign to a watch list.
Basing a demand forecast for major kitchen appliances on housing start data is an example of which of the following?
Associative forecasting
Takt time equation
Available Time / Customer Demand
What would a retail organization most likely use as its measure of inventory when calculating inventory turnover?
Average inventory at selling price
An organization relies on average inventory from its balance sheets rather than cash-to-cash cycle time to measure how well it is managing its saleable assets. What error might this result in?
Average inventory might obscure a large seasonal inventory buildup.
What can help an organization ensure that each component or rare material in a returned product is properly recycled and tracked for compliance purposes?
Bill of material for disassembly
When finalizing a blanket purchase order, who needs to some form of forecasting over the contract period?
Both buyer and seller
Both supply chain management and design for the environment have which of the following in their focus?
Both focus on all phases of the product life cycle.
Which input to capacity planning may specify long-term capacity goals that require capital investments?
Business plan
Which of the following provides a point of reference for formulating sales and operations planning?
Business plan
Which of the following strategies guides the others into alignment?
Business strategy
An organization buys in response to an immediate need, sharing technical purchasing requirements rather than strategies or plans. This exemplifies which of the following types of business relationships?
Buy on the market
traditional approach to purchasing
Buy on the market
When buying materials from various suppliers, whose responsibility is it to ensure that none of the suppliers is banned by national restrictions from such trade?
Buyer
Who bears the risk of loss in a FOB Origin contract once the carrier is on route to its destination?
Buyer
How can dashboards empower individual contributors without prior involvement of managers?
By enabling them to plan changes based on information tailored to their roles and responsibilities
How is the write-off value for inventory calculated?
By following strict accounting guidelines
How can an organization generate revenue from the by-products of its manufacturing process?
By selling the by-products to other organizations that require them for manufacturing processes
Which of the following statements about outsourcing customer relationship management (CRM) is true?
CRM vendors may provide seamless customer service.
An organization has a diverse sales force, and salespeople frequently work from home or on the road. The organization wants to add customer relationship management (CRM) technology solutions very quickly. Which of the following would best help this organization meet these goals?
Cloud-based CRM system available as a software as a service (SaaS) subscription from a vendor
You are working in an organization that is in the second developmental stage of organizational design. What should you be prepared to do?
Communicate upward or laterally in functional teams.
In order to provide the desired level of customer service but remain profitable, a retailer needs to avoid carrying unnecessarily high levels of inventory but must be able to respond rapidly to changes in demand and avoid stockouts. What organizational strategy linking to demand management would be the best for this retailer?
Communicating demand
Which is an element of contract deployment?
Communicating with the winning supplier
Which is the biggest impediment to reaching Stage 3 of supply chain network technology optimization, the integrated enterprise, for an organization that has held the majority of market share in its industry for many years but has slowly lost ground to high-quality foreign competition?
Company egocentrism
Which of the following companies is most likely to be interested in customer relationship management (CRM)?
Company that manufactures power tools for professional contractors
quality
Conformance to requirements or fitness for use. [It] can be defined through five principal approaches: (1) [The transcendent type] is an ideal; a condition of excellence. (2) [The product-based type] is based on a product attribute. (3) [The user-based type] is fitness for use. (4) [The manufacturing-based type] is conformance to requirements. (5) [The value-based type] is the degree of excellence at an acceptable price. Also, [it] has two major components: (1) [conformance—it] is defined by the absence of defects, and (2) [design—it] is measured by the degree of customer satisfaction with a product's characteristics and features.
An organization's macro environment has changed for the worse. As part of a demand analysis, what can the organization's marketing professionals do about this?
Consider whether product end-of-life or new product introductions should be planned for the new environment.
Which input into an organization's business model breaks down the organization's necessary functions and activities into decision-making activities and execution activities?
Core competencies
A manufacturer is developing a new product. It will use a new manufacturing process, and this makes it difficult for both the manufacturer and the supplier to accurately estimate costs. The manufacturer and the supplier have a strong, long-standing relationship. What type of contract would be most appropriate for this situation?
Cost-based contract
A manufacturer wants to engage in coordinated risk management with its supply chain partners. What is the best practice if it decides to focus on crisis communication planning?
Create joint contingency plans.
Which of the following forms the basis for a naive demand forecast?
Data from the last demand period
A big data and data analytics system has very good cybersecurity and cyber insurance. Which is a significant risk to this system that remains even if the cybersecurity does not fail?
Data privacy risks
In the supplier certification process, before evaluating alternative suppliers and selecting suppliers, which of the following should already have been done?
Decide who should be carrying out testing or auditing.
What tool can be used to augment an expected monetary value (EMV) analysis and help organizations decide between two alternatives, each with possible best- and worst-case results?
Decision tree analysis
What contract term specifies how orders will be placed?
Delivery requirements
Which is true of contract elements?
Delivery requirements can specify exactly how to protect a product during shipment.
Pegging refers to the ability to make a connection between the required numbers of a specific component and which of the following?
Demand for the parent according to the material requirements plan
What is the key benefit of using an echelon inventory policy?
Demand from all lower echelons (including in-transit inventory) can be aggregated.
An organization's extended supply chain has both domestic and foreign demand for its products and has multiple owned and partner-owned production plants. Which of the following can synchronize all of these various plans for demand and supply?
Demand management
Which role is responsible for performing analytical work on data and the demand plan?
Demand manager
dependent demand
Demand that is directly related to or derived from the bill-of-material structure for other items or end products. Such demands are therefore calculated and need not and should not be forecast. A given inventory item may [also have] independent demand at any given time. For example, a part may simultaneously be the component of an assembly and sold as a service part. See: independent demand.
Which of the following variables differentiates supply chains in terms of efficiency and responsiveness?
Demand uncertainty and volume
A retailer wants to strategically position inventory throughout its supply chain to reduce inventory, lead times to the customer, and the bullwhip effect. Which ordering system would help the retailer achieve this goal?
Demand-driven material requirements planning system
An automobile company has identified a five-year trend in the price of gasoline, with prices consistently increasing year over year. How can it respond to capitalize on this trend?
Design and produce vehicles that are more fuel-efficient.
Which product design method can help turn a product from an order qualifier to an order winner?
Design for quality
A company manufacturing a product containing hazardous materials redesigns the packaging so that the box containing the product can be used to return the product to the manufacturer. This is an example of which of the following?
Design for reverse logistics
Which of the following approaches to product design is compatible with the requirement that German brewers use refillable bottles?
Design for reverse logistics
An organization designs product documentation with large pictographs showing how to avoid common user errors that have previously resulted in customers believing that an otherwise good product is defective. This is an example of which of the following?
Design for service
Inventory turnover is a metric for which of the following approaches to product design?
Design for supply chain
How can an organization best design for logistics?
Design to maximize standardization.
What is an organization's next step in a make-versus-buy analysis after they have determined that they do not have texting-based customer service as a core competency?
Determine if there is a need for texting in customer service.
Which of the following is the best value proposition for the customer segments described below? Segment A value profile: ongoing relationships and consistent lead times but not fast delivery;15% of the market and 65% of revenue. Segment B value profile: low price and fast delivery;60% of the market and 18% of revenue.
Develop a reliable supply chain with dedicated agents for segment A and a highly automated, low-cost, fast delivery supply chain for segment B.
When a voluntary compliance standard or best practice is found to have some gaps in compliance, what is the best next step listed?
Do a feasibility study on closing the gaps
How can an organization reduce the risk of legal losses?
Document everything possible and maintain a paper trail.
What regulation requires organizations to disclose the use of conflict minerals that are necessary to the functionality or production of a product in the United States?
Dodd-Frank Act of 2010
design for the supply chain
Enhancement of a firm's product design in consideration of the issues that will arise in the supply chain, from raw materials to the final stage of the product's life cycle.
When attempting to secure competitive advantage in a market with thriving customer demand, what is an important factor to consider when analyzing potential competitors?
Ensuring that you have at least as many desired customer options as your competitor and use CRM to discover more desired options
An organization is performing inventory planning and network design. Why would the organization find considering echelons helpful in the process?
Entire echelons could be omitted from the supply chain.
The APICS Dictionary, 15th edition, refers to a supply chain as a "global network." Which of the following correctly indicates what could comprise this network?
Entities and processes (the engineered flow) of any size or configuration
ISO 26000 provides companies with guidance on being socially responsible. Which topics are covered in these guidelines?
Environment, consumer issues, labor practices, and human rights
Which risk type requires organizations to monitor rapidly changing regulatory standards in order to maintain regulatory compliance?
Environmental
To better respond to unpredicted disruption, supply chains need to build in redundancy. This can be accomplished by which of the following?
Establishing safety stock
Which intermediary would be best to help a company prepare their goods to survive rough handling but with the least bulk and weight?
Export packing company
Which of the following is true of portals?
External portals can provide company- and role-based access and authentication.
An organization conducts due diligence with all of its tier 1 suppliers to minimize risks of supply chain disruptions. What is a significant residual risk?
Failures originating at the tier 2 level or below
A U.S. organization is developing a patent on a new product it will sell in several well-developed overseas countries. What is the easiest way for this organization to seek national and international patent protection?
File one international patent application in the U.S.
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?
Fill rate
What can get in the way of a message being received or properly understood by the intended recipient?
Filters or noise
What parts of the sales and operations planning (S&OP) process are considered reconciliation steps?
Financial review meeting, pre-meeting, and executive meeting
Which of the following types of third-party logistics firms schedules cargo transport but operates no carriers?
Freight forwarder
A retailer is growing tired of one of its supplier's frequent promotions because they invariably lead to overstocks after the sale and produce no net gain in profits. The supplier also dislikes the promotions for similar reasons, but each season a new promotion is rolled out. Which of the following would best help these firms resolve their problems?
Frequent personal communications and relationship building between the firms
Which of the following describes a manager's movements as he or she adopts the SCOR model?
From a functional area orientation to a process orientation
Other than competitive priorities, what does the organizational strategy feed to the supply chain strategy to ensure alignment?
Future direction, such as new products
If an organization pursues a level production strategy, which of the following occurs in a period with inventory buildup and low sales in relation to the income statement items of cost of goods sold (COGS) and general and administrative expenses?
General and administrative expenses will continue to reduce profits during the period.
trend
General upward or downward movement of a variable over time (e.g., demand, process attribute).
Which is an expense that may still be needed in multiple countries prior to a new product launch even after the organization files an international patent application?
Getting in-country patent, liability, and tax law review
Which of the following is helping businesses develop reverse logistics key performance indicators to asses and improve their environmental performance?
Global Reporting Initiative (GRI)
Which of the following happens most often when an organization uses available-to-promise (ATP)?
Goods that are still in the process of being assembled could be promised to a customer.
When used in forecasting, what does standard deviation tell forecasters about a service that is being forecasted?
How much variability in demand to expect
Which of the following is a true statement about levels of collaborative intensity?
If it's a complex process or an item with multiple parts, many contractors can form an alliance to get all the components to work together.
Which of the following is a benefit of lateral supply chains?
Improved business focus and expertise
What is an example of a tangible benefit to IT investment?
Improved scheduling
simplification
Improving quality and cutting costs by removing complexity from a product or service.
pegging
In MRP and MPS, the ability to identify for a given item the sources of its gross requirements and/or allocations. [This] can be thought of as active where-used information. See: requirements traceability.
In a reverse logistics system, in which direction does information flow?
In both directions between the raw material supplier and the end user
An organization's information system infrastructure features various systems feeding into each other, allowing for some levels of data integration. Which is the next level of integration that the organization should plan to move into as it looks to improve upon the current system in a sustainable manner?
Internally integrated technology
Two bulk chemicals are each stable and safe by themselves, but interaction between the two could create a toxic gas cloud. What regulation would prohibit these chemicals from being stored next to each other on a container ship?
International Maritime Dangerous Goods (IMDG) Code
Reverse auction (APICS)
Internet auction[s] in which suppliers attempt to underbid their competitors. Company identities are known only by the buyer
An organization wants to identify and understand the risk associated with a highly technical process that they have pioneered and use exclusively. Several process experts that designed the process still work for the company. What is the best method for the organization to use to identify the risk in question?
Interviews
Which is an important source of input for the master scheduling process that strongly impacts how to prioritize production?
Inventory levels
An organization wants to reduce the number of spare parts it holds in stock for its manufacturing equipment maintenance but cannot risk needing to order a part that would shut down the plant until it arrives. What can the organization do that would address both cost and risk in this scenario?
Invest in predictive analytics.
Is it a good idea or a bad idea for a manufacturer to shift costs to its distributors to improve its profits?
It is a bad idea if the ultimate price to the consumer is higher.
What makes reverse logistics so complex?
It is a complete supply chain in its own right.
Which of the following statements best defines a business plan?
It is a document consisting of organizational, strategic, and financial tactics.
What is a potential cause of issues in succeeding with triple bottom line goals in the economic area?
Lack of alignment between the financial-related goals of different functions in the supply chain
A manufacturer decides to employ a total quality management (TQM) approach to improve the manufacturing process. The upper management team directs floor managers to assemble teams of machine operators to decide how to best improve and to report back to them. They direct managers to look for solutions and better processes, not to identify poor performers, and to focus on ways to best serve their customers. They expect that the teams will generate standard performance measures to track improvement. Despite this effort, the TQM process fails. What is the most likely reason for the failure?
Lack of upper-level management participation in the process
A manufacturer is engaging in supplier segmentation in order to create a responsive supply chain. The manufacturer often redesigns products, looking to continuously improve and remain at the forefront of product design. What type of segmentation would work best for the manufacturer if they want to determine which suppliers can best contribute to their product design processes?
Level of innovation
Which group of financial ratios helps determine whether a supplier is likely to be able to meet its debt obligations based on relative levels of debt versus equity?
Leverage ratios
A product is in decline and a new product will be ready to distribute in three months. What do supply chain managers need to review to help operations determine when to stop making more units of the old product?
Lifetime sales quantities
What is a drawback of water transport as compared to other modes?
Limited accessibility to waterways
Which of the following outcomes is the likely result of applying the lean philosophy to supply chain management?
Low cost and increased susceptibility to significant disruptions from disaster related events
Which is the primary benefit of a horizontal marketplace or trading exchange?
Lowers transaction costs
Which of the following illustrates an emphasis on the affordability aspect of customer value?
Luxury boat priced lower than other luxury boats of similar size and features
What information needs to be tracked at each point along the reverse supply chain?
Marginal costs/revenues and the status of each product or subcomponent
Which of the following objectives was most important in earliest warehousing practices?
Market presence in each sales territory
Which of the following types of information would be appropriate for a qualitative forecast?
Market research
A firm supplies products and services to a wide variety of industries with varying requirements for responsiveness and reliability. Many customers across these industries are not satisfied with the firm's ability to meet the lead time and on time delivery requirements. Which of the following tools is most appropriate for the firm to use to improve customer service?
Market segmentation
Which of the following processes develops the master production schedule based on demand and inventory levels?
Master scheduling
Which of the following is a process change that would improve the time to market of customer relationship management (CRM) activities?
Minimizing the number of tasks that need to be performed sequentially
For an assemble-to-order product, the master production schedule is likely to focus on scheduling which of the following?
Modules
How often, under normal circumstances, does a pre-S&OP meeting take place?
Monthly
The sales and operations plan (S&OP) includes which of the following?
Monthly production figures by product family
materials handeling
Movement and storage of goods inside the distribution center. This represents a capital cost and is balanced against the operating costs of the facility.
An organization normally receives a basic component for a product in a fully assembled state. Due to a natural disaster, it must assemble some of these components itself. Where would it check to see the raw materials needed to perform this assembly work?
Multilevel bill of material
After selecting the proper partner, what is the next step in creating a successful alliance?
Negotiate a win/win deal.
An organization invests significant effort in performing a spend analysis as part of its supply base analysis. However, the results are difficult to interpret since different divisions had different supplier databases and it is not clear which categories are the "vital few" to manage. What is the best solution proposed?
Next year, invest in a data warehouse to consolidate each division's supplier information.
Which costs will increase if a retailer requests the same amount of inventory to be delivered in twice as many shipments?
Ordering costs
An organization has outdated equipment for a core competency, and it has cash flow issues delaying updates to the equipment. What action might free up some cash to help them make these investments right away?
Outsource a non-core competency activity where the vendor will incur capital expense.
What is true of the cost effects of increasing the number of warehouses?
Overall system costs tend to decline up to a certain point, and then increase.
What is true of packaging for seaborne delivery to a foreign buyer?
Packaging should be as light as possible.
Maria sells her paintings in the street market on weekends. Which of the following are Tier 2 suppliers in this supply chain model?
Paint wholesaler
stakeholders
People with a vested interest in a company, including managers, employees, stockholders, customers, and suppliers.
Which of the following can be a result of a carefully designed reverse logistics chain?
Potential for very lucrative customer service contracts and extended warranties
An organization is using the Digital Capabilities Model for Supply Networks to increase its supply chain maturity level. It has invested in state-of-the-art customer relationship management software and process automation to create a seamless customer experience. What else is needed to create the model's "connected customer" capability?
People, process, and technology synergy
During what step in the change management process should SMART criteria be set?
Planning
What should be part of an action plan to close gaps between the current supply chain strategy and the desired one?
Planning how to communicate and manage change initially and over the long term
A focus on economic sustainability places the most emphasis on which of the following elements?
Planning, mitigating, detecting, responding to, and recovering from supply chain risks
Which of the following meetings is typically used to arrive at a consensus between plant managers, logistics managers, schedulers, customer service managers, and other supply chain managers prior to involving executives in sales and operations planning (S&OP)?
Pre-S&OP meeting
A building supplies distributor has decided to invest in developing a self-service customer interface so that customers can order and manage their own accounts. This illustrates the use of customer segmentation. What customer characteristic is the distributor focusing on?
Preferred channel
A manufacturer produces and sells an average of two machines per day, 7 days per week. The machines cost $20,000 each. The annual cost of carrying and transporting finished goods inventory is 15%. Which of the following modes of transportation is most economical?
Rail
Considering the types of cargo typically carried over long distances by inland water carriers and the rates per ton-mile, which of the following modes of transportation is the barge's closest competitor?
Rail
A public organization is struggling to be profitable. It believes that with certain capital improvements it will see a large growth in profitability. However, it still wants to control long-term costs, even while making these investments. Which method of financing these capital improvements would be best for the organization?
Raise money via stock release.
An organization has attempted to forecast demand for a popular product over the last decade. They have sufficiently accounted for changes due to holidays and climate specifics as well as those due to advertised sales. They have been accurate when forecasting long-term changes, but over short-term periods, they have been inaccurate, at times leading to stockouts and excess inventory. What is the likely cause of their forecast inaccuracy?
Random variation
In the ideal world of supply chain inventory, which of the following should never be at rest in a warehouse?
Raw materials
A company has revenues of $100,000, which includes 10% supply chain expense and 80% other expenses. Which of the following actions will result in the largest increase in gross profit?
Reduce supply chain expense by 5%
Which of the following is generally considered to be the most responsible strategy for managing reverse logistics?
Reduction of resources used in extraction, manufacture, and packaging
A supply chain executive has read about an emerging technology called a digital twin and wants you to create a briefing that indicates potential areas where the technology can be used. What is a fast way to gather this information?
Refer to the Practices category of the SCOR Digital Standard.
Which term describes the development of lifetime customers by training staff to optimize each customer's experience?
Relationship building
Responsiveness to changing demands through use of a sales portal is an example of connecting suppliers through which of the following techniques?
Relationship management
Which of the following is an integral part of the sales and operations planning (S&OP) process because it promotes meeting brevity and consensus building?
Replanning
Which of the following statements does NOT apply to supply chain event management (SCEM)?
SCEM is used to analyze the current state of a company's processes and to compare it with appropriate industry benchmarking data
Which of the following strategies should a company focus on to measure and improve customer service?
Responsiveness
Which of the following measures most commonly is used for assessing the efficient use of capital?
Return on investment ratio (ROI)
In what type of auction does the buyer post the equivalent of an online request for quotation, many sellers bid on the contract, and the lowest bidder has a binding contract to fulfill the buyer's needs?
Reverse auction
Which "right" of logistics can only be partly addressed during order fulfillment and needs to be addressed during product or service design for it to be customer focused?
Right product
What can a risk manager use to shorten the risk identification process?
Risk checklists and documentation and assumption reviews
Which is a common tradeoff area when conducting supply base right-sizing?
Risk management
Who is responsible for identifying potential failure points along the supply chain?
Risk manager
Which of the following components of a risk assessment process might result in shareholders requiring a greater minimum return on their investment?
Risk tolerance
In enterprise resources planning (ERP) system manufacturing modules, the result of master scheduling is the master production schedule (MPS), which is evaluated for constraints by which of the following?
Rough-cut capacity planning (RCCP)
If you wanted to know the operation(s) that would be performed on a particular component at a specific workstation, where would you look?
Route sheet
Safety Stock calculation
SD in units * safety factor
Where would a wholesaler find information on an organization's hazardous waste if they are using the Globally Harmonized System of Classification and Labeling of Chemicals?
Safety data sheets
Expenses involved in the reverse logistics chain may be offset by which of the following?
Sale of service contracts
Gross profit calculation
Sales - COGS
Which of the following functional areas is primarily responsible for demand forecasting?
Sales and marketing
What processes are used in master planning?
Sales and operations planning and resource planning
Which of the following benefits of a customer data warehouse (CDW) can result from the strategic allocation of human and technology resources according to customer channel preferences and purchasing patterns?
Sales productivity
Which of the following is true of a situation in which an organization has long lead times when matching customer orders to supply?
Salespersons should work to educate customers on lead time issues to set expectations.
After performing an extensive customer survey, what else does an organization need to do to discover whether there are any customer requirements being missed in the market?
Scan what the competitors are offering.
Which of the following feedback tools would summarize supplier performance?
Scorecards
In which type of customer segmentation are customers grouped by income?
Segmentation by demographics
Which of the following is the most critical aspect of influencing demand with extended supply chain partners?
Selling the benefits of changes using soft skills such as leadership
A firm's highest stage of production is manufacturing resource planning (MRP II), it uses informal demand planning with disconnected spreadsheets for the supply chain, and it has online catalogs on the internet. What stage of supply chain development has the firm reached?
Semifunctional enterprise
Which of the following is the supply chain evolution stage in which a nucleus company begins initiatives to improve efficiency, effectiveness, and quality within functional areas?
Semifunctional enterprise
In an advanced supply chain, which of the following would be the best data for a buyer to send to a sheet metal producer?
Sheets of steel required for metal door construction company for the month
A dock receipt is issued by which of the following entities?
Ship agent
You are shipping copy machines and high-end cameras from Asia. What is the best choice for the transportation to use in this case?
Ship the items using two different modes: the copy machines via water and the high-end cameras via air.
Which of the following statements is true about changing market conditions such as those in the fashion industry?
Some companies manage this by starting their seasonal product design process early.
How can a brick-and-mortar retailer that relies exclusively on 3PL and 4PL support for supply chain activities best implement sustainability efforts in its supply chain?
Specify sustainability as a selection criterion in requests for proposals and specify sustainability performance in contracts.
Which of the following supplier relationship management (SRM) analytical applications would quantify how much it is costing the organization when buyers resist using national agreements for some categories of purchases?
Spend analysis
Which of the following types of warehousing is most appropriate for agricultural supplies that might be used only once during the year?
Spot stocking
Which of the following performance measures pertain to availability in customer service?
Stockout frequency and fill rate
In addition to the relative capabilities of existing suppliers what else determines how intense a new supplier research process will need to be?
Strategic importance or technical complexity of item
What are the significant inputs to the sales and operations planning (S&OP) process?
Strategic planning, demand planning at the family level, and resource planning
Which of the following is the most appropriate subject for discussion at the demand planning phase meeting that is part of the sales and operations planning (S&OP) process?
Strategies to close any gaps between the demand plan and business plan revenue goals
What is a benefit to multinational organizations for adhering to the Organization for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises?
Stronger foreign investment climate
An organization's marketing department conducts market research by studying the size, location, nature, and characteristics of markets along with sales (or consumption) data. What else does it need to do?
Study market share and do consumer research.
Which of the following is a type of assistance marketing could provide to a supply chain manager when one product in a product family is having significant supply lead time problems?
Substitution
tracking signal
Sum of Forecast Errors / MAD *uses negative numbers not absolute values
Mean Squared Error (MSE)
Sum of Squared Errors for Each Period/Number of Periods
Supplier A's plexiglass costs US$10 per square meter and has a nonconformance cost of US$3 per square meter. Supplier B's plexiglass costs US$12 per square meter and has no nonconformance costs. What is the supplier performance index for each supplier?
Supplier A: 1.3; supplier B: 1.0
What is a key difference between certification and supplier rating systems?
Supplier rating systems are used more frequently to capture ongoing performance levels.
Which of the following systems can provide proactive tools such as automatic notification by portable device when a party needs to act as well as a simple means of reversing prior operations decisions?
Supply chain event management (SCEM)
Which of the following is true of the total cost of ownership (TCO)?
TCO compares the differences between the incremental costs of alternatives.
Which statement about the World Trade Organization (WTO) is true?
The WTO helps less-developed nations get better access to world markets for their exportable products.
order processing
The activity required to administratively process a customer's order and make it ready for shipment or production.
planning horizion
The amount of time a plan extends into the future. For a master schedule, this is normally set to cover a minimum of cumulative lead time plus time for lot sizing low-level components and time for capacity changes of primary work centers or of key suppliers. For longer-term plans, [this] must be long enough to permit any needed additions to capacity. See: cumulative lead time, planning time fence.
supply chain management
The design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally.
forecast error
The difference between actual demand and forecast demand. [It] can be represented several different ways: mean absolute deviation (MAD); mean absolute percentage error (MAPE); and mean squared error (MSE). See: mean absolute deviation (MAD), mean absolute percentage error (MAPE), mean squared error (MSE).
A U.S. organization gets an accredited third party to certify it is compliant with ANSI Z.10. What does this mean?
The organization has safety standards that exceed U.S. OSHA requirements.
Organization ABC's leaders believe that the organization's supply chain is in the fifth stage of supply chain maturity, the orchestrated supply chain. What might be a red flag that they are more likely at just the fourth stage of maturity?
The organization has succeeded in closing visibility gaps in its technology despite a great deal of change resistance.
market plan
The output of the market planning process. The market plan includes the current market position, opportunity and issue analysis, marketing objectives and strategies, action plans, programs, projects, budgets, and pro forma profit and loss statement and management controls. Syn: brand plan, product plan.
In a master scheduling grid, the planning horizon relates to the cumulative lead time in which of the following ways?
The planning horizon is equal or greater than the cumulative lead time.
demand shaping
The practice of using the four Ps (product, pricing, placement, and promotion) and other market variables to influence the demand of a product or service so that demand better matches available supply. See: four Ps.
An organization wants to create automatic communication between its inventory management system and its main supplier's inventory management system, which are incompatible. They decide to use data-oriented middleware despite the labor-intensive setup process. What long-term risk is associated with this selection?
The process may need to be repeated when adding, changing, or upgrading software in the future.
demand planning
The process of combining statistical forecasting techniques and judgment to construct demand estimates for products or services (both high and low volume; lumpy and continuous) across the supply chain from the suppliers' raw materials to the consumer's needs. Items can be aggregated by product family, geographical location, product life cycle, and so forth, to determine an estimate of consumer demand for finished products, service parts, and services. Numerous forecasting models are tested and combined with judgment from marketing, sales, distributors, warehousing, service parts, and other functions. Actual sales are compared to forecasts provided by various models and judgments to determine the best integration of techniques and judgment to minimize forecast error. See: demand management.
Which of the following statements about reverse logistics is true?
The products will not necessarily move through the same tiers as in the forward chain.
tracking signal
The ratio of the cumulative algebraic sum of the deviations between the forecasts and the actual values to the mean absolute deviation. Used to signal when the validity of the forecasting model might be in doubt. See: forecast error, mean absolute deviation.
component
The raw material, part, or subassembly that goes into a higher-level assembly, compound, or other item. This term may also include packaging materials for finished items. See: ingredient, intermediate part.
What is the biggest difference between railroads in Europe and those in many other parts of the world?
They are not standardized.
Supplier capacity measurements show that supplier X consistently has had three times as many units available as its top competitors. Based on only this metric, what can the organization determine?
The supplier looks promising but should be carefully checked for signs of financial distress.
Which is a clue that the organization represents a significant percentage of a given supplier's business?
The supplier singles out the buyer in its marketing materials.
When the financial goals of sales, marketing, and the supply chain in a company are not properly aligned, what typically occurs?
The supply chain sacrifices best practices to make the short-term numbers look better.
branding
The use of a name, term, symbol, or design, or a combination of these, to identify a product.
mass customization
The use of mass production techniques to create large volume of products in a wide variety keeping production costs low while enabling customized output primarily utilizing postponement or delayed differentiation.
A local supplier is selected as a supply partner over an international supplier who had a lower total cost of ownership. An audit reveals that the supplier was given more weight for being local. Which of the following would make this weighting valid?
The weight is based on the organization's corporate social responsibility policy.
An organization has formed an alliance with a supplier. The supplier's personnel have complained that they have to learn new skills and technologies. Which can best help the supplier's employees appreciate the alliance?
The work being done is helping to build organizational skills and expertise.
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 between the two points allows for shifting schedules or priorities.
Since reverse logistics affects the entire product life cycle, one can expect which of the following?
There will be increased use of customer service with products in early life cycle stages.
Selection of processes for improvement, according to quality methodology, should be done at which of the following levels?
Top management
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?
Total overhead costs
Which would be considered a key performance indicator (KPI)?
Total supply chain inventory turns
Which of the following materials-handling options uses space efficiently, has the potential to improve inventory identification and accuracy, and is flexible?
Towline
What should an organization do if it wants to ensure that imports and exports make it through customs without unnecessary delays?
Use a customs house broker with proven expertise.
An organization is concerned about the quality of the materials it is importing. It wants to inspect all incoming materials prior to paying import duties. What should the organization do?
Use a free/foreign trade zone (FTZ).
A new manufacturing process produces wastewater with higher levels of acidity than can be discharged. What can the organization do to solve this issue in a way that is also high on the waste hierarchy?
Use a waste exchange to advertise acidic water as a possible raw material.
A manufacturer that uses assembly lines committed to the Just-in-Time (JIT) methodology is running into issues reconciling material requirements planning (MRP) with that methodology. What is the best option available to address the conflict?
Use balanced flow.
A large organization is looking to improve the performance of multiple customized applications and cut long-term costs while doing so. They currently have dedicated servers for each application. What is the best option available to the organization?
Use cloud computing to virtualize servers and create internal clouds for the applications to use.
How can an organization pursue cost savings when shipping multiple parts used in construction for a single item?
Use joint replenishment.
Product traceability and configuration management can help the organization with compliance in what area?
Use of a trading bloc
Which of the following are common currency-related trends?
Use of letters of credit and currency hedging
Which of the following is a method of replacing physical inventory with better information?
Use postponement centers.
Process benchmarking does which of the following?
Uses a checklist of qualitative features from world-class organizations
What tool can help a supply chain director visually show the value provided by the supply chain, including all of the process steps as well as the value-added and non-value-added time for each step?
Value stream map
Which of the following would appear in the routing file?
Work center ID
A U.S. organization imports chemicals from Mexico. Customs delays checking for contraband have become onerous, and lead time has become highly variable. Which is the best way to reduce this risk?
Work with U.S. customs by enrolling in C-TPAT, but also find a domestic source.
As part of the sourcing process, does segment suppliers need to come after create/refine categories and category strategy and do spend and portfolio analysis?
Yes. Segment suppliers is done for individual suppliers while the earlier steps address whole groups.
Which of the following is a leading economic indicator?
Yield curve
A strategic profit model calculates return on assets (ROA) using net profit margin times asset turnover. The model also shows what ratios and calculations are used to calculate the latter ratios. Which is a good supply chain management use for this model?
You can calculate how much of a loss in sales it would take to make an inventory reduction unprofitable.
International Financial Reporting Standards (IFRS) (APICS)
a common global language for business affairs so that company accounts are understandable and comparable across international boundaries. As a result of growing international shareholding and trade, they are rules to be followed by accountants to maintain books of accounts which is comparable, understandable, reliable, and relevant as per the users internal or external
Focused differentiation
a company develops unique strategies for targeted niche markets to meet unique buyer needs. Innovation is important in focused differentiation.
Bill of Materials (BOM)
a complete list of components for a manufactured or assembled item.
Holding a brainstorming session for an improvement team is usually an effective means of creating:
a process map or flow process chart
dependent demand
components delivered for installation in finished products
Goal of continuous replenishment
continuous reduction of inventory levels at the store as the forecasts become more accurate. lost sales due to stockouts are avoided and inventory turnover is improved
A store receives frequent deliveries of high-volume commodity items which have a stable customer demand. Which of the following supply chain strategies is best suited to this store?
continuous replenishment
end result of negotiation is
contracting This may proceed order placement or the order may be the contract if it is a simple purchase order
International contracts for carriage
contracts for transport and materials handling, as opposed to contracts for sale and transfer of title. use of them in a contract for carriage creates an obligation
minimum viable product (MVP)
core of a software system that omits some features to enable faster release, feedback, and proof of concept. Even an outside vendor would want to make an MVP if the software has yet to be developed.
constraints on risk response
cost and feasibility
Ordering costs include
costs incurred when ordering inventory and setup costs resulting from the process of preparing to go into production to fill the order. As such, requesting that setup for production be done for twice as many shipments would cause ordering costs would rise
Information technology enables supply chain management by:
creating global visibility, so that even companies with no global operations must compete globally.
Costs can be determined by three factors
current logistics functions, potential savings in times, and improved quality of service
During medium-range planning activities, safety stock can best be used to:
cushion the company against unknown fluctuations in demand
Up selling
customer relationship management tactic in which customers are offered higher-priced or more profitable items instead of the item they were originally considering
attaining six-sigma quality requires to what three elements?
customer, process and employee
Nucleus firm
defined as the firm that has the most power or brand equity in a relationship, and this firm must take the initiative to move the extended supply chain network to a higher stage of supply chain development
perfect order fulfillment
defined as the percentage of orders meeting delivery performance with complete and accurate documentation and no delivery damage
Which of the following types of plans is a direct output of sales and operations planning?
demand
From an IT perspective, which part of the supply chain exists to collect, analyze, and disseminate market intelligence?
demand channel
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.
Kaizen events
design small scale process improvement projects particularly useful at the beginning of large scale quality management projects to achieve a quick success and thus build credibility for larger change initiative
Component commonality
design strategy of substituting one common component for a variety of similar components
Target costing is:
designing a product to meet a specific cost objective. It involves setting the planned selling price and subtracting the desired profit as well as marketing and distribution costs, thus leaving the required manufacturing or target cost.
redundancy can be added to a supply chain by
establishing safety stock, using multiple suppliers (even when more expensive), and intentionally setting low capacity utilization rates
rough-cut capacity planning (RCCP)
examines bottlenecks that may cause production to miss targets
Microeconomics focuses on the decisions that businesses and people make:
in terms of resource allocation and the prices of products and services.
Dodd-Frank Act of 2010
includes a provision requiring certain companies to disclose their use of conflict minerals if they are "necessary to the functionality or production of a product.
Design for reverse logistics
includes designing for repair, replacement, and returns as well as designing packaging to account for common consumer frustrations. This might include ease of disassembly for repairs, an affordable warranty program, a box that can be used for shipping and return, well-trained and accessible customer service personnel, and comprehensible instructions as well as a product designed to endure
When market research reveals that some customer segments desire certain features but other segments desire different features, an organization's primary criteria for deciding on features to include are those that:
increase net profit margin.
A company has one of its key components sole sourced from a global supplier whose manufacturing facility is destroyed in a major natural disaster. The immediate impact of this incident on the company's operational performance is most likely to be a reduction in:
inventory turn
Formal collaboration
involves representatives of suppliers and customers. Integrating suppliers and customers into the design process can result in benefits such as fewer cost overruns, new and improved approaches to design, improved customer satisfaction, improved efficiency, and higher product quality for the price.
Disconnected technology
involves using a variety of non interfacing databases
Availability
is the capacity to have inventory in stock when wanted by customer. It is measured by stockout frequency, fill rate, and orders shipped complete
Ship agent
issues a dock certificate to signify that the steamship company has received cargo brought to port by the inland carrier
When a restaurant pursues a chase production strategy, at the points of highest and lowest load, capacity key performance indicators for hourly labor and perishable inventory should show that there is:
just the right amount of capacity at both the highest and lowest loads.
Which would be considered an external risk to the supply chain?
labor shortages
Qualitative forecasting methods are used when
no historical data or other means of calculating demand are available. Market research is the only option that is not based on historical or numerical information.
Common carriers
not allowed to discriminate among shippers, products, or places, and they must take all legitimate business within the scope of their license, even at a loss
Exempt carriers
not subject to economic regulation of their rates and terms of service.
bonded logistics parks (BLPs)
occupiers can transship products duty-free, receive value-added tax refunds upon entry, and conduct reimportation under customs supervision where goods are not required to leave the country. BLPs are often located near ports, and they serve as cost-effective holding areas where orders can be consolidated from various locations before being exported. They also offer a streamlined customs clearance procedure, since goods transported into BLPs are considered offshore and can be immediately loaded onto ships bound for overseas markets.
Internally integrated technology
one main system storing all data
A statistical forecast should be:
one of many inputs to demand plans.
the intensity of a supplier search depends on
primarily on the strategic importance or technical complexity of the overall sourcing requirements plus the relative capabilities of existing supplier
Private carriers
own or lease a fleet of vehicles to transport their own products
Activity network diagram
particularly helpful when an improvement team needs to identify the required order of tasks in a process or project. It's also used to convey dependencies and simultaneous activities via a simple visual. Each task is labeled with the number of days for completion (or most appropriate metric) that it takes to complete the task.
The only Level 1 SCOR measure of supply chain reliability is:
perfect order fulfillment.
Demand manager responsibilities
performing analytical work on data and the demand plan and building consensus on the plan, among other tasks.
SCOR model is composed of linked processes
plan, source, make, deliver, return
end-of-life management (APICS)
planning for the phase-out of one product and the phase-in of a new product to avoid both the excessive inventory of and an out-of-stock situation with the new product before the replacement product is available
Direct materials calculation
quantity used * unit cost
A great majority of international shippers use freight forwarders because they:
quote carrier rates and handle payments.
A logistics manager concerned with avoiding breakage of cargo would be least inclined to choose which of the following modes of transportation (ignoring tradeoffs)?
rail
When a system is producing goods at takt time, the rate of goods produced exactly equals
rate of customer demand
agile project
recommended for new technologies that require prototypes and might have a high degree of change even late in the project. This helps such technologies to be responsive to competitor actions, to information learned from prototype feedback, and so on.
glocalization
refers to the globalization of a product that is then adapted specifically to the local culture in which it is marketed
process change costs may include
requirements identification and research, product development, and contract sourcing
Sarbanes-Oxley Act of 2002 (SOX)
requires U.S. public companies to establish adequate internal financial reporting and IT controls. For example, an IT audit should reveal that persons who approve purchase orders cannot also receive goods. The audience for a technology audit is upper management, not IT or a specific department.
The process of identifying, analyzing, and addressing an organization's exposure to uncertainty within the supply chain is known as:
risk management.
organizations need two implementation plans
road map (master plan) and set of project plans
Set of project plans
schedules all steps required to achieve the targets for each key performance indicator, sets deadlines, and assigns accountability
Increased customer visibility means:
seeing the transaction from the customer's viewpoint.
A key element of contingency planning for supply chain management that differs from contingency plans for other business functions is that it is necessary to:
share risks among supply chain partners.
Demand for dependent items
should be calculated from the forecast of demand for their parent items
The network configuration of a supply chain:
should be designed to reflect trading partners' capacities.
The value of inventory on the balance sheet is most often based on:
standard costs.
ATA Carnet
stands for Admission Temporaire/Temporary Admission. Carnet convention was adopted for western Europe in 1961 and was intended primarily to apply to commercial samples, professional equipment, and items for presentation at tradeshows and other similar events. Despite their original use for these specific purposes and items, Carnets now cover almost any type of goods, excluding disposable and consumable items, and they are used worldwide.
demonstrated capacity
sum of output for given number of periods / # of periods
An organization wants to understand what supply risks pose a threat to its manufacturing process. It performs an audit of its suppliers and discovers that one of them is running low on raw materials. What type of risk would this cause to the organization's manufacturing process?
supplier lead time
The most productive, cost-effective packaging needs to:
support efficiency, be protective, be labeled, and have low environmental impact.
Standard deviation measures
the amount of variation in actual results from a central tendency (peak of the bell curve) and does not use forecast error as an input but rather assesses the relative level of variability of actual results as a proxy for how much error in a forecast is likely
The impact of seasonality on demand in a fast-food restaurant might be measured in which of the following ways?
time of the year, day of the week, hour of the day
A company analyzing a make-or-buy decision for one of its products should consider:
total cost of ownership.
Perfect order fulfillment is equal to:
total perfect orders divided by the total number of orders.
As measured by millions of tons, which of the following modes of transportation moves the most cargo in the United States?
truck
The Global Compact
two complementary objectives: to encourage companies to incorporate its ten principles into their global business activities and to support the broader goals of the United Nations.
International Maritime Dangerous Goods (IMDG) Code
uniform international code for the transport of dangerous goods by sea, and it covers such matters as packing, container traffic, and stowage, with particular reference to the segregation of incompatible substances.
You are ordering a camping tent through the call center for a recreational equipment manufacturer. The operator notes that for a little more money you could receive significantly more value in another tent model. This is an example of:
up selling
Suppliers are ______ from the manufacturer
upstream
An inventory manager monitors forecast accuracy as the primary key performance indicator (KPI). Management continues to be unhappy with the warehouse inventory and service levels. Which of the following actions should the manager consider first?
use broader KPIs
A company that is changing its business model to that of a lateral supply chain most likely would:
use outsourcing
Spot stocking
used for limited product lines and highly seasonal products that can be centrally stored during most of the year and spot stocked in season at warehouses near the places where they will be purchased and used.
Balance flow
used in repetitive work centers such as assembly lines
predictive analysis
used to determine which replacement parts to keep in stock, which to order in advance of a scheduled maintenance, and which to order only on demand
Operations research
uses a number of tools to find the best number and location of suppliers, manufacturing and assembly facilities, warehouses and distribution centers, and retail locations. The best solution depends on supply chain strategy. Some networks will minimize total supply chain cost, while others will provide best value in terms of the most flexible, the highest quality, or the fastest flow of products through the network.
Associative forecasting (also called casual, correlation, explanatory, or extrinsic)
uses one or more sources of data that can be gathered from internal or external sources as a predictor of something that is presumed to be correlated and therefore can be predicted.
Quality Function Deployment (QFD)
uses precise steps and a methodology such as a "house of quality," which is essentially a comparative spreadsheet that ranks how a product or service stands up to customer wants as well as to what the competition is offering
A primary benefit of an enterprise resources planning (ERP) system to the supply chain is:
visibility to real-time supply chain data.
lean thinking
waste is anything that fails to add value in the eyes of the customer
Which of the following metrics is considered external thus customerfacing?
(A) Perfect order
A ship, which is able to carry 6,000 twenty-foot equivalent unit (TEUs), would maximize its capacity by carrying which of the following containers?
(B) 3,000 40' containers
A marketing initiative increases packaging dimensions for an existing product that remains unchanged. While the larger packaging may increase sales of the product, the impact on sustainability will be that:
(B) transportation capacity will be wasted
Pallet-flow racking is perfect for facilitating
(C) first in, first out (FIFO).
Which of the following functions are associated with a supply-facing warehouse?
(D) Inbound materials and components
An electronic business strategy should
- enable collaboration with the extended supply chain (including integration of customers and suppliers) collaboration allows faster partner integration so firms have continuously reconfigurable relationships at every level
Five phased of Six Sigma
DMAIC: define, measure, analyze, improve and control
Which of the following is the most important result when a company implements customer relationship management?
retention of key customers is increased
ROE calculation
Net income/Avg Owners Equity
What type of demand component does the following figure represent?
Seasonal
a predictable repetitive pattern of demand measured within a year where demand grows and declines. These patterns are calendar related and can appear annually, quarterly, monthly, weekly, daily and/or hourly
Seasonality (seasonal variation)
Other name for PDCA
Shewhart cycle / deming circle
The most critical measure of strategic success is the amount of increase in
return on investment (ROI)
Which of the following tools creates supply chain plans that incorporate long-range product family planning and short-term detailed scheduling?
advanced planning and scheduling
ABC Corporation is implementing a website that connects clothing distributors and retailers with many different garment manufacturers from whom they can buy finished goods. This website would be an example of:
business-to-business commerce
A company sells small household goods through catalogue and internet ordering. It ships the goods to customers around the world from a single distribution center located next to the company headquarters. Approximately 80% of its shipments are domestic. The most appropriate approach to domestic delivery of goods typically would be to:
contract with a package delivery service
Which of the following features typically is required for the sales and operations planning (S&OP) process to be effectively used by an organization?
data integration across multiple functions
Inventory is aggregated by
demand pattern, production process, stage of production flow, value to the organization, product of SKU family or type, and distribution pattern *this is done prior to the implementation to set inventory objectives and policy)
ROE definiton
financial measurement of how successful a company is in creating income for the owners of the organization. A comparison of the ROE with the ROA indicates the effectiveness of financial leverage employed by the firm
Plan in PDCA
first step - a plan to effect improvement is developed
The primary reason for a firm to pursue strategic supply chain activities is to
gain competitive advantage
Lean manufacturing (APICS)
philosophy of production that emphasizes the minimization of the amount of all the resources (including time) used in various activities of the enterprise. It involves identifying and eliminating non-value-adding activities in design, production, supply chain management, and dealing with customers. Lean producers employ teams of multiskilled workers at all levels of the organization and use highly flexible, increasingly automated machines to produce volumes of products in potentially enormous variety. It contains a set of principles and practices to reduce cost throughout the relentless removal of waste and through the simplification of all manufacturing and support processes
PDCA, which refers to a circular model for continuous improvement, is an acronym for
plan, do, check, action
A company that desires to implement a strategy for inventory management first must define which of the following concepts?
products and markets claasifications
Value stream mapping is
provides a way to link reporting requirements, stakeholders from multiple functions, managers and staff, and metrics to sustain a lean initiative across the entire supply chain
Safety stock
quantity of stock planned to be in inventory to protect against fluctuations in demand / supply.
SCEM technologies provide
real time demand sensing and visibility to changing marketplace requirements. utilizing the technology can enable an organization to quickly determine the profitability tradeoffs and compromises in response to unplanned events occuring in the demand channel
ROI APICs Definition
relative measure of financial performance that provides a means for comparing various investments by calculating the profits returned during a specified period of time. In the theory of constraints, is calculated as throughput minus operating expense divided by investment