Exam Questions
business-to-business commerce (B2B)
Business conducted over the internet between businesses.
Which of the following statements about outsourcing customer relationship management (CRM) is true?
CRM vendors may provide seamless customer service.
electronic product codes (EPCs)
Codes that are used with RFID tags to carry information on the product that will support warranty programs.
If you are working in a firm that is in Stage 1 of supply chain management evolution, you should be prepared for:
overly optimistic forecasting
break-bulk
"dividing truckloads, railcars, or containers of homogeneous items into smaller, more appropriate quantities for use."
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.
Which of the following is an objective of production activity control (PAC)?
Minimizing work in process
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
Which of the following is true of bar codes?
Bar codes are often integrated with RFID tags printed as a single label.
Which of the following smoothing constants would yield the same result as a naive forecast?
1
The sum of the demand for an item for the past 12 months is 960 units. The demand in May for the past three years was 92 units, 91 units, and 99 units. What is the seasonal index for May?
1.175
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
The sales and operations plan as a whole provides a statement of company plans for what period?
12 to 18 months or more
Which of the following would be a typical time horizon for sales and operations planning?
12-18 months
According to the ABC system of classifying inventory, the greatest share of revenue will be generated by approximately what percentage of total inventory items?
15%
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?
150 + 220 = 370; 370 - 107 = 263.
What length of time should an organization use for its demand planning horizon at a minimum, following best practices?
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?
2,135 + 1,750 = 3,885; 3,885 - 1,061 = 2,824.
Referring to the table below, calculate a forecast for April using the three-month moving average method. Based on your calculation, which of the following statements correctly relates the forecast to the actual April demand of 22?
20: (21 + 17 + 22)/3 = 60/3 = 20.
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%(total benefit-total cost/total cost)
If there are 5 people on a project team and 4 additional identified stakeholders, how many communication channels are there?
36(9 (9 - 1)/2 = 36)
A supply chain has seven suppliers each with its own warehouse, one manufacturing warehouse, and three distribution centers each serving six retail stores. How many echelons does this supply chain have?
4
Although it depends upon the type of industry, in most cases supply chain costs can total what percentage of a company's revenues?
50%
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(80 x 0.90 x 0.80 = 57.6 standard hours)
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
An organization forecasts demand for a given month to be 148.86 units. Actual demand is 176 units. What is the forecast accuracy expressed as a percentage?
84.6
business process management
A business discipline or function that uses business practices, techniques, and methods to create and improve business processes.
collaborative planning, forecasting, and replenishment (CPFR)
A collaboration process whereby supply chain trading partners can jointly plan key supply chain activities from production and delivery of raw materials to production and delivery of final products to end customers.
environmentally responsible manufacturing
A collection of manufacturing activities that includes design of the product, facility, manufacturing processes, logistics, and supplier relationships that reduce or eliminate environmental waste through innovation and improvements.
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.
Which would be classified as work-in-process inventory?
A completely processed item awaiting inspection
inventory optimization software
A computer application that can find optimal inventory strategies and policies related to customer service and return on investment over several echelons of a supply chain.
What are the three essential elements of a performance measurement system?
A criterion, a standard, and a measure
Which of the following correctly identifies an effect of using moving average forecasts?
A moving average forecast smooths out random variations.
Global Reporting Initiative (GRI)
A network-based organization that pioneered the world's most widely used sustainability reporting framework.
environmentally responsible business
A firm that operates in such a way as to minimize detrimental impacts on society. See: green manufacturing, green supply chain.
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.
blanket purchase order
A long-term commitment to a supplier for material against which short-term releases will be generated to satisfy requirements. Often [these] cover only one item with predetermined delivery dates.
Which of the following scenarios shows proper application of the principles of communicating demand?
A manager thanks a marketing person for properly communicating the results of an underperforming advertising campaign on a timely basis, even though it was bad news.
customer relationship management (CRM)
A marketing philosophy based on putting the customer first. Involves the collection and analysis of information designed for sales and marketing decision support (in contrast to enterprise resources planning information) to understand and support existing and potential customer needs.
customer service ratio
A measure of delivery performance of finished goods or other cargo, usually expressed as a percentage.
fill rate
A measure of delivery performance of finished goods or other cargo, usually expressed as a percentage. In a make-to-stock company, this percentage usually represents the number of items or dollars (on one or more customer orders) that were shipped on schedule for a specific time period, compared to the total that were supposed to be shipped in that time period.
kanban
A method of just-in-time production that uses standard containers or lot sizes with a single card attached to each.
information system architecture
A model of how the organization operates regarding information. The model considers four factors: (1) organizational functions; (2) communication of coordination requirements; (3) data modeling needs; and (4) management and control structures.
continuous replenishment
A process by which a supplier is notified daily of actual sales or warehouse shipments and commits to replenishing these sales (for example, by size or color) without stockouts and without receiving replenishment orders. The result is a lowering of associated costs and an improvement in inventory turnover. See: rapid replenishment, vendor-managed inventory.
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.
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.
assemble-to-order (ATO)
A production environment where a good or service can be assembled after receipt of a customer's order.
buffer
A quantity of materials awaiting further processing. It can refer to raw materials, semifinished stores or hold points, or a work backlog that is purposely maintained behind a work center.
active tag
A radio frequency identification tag that broadcasts information and contains its own power source.
data warehouse
A repository of data that has been specially prepared to support decision-making applications. Syn: decision-support data. See: information data warehouse.
Which is an example of holding inventory in anticipation of future demand?
A retailer orders inventory based on what marketing thinks will be sold.
ISO 14000 Series Standards
A series of generic environmental management standards, developed by the International Organization for Standardization, that provide structure and systems for managing environmental compliance with legislative and regulatory requirements and affect every aspect of a company's environmental operations.
incoterms®
A series of pre-defined commercial terms published by the International Chamber of Commerce relating to international commercial law. These terms do not cover property rights.
When considering options for developing or buying enterprise resources planning (ERP) software, a firm should be most concerned to select software that provides which of the following benefits?
Alignment between the firm's strategy and operations
define, measure, analyze, improve, control (DMAIC) process
A six sigma improvement process composed of five stages: (1) Determine the nature of the problem. (2) Measure existing performance and commence recording data and facts that offer information about the underlying causes of the problem. (3) Study the information to determine the root causes of the problem. (4) Improve the process by effecting solutions to the problem. (5) Monitor the process until the solutions become ingrained.
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.
global strategy
A strategy that focuses on improving worldwide performance through the sales and marketing of common goods and services with minimum product variation by country.
Technically speaking, which of the following combinations of companies is sufficient to constitute a supply chain?
A supplier, a nucleus firm, and a customer
automatic identification system (AIS)
A system that can use various means, including bar code scanning and radio frequencies, to sense and load data in a computer.
kaizen event
A time-boxed set of activities carried out by the cell team during the week of cell implementation. [It] is an implementation arm of a lean manufacturing program. See: kaizen blitz.
Which of the following is not true of e-business strategy?
A well-designed e-business strategy should be able to bring a company directly from Stage 2 to Stage 4 of supply chain development
Cycle counting is usually paired with which of the following to minimize the total cost of inventory shrinkage?
ABC inventory classification
Understanding process interdependencies and responsibility for each substep and identifying bottlenecks will provide which supply chain ability?
Ability to streamline operations
Which part of a sender-receiver communication indicates that a message was received but doesn't necessarily mean that it was understood?
Acknowledge
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.
What is the most important benefit of supply chain event management (SCEM) software?
Active visibility providing knowledge of existing problems
Which of the following could reduce the likelihood of operations managers ignoring the consensus plan agreed to in a sales and operations planning (S&OP) meeting and following their own plans?
Actively listen to the operations managers' opinions and issues.
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
anticipation inventories
Additional inventory above basic pipeline stock to cover projected trends of increasing sales, planned sales promotion programs, seasonal fluctuations, plant shutdowns, and vacations.
Which of the following could best relieve some of the pressure from the bottlenecks that exist in different parts of each of an organization's multiple production facilities?
Advanced planning and scheduling (APS)
Which of the following will be most likely to promote success in a company opening an online store in addition to its retail locations?
Advertise that online products can be returned at the stores.
A study indicates that a company's e-business area that needs the most development is portals to provide manual and automated search features by user role as well as broker intermediaries to form a larger community of users. In which of the following layers of e-business are these changes located?
Aggregation
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
An organization is conducting warehouse capacity forecasting. Average inventory for various types of 1 cubic meter generators (which use 1 square meter of floor space each) is expected to be 600,000 units. The factor for non-storage space requirements is 3. There are 5 levels of vertical storage available for these units. If the warehouse holds only these types of inventory, what is the square meter requirement estimate for this warehouse?
All generators take up 1 square meter of floor space. 1 square meter each multiplied by 600,000 units is 600,000 square meters. Dividing this by 5 (for the vertical levels) equals 120,000 square meters. Multiplying 120,000 by 3 (for the additional space requirements) equals 360,000 square meters.
The sales department's involvement with product management includes which of the following phases of the product's life cycle?
All phases, from conception through withdrawal
For which of the following items should demand be calculated rather than forecast?
All steering wheels for new Chevrolet Cruzes
Which of the following descriptions applies most accurately to a quick response program (QRP)?
Basic type of collaboration that involves the sharing of point-of-sale (POS) information
cost of goods sold (COGS)
An accounting classification useful for determining the amount of direct materials, direct labor, and allocated overhead associated with the products sold during a given period of time. See: cost of sales.
joint venture
An agreement between two or more firms to risk equity capital to attempt a specific business objective.
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.
cash-to-cash cycle time
An indicator of how efficiently a company manages its assets to improve cash flow.
ISO 26000
An international standard adopted by the International Organization for Standardization to assist organizations in contributing to sustainable development beyond legal compliance through a common understanding of social responsibility.
Globally Harmonized System of Classification and Labelling of Chemicals (GHS)
An international standard, created by the United Nations Economic Commission for Europe (UNECE), for classifying chemicals according to their health, physical, and environmental hazards.
horizontal marketplace
An online marketplace used by buyers and sellers from multiple industries. This marketplace lowers prices by lowering transaction costs.
consortia trade exchanges (CTX)
An online marketplace, usually owned by a third party, that allows members to trade with each other. Such sites lower members' search costs and enable lower prices for the buyer.
For product development, which is considered to be value-added?
An unnecessary handle that most customers say boosts confidence
What does the economic order quantity (EOQ) model take into account in its calculation?
Annual carrying cost
An organization needs to order a type of teddy bear nine months in advance of the holiday season and bases the quantity partly on the consumer confidence index. What sort of inventory is this?
Anticipation inventory
When an enterprise buys new technology, which of the following selection criteria should be primary?
Appropriateness to supply chain strategy
Which of the following should be the primary selection criterion when an enterprise buys new technology?
Appropriateness to supply chain strategy
How can contract sourcing be categorized?
As a process change cost
What is a good way to brand the supply chain management function within an organization's overall revenue model?
As a value-added service
Which of the following is not a true statement about the logistics value proposition?
As long as the customer is satisfied with the service, the cost is not critical.
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 sometimes meets resistance from distribution centers because of the increased demands for skills training and capacity expansion?
Assemble-to-order
Basing a demand forecast for major kitchen appliances on housing start data is an example of which of the following?
Associative forecasting
Which of the following warehousing functions is most like spot stocking?
Assortment
Which of the following was a drawback in the early versions of material requirements planning (MRP) software?
Assumed infinite capacity
If each step of a supply chain adds value, what else can the customer expect to see aside from utility?
Attractiveness, price, and availability
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
Which of the following is a riderless materials-handling device that moves along optical tape or magnetic wire in the floor?
Automated guided vehicle system (AGVS)
A warehouse for high-end luxury goods wants a storage handling system that will reduce the risk of loss to pilferage to the maximum extent possible. Which system would work best to achieve that goal?
Automated storage and retrieval system
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
A company wants to improve its customer service. Which of the following should it focus on to achieve that goal?
Availability
In general, which is the most important consideration in locating a warehouse?
Availability of services
Which is the most significant factor when considering the location of warehouses?
Availability of services needed
What are the attributes of basic customer service?
Availability, operational performance, and customer satisfaction
Where would you find the types of components in a clock radio?
Bill of material
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)
A hard drive manufacturer produces hard drives for dependent and independent demand sales. How should the organization categorize these hard drives once they pass final inspection?
Both dependent and independent demand hard drives are finished goods inventory.
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
What materials-handling system should be employed by a warehouse that deals with extremely heavy objects and wishes to use automation for labor reduction and safety reasons?
Bridge and wagon cranes
Which of the following methods is most appropriate for lifting very heavy items while causing minimal disruption to floor activities in the area?
Bridge crane
What is an ongoing cost associated with an IT project?
Bug fixes
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
Which of the following internet-enabled business models is most likely to get market investment?
Business models intending to use the internet as one of many sales channels and owning some of their own physical distribution means
Which input to capacity planning may specify long-term capacity goals that require capital investments?
Business plan
Collecting information through surveys, games, or prizes is an example of which of the following?
Business-to-consumer (B2C)
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
How can an additional echelon of distribution centers in the supply chain help lower transportation costs?
By acting as break-bulk warehouses
An organization finds itself overextended, attempting to create, market, and sell products well outside its areas of expertise, and is beginning to suffer financially as a result. How can subcontracting certain processes benefit the organization as it attempts to tackle the source of the problem?
By allowing it to focus on core competencies
How can a supply chain best demonstrate social value?
By avoiding or reducing negative environmental effects
How is the write-off value for inventory calculated?
By following strict accounting guidelines
What is a common method of aggregating products for demand planning purposes?
By life cycle stage
Which of the following is part of a good policy on data capture?
Capturing partial data is better than capturing no data.
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
Pilferage contributes to which of the following costs?
Carrying costs
Which inventory costs are variable costs that increase as the level of inventory increases?
Carrying costs
What is the most important thing for an organization to establish before it attempts to break into a market with many competitors or when the market conditions are considered challenging due to the economy?
Clear competitive advantage
A team manager leads his team on a project to identify and implement several process improvements. The project suffers as the manager personally oversees the efforts of each team member, slowing progress to a crawl. What should the manager have done to ensure a more successful project?
Clearly delegate responsibility.
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.
An organization wants to reduce physical inventory via the use of information technology, keeping inventory in transit instead of remaining in warehouses. What should the organization do when handling inventory in this manner?
Closely track the inventory with GPS.
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
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.
An organization has many part-time employees who can be sent home if orders are sluggish. It also has standing contracts for busy periods with external producers. Which of the following elements of demand management does this organization's strategy focus on?
Communicating demand
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 managment would be the best for this retailer?
Communicating demand
An organization makes several adjustments to the supply chain to be more sustainable and use fewer natural resources from the area. The financial impacts of these changes are negligible. From a values perspective, which supply chain stakeholders would these changes best align with?
Communities
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
Proactively managing risk rather than being reactive provides which of these benefits to the organization?
Competitive advantage
Which of the following are benefits of a vertical supply chain?
Complete control and visibility of operations
A project manager is working sequentially on the plans for each project management Knowledge Area. What should he do after the scope, time, cost, quality, human resources, and other Knowledge Area plans have each received a once-through?
Complete the schedule and budget to reflect the impact of the later Knowledge Area plans.
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 offers streamlined production and lower purchasing costs with a possible tradeoff against reduced design flexibility and lower quality?
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 third-party logistics provider (3PL) contract clauses need to be robust because 3PLs will likely see details on supplier and manufacturer costs?
Confidentiality clauses
Transportation management systems (TMS) include load tendering and delivery scheduling. These functions can automatically schedule shipments with carriers, provided the location has which of the following?
Configuration for advance shipment notifications (ASNs)
design for the environment (DFE)
Considering health, safety, and environmental aspects of a product during the design and development phase of product development.
An organization needs to maintain slow-moving stock on site, but it does not want to incur inventory carrying costs and wants to retain control of display of the inventory. What would be appropriate in this situation?
Consignment without VMI
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.
Which of the following creates online catalogs with metadata to automate how content is presented so parties see only items specific to their strategic needs, restrictions, and perspective?
Content management e-commerce
An organization is purchasing new software and is concerned about the potential for the total cost of ownership to increase dramatically as difficult-to-implement software upgrades and expensive training are required over time. What can the organization do to mitigate that risk?
Control excessive customization
joint replenishment
Coordinating the lot sizing and order release decision for related items and treating them as a family of items.
Effective logistics strategy depends upon which of the following?
Coordination of transportation, warehousing, and packaging to create maximum value
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 capabilities
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?
Cost of current logistics functions Potential savings in time Improved quality of customer service
Which of the following is true regarding unauthorized persons creating counterfeit EPC Gen 2 RFID tags with a manufacturer's code and product SKUs (stock keeping units)?
Counterfeit tags can be made, but the EPCglobal Network's online registry will identify a mismatch and detect the fraud.
Which of the following does not describe product design for maximum supply chain flexibility?
Create many product variations.
Which of the following could best help promote organizational adoption of new design and development collaboration efforts?
Create simple graphics that make the goals easy to understand at a glance.
The tasks of a cross-organizational team involved in supply chain integration include which of the following?
Creating a plan for combining best practices across the network
Which of the following is typically a function of a warehouse management system (WMS)?
Creating put-away algorithms
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 of the following forms of interface devices would be best for a small firm that wants to make a connection to a second small firm where both have highly customized software?
Custom linkage
What is the business strategy of an organization that develops a deep understanding of customer needs and then provides fewer options to select from than the competition?
Customer experience differentiation
Which supply chain flow travels through the organization via orders, sales activity, and forecasts?
Customer information
Which of the following should be avoided in an enterprise resources planning (ERP) initiative even if the company has the capital to perform them all?
Customizing the ERP system to match the company's best practices
An organization sees demand for a luxury item grow over a three-year period that occurs during a period of national economic recovery following a recession. What is this an example of?
Cycles
A customer relationship management (CRM) program is which of the following?
Cyclical
Capacity control is most closely related to which of the following activities?
Daily input/output
Which of the following will filter the output of an analysis into role-specific information so that a decision support system (DSS) can make sense of voluminous data?
Dashboard
Which of the following is true of data aggregation?
Data aggregation for customers can be by relatively equal demand, meaning that some zones will be larger than others.
Which of the following analytical tools would be able to find hidden patterns in the data that are collected from each of a company's retail locations?
Data mining
Which of the following forecast techniques relies upon an expert panel that responds to questionnaires and never meets face to face?
Delphi method
From an IT perspective, which part of the supply chain exists to collect, analyze, and disseminate market intelligence?
Demand channel
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 true of demand elasticity over time?
Demand is more inelastic over the short term and more elastic over the long term
Which role is responsible for performing analytical work on data and the demand plan?
Demand manager
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
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 organization's senior leadership has asked each department head to formally sign off on an official date for several retail store openings. All department heads have signed off, even though some know that everything would need to work perfectly to make that date and that there are some major cultural issues in the way at some locations. What does this organization need to do to get this critical information to decision makers?
Design a way for people to provide anonymous information on strategic gaps.
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 of the following design philosophies is most responsible for furniture that comes in kit form to be assembled by the retail customer at home?
Design for logistics
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
foreign/free trade zone (FTZ)
Designated areas within a country that are considered to be outside the country. Material in the zone is not subject to duties and taxes until the material is moved outside the zone for consumption.
Which of the following is not a goal of design for manufacture and assembly (DFMA)?
Designing components with very tight tolerances
environmentally sensitive engineering
Designing with consideration of how a product or its packaging will ultimately be disposed.
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.
What can an organization do if a need exists for a service for customers, the organization does not have it as a core competency, and it does not want to outsource the activity?
Develop it as a competency.
An organization wanting to create supply chain resilence 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
Which of the following actions would best aid a supply chain in becoming demand-driven?
Developing agility for more frequent changeovers or staffing or process switching
Which of the following best describes profit margin?
Difference between sales and cost of goods sold
Choice of a warehouse management system (WMS) should hinge on which of the following areas?
Directed picking, replenishment, and put-away
Which formula determines how long it will take to recoup an initial investment or break even?
Discounted payback period
Which is a key reason to take a hard look at organizational and supply chain strategy even if it is currently very profitable?
Disruptive technology
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.
Which of the following correctly indicates a feature of process-oriented middleware?
Does not require new code for each system to be integrated
What can you learn from watching a person's face for nonverbal cues as you are conveying important information?
Does the person understand and agree or disagree?
A company with multiple versions of the same enterprise resources planning (ERP) system and also a second ERP system due to a merger has experienced data quality and formatting problems, cannot leverage purchasing contracts effectively, and has no common metrics for management control purposes. Which of the following would be the best solution for this company's problems?
Don't replace any versions or vendors but use internet-based interface devices.
When are determinations about the delivery of components for operations made?
During the material requirements planning (MRP) process
Which of the following software systems has the power to tie together supply chain partners?
ERP
Which of the following is the primary demand generation task for a surgical device manufacturer developing a new product to compete against an existing product?
Educating doctors
Which project management Process Group is used to collect data, and which is used to interpret data?
Executing is used to gather data; Monitoring and Controlling is used to interpret data.
The manufacturer of a formerly popular kitchen appliance has decided to redesign and rebrand the product in an effort to reach new, younger consumers. Which of the following functions would the marketing department be primarily responsible for in this effort?
Educating retailers on the product rebranding
At a time when manufacturers' orders for durable goods are declining and there is an inverted yield curve, what would be the best sustainability initiative?
Effectively reducing product packaging
Which of the following could be an example of ineffective cost cutting?
Eliminating one or more storage facilities to save warehousing costs without reviewing the impact on transportation costs
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
What refers to conditions outside the control of a project team that influence or constrain the project?
Enterprise environmental factors
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
Which of the following would not be an acceptable measurement of output for an operations plan for use by operations managers?
Euros
What step of the sales and operations planning (S&OP) process comes after evaluating demand levels?
Evaluating supply capability
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
A company benchmarks its competitor as having unattended internet trading and capable-to-promise (CTP). What stage of supply chain development has this competitor reached?
Extended enterprise
Why is it important to study enterprise environmental factors at the start of a project?
External events may make the project infeasible at this time.
In a service industry such as an electrical utility supply chain, which of the following is a Tier 1 supplier?
Facility maintenance
A manufacturer creates a new supply plan that is aligned with the corporate strategy, mission, and culture. The manufacturer makes decisions on using centralized vs. autonomous sourcing and plans for future growth. However, soon after the plan is implemented, unforeseen issues begin causing stockouts of crucial supplies, disrupting the manufacturing process and causing massive losses. What is the likely cause of this failure?
Failure to conduct a risk assessment
An organization is looking to use quality function deployment (QFD) when designing products. It starts by using group decision making to ensure that design conflicts are resolved with the customer in mind, and it embraces the methodology wholeheartedly. However, the resulting designs are not meeting customer requirements. What is the likely cause of this shortcoming?
Failure to translate customer segment demand data and voice of the customer information into design requirements
Which of the following is a typical advantage of using a best-of-breed application instead of an already integrated enterprise resources planning (ERP) module?
Faster to market with innovative functions and services
What can get in the way of a message being received or properly understood by the intended recipient?
Filters or noise
An organization is using a consensus demand plan that has been integrated with the supply plans. Which other set of plans does the demand plan need to be integrated with?
Finance plans
Revenues, profit margin, market share, expenses, image, and reputation are values for which stakeholder group?
Firms in the supply chain
What is an essential trait for organizations with global supply chains?
Flexibility to withstand disruptions
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
demand forecasting
Forecasting the demand for a particular good, component, or service.
Which is the most cost-effective example of Monitoring and Controlling in project management?
Performing process audits at the start of Executing
Which is designed especially for use with pallets?
Forklift
Which of the following pieces of warehouse equipment provides maximum flexibility in the movement, placement, and retrieval of pallets?
Forklift truck
A company executive tells an amusing story to the audience that helps make the organization's new mission and vision memorable. What sort of communication is this?
Formal
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
configuration management system
Formal procedures to identify and document the physical characteristics of a product or project, control changes, and support an audit to verify conformance.
A major organization decides to greatly increase buying and selling activities over the internet, which should generate a high level of sales and traffic. Which internet structure layer must be invested in to support this effort?
Foundation level
In which stage of organizational design development might an organization start having at least one business process that requires collaboration from another corporation even if this is just for one product line or component? First: multiple dysfunction
Fourth: extended enterprise
Which of the following is true about the supply chain adding value for customers and stakeholders?
From their perspective, it must increase the product's or service's utility.
Other than competitive priorities, what does the organizational strategy feed to the supply chain strategy to ensure alignment?
Future direction, such as new products
A nucleus firm in the banking industry uses independent brokers to market new stock issues and has been successful in this channel. After investing some profits in the firm itself, they choose to reward their stockholders by distributing all remaining profits in a special dividend, even though independent brokers are prohibited from owning these shares. Which of the following has this firm forgotten to account for in its creation of financial value?
Gains must be fairly distributed among stakeholder
What must a retailer do to ensure the successful use of continuous replenishment?
Generate point-of-sale data and share it with the supplier daily.
A stock keeping unit (SKU) in a distribution system can identify which of the following?
Geographic location
Which of the following is a primary goal of companies at higher stages of development regarding the acquisition and use of data?
Getting access to data outside the company
How can gathering stakeholder communication requirements promote achieving project objectives?
Gives a better understanding of stakeholders' perspectives
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.
What global force that impacts virtually every supply chain is caused by the increasing power of speed and information available to both consumers and competitors?
Greater market volatility
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
A demand forecast determined by a panel of all the salespeople in an organization may reach an exaggerated, false conclusion due to which of the following situations?
Groupthink effect
What is prompting many countries to adopt the International Financial Reporting Standards (IFRS)?
Growth in international shareholders and trade
A manufacturer has a particularly productive work center that has started to generate outputs at a higher level than the packaging work center that follows it is able to handle. What risk does the manufacturer face as a result?
High inventories on hand or the waste of labor hours
Which of the following is likely when a retailer of children's toys uses conventional forecasting to anticipate demand (as does their wholesaler) and adds some safety stock to orders both to smooth out the inevitable variations from the forecast and to replenish supplies after a promotion (not communicated to their suppliers) that the retailer plans to have to liquidate excess inventory?
High inventory holding costs for the retailer and high variability of demand for the wholesaler
Which of the following conditions is a potential drawback of lot-for-lot replenishment when items must be ordered frequently?
High setup costs
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
Which of the following would be the most effective method of keeping the demand plan from being consistently biased toward overstated demand?
Hold the demand side of the organization accountable for its request for product.
What is an essential component of an organization's business model?
How it expects to make a profit based on its operations
Zenon International has an organizational strategy that specifies how it will function in its environment, how it will satisfy customers, how it will grow, how it will compete, and how it will achieve its financial objectives. According to the APICS definition of strategy, what elements are missing?
How it will manage the organization and develop business capabilities
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.
Item A is constructed over one week using parts B and C. Part B has a lead time of two weeks, and part C has a lead time of four weeks. A week after part C was ordered, the scheduler discovers that part B will have an additional week of lead time. Which of the following should the scheduler do?
Immediately order part B and issue a net change so no other rescheduling is needed.
An organization is approached by a partner organization that suggests that the two organizations work to integrate software. The first organization is concerned about data protection and is hesitant to agree. Which solution would help allieviate this organization's concerns?
Implement process-oriented middleware
Which might be a positive effect of adding more warehouses to a system?
Improved customer service
What is an example of a tangible benefit to IT investment?
Improved scheduling
cycle time
In industrial engineering, the time between the completion of two discrete units of production.
economic value added
In managerial accounting, the net operating profit earned above the cost of capital for a profit center.
available-to-promise (ATP)
In operations, the uncommitted portion of a company's inventory and planned production maintained in the master schedule to support customer-order promising.
Offering the choice of either waiting in line at a grocery store or using a self-checkout kiosk is designed to do which of the following?
Influence demand. Manage and prioritize demand
Some organizations use safety lead time to address lead time variations in which of the following?
In-transit inventory
Which of the following conditions contributes to the supply chain phenomenon known as the bullwhip effect?
Inaccurate demand forecasting
Which of the following represents a sound approach to tracking data to use in demand forecasting?
Include all products in a family.
business intelligence
Information collected by an organization on customers, competitors, products or services, and processes. [It] provides organizational data in such a way that the organizational knowledge filters can easily associate with this data and turn it into information for the organization.
Which information technology steps can translate a policy for retailer-specific delayed packaging for generic products into a functioning practice?
Information infrastructure design
Which of the following is a risk of ordering more inventory than required to fill forecasted demand?
Increased obsolescence
A company has reached Stage 4 of supply chain development, extended enterprise, by engaging in extended supply chain global e-business. Which of the following is likely true of this company from this point forward compared to where they were a few years ago?
Increased outbound transportation costs
An organization is preparing to transition from a wholesale distribution model to an e-commerce-focused model with direct sales to customers in smaller quantities. What likely outcome should the organization prepare for?
Increased outbound transportation costs
When a logistics manager removes a complete tier from the distribution chain to reduce overall expenses, there may be a tradeoff for expenses in which of the following areas?
Increased transportation costs for extra miles of carriage
You're the supply chain manager responsible for the overall performance of the chain. Which of the following is the most desirable?
Increased velocity, reduced variability, increased visibility
Which of the following would be the least likely reason to implement radio frequency identification (RFID) at a company?
Increasing internal inventory accuracy in a make-to-order, low stock environment
Assuming a set of normal business constraints such as a need to constrain costs and provide a positive return on investments, which data capture policy would best allow an organization to more quickly translate data into increased opportunities for profit?
Incrementally improving data capture rather than pursuing system reengineering
What are the Process Groups, in the correct order, as defined in the PMBOK® Guide?
Initiating, Planning, Executing, Monitoring and Controlling, Closing
In today's world, supply chains can be described as moving toward which characteristics?
Interdependence, collaboration, and playing a strategic role
What sort of technology will enable even a smaller firm with great brand equity to become the channel master?
Internet-enabled supply chain with an efficient technology model
Which of the following changes tend to occur as a result of adding warehouses to a logistics network (assuming no other changes)?
Inventory increases, while the ratio of storage space to total warehouse square feet decreases.
end-of-life-inventory
Inventory kept on hand to satisfy demand for products that are no longer being manufactured.
distribution inventory
Inventory, usually spare parts and finished goods, located in the distribution system (e.g., in warehouses or in transit between warehouses and the consumer).
An organization is having issues with the bullwhip effect. How can it best reduce instances of the bullwhip effect on an ongoing basis without increasing stockouts?
Invest in technology to increase vertical collaboration and visibility in the supply chain.
What is the key question to ask when setting a customer service strategy?
Is the cost to achieve the level of service justified?
What can be the effect of placing an order for replenishment inventory early?
It can create the potential for a very large overstock.
How can a company best introduce a brand-new product type that has no sales history and ensure its availability?
It can send product directly from production to central distribution centers that ship only per actual customer orders.
Which of the following statements about product design for service is true?
It may compete with the design goal of minimizing development costs.
Which of the following would tend to reduce the amount of safety stock needed at a particular location?
Less frequent ordering
Which of the following is true of (SOA)?
It uses extensible, universally available, descriptive standards.
Your organization has been working diligently on improving the customer service scores of its logistics services in order to reach a 100% service level. Is that a good strategy?
It's not a good strategy, because the company could incur additional expenses that are counterproductive.
What is the definition of inventory?
Items to support production, supporting activities, and customer service
Which of the following conditions is generally associated with lot-for-lot replenishment?
Just-in-Time (JIT) manufacturing
Which of the following is a supply chain strategy based on the business strategy of product differentiation?
Keeping minimal inventory of the base model and expanding inventory of options
A demand plan dashboard for use in the demand review meeting of the sales and operations planning (S&OP) process should include which of the following information?
Key events, risks, and notes on where demand-side departments disagree
Which method of inventory valuation is banned by the International Financial Reporting Standards (IFRS)?
LIFO
If a restaurant chain performs hourly forecasting, which of the following will likely be reduced, assuming that there is acceptable forecast error?
Labor costs
When deciding whether to acquire a component from a domestic or foreign source, which of the following comparisons provides the most accurate assessment of their relative value?
Landed cost of each source
Dropping the price of a popular new technological gadget to match the price of a substitute product just coming out will likely have what effect?
Large increase in demand
Which basic operations strategy assumes the risk of stockouts in exchange for protection against high costs for overtime and capacity maximization?
Level production
Which of the following is an advantage of using enterprise resources planning (ERP) vendor offerings versus best-of-breed vendor offerings?
Leveraged ownership of enterprise data
How should organizations balance sustainability customer requirements against product cost?
Limit sustainability costs to allow still meeting a price customers will pay.
Which of the following should be done regarding inventory policy if a snack chip manufacturer adds a new type of snack chip to its line of offerings?
Link the item's policy to the production line product family. Link the policy to the organization's other product families stocked on the same shelves.
A warehouse regularly handles products with strict expiration dates, and it wants a materials-handling system that will help with product rotation to avoid spoilage. Which system would work best to achieve that goal?
Live racks-loaded from the rear and use gravity to move product to the front of the rack, where picking occurs
What is the correct order of steps for integrating the supply chain? (Note that these steps do not reflect the entire process.)
Locate in the right countries and geographic locations; develop an effective export-import strategy; select warehouse locations; select transportation modes and carriers,Select the right number of partners. Develop state-of-the-art information systems.
Which supply chain strategy could provide the dual benefits of better sustainability and faster delivery to customers?
Locating final assembly closer to key customers
A business plan would typically include which of the following?
Long-term guidance for developing tactical production plans
Which would be the fastest way for a fashion clothing company to get to market while also minimizing demand mismatch risks?
Look at street trends and buy appropriate fabrics before the runway season.
Which of the following would best reveal a situation in which salespersons changed demand plan numbers to deliberately understate demand just to make their next quarter's sales goals easier to meet?
Look at the assumptions to see if they support changes in the demand plan
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 of the following types of inventory costs could be overlooked when setting safety stock levels because they are difficult to quantify even though they are significant costs?
Lost sale costs
A retailer opens a new store, focusing on maximizing available square footage for sales. As such, the retail location does not have a large back room and cannot hold a large amount of backstock inventory. What is the most appropriate ordering system for this retail location?
Lot-for-lot
An efficiency-focused supply chain strives for which of the following?
Low forecasting errors, limited product variety, and a long product life cycle
What was Gap Inc. able to achieve with its supply chain strategy for its stores?
Lower-scale economies for purchasing and production
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
Which type of inventory is a period expense and thus must be expensed on the income statement in the period in which it was purchased rather than being listed on the balance sheet?
Maintenance/repair/operations (MRO)
Organizations that have low sales volume and serve markets with more volatile demand and uncertain forecasting tend to focus on what type of manufacturing strategy?
Make-to-order
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
A peach orchard in Colorado decides to engage in business-to-business sales for the first time, looking to stock fresh peaches in a small set of independent grocers around the state. Which fulfillment channel is most appropriate for the orchard to use?
Manufacturer storage with direct delivery
A small dairy company is selecting an order fulfillment channel to handle milk deliveries to local retailers. Which method is most applicable?
Manufacturer storage with direct delivery
Rough-cut capacity planning at the end-item level is part of which process?
Preparation of the master production schedule
An electric car company is operated on a make-to-order system, giving customers the ability to customize even minor details when purchasing from an independent dealer. The vehicle is then delivered to the customer from the manufacturer. Which fulfillment channel is most appropriate for the car company?
Manufacturer storage with drop ship
Which order fulfillment pattern can be described as one where customers can order either from a retailer or a distributor and orders are fulfilled directly from the manufacturer to the customer?
Manufacturer storage with drop ship
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
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
Which of the following could be subject to alteration as the result of decisions made in an executive sales and operations planning (S&OP) meeting?
Marketing plans
What is the focus of strategic and business planning?
Marshalling resources and determining actions to support the organizational mission and goals
A motorcycle manufacturer redesigns a line of bikes to allow customers to put together a variety of gas tank styles, fenders, motors, and wheels to create models for different purposes. This exemplifies which of the following?
Mass customization
What is a major source of data for the material requirements plan?
Master production schedule
Which of the following is an input to the material requirements plan (MRP)?
Master production schedule
What is the plan that provides, in effect, a contractual agreement ensuring salespeople that they can make delivery promises?
Master production schedule (MPS)
A salesperson needs to expedite an order, but doing so will require alteration of the production of items inside a planning time fence. With whom would the salesperson negotiate this change?
Master scheduler
Which of the following processes develops the master production schedule based on demand and inventory levels?
Master scheduling
Where in the planning process does the capacity requirements planning process occur?
Material requirements planning
Which of the following processes results in production numbers driven by dependent demand?
Material requirements planning
Which areas does operations research rely upon to help with network modeling?
Mathematics, statistics, and computing
What is one of the tradeoffs of focusing on transportation and storage when designing for logistics?
Maximizing items on a pallet may cause issues with slow-moving goods for retailers.
What should supply plans do?
Measure costs and benefits over a base period plus costs to grow capacity over a long horizon.
A vertically integrated enterprise can grow by doing which of the following?
Merging with or acquiring other companies
Which of the following is true of service-oriented architecture (SOA)?
Messages must be descriptive rather than prescriptive.
Which ordering system would be most appropriate for a manufacturer that requires the flexibility to order across varying time periods but has limited storage space and a firm maximum for on-hand inventory?
Min-max system
A power supply that can be used with different end cables in countries with different electrical infrastructures is an example of which of the following design strategies?
Modular design
An organization is undertaking a total cost of ownership study of the supply chain, looking to reduce costs. When looking at landed costs, which cost may represent an area to generate cost savings?
Monitoring and control costs
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?
Monitoring and control costs,Transportation costs
The sales and operations plan (S&OP) includes which of the following?
Monthly production figures by product family
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
Which of the following is a problem associated with having multiple versions/vendors of enterprise resources planning (ERP) systems?
Multiple incompatible sources for the same data
Which is the best supply chain for an organization that has some small expensive items and some bulky inexpensive items?
Multiple supply chains
An organization's two distribution centers have planned order releases of 100 and 200 units respectively. Its central factory has a projected available balance of 100 units and scheduled receipts of 200 units and keeps 100 units of safety stock. In distribution requirements planning, what is the net requirement for the central factory for a given week?
Net Requirement = (Gross Requirements + Safety Stock) - (Projected Available Balance + Scheduled Receipts) = [(100 units + 200 units) + (100 units)] - (100 units + 200 units) = 400 units - 300 units = 100 units
A local area network (LAN) exists at which of the following IT infrastructure levels?
Network level
Can a highly efficient cross-docking system achieve the goal of no inventory ever at rest?
No, due to inherent variability in demand.
Which of the following must champion the relationships to be formed across an extended supply chain?
Nucleus firm
cross-selling.
Occurs when customers buy additional products or services after the initial purchase
What should a project manager do if a project near completion is indefinitely postponed?
Officially close the project and release the team.
interplant demand
One plant's need for a part or product that is produced by another plant or division within the same organization.
A manufacturer is preparing to release a new product to the market in four months, just before the holiday season that ends three months later. In test releases, the product has shown to be extraordinarily popular, and the organization is projecting sales to grow at a pace that greatly outstrips production capacity as it currently stands. It takes four months to set up a new facility for production of this product. What capacity growth staging strategy would be best if the organization wants to ensure that it can meet demand for this holiday season?
One-step lead strategy
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
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
Which inventory order system places orders at varying times based on the average demand during the lead time?
Order point system(In an order point system, the time between replenishment orders is not fixed but varies based on the actual demand during the reorder cycle.)
Lot-for-lot replenishment is most appropriate for which types of orders?
Orders in a Just-in-Time (JIT) shop
Which of the following describes mass marketing?
Organizations advertise based on the shared values of multiple segments.
What is a drawback to using U.S. GAAP, which is country-specific, as opposed to using the International Financial Reporting Standards?
Organizations may find legal ways to be less transparent.
Which of the following is a best practice for managing and prioritizing demand?
Organizations should retain demand management and prioritization power solely within the demand side of the organization.
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 increase up to a certain point, and then decrease.
Two independent sales distributors want to pursue distributor integration in order to gain flexibility without needing to carry excess stock. What is the most likely obstacle to this arrangement?
Ownership of inventory
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
Which is a best practice for a person fulfilling a project manager role?
Project managers admit to mistakes and see them as learning opportunities.
One of a tire producer's suppliers is a natural rubber producer whose products are becoming subject to more demand even as the product becomes more rare. Another of their suppliers is a tire recycler, who provides the tire producer with old tires. Which of the following collaborative intensities would be appropriate for these partners?
Partnership or higher for the natural rubber producer; buy on the market for the tire recycler
Which of the following is true of radio frequency identification (RFID)?
Passive RFID tags do not contain their own power source.
Which is a good way to optimize the organization of storage locations?
Perform a velocity analysis of warehouse space and relocate items as needed.
A company that sells spare parts for cash registers has multiple inventory inaccuracies, multiple names for parts in their systems, and redundant products. Which of the following are the best first steps to help the company improve these issues?
Perform data cleansing and institute role-based access policies, procedures, and software limits for adding, deleting, and modifying information
Which of the following correctly describes the benefit of conducting periodic inventory counts?
Periodic counting provides a financial value for all inventory at one point in time.
What is true regarding the competitive advantage of an electronic business supply chain?
Physical assets become barriers to change and are tied-up costs
The design and implementation of two-way communication between a business and its customers describes which of the following components of a customer-driven marketing strategy?
Placement
An organization designs products to be built to order, featuring modular parts that are easy to combine to meet customized orders from customers. Product assembly and customization occurs just prior to shipping. What is this an example of?
Postponement
What strategy can be used to reduce the bullwhip effect?
Postponement
Which of the following warehouse operations assumes that there will be costs for training or hiring staff with final production skills?
Postponement-there will be costs for training or hiring staff with final production skills
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
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
Which of the following forms of interface devices would be best for a firm implementing an internal solution that can be directly extended to integrate external partners who resist standardizing?
Process-oriented middleware
What is the proper order for the meetings in the sales and operations planning (S&OP) process?
Product review, demand planning, supply planning, financial review, pre-meeting
Which of the following is the primary focus of master scheduling (MS)?
Production amounts for individual products
design for remanufacture
Products developed in a manner that allows components to be used in other products. This process is associated with green manufacturing.
innovative products
Products that tend to have a high profit margin, be unique, have less competition, and have dynamic demand.
What tool associated with advanced planning and scheduling (APS) would allow an organization that manufactures custom products to see what parts combinations it can produce and the profit margin for a particular order?
Profitable-to-promise
What PMBOK® Knowledge Area is concerned with planning, acquiring, developing, managing, and releasing the team?
Project Human Resource Management
In what process group included in the project management cycle is the project manager selected?
Project initiation
In what process group included in the project management cycle are decisions made on how to identify, prioritize, and manage risks?
Project planning and design
Which of the following is true of projects?
Projects are one-time, unique sets of events.
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
Which of the following could help limit the size of product recalls to goods produced just at a specific factory between specific dates?
Proprietary bar codes
Which of the following statements best describes the relative care that should be taken in securing A, B, and C inventory items?
Provide the best protection for A items.
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 warehouse activity entails removing material from the dock (or location of receipt), placing that material in a staging area and then moving it to a specific location, and recording the movement and identification of the location where the material has been placed?
Put-away
In postponement of product design, which is the supply chain strategy being used?
Push-pull strategy
Which of the following is generally considered an important combination method in forecasting because it can reduce bias, even though an effect such as groupthink could increase bias?
Qualitative forecasts
What are time-series models used in?
Quantitative forecasting
What quality attribute of communications relates most to the need for efficiency?
Quantity of data provided
A ski resort wants to automatically detect when skiers have a lift ticket and when to offer a returning skier a loyalty discount. Which technology would meet these objectives with the least trouble for skiers?
RFID
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 is looking to use demand management to tailor demand to meet available capacity at product launch, due to limited initial capacity. How can the organization best achieve its goals?
Raise the price on a semi-permanent basis.
An organization needs a warehouse for many stock keeping units (SKUs), space is at a premium, and they plan to install a directed pick and put-away system. Which of the following would be the best stock location method?
Random location storage
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
Which stock location method will tend to maximize cube utilization?
Random-location storage
In the ideal world of supply chain inventory, which of the following should never be at rest in a warehouse?
Raw materials
In a low-price supermarket chain, the stores, the distribution centers, the third-party logistics provider, and the manufacturers work together to replace what is sold in the stores within less than 24 hours. What type of supply chain structure does that illustrate?
Reactive efficient
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
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.
Benefits of a fourth-party logistics provider (4PL) arrangement include which of the following?
Reduced costs and/or higher-quality logistics operations
The sales and operations planning (S&OP) team might decide to adopt a chase production strategy because it offers which of the following benefits?
Reduced inventory holding costs
A supply chain manager plans to increase the number and geographic locations of warehouses. Which of the following changes would be the most likely overall benefit to the supply chain?
Reduction of delivery time to retail outlets
A small auto parts store is upgrading to digital tracking of parts numbers, order numbers, and customer data. What option should it use for digital storage of these data?
Relational database
Which of the following is the primary limiter on the spread of radio frequency identification (RFID)?
Relatively high RFID tag prices
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 would promote accuracy and efficiency in the demand management process?
Require headquarters sales staff to provide assumptions used in demand plan numbers.
Demand and which of the following types of information typically flow from the end customer upward in a service supply chain?
Requirements
What does capacity requirements planning generally refer to?
Short-term assessment of labor, plant, and equipment availability
What level of capacity planning and control focuses on long-range activities?
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 though resource planning. Which of the following was an input to verify the need?
Resource profile
Which of the following is sometimes overlooked when designing a supply chain?
Reverse supply chain flow
Which of the following would contain information such as machine setup and run time?
Route sheet
Which of the following parts of a transportation management system (TMS) would a manager use to optimize and select carriers for the movement of a container from a container ship to a railcar and finally to a truck?
Routing
Which of the following describes human-friendly code that allows users without extensive training to perform custom database searches?
SQL
A supply chain that produces and sells bar soap using traditional forecasting at each stage has been experiencing the bullwhip effect. Which of the following has the strongest influence on this effect?
Safety stock
What processes are used in master planning?
Sales and operations planning and resource planning
Which of the following would best achieve the goals of improving forecast accuracy, reducing the frequency of supply-demand mismatches, and minimizing the non-selling time of headquarters sales staff?
Sales staff are required to make brief demand planning inputs each day noting changes.
What three factors determine cash flow for an organization?
Sales, after-tax operating profit margins, and capital requirements
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.
A retailer observes that over the past three years, mulch sales have dramatically increased in the spring and early summer before subsiding through midsummer, fall, and winter. What is this an example of?
Seasonality
What skill area relates to the need for project managers to determine whether they or the candidates they are considering have enough learning and field experience for a given project?
Self-assessment and experience
An organization overestimates demand and produces inventory that ends up stored in warehouses for several years, until it is no longer considered a marketable product. What action must the company take for the purposes of the balance sheet?
Sell off the inventory at a discount or write it off and remove it from the financial statement.
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
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
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.
What should the course of action be if rough-cut capacity planning determines that production targets are not realistic under the tolerances set out by the sales and operations planning (S&OP) policy?
Send the plan back to the master scheduler for revision.
What should happen with a project management plan after it is completed and approved?
Send updates to team members regularly using configuration management
If a major consumer electronics company wants to optimize its knowledge of its marketplace, it should do which of the following?
Share distribution point information with its partners.
In regard to technology, collaborative planning, forecasting, and replenishment (CPFR) may be said to depend fundamentally upon which of the following?
Shared data
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.
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
Which of the following actions would be the best choice if the load scheduled for a work site exceeds its rated capacity?
Shift work to another work center with available capacity.
If there are no sales data for a new type of car with an innovative technology to use to anticipate regional sales, which is the best method of satisfying demand?
Ship most units to distribution centers instead of retail locations.
What does the term "flattening of the globe" refer to?
Shrinking of the world into one global economy
Which of the following provides a sound method for grouping products into product families for the operations plan?
Similarity of manufacturing processes
design for service(maintainability)
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.
Which of the following is true of radio frequency identification (RFID) and its associated EPCglobal Network?
Some RFID tags can be rewritten with new information and reused.
A company can demonstrate cross-functional integration of planning and capacity for operations. It appoints a leader with experience in external integration, who starts by aggregating purchasing to find volume discounts. This organization is currently trying to grow out of which of the following stages of supply network technology optimization?
Stage 2, semifunctional enterprise
At which of the following stages would a company be if it has multiple uncoordinated improvement efforts, such as inventory reduction, better forecasting techniques, and lower cost procurement, occurring sequentially instead of in concurrence?
Stage 2: Semifunctional enterprise
You know the actual hours worked at a work center. What else do you need to know to calculate the work center's efficiency?
Standard hours of output
Which of the following is another name for the "one size fits all" type of design?
Standardization
A superior assigns you as a project manager. She tells you to staff a team and start planning right away even though the project charter has not yet been signed. What should you do?
State that the charter needs to be signed before you can start.
An organization decides to stage capacity investments so that capacity stays ahead of demand but to do so in a manner that does not require a single major investment up front. What is the best method for the organization to stage the growth in capacity?
Stepwise lead strategy
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 the best definition of the phrase "contact channel strategy"?
Strategy to ensure the most cost-effective and customer preferred channel is used to distribute products; and securing lifetime customers through exceptional customer care
alliance development
Strengthening the capabilities of a key supplier
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.
Each company in an extended supply chain has its own decision support system, each run separately using the same data. Often some firms end up with a surplus while others have shortages. Which of the following describes this supply chain's problem?
Suboptimization
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
Which of the following strategies represents the traditional "over the wall" approach to product design?
Supplier plays no role in design.
An organization is expanding its purchasing efforts into a new region with different cultural dimensions and expectations that are difficult for outsiders to navigate. Which business practice would it benefit most from subcontracting?
Supplier relationship management (SRM)
What group is the primary stakeholder in any business activity?
The business itself
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 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)
content management applications
Supports the evolutionary life cycle of digital-based information and makes information dynamically updatable online; includes the ability to publish content to a repository and support access to digital-based content.
Which of the following is true of the total cost of ownership (TCO)?
TCO compares the differences between the incremental costs of alternatives.
advanced planning and scheduling (APS)
Techniques that deal with analysis and planning of logistics and manufacturing during short, intermediate, and long-term time periods. [This] describes any computer program that uses advanced mathematical algorithms or logic to perform optimization or simulation on finite capacity scheduling, sourcing, capital planning, resource planning, forecasting, demand management, and others
automatic identification and data capture (AIDC)
Technologies that collect data about objects and then sends the data to a computer without human intervention. Examples include radio frequency wireless devices and terminals, bar code scanners, and smart cards.
Which of the following statements regarding technology audits is true?
Technology audits are critical for determining the adequacy of financial reporting controls.
Which of the following cross-enterprise functional teams must be one of the first to be set up and must generate specific results before the other teams can proceed?
Technology team
An organization has a reliable supplier who has never had order or lead time issues. Which of the following choices would be best when the price of the materials fluctuates strongly with the market and is currently low?
Temporarily increase cycle stock.
Which of the following situations is the most critical to address in a transportation management system because it could result in workers and managers ceasing to trust in the integrity of the system?
Ten percent of shipped items have missing cube or weight data.
Which of the following is a potential risk of using a third-party logistics provider (3PL)?
The 3PL employee represents the firm to the client, and the 3PL may have contracts with the firm's competitors.
kaizen
The Japanese term for improvement; refers to continuing improvement involving everyone—managers and workers.
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.
cross-docking
The concept of packing products on incoming shipments so they can be easily sorted at intermediate warehouses or for outgoing shipments based on final destination.
Which of the following statements about purchased customer data is true?
The data may be more useful for new customer acquisition.
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.
electronic document
The electronic representation of a document that can be printed.
inventory visibility
The extent to which inventory information is shared within a firm and with supply chain partners.
Which is the most important criterion for making the decision to contract out a business function to a third party?
The function is a core competency for the third party.
distribution requirements planning (DRP)
The function of determining the need to replenish inventory at branch warehouses.
demand management
The function of recognizing all demands for goods and services to support the marketplace. It involves prioritizing demand when supply is lacking.
Which of the following statements identifies a beneficial result of including more periods in a moving average?
The impact of random variations is reduced.
What is the biggest risk of signing a long-term supply contract to buy regular amounts of a subcomponent to get a significant price reduction?
The inventory of obsolete items could increase.
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
An organization is using an order point system, and its supplier reduces its delivery lead time. What will happen if the organization keeps the same order point?
The level of safety stock will automatically increase.
A manufacturer of luxury boats gets a request from a customer to upgrade the seats on a boat in work-in-process inventory. There is a demand time fence for the hull and engines and a 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.
electronic data interchange (EDI)
The paperless (electronic) exchange of trading documents, such as purchase orders, shipment authorizations, advanced shipment notices, and invoices, using standardized document formats.
inventory turnover
The number of times that an inventory cycles, or "turns over," during the year.
A manufacturer uses an order point system to determine when to place an order. It requires an average of 240 units per week, and the order lead time is 3 weeks. It maintains 170 units of safety stock. What is the resulting order point?
The order point is calculated by adding the demand during the order lead time to the safety stock level. In this case, the demand during the order lead time is 240 x 3 = 720, which is then added to the safety stock level of 170 units, which results in an order point of 890 units.
cost of quality
The overall costs associated with prevention activities and the improvement of quality throughout the firm before, during, and after production of a product.
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
enterprise resources management
The planning, execution, control, and measurement functions required to effectively operate an enterprise.
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.
capable-to-promise (CTP)
The process of committing orders against available capacity as well as inventory. This process may involve multiple manufacturing or distribution sites.
Which of the following is a likely outcome of asking suppliers to participate in an organization's product design effort?
The product quality could be improved without significantly increased costs.
A manufacturer, a distributor, a wholesaler, and a retailer all agree to base their orders on actual consumer orders instead of performing detailed forecasts based on each party's Tier 1 customers' actual orders. Which of the following will result, and what are the likely risks of this method?
The push/pull line moves back to the manufacturer but at the risk of greater overtime or rush orders.
database management system (DBMS)
The software designed for organizing data and providing the mechanism for storing, maintaining, and retrieving that data on a physical medium (i.e., a database).
inventory velocity
The speed with which inventory passes through an organization or supply chain at a given point in time as measured by inventory turnover.
An organization that uses standard costing is calculating the efficiency of its main manufacturing facility over the last month. In any given week, the facility has 1,600 standard hours of work. The hours actually worked over the last four weeks are as follows: week 1—1,689, week 2—1,547, week 3—1,590, week 4—1,730. What is the total efficiency for the last four weeks?
The sum of total standard hours worked for the period in question is 6,400. The sum of the hours actually worked is 6,556. 6,400/6,556 = 97.6%.
demand pull
The triggering of material movement to a work center only when that work center is ready to begin the next job.
electronic commerce (e-commerce)
The use of computer and telecommunication technologies to conduct business via electronic transfer of data and documents.
inventory valuation
The value of the inventory at either its cost or its market value.
When conducting capacity forecasting for a warehouse that uses random location storage, what would happen if the maximum inventory of each type of unit is used to determine the overall warehouse footprint size?
The warehouse would have a large amount of excess capacity.
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
Which of the following characteristics belongs to the e-business supply chain rather than a traditional supply chain?
There is a focus on economies of scale and scope.
What is a risk of having too many communication channels open on a project with many stakeholders?
There is a higher risk of missed or erroneous communications.
Why should positive variances from standards be tracked by an organization?
They could show where someone was taking a dangerous shortcut.
What is true of two organizations with electronic business supply chains operating in the same industry?
They may operate as a buyer, seller, rival, or trading partner depending on the product in question and the market conditions.
Managers are enticed by the lower item cost of a product component when it is sourced overseas in a country with low labor costs. Which of the following can a supply chain manager use to show managers that item cost is only a minor part of the overall equation?
Total cost of ownership
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
A company competing on innovation should minimize which metric?
Time-to-volume
Which is an objective of aggregate inventory management?
To balance customer service, operations efficiency, and inventory investment cost objectives
Which of the following statements correctly identifies the purpose of the weights in a weighted moving average?
To be more sensitive to recent trends in demand
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
Business models intending to use the internet as one of many sales channels and owning some of their own physical distribution means
To minimize metadata
Which of the following is a major goal of service-oriented architecture (SOA)?
To separate applications from data so that applications have universal functionality
Which of the following is a primary purpose of the cash flow statement?
To show key stakeholders if the company has sufficient cash to pay debts, bills, and dividends to owners
Which of the following is taken into consideration when calculating inventory accuracy?
Tolerance level per stock keeping unit (SKU) Target value of SKU On-hand quantity and recorded balance Total number of SKUs
Which of the following would you select to pull several trailers conveying pallets?
Tow tractor with trailer
Which of the following materials-handling options uses space efficiently, has the potential to improve inventory identification and accuracy, and is flexible?
Towline
Which is a best practice for expediting transportation?
Track the percentage of orders expedited and the marginal costs of expediting.
What is a best practice when sales or managerial overrides are used in combination with seasonally adjusted exponential smoothing?
Track the quantitative and qualitative forecasts separately
Which of the following should be integrated in a transportation management system (TMS) to increase cost control, customer service, and automation?
Transportation planning and order fulfillment
If you were able to get a 20% discount on any of the following logistics expenses, which would you choose to receive the maximum cost savings?
Transportation(Transportation expenses make up the largest portion of the logistics budget)
According to John Maynard Keynes, which is a primary cause of recessions from a macroeconomic perspective?
Trend to forego capital investments and instead save cash
Fatima Alano is the new CEO of a company, and she's known for the sustainability initiatives she spearheaded at her last company. Which of the following would she be most likely to focus on first?
Triple bottom line
Which of the following is least likely to produce a positive effect on accountability for managers involved in a manufacturing software improvement project?
Tying results to the stock price of the firm
A trend in extending the design of products originally made for emerging economies for sales in developed economies is an example of which of the following?
Universality
An organization wants to automatically record the movement of inventory through its supply chain using a warehouse automation system (WMS). It typically is looking for information on a limited number of high-value items as well as a large number of medium- and low-value items. What is the best way to track the inventory using the WMS?
Use active RFID tags on each high-value item and passive tags on boxes of low- and medium-value items
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.
Which of the following is a method of replacing physical inventory with better information?
Use postponement centers.
A start-up company wants to save time and money during the initial information technology setup process. What is the best choice for the company?
Use software as a service
Which of the following is a main reason why portals in web-based warehouse management systems (WMS) enhance visibility and control?
Users can either push data and inventory to others or pull inventory and data to themselves.
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
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
Which of the following identifies a type of collaboration in which a manufacturer of razor blades determines how its product is displayed on a retailer's shelves and performs cycle counting at the store?
Vendor-managed inventory (VMI)
When Henry Ford organized Ford Motor Company to include raw materials extraction and dealerships as well as his assembly lines, he created which of the following?
Vertical supply chain
A division-level supply chain professional working to streamline organizational operations sends an email to the manager of a company-owned warehouse, looking for a performance metrics report. What dimensions of communication are represented in this action?
Vertical, informal, internal
Which of the following types of automated identification and data capture (AIDC) systems could be used to read text on the side of a box as it moves on a conveyor belt?
Vision systems
Which of the following allows developers to wrap otherwise incompatible electronic messages in a shell for universal message receipt?
Web services
For transportation management systems (TMS), which of the following would be the best choice to plan for shipment costs, fuel costs, road maps and routes, road conditions, weather conditions, and carrier availability?
Web-based TMS services
When setting supply chain strategy at a firm that isn't the nucleus firm, which of the following is the most important to focus on?
What's good for the final customer
What lesson can be learned from studying a humanitarian and disaster relief supply chain?
When social and physical infrastructure breaks down, long-term relationships based on trust become invaluable.
inventory accuracy
When the on-hand quantity is within an allowed tolerance of the recorded balance. This important metric usually is measured as the percent of items with inventory levels that fall within tolerance.
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
According to Michael Porter, in his influential work on business strategy Competitive Advantage, what else needs to be integrated into a business plan if it already specifies customer service, sales channels, a value system, and an asset footprint?
Whether to use make-to-stock or some other operating model
Which of the following is true of the use of data for decision making?
Which of the following is true of the use of data for decision making?
Which of the following would appear in the routing file?
Work center ID
Should the supply chain manager of a channel master monitor the communications process between it and its strategic trading partners?
Yes. It is important that communications stay complete, accurate, and respectful.
Which of the following is a leading economic indicator?
Yield curve
When inventory moves from being backordered to being in excess, it may be due to:
a change in demand downstream in the supply chain.
balanced scoresheet
a list of financial and operational measurements used to evaluate organizational or sc performance
What is a SWOT analysis?
a tool used to analyze an organization's current state and opportunities.
In the internet, the client of the client/server model is represented by:
a web browser
During which phase of the PDCA model does a demand manager lead efforts to respond to variances from the plan and address root causes of the variances?
action
Demand forecasts are likely to be most accurate for which of the following items?
all cars
The minimum total cost on an economic order quantity (EOQ) curve is:
always directly above the intersection of the carrying and ordering cost curves.
Pipeline inventory is the products that:
are in transit between locations.
In distribution requirements planning (DRP), the key difference between a push system and a pull system is whether:
area warehouses are authorized to order inventory replenishment.
Which of the following production strategies allows for mass customization without long lead times?
assemble to order
Which tool or technique formally connects the strategies and overall objectives of a business to goals and measurements that go beyond just financial metrics?
balanced scorecard
If an organization has a demand manager position, this person's direct supervisor should:
base performance measurements on the reliability of the overall demand plan.
E-business vision and strategy should:
be tightly integrated with and driven by a valid business strategy.
What is the focus of a rough-cut capacity check?
bottlenecks
business-to-consumer sales (B2C)
business being conducted between businesses and final consumers, largely over the internet.
Which of the following provides a point of reference for formulating sales and operations planning?
business plan
An organization does research and then creates a schedule and budget for influencing demand for a new product, including promotions and advertisements. The activities are performed well, but, after nine months, the sales are far below what was expected and the product is abandoned. Which of the following aspects of the plan-do-check-action cycle did these demand-influencing activities omit?
check and action
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.
A company wants to get each member of its extended supply chain to understand the benefits of collaborative lean manufacturing. Which of the following would provide this shared understanding?
conceptual model
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
A warehouse management system (WMS) should:
coordinate bulk discounts with maximum pallet capacities.
Information technology enables supply chain management by:
creating global visibility, so that even companies with no global operations must compete globally.
Which of the following warehouse operations assumes no storage of incoming goods before reshipping?
cross docking
Which of the following is true of the people or metrics involved in supply chain management?
current supply chain performance is better quantitatively benchmarked against the firm's desired performance than qualitatively benchmarked.
A business finds that a dissatisfied customer has created a website on which the business and its products are harshly criticized. This situation most likely represents a failure in:
customer communication and care.
A business gathers information from its accounts information system to identify those customers who have bought a large volume of items in an innovative product group. This is an example of:
data mining
Supply chain management works to reduce:
demand and supply variability.
What demand-side activity is an input into strategic planning?
demand management
Target costing is:
designing a product to meet a specific cost objective.
response focused sc
develop forecast based on system flexibility and capacity cushion
According to the APICS Dictionary, 16th edition, which is a general business strategy?
differentiation
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.
In a supply chain, distributors can refer customers to other distributors who have needed product on hand. This best describes a:
distributor integration network
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.
Complete the schedule and budget to reflect the impact of the later Knowledge Area plans.
executing
You work in the supply chain as a finance manager, and your supervisor has told you that he wants you to become more familiar with spend management. This means that you will likely be spending more time:
focused on outsourcing processes
A company is effective if it:
focuses on and meets its customers' needs and wants while still meeting its cost objectives.
Many Japanese companies build keiretsu to:
form cooperative relationships, usually through ownership of stock in member companies.
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
Supply chain efficiency can be risky if a firm:
has eliminated stock buffers and relies on Just-in-Time (JIT) delivery.
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 a benefit of lateral supply chains?
improved business focus and expertise
Microeconomics focuses on the decisions that businesses and people make:
in terms of resource allocation and the prices of products and services.
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
Older enterprise resources planning (ERP) systems typically can do all of the following without further upgrades except:
increasing flexibility by allowing changes to their conceptual models.
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.
You are the supply chain manager, and, based on recent research, you are anticipating changes in the market. Which of the following would be most important to develop?
innovation
By allowing it to focus on core competencies
integral
"A period marked by high costs and low sales." This phrase best describes what phase of the product life cycle?
introduction
Which can be seen as a lubricant that keeps the supply chain flexible even though it is also a buffer that hides flaws in the supply chain that might otherwise be corrected?
inventory
cycle stock
inventory that "depletes gradually as customer orders are received and is replenished cyclically when supplier orders are received."
What supply chain function do customers usually take for granted?
logistics
The integrated enterprise stage of supply chain evolution is significantly different from the prior stage in that:
its business processes are facilitated by organization-wide technology.
Which of the following is the technique of using visual signals to "pull" components through the manufacturing process?
kanban
A value stream map is usually used in conjunction with which of the following improvement methods?
lean
An organization is looking to expand sales of its product line into a new market. What process should it undertake to identify the best new market area to move into?
market research
Supply chain managers can be useful as intermediaries between manufacturing professionals and which area that is often otherwise underrepresented in production planning?
marketing
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.
Which of the following design strategies is the polar opposite of integral design?
modular design
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
All of the following are included in supply chain event management's active visibility except:
multiple application workflow capability.
In the customer-driven business model, strategic pricing:
must be continually analyzed to ensure that it is attractive to customers but still profitable to the business.
A manufacturer is planning component orders for a new product that requires several parts with differing lead times. How can it ensure that the necessary parts arrive at the work center at the same time?
offsetting
Which replenishment frequency would typically require the highest level of safety stock?
once per week
A statistical forecast should be:
one of many inputs to demand plans.
A warehouse ideally should:
optimize cube utilization and inventory velocity in part by providing 100% accessibility.
fourth-party logistics (4PL)
organization is often a separate entity formed by a joint venture or other long-term contract between a client and one or more partners
A razor blade manufacturer installs RFID in their promotional displays so they can monitor when these displays leave the back rooms of retail locations and when they are discarded. This is an example of marketing control over which of the following?
placement
SC SCOR model
plan, source, make, deliver, return, enable
Maintaining a large safety stock of flu medicine in anticipation of a potential epidemic is an example of:
planning demand
"A strategic decision, based on competition, perceived value, and brand identity." This describes which component of a modern marketing strategy?
price
efficiency focused sc
proactively managing customer demand and use time series forecasting to predict future demand
Creation of brand image is a concern related to:
promotion
The key to synchronizing supply and demand is to:
reach consensus on a demand plan and a production plan and share relevant changes with supply chain partners.
Vendor-managed inventory is an example of a collaborative initiative that can benefit supply chain participants by:
reducing inventory costs.
By ordering extra safety stock, a purchasing manager might reasonably expect to benefit the supply chain in all of the following ways except:
reducing overall supply chain costs.
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
An organization's core competency is in the service component of a product-service package, and customers have praised their ability to quickly resolve problems. If most of these problems are product quality issues, the best way to improve this supply chain would be to:
replace the process value supply chain partners who have poor quality.
Which of the following modules of an advanced planning and scheduling (APS) system would allow an organization to simulate in advance the effect on customer service of closing a plant?
requirements optimization
The authors of a Harvard Business Review article think that an intense focus on glocalization will soon be coming to an end. Supporters of this perspective believe that multinational corporations (MNCs) should instead be focusing their efforts on:
reverse innovation
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
Where should an organization look to find the sequence of operations for the manufacture of a product when engaging in capacity requirements planning?
routing file
Stockpiling is a warehouse function used for:
seasonal inventories: clothing, lawn furniture, and agricultural products.
Which of the following would best solve a problem in which expert labor needed for technical support is more costly and difficult to acquire in some parts of the country than in others?
service-related distributor integration
The network configuration of a supply chain:
should be designed to reflect trading partners' capacities.
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
A design engineer is creating a product that conforms to customer needs according to market research. Which of the following is the most important secondary design element that the engineer should include in the design?
sold for positive return
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.
The value of inventory on the balance sheet is most often based on:
standard cost
The widest demand variability in the bullwhip effect generally occurs at which of the following nodes?
supplier
A coal mine ships coal to a generating plant that supplies power to a manufacturer that produces a machine that is shipped to a distributor that sells mining equipment to the same mine that began the process. This is an example of a:
supply chain that doubles back on itself.
What is a characteristic of a project that distinguishes it from an operation?
temporary in nature
A relational database links tables:
that share a common data element.
Direct materials plus direct labor plus manufacturing overhead equals:
the cost of goods sold.
Maintaining a high level of customer care is critical to customer-driven brand image promotion because:
the internet has given dissatisfied customers the means to make their dissatisfaction quickly and widely known.
Which of the following is true of a manager's transportation execution decision support system (DSS)?
the transportation execution DSS uses simpler models than strategic or tactical DSS systems.
Success in e-business is often difficult to achieve because both parties must have access to the same analysis of the same data but cannot get to this level of visibility without:
trust
A partnership in a supply chain is a relationship that must be based on:
trust, shared risks, and the rewards of achieving a competitive advantage.
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:
ust the right amount of capacity at both the highest and lowest loads.
To keep supply chains competitive, warehousing focuses on:
value-added activities.
All of the following are prerequisites for companies wanting to invest in radio frequency identification (RFID) except:
very high inventory accuracy.
Total lead time can be determined from the information in which of the following?
work center file, routing file
