ASCM - CSCP
What are the three essential elements of a performance measurement system? A target, a goal, and an objective A criterion, a standard, and a measure A comparator, a benchmark, and a point of reference A metric, a gap, and an interpretation
A criterion, a standard, and a measure
All of the following are included in supply chain event management's active visibility except: simulation tools. notification of exceptions to unplanned events. measuring of key performance indicators and metrics. multiple application workflow capability.
Active visibility is provided by monitoring, measurement, notification, simulation, and control tools.
A large public utility understands that customer relationship (CRM) will be important in the future. It has committed to implementing the philosophy and supporting processes and information technology applications based on this future need. The factor most likely to inhibit success of the implementation is that the company: will have to gather data about a large number of customers. will have to develop custom applications for its business. is addressing the philosophy and applications concurrently. does not have documented objectives for the effort.
CRM is often seen as a point solution designed to automate tasks and improve efficiencies rather than a clearly articulated strategy complete with metrics to ensure maximum return on investments. Companies often spend large sums to achieve a single CRM function utilized by just a single department and wonder why the return does not have a companywide effect. A company must first define the projected objectives and benefits of the project before it can begin the process of assembling the CRM suite of products.
Capacity management is used primarily for: calculating available capacity. balancing work center capacity and load. validating the master production schedule. prioritizing manufacturing orders.
Capacity management is used to determine the capacity required to supply the load.
Which of the following is not a goal of design for manufacture and assembly (DFMA)? Using concurrent and parallel processing to reduce work-in-process time Reducing the number of parts Designing components with very tight tolerances Simplifying the process steps for assembly
DFMA designs components that do not require extremely tight tolerances.
Which of the following activities is an aspect of demand management? Implementing a customer relationship management (CRM) system Adjusting resources to support upcoming demand Calculating gross demand requirements for master-scheduled items Prioritizing demand when supply is constrained
Demand management is the process of recognizing all demand and prioritizing the demand if supply is constrained. Adjusting resources is a function of capacity management. Gross requirements are not calculated. CRM systems are tools but are not the actual activity.
A company is most likely to achieve which of the following benefits when implementing time fence policies? Providing suppliers with a specific schedule Reducing the number of schedule changes Reducing lead time Calculating available-to-promise inventory
Demand time fences are used to ensure stable demand inside a short time period, thereby reducing the number of schedule changes.
Which of the following metrics is most appropriate for a company striving to measure the magnitude of the lack of product to meet customer requirements? Perfect order Fill rate Lead time Stockout frequency
Fill rate measures the impact of stockouts over time; service performance is not impacted until a customer needs a product. At that time, it is important to determine that the item is not available and how many units the customer actually needs.
Which two forces have the most significant impact in revolutionizing supply chain management? I. Increased project complexity and scope II. Market stabilization III. Global expansion IV. Use of third-party logistics providers I and II I and III II and III II and IV
I and III Global forces that are revolutionizing supply chain management include increased project complexity and scope, with large teams operating at different remote sites; global expansion, which is making supply chains longer and more complex than ever before; and greater market volatility due to the increasing power and speed of information available to both consumers and competitors.
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? It can be sold for a positive return. It has more features than the competitor's product. It has a lower price than the competitor's product. It can reach the market quickly.
It can be sold for a positive return. Serving the end-user customer is the primary driver of supply chain decisions. And, second, the organizations in the supply chain have to make a profit and stay in business to serve the customer. Design engineers or, better yet, design teams from across the network design products that are right for the end customer and can be sold profitably.
Which of the following types of carriers is the best choice for local transport of agricultural products? Private Exempt Contract Public
Logistics managers rely on exempt carriers for a significant amount of business in their niches, such as local transport of agricultural products. The primary benefit offered by exempt carriers is lower rates.
An organization rewards its commodity suppliers up front by purchasing inventory in advance of need (up to the safety stock level) and paying those suppliers to warehouse and replenish that inventory as lot-size orders are filled. Which of the following aspects of a supplier relationship management strategy is important to verify at the start of this relationship and periodically thereafter? Relative cost of warehousing rent versus ordering costs for in-house warehousing Relative value of warehousing rent to supplier versus smooth flows to operations Relative cost of transportation when orders are sent only to fill current demand Relative value of safety stock versus the cost of stockouts and lost customers
Maintaining continuity and smooth flows depends on the effective coordination of inputs (purchases) of goods and services from external suppliers. As a result, the purchasing function becomes a prime player in helping to provide that coordinated flow.
According to macroeconomic theory, as aggregate prices decrease, what happens to the real gross domestic product (GDP), and why? Real GDP decreases, because there is less consumption spending. Real GDP increases, because there is more real wealth. Real GDP decreases, because suppliers are less motivated to produce. Real GDP increases, because there is deflation.
Real GDP increases, because there is more real wealth.
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. Complete a variance analysis. Perform brainstorming. Perform internal benchmarking.
Scan what the competitors are offering.
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. regionalization. sustainability. globalization.
Supporters of this theory believe that since success in developing countries is contingent on ongoing sales in developed countries, MNCs that want to maintain a competitive lead should focus on reverse innovation of their products. Reverse innovation is developing innovative new products that meet specific needs and budgets of customers in particular markets using a decentralized, local market focus.
Which of the following performance measures would be expected to increase with a successful sales and operations planning (S&OP) implementation? Cash-to-cash cycle time Percentage of on-time deliveries Actual sales to forecast performance Cost of goods sold
The S&OP process will have the most impact on the percentage of on-time deliveries due to the collaborative effort of all departments and the visibility to future inventory levels. The other options may be indirectly impacted but are not direct benefits.
Which of the following metrics should a company use to measure supply chain responsiveness? Cash-to-cash cycle time Inventory turns Order fulfillment cycle time Order fill rate
The amount of time lapsed between order receipt and delivery to a customer is a measure of how responsive the supply chain is.
Which could be used to produce a more accurate and useful SWOT analysis? Certification under ISO 14000 Series Standards Certification under ISO 26000 Series Standards Accreditation under ISO 9000 Series Standards Voluntary use of ISO 31000 Series Standards
Use of ISO 31000, 31010, and Guide 73 allows more accurate assessment of internal strengths and weaknesses and external opportunities and threats (i.e., SWOT analysis). The other standards might also be of some use (though not as direct), but one does not get certification for a series of standards (it is for individual standards only), and accreditation is not applicable.
If you were a supply chain manager for IKEA, which strategy would you promote with your suppliers according to IKEA's IWAY initiative? Create virtual communities of suppliers online to share their ideas about sustainability practices. Provide training on sustainability practices to suppliers through local educational institutions. Encourage open bidding by suppliers to reduce pricing in exchange for volume purchases. Use the code of conduct to encourage long-term relationships with a limited number of suppliers.
Use the code of conduct to encourage long-term relationships with a limited number of suppliers
Volume growth is a key performance indicator for which of the following? Customer service Product merchandizing Supply chain variability Replenishment
Volume growth measures the success of merchandizing efforts.
According to the APICS definition of waste, which is a type of waste? Any scrap that is not planned Wait time that makes a product more beautiful in the eyes of the customer Any unique by-products requiring special management control Any involvement of parties outside the supply chain
Waste includes any activity that does not add value to the goods or services in the consumer's eyes. According to the definition in the 15th edition of the APICS Dictionary, waste can also be a "by-product of a process or task with unique characteristics requiring special management control."
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 Business models intending to be a purely internet-based company directly ordering from suppliers and shipping via package services for physical distribution Business models stressing gaining market share rather than profits to become the dominant player on the web for their market Business models for internet sales stressing customer service such as paying for all customer returns and not mandating a specific return method
A Business models that do not stress profitability and stability are not getting market support any longer. Businesses that do not control some of their physical distribution capabilities are likely to have poor customer service and reliability, so the channel that controls some of these features can provide less variability.
What is the minimum level of enterprise evolution in which a firm might use a logistics supplier to integrate with external members and also internally combine warehousing and transportation activities to optimize cost versus customer service? Stage 1: Multiple dysfunction Stage 2: Semifunctional enterprise Stage 3: Integrated enterprise Stage 4: Extended enterprise
A company at Stage 3 will make advances such as carrying out warehousing and transportation decisions in tandem to achieve the optimal balance of cost-effectiveness and customer service. At this point, the nucleus firm may begin to take a step toward integration with the external members of the chain by contracting with a logistics supplier.
A supply chain manager's superior asks her to draw up a project charter and be the project manager on a project to continually improve inventory levels by conducting ongoing audits. What should be clarified first? Who will be available to help on this project, and will they be full-time? How will funding for the project be proposed and approved? What will the end date for this project be? Will we have sufficient budget for this project?
A project is a temporary endeavor with a clear end date in mind. What is being described is actually part of supply chain operations rather than a project. A few changes, such as an end date and some measurable objectives, could turn this into a project.
An appropriate use of an advanced planning and scheduling (APS) system is: defining business rules when specific events occur. optimization of transportation routes. automatic replenishment of inventory. identifying constraints within a facility.
APS systems can be used to identify an imbalance between available and required capacity so that constraint management can occur. Optimization of routes is done by a transportation management system. Supply chain event management systems are used when specific events occur. Replenishment of inventory is handled by material requirements planning.
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? Buy-side Business-to-business (B2B) Sell-side Content management
ATP data helps customers in their purchase decisions, so this feature is part of an interactive sell-side e-commerce website.
Which of the following is a best practice for the creation of demand plans? Organizations should change the demand plan to match the business plan if it differs. Organizations should use a one-year maximum planning horizon. Organizations should revise the plan at most on a quarterly basis. Organizations should include a mechanism for recording uncertainty in inputs.
Assumptions and uncertainties should be documented, reviewed, and challenged in the monthly sales and operations planning review process to validate that the demand plan is realistic. Knowledge of assumptions and uncertainties will also help the organization determine the best way to arrive at a consensus regarding demand plan numbers.
If each step of a supply chain adds value, what else can the customer expect to see aside from utility? Agility, availability, and price Special discounts; first come, first-served ordering; and product differentiation Attractiveness, price, and availability Appealing features, multiple uses, and price
Attractiveness, price, and availability The goal is to add value at each step in a service-oriented value chain as well as in a manufacturing-oriented supply chain. Utility may not be the only value, or worth, of a good or service from a customer's point of view; price, availability, and attractiveness are also values to consider.
What are the attributes of basic customer service? Availability, operational performance, and customer satisfaction Wait time, respectfulness, and helpfulness Up-selling, cross-selling, and customer satisfaction Customer satisfaction, response time, and response accuracy
Availability, operational performance, and customer satisfaction Availability is the ability to have the product when it is wanted by a customer. Operational performance deals with the time needed to deliver a customer order. Customer satisfaction takes into account customer perceptions, expectations, and opinions based on the customer's experience and knowledge. For more information, see Module 1, Section A, Chapter 3, Topic 2
Proactively managing risk rather than being reactive provides which of these benefits to the organization? Ability to be risk-seeking Competitive advantage Risk elimination Lower up-front costs
Competitive advantage Managing risk proactively gives an organization an edge over its competition because the organization will respond to risks quickly, become more flexible, and feel prepared in the face of uncertainty.
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? Simulation Action plan Conceptual model Nucleus firm
Conceptual models are guides to shared understanding and can be as simple as a flowchart with descriptions or examples.
Which of the following warehouse ownership models can combine the benefits of economies of scale and scalability with lower long-term costs? Contract warehousing Fourth-party logistics (4PL) warehousing Public warehousing Private warehousing
Contract warehousing combines characteristics of private and public warehousing. A long-term contractual relationship typically results in lower total cost than a public warehouse while providing expertise, flexibility, scalability, and economies of scale. It accomplishes this by sharing management, labor, equipment, and information resources across multiple clients.
Which of the following factors is most likely to increase as a result of a retail chain moving from central control of inventories to distributed control at the retail outlets if all other factors are held constant? Replenishment order quantities Total overhead costs Item forecast accuracy Delivery time to the retail outlets
Costs are typically much greater with decentralized control of inventories because there are fewer economies of scale.
Which of the following is true of data aggregation? Data aggregation makes data more accessible but increases forecasting variability. Data aggregation for customers can be by relatively equal demand, meaning that some zones will be larger than others. Aggregating customer data for marketing purposes requires using a mass marketing strategy. Aggregating customer data is growing less useful because markets are becoming more fragmented daily.
Customer aggregation can create geographic zones with a single customer or set of customers representing the types of customers within that region. Demand can be set to be relatively equal, so areas of high customer population have smaller zones than areas of low customer population.
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? Low cost niche marketing Product focus Low cost differentiation Customer experience differentiation
Customer experience differentiation One tenet of a customer experience differentiation business strategy is often to minimize the number of options to reduce customer decision-based stress, offering just what is likely to be wanted. From a supply chain perspective, this minimizes inventory and markdowns.
A chain of grocery stores has implemented a customer loyalty program that includes sending customers coupons four times per year. The coupons are for items each customer has frequently purchased in the past but has not purchased in the past three months. This program would typically be considered an element of: cross-selling. customer relationship management. business-to-consumer sales. sales force automation.
Customer relationship management (CRM) is about nurturing mutually beneficial, long-term relationships intimate enough to provide tailored solutions to meet mutual needs. CRM programs focus more on the customer, while sales force automation is more centered on those tools used by salespeople.
Which of the following statements about purchased customer data is true? The data paint a picture of a business's own customers. The data may be more useful for new customer acquisition. The data are useful in managing relationships with existing customers. The data can be very broad.
Data purchased from companies such as database marketing companies provide information about customers outside a company's own customer base. These data are useful in reaching new customers.
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? Tell managers to speak up at meetings if they have concerns or objections. Use change management to create an atmosphere that is intolerant of failure. Design a way for people to provide anonymous information on strategic gaps. Perform a gap analysis on the strategic plan.
Design a way for people to provide anonymous information on strategic gaps.
When working to extend risk management to supply chain partners, one best practice to generate lowest supply chain risk is to: create business rules prioritizing suppliers and production and transportation routings. transfer as much risk as possible to other partners. create business rules prioritizing high-impact risks regardless of their probability. transfer as much risk as possible from partners to the organization itself.
Examples of supply chain business rules for a supply chain designed to manage risk include business rules for customer priority, supplier priority, production routing, transportation routing, and so on.
In a service industry such as an electrical utility supply chain, which of the following is a Tier 1 supplier? Facility maintenance Steel manufacturer for electric transformers Manufacturer of coal excavator equipment Commercial customer
Facility maintenance Tier 1 suppliers in this supply chain include fuel suppliers, janitorial services, and facility maintenance. The steel manufacturer and the manufacturer of coal excavator equipment would both be considered Tier 2 suppliers, as they produce products needed by the Tier 1 suppliers. Commercial customers are a customer type for the electric utility, not a supplier.
Which of the following metrics is most appropriate for a company striving to measure the magnitude of the lack of product to meet customer requirements? Stockout frequency Fill rate Lead time Perfect order
Fill rate measures the impact of stockouts over time; service performance is not impacted until a customer needs a product. At that time, it is important to determine that the item is not available and how many units the customer actually needs.
The ability to manage which of the following factors typically is critical for a firm moving from transaction-based relationships to cooperative relationships with trading partners? End-customer requirements Contract terms and conditions Uncertainty and risk Production plans
Flexibility and malfunction recovery are the terms of operational performance that account for a firm's uncertainty and risk. The firm's logistical competency when moving from transaction-based relationships to cooperative relationships is directly related to how well it is able to accommodate unexpected circumstances and its implementation of adjustments to prevent or accommodate any unforeseen risks.
What is prompting many countries to adopt the International Financial Reporting Standards (IFRS)? Growth in international shareholders and trade Mandate for the U.S. and China to adopt it Financially advantageous due to the loopholes it creates Developed by the United Nations with support from multiple countries
Growth in international shareholders and trade The APICS Dictionary, 15th edition, defines the International Financial Reporting Standards (IFRS) as follows: "A common global language for business affairs so that company accounts are understandable and comparable across international boundaries. As a result of growing international shareholding and trade, they are rules to be followed by accountants to maintain books of accounts which is comparable, understandable, reliable, and relevant as per the users internal or external."
A firm is trying to harmonize supply and demand so as to minimize total product, transportation, and inventory costs. Which of the following would be the first step the company needs to take in this endeavor? Collaborate with supply partners. Improve forecast accuracy. Understand the impact of promotions. Reduce the number of stock keeping units (SKUs).
High demand forecast error can damage supply chain performance, resulting in lost sales, obsolete inventory, and insufficient utilization of resources. Selecting the push-pull boundary to aggregate demand across products, geography, and time can help improve forecasting. Using market analysis and demographic and economic trends, reducing the number of SKUs competing in the same market, and incorporating collaborative planning and forecasting processes with customers can also help improve accuracy.
An interorganizational supply chain visibility initiative is championed by the channel master's executives, and they provide the other companies with detailed project plans and change management steps. However, the project fails after partner employees resist or ignore the changes after the project ends. What would have best promoted success? Redesign contracts with partners to require compliance with this initiative. Invest in highly competent project managers. Invest in highly competent change managers. Involve executives from other companies as champions and decision makers.
Highly competent management of change is important. But leadership from the top ranks of the organization is crucial to the success of continuous process improvement. If the leaders in the affected partner companies aren't brought into the process as full partners and passionate advocates, getting the employees to commit to the change will be difficult or impossible.
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? Increase cash reserves. Increase investments in diversified financial products. Raise prices for the organization's products. Hire high-quality new employees at reasonable salaries.
Hire high-quality new employees at reasonable salaries.
ISO 26000:2010 provides companies with guidance on being socially responsible. Which topics are covered in these guidelines? Consumer issues, labor practices, human rights, and use of social media Environment, consumer issues, labor practices, and human rights Labor practices, human rights, consumer issues, and use of advertisements Human rights, consumer issues, fair operating practices, and employee communication messages
ISO 26000:2010 provides companies with guidance for being socially responsible and covers the environment, consumer issues, labor practices, human rights, fair operating practices, and community involvement and development.
Supply chain partners that are certified in ISO 9000 and ISO 14000 are conforming to which of the following standards? Quality and social responsibility Environmental and social accountability Purchasing and quality Quality and environmental
ISO 9000 is a series of quality standards; ISO 14000 contains guidelines for managing a firm's environmental impact.
Companies and supply chain partners who are not members of a trading bloc might need to do which of the following to counteract the bloc's impact? Resort to protectionist tactics. Raise their prices to counter decreased demand for their exports. Establish premium tariffs for future transactions with bloc members. Avoid any sales transactions with the bloc countries.
If a trade bloc is large, nonmembers may see their prices and demand for exports decrease. This can result in deterioration in trade terms and decreased market power of these nonmembers. Seeing a decrease in their exports, they may resort to protectionist tactics and increase their lobbying efforts.
If you are working in a firm that is in Stage 1 of supply chain management evolution, you should be prepared for: participating in periodic sales and operations planning meetings. implementation of basic materials-handling equipment in addition to manual operations. some departments implementing strategies that make jobs more challenging. overly optimistic forecasting.
In Stage 1, multiple dysfunction, forecasting tends to be mostly guesswork and is often inflated by unfounded marketing optimism. The other issues listed arise in Stages 2 and 3.
A retailer replenishes stock by placing orders for new goods from a manufacturer on a one-to-one replacement basis and provides the manufacturer with point-of-sale data for their own forecasting purposes. This describes which of the following inventory management models? Quick response program Continuous replenishment Distributor integration Vendor-managed inventory
In a quick response program, the retailer continues to order from the supplier, although the supplier may collect POS data for the purposes of planning and forecasting. This is similar to a continuous replenishment system; in that type of system, however, the retailer does not place orders.
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 Small increase in demand Small decrease in demand Large decrease in demand
Luxuries are elastic, meaning that there will be a large increase in demand given a small change in price.
Which of the following would not generally be considered a sufficient reason to upgrade from an existing enterprise resources planning (ERP) system to a newer ERP system? To provide a faster learning curve To fully integrate disjointed systems such as customer relationship management To provide a more open architecture To minimize metadata
Maximizing, rather than minimizing, data about data (metadata) is one reason to upgrade an ERP system.
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? Market research Balanced scorecard Operations research SWOT analysis
Operations research uses a number of tools to find the best number and location of suppliers, manufacturing and assembly facilities, warehouses and distribution centers, and retail locations. The best solution depends on supply chain strategy. Some networks will minimize total supply chain cost, while others will provide best value in terms of the most flexible, the highest quality, or the fastest flow of products through the network.
Which is the most cost-effective example of Monitoring and Controlling in project management? Performing validation of scope Performing process audits at the start of Executing Presenting project changes for approval Performing inspection of deliverables
Performing process audits at the start of Executing Monitoring and Controlling is especially important during Planning and early in Executing (e.g., in process audits), because it can prevent problems from occurring in the first place. Placing more weight on Monitoring and Controlling late in Executing (e.g., in inspection of deliverables) or during Monitoring and Controlling itself (e.g., validation of scope) is problematic, since problems are much more expensive and time-consuming to fix at these stages.
Which of the following correctly indicates a feature of process-oriented middleware? Translates messages between systems one data field at a time Requires that the same process be adopted by each participating firm Used to perform the actual mapping out of business processes for a firm Does not require new code for each system to be integrated
Process-oriented middleware (also called business process management or BPM software) does not require new code for each new system integration but instead requires matching to a single integration process engine for all applications.
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 Automated storage and retrieval systems UPC bar codes Export management companies
Proprietary bar codes can contain a product serial number that identifies a unique item, while UPC bar codes identify only an item's stock keeping unit. For product traceability to limit the size of product recalls, tracking the chain of custody of items requires tracking by serial number.
An advantage of using quality function deployment (QFD) over design for quality is that, in QFD, quality of design is: measured as less than 3.4 defects per million. measured relative to competitor product features. measured using any of the seven new tools for quality. measured using any of the seven basic tools for quality.
QFD uses precise steps and a methodology such as a "house of quality," which is essentially a comparative spreadsheet that ranks how a product or service stands up to customer wants as well as to what the competition is offering. Both systems could employ any of the quality measurement methods listed.
Refer to the risk metrics shown below, which are scored on a numeric scale from 1-5 (1 being the lowest and 5 being the highest). What is the risk level for the loss of a major contract up for negotiation this year? MetricScale Score Risk tolerance 2 Probability of occurrence 4 Magnitude of loss 5 Cost to mitigate 4 15 20 25 40
Risk level equals probability of occurrence times magnitude of loss: 4 x 5 = 20. Risk tolerance and cost to mitigate are not included in the calculation and may not use such rating scales.
Which of the following is a major goal of service-oriented architecture (SOA)? To minimize information content, product categorization, and data storage To create smart products that sense and respond to changing needs To use XML and web services to build a tightly coupled system To separate applications from data so that applications have universal functionality
SOA has two main goals: to achieve loose coupling among each of the services in its architecture and to separate applications from their data so they achieve universal functionality.
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? Multiple dysfunction Semifunctional enterprise Integrated enterprise Extended enterprise
Semifunctional enterprise At Stage 2, semifunctional enterprise, a firm has adopted MRP II, its demand planning is still done informally, and its internet capability has not progressed beyond online catalogs.
Software that is designed for remote and mobile exception reporting is likely to be more cost-effective if which licensing method is used? License per user License per device Noncompliance until audited Software as a service
Since remote access and exception reporting are key features of the product, users will likely be using multiple devices to access the software. Therefore a license per user will tend to be more cost-effective than a license per device. Software as a service might allow either of these licensing methods.
Which of the following is true of radio frequency identification (RFID) and its associated EPCglobal Network? The EPCglobal Network's object naming service can detect counterfeit tags, but it takes several days. Some RFID tags can be rewritten with new information and reused. Users report that RFID has completely eliminated all physical inventory movement to verify that tags have been read. RFID tags contain all product data and can be dynamically updated.
Some tags are for single use only, while other tags can be updated and reused.
Which of the following is a main reason why portals in web-based warehouse management systems (WMS) enhance visibility and control? Web-based WMS is available only as software as a service (SaaS), which consolidates warehouse demand among all clients. Users can either push data and inventory to others or pull inventory and data to themselves. Subscribers use dynamic databases to select optimum carriers, and carriers can indicate their availability to ship to a particular location. Unlike traditional WMS, systems with portals can use merge-in-transit to create automated shipment notifications.
Some vendors offer WMS with web-based interfaces or portals. Portals allow visibility and control because users can push data and inventory to supply chain members or they can pull the data and inventory to themselves. Such portals can be available from purchased software or as SaaS, which is a web-based subscription service. SaaS eliminates risk of failure, setup time, and upgrade costs.
Which of the following may be necessary to get the most out of an organization's sales and operations planning (S&OP) process? Sharing some form of the results of the process with external partners Ensuring that attendees from each meeting are included in each subsequent meeting Engaging in collaborative demand planning with all direct suppliers Hiring a demand manager to chair each S&OP meeting in the process
Synchronizing supply and demand often requires cooperation from the entire supply chain community. At a minimum, the organization should communicate appropriate information to its suppliers related to its production plans after each update. Higher levels of collaboration with key partners could also occur, such as involving key partners in collaborative demand planning.
Which of the following statements regarding technology audits is true? Technology audits are designed to ensure that technology implementations are treated primarily as computer projects. Technology audits can be technical because their primary audience is IT. Technology audits are critical for determining the adequacy of financial reporting controls. Technology audits are best performed by internal IT staff, who also develop a business case for the software.
Technology audits play a critical role in compliance with the Sarbanes-Oxley Act of 2002 (SOX), which requires U.S. public companies to establish adequate internal financial reporting and IT controls. For example, an IT audit should reveal that persons who approve purchase orders cannot also receive goods. The audience for a technology audit is upper management, not IT or a specific department.
A company is beginning the process of defining market segments for its products and services. The most appropriate objective for this undertaking would be to identify groups of customers with similar: service requirements. revenue potential. purchasing histories. geographical locations.
The APICS Dictionary, 15th edition, defines a customer-driven approach as "a company's consideration of customer wants and desires in deciding what is produced and its quality." Design should start with analysis of actual customer requirements or needs.
A make-to-stock manufacturing organization should do which of the following when demand forecasting predicts increased demand due to economic growth? Increase safety stock. Increase buffers in work-in-process inventory. Increase in-transit inventory. Increase cycle stock.
The APICS Dictionary, 15th edition, defines cycle stock as follows: "One of the two main conceptual components of any item inventory, the cycle stock is the most active component; the cycle stock depletes gradually as customer orders are received and is replenished cyclically when supplier orders are received."
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? Component commonality Mass customization Modular design Universality
The APICS Dictionary, 15th edition, defines universality as follows: "The strategy of designing a product initially intended for one market in such a way that it can also be sold in other markets. It is a form of standardization."
Which of the following tools is frequently used to identify the wants and needs of customers with specific demographics? Customer focus groups Product profiling Customer segmentation Market targeting
The APICS Dictionary, 15th edition, describes a focus group as a "set of people who are interviewed together for the purpose of collecting marketing data." This tool is used for identifying the wants and needs of customers.
Selecting decoupling points to minimize lead times in a manufacturing process is an example of which of the following types of decisions? Operational Tactical Cross-functional Strategic
The APICS Dictionary, 15th edition, describes decoupling points as follows: "The locations in the product structure or distribution network where inventory is placed to create independence between processes or entities. Selection of decoupling points is a strategic decision that determines customer lead times and inventory investment." The goal is that fluctuations in the production rate of the supplying operation do not constrain production. The strategic level deals with decisions regarding product design, internal and outsourced production, supplier selection, and strategic partnering. It also includes decisions on the number, location, and capacity of warehouses and manufacturing plants and the flow of material through the logistics network. By addressing these supply chain issues of the strategic level, lead times can be minimized.
Direct materials plus direct labor plus manufacturing overhead equals: the supply chain management cost. the cost of goods sold. the overall value at risk. the cost to make and market.
The cost of goods sold (COGS) equals direct materials plus direct labor plus manufacturing overhead.
The most important factor in changing the supply chain strategy is: customer perception of value. global opportunities. competitive positioning. projected profit margins.
The customer's perceived value of the product or service is the driver for how a company determines not only its value proposition but also the strategy and design of the supply chain.
Prioritizing demand in which of the following situations is typically considered a component of demand management? Demand comes from a very large number of customers. Forecast error is large compared to average demand. Production lead times for products in a family are long. Supply is less than demand for a product family.
The definition in the APICS Dictionary states that demand management "involves prioritizing demand when supply is lacking."
What will happen with a time-series forecast if strong seasonality is not removed prior to forecasting? It will lead changes in trend. It will be more subject to the groupthink effect. It will predict a downward swing in demand to keep on going down indefinitely. It will contain more random variability.
The downward trend that is generated by a change in seasonal demand would be projected forward. In other words, it would lag the change in trend.
Which of the following best describes the first step of collaborative planning, forecasting, and replenishment (CPFR)? Supply chain partners develop a joint business plan. Supply chain partners share inventory positions and demands. Supply chain partners combine production facilities. Supply chain partners share material requirements planning (MRP) outputs.
The first step would be for the partners to develop a joint business plan in order to provide a common vision for the collaboration.
An organization implementing a balanced scorecard for a supply chain network would need to focus on which of the following perspectives? Financial, customer, supplier, operations Supplier, workforce learning and growth, customer, financial Customer, supplier, internal processes, financial Financial, customer, internal processes, workforce learning and growth
The four perspectives of a balanced scorecard are financial, customer, internal processes, and workforce learning and growth.
Organizational and supply chain strategies determine the measures of success and incentives for supply chain improvement initiatives. Those initiatives should be linked to which of the following? The outcome of the change initiative The four perspectives of the balanced scorecard The judgment of each participant's direct supervisor The approval of top management
The goals and measures of the balanced scorecard should be consistent with organizational and supply chain strategies and should be based on the mutually supporting indicators drawn from the four perspectives of the scorecard (business process, customer, innovation and learning, and financial).
A customer has an advanced technology infrastructure. The most cost-effective mode of data exchange likely would be: file transfer protocol. extensible markup language. application link enabling. electronic data interchange.
The important thing to know about extensible markup language (XML) is that it is operating in the background of all interactive internet transactions, enabling them to occur despite differences in computer hardware and software.
According to the functional and innovative product categories designated by Marshall L. Fisher, which of the following would be a proper performance indicator for a typical innovative product? Aggressively reducing lead times High inventory turns Design for maximum performance at minimal cost Inventory reduction
The key performance indicators for each supply chain differ because of the product characteristics. Aggressively reducing lead times, for example, is appropriate for innovative products but would be irrelevant for functional products that can be manufactured and delivered on predictable schedules in high volumes.
Which of the following measurements best describes performance related to sales and operations planning (S&OP)? Balance of current supply with next period's demand Balance of supply with demand within the demand time fence Balance of supply with demand over the planning horizon Balance of supply with demand within the cumulative lead time
The key to S&OP success is to balance supply and demand throughout the entire planning horizon.
Using primarily a pull system in the distribution network offers which of the following benefits to the supply chain as a whole? Elimination of safety stock Enhanced visibility of future demand all along the chain Sensitivity to demands of the final customer Enhanced communication up the chain
The main benefit of the pull system of distribution is sensitivity to local customer demand, since orders begin near the customer and "pull" products from upstream. This approach does not facilitate communication, eliminate safety stock, or improve visibility down the chain because there is no central coordination and upstream partners have to depend upon forecasting to plan for future orders rather than upon (for example) a predetermined production schedule.
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 Arts and crafts retail store Maria There are no Tier 2 suppliers in this situation.
The paint wholesaler sells paint to the retailer from whom Maria buys her supplies, so the paint wholesaler is the Tier 2 supplier in this supply chain model.
Implementing customer relationship management (CRM) will enable a company to: implement market segmentation. give customers access to real-time order information. offer a standardized sales approach to all of its customers. align resources to manage new and existing customers.
The primary benefit of CRM is to manage new customers and retain existing ones. It allows for a customized, not standardized, sales approach. CRM can be used to provide information for market segmentation, but that is not the primary purpose.
In which stage of the continuous improvement model might it be necessary to rethink the goal or move the benchmark? Process analysis Process assessment Project planning Implementation and change management
The project planning step requires flexibility, such as rethinking the goal and perhaps even moving the benchmark. Sometimes you start down one road only to encounter a road block, a shortcut, or an intersecting path that leads to a better destination that wasn't marked on the original map. Even the improvement process itself is subject to improvement.
The major purpose of the sales and operations plan (S&OP) is to: provide a binding contract between sales and operations. develop a single set of supply/demand numbers for all stakeholders. obtain start-up financing from bankers and investors. balance sales and output of end items.
The sales and operations plan reconciles the business plans of all units of the firm, sales and marketing, operations, and finance; the unified set of numbers has the approval of senior management. It is neither a contract between sales and operations nor a balance of end item supply and demand.
End customer fill rate will most likely improve when members of a supply chain share which of the following information? Intercompany processes Customer demand data Inventory by location Manufacturing schedules
The sharing of customer demand data increases the ability to fill customer orders and reduces the bullwhip effect.
When an operations manager starts describing the production problems with a particular product mix forecast, it reminds the supply chain manager of a similar situation at a prior job. By the time the operations manager is done speaking, the supply chain manager has recalled the details and is ready to share the story. This is an example of which of the following? Good influencing skills Good interpersonal affiliation skills Poor decentralization skills Poor listening skills
The supply chain manager is exhibiting poor listening skills because, rather than actively listening to the operation's manager's story, he was distracted by a memory of a similar event. Regardless of how good an analogy the memory may be, it cannot replace the lost knowledge of the current situation. Before people will trust a suggested solution, they need to trust that the person truly understands the situation.
A company manages catalog purchasing of stationery products and computer equipment for clients. It provides invoicing to its clients and delivers product. This best describes: a collaborative transportation management network. a fourth-party logistics (4PL) company. a third-party logistics (3PL) company. a distributor integration (DI) network.
This company is probably a third-party logistics provider, a company that performs all or part of an organization's procurement of materials and distribution.
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 Customer-responsive Stable Reactive efficient
This is an example of a reactive efficient supply chain structure. Such structures: Support competitive positioning by serving as an efficient, low-cost, integrated unit. Focus efficiency and cost management on the total delivered cost of finished goods. Place greater importance on connectivity technology and new equipment to automate functions to reduce labor costs and improve capacity and throughput.
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: build or purchase the capabilities to better influence the demand channel. replace the process value supply chain partners who have poor quality. replace the value delivery supply chain partners who have poor quality. build or purchase the capabilities to produce the goods of poor quality.
This organization's core competencies are in the distribution function, or the value delivery supply chain. The organization could build or purchase manufacturing capabilities, but it isn't a core competency. Instead the portions of the process value supply chain (suppliers and manufacturers) could be replaced. Viewing a supply chain as a set of modular components helps demonstrate the flexibility that this organization can take advantage of to reduce its quality issues.
Which of the following approaches reduces lead times from supplier to customer using point-of-sale (POS) data? Continuous replenishment Direct customer shipments Quick-response program Vendor-managed inventory
To be effective in reducing lead times, lowering inventory costs, and smoothing out the bullwhip effect, POS data and forecasting have to be married to an inclusive supply chain management process. Simply sharing information between customer and supplier is one of the earliest and most basic types of supply chain alliances. A quick response program (QRP) links final retail sales with production and shipping schedules back through the chain of supply, employs point-of-sale scanning and electronic data interchange, and may use direct shipment from a factory to a retailer.
If you know the available time at a work center and want to calculate its rated capacity, you also need to know which of the following? Efficiency and number of workers/machines Utilization and number of workers/machines Efficiency and utilization Efficiency and manufacturing lead time
To calculate rated capacity, you multiply the number of available hours by the efficiency and utilization. Essentially, that tells you how much of the available time is being used and how efficiently it's being used.
An implementation of an advanced planning system is scheduled to cost US$520,000 in the first year and US$80,000 each year for the next four years. It is expected to produce annual benefits in cost savings and efficiency gains of US$200,000 a year for five years. Which of the following is the correct result of an ROI analysis? 14% 19% 23% 43%
Total costs are US$840,000 and total benefits are US$1,000,000. Return on investment (ROI) is [(Total Benefits - Total Costs)/Total Costs] x 100 = [($1,000,000 - $840,000)/$840,000] x 100 = 0.190476 x 100 = 19%.
A virtual supply chain organization can best be characterized as: supply chain organizations who have empowered decision making at lower levels. a coordinated supply chain where major strategic decisions are communicated by the channel master. supply chain partners communicating through use of the internet. supply chain partners working in close collaboration while retaining independent ownership.
Virtual supply chain organizations work together to deliver products and services to customers as one entity, yet they retain their autonomy.
An organization negotiates a firm commitment decision point and a volume commitment decision point into its contract with a supplier related to when demand information becomes a commitment to order inventory from the supplier. Which of the following is the difference between these two points? The zone between the two points allows for cancelling orders if demand is low. The zone outside either commitment point is a commitment to buy. The zone between the two points allows for shifting schedules or priorities. The zone outside either commitment point has a time horizon equaling the remainder of the cumulative lead time of the product.
When organizations use commitment decision points, the zone between the two points is governed by the volume commitment decision point, which obliges the organization to purchase in the volume that is communicated in the demand information sent to the supplier. They can still shift the timing of orders or their priorities.
An organization negotiates a firm commitment decision point and a volume commitment decision point into its contract with a supplier related to when demand information becomes a commitment to order inventory from the supplier. Which of the following is the difference between these two points? The zone between the two points allows for shifting schedules or priorities. The zone between the two points allows for cancelling orders if demand is low. The zone outside either commitment point has a time horizon equaling the remainder of the cumulative lead time of the product. The zone outside either commitment point is a commitment to buy.
When organizations use commitment decision points, the zone between the two points is governed by the volume commitment decision point, which obliges the organization to purchase in the volume that is communicated in the demand information sent to the supplier. They can still shift the timing of orders or their priorities.
A firm produces a wide variety of coaxial cable assemblies to customer order. They have been commited to shipping orders within 96 hours of receipt of the customer order. However, the firm has now decided to produce the most common configurations to stock and ship within 24 hours of receipt of the order. Customers will still be able to request specific configurations of the product, but those orders will be shipped within ten business days of order receipt. This shift in strategy is an example of which of the following product design strategies? Industry-specialized Customer-focused Product standardization Process standardization
With product standardization, a large variety of products may be offered, but only a few are kept in inventory. When a product not kept in stock is ordered, the order may be filled by a product that offers a superset of the features required by a customer.
When investing in new capacity in an industry with ever shorter product life cycles, which of the following would represent the best investment? Upgrading existing specialized equipment for better throughput Purchasing high throughput general-purpose equipment Purchasing lowest-cost specialized equipment Purchasing fast changeover general-purpose equipment
With shorter product life cycles, there is less certainty as to what kind of process will be needed to make new products. Moving toward more general-purpose equipment and away from high-speed, special-purpose equipment is an effective strategy for dealing with this dilemma in that the general-purpose equipment would be more flexible and adaptable to new products.
An advantage of cycle counting over annual physical inventory is: every item is counted at least once a year. ease of auditing. timely detection of problems. correction of inventory values.
It is much easier to find the cause of inventory inaccuracy during the cycle counting procedure rather than waiting until the annual inventory. Both processes correct the value and include counting every item at least once a year.
