APICS CSCP Practice Test Questions

An organization's inventory on its balance sheet in year 1 is $6 million and in year 2 it is $4 million. If its cost of goods sold (COGS) in year 2 is $80 million, what is its inventory turnover ratio?

($6 million + $4 million)/2 = $5 million. The inventory turnover ratio is COGS divided by average inventory: $80 million/$5 million = 16 times.

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?

97.6%

Cycle counting is usually paired with which of the following to minimize the total cost of inventory shrinkage?

ABC inventory classification

A plant has $1 in variable costs per unit produced, and units sell for $2 each. The plant has firm orders for 1,000,000 units and has $600,000 in overhead for the period. The gross profit margin for these units is thus $0.40 per unit. A special order request comes in and there is available capacity, but the price would be $1.50 per unit for 200,000 units. What would a marginal analysis suggest the organization do?

Accept the offer and increase gross profits by $100,000.

If you are the supply chain manager, where should you be looking in the supply chain in order to get the best view of potential changes to the market?

At the next stop downstream in the chain and at the consumer end

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

When determining lot size, which of the following costs should be balanced?

Carrying and ordering

What has the ERTMS (European Rail Traffic Management System) done for rail transport in Europe?

Centralizes command and control between nations

A company wants to reduce the lead time of components and increase the on-time delivery performance of suppliers. Which of the following processes needs to be implemented?

Collaborative planning, forecasting, and replenishment (CPFR)

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

A letter of credit offers security from which risk?

Counterparty risk

As part of the sourcing process, what is a prerequisite to doing a spend and portfolio analysis on suppliers?

Create/refine categories and category strategy

Which of the following two warehouse functions share the same benefit of having consolidated, full-trailer shipments into and/or out of the facility?

Cross-dock and break-bulk

A focus on quality, affordability, or availability indicates a focus on which of the following?

Customer value

What Incoterm would be appropriate for a truckload (TL) delivery if the buyer wants the seller to handle both delivery and unloading at their factory warehouse?

DPU

Which of the following statements about customer segmentation is true?

Demographic segmentation is not based on data about actual customer buying behaviors.

For the remanufacturing process to work, companies must take the remanufacturing of products into account beginning in which phase?

Design

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 of the following is a preventive action?

Diversifying the customer base

How does demand-driven material requirements planning (DDMRP) minimize buffer inventories while maintaining desired customer service levels?

Dynamically adjusting buffer levels based on daily reviews of how long customers will wait for orders

When scheduling a constrained resource, which of the following actions should be taken?

Ensure that there is a constant flow of work to the constrained resource.

A customer buys a significant percentage of your spare parts for now obsolete product lines. The customer is not interested in upgrades to the new lines. Which would be an appropriate strategy for dealing with this customer?

Get the customer to commit to buying enough spare parts right now to cover the expected remaining life of its products.

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?

Improve forecast accuracy.

An organization has pursued lean and Just-in-Time manufacturing and offshoring to a nearby low-labor-cost country. Which of the following is a significant consequence of these actions on the organization's supply chain?

Increased risk

If there are supply and demand imbalances after the servicing orders step of demand management, what should the organization do?

Influence customers to alter purchases as needed.

Which is a characteristic of a successful alliance?

Interdependence

What technologies form the foundation of an intelligent supply chain because one provides input data at a much finer grained level of detail than otherwise possible and the other enables each object providing that data to have a "digital twin?"

Internet of Things (IoT) and intelligent asset management (IAM)

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?

Involve executives from other companies as champions and decision makers.

What will happen with a time-series forecast if strong seasonality is not removed prior to forecasting?

It will predict a downward swing in demand to keep on going down indefinitely.

Which of the following is true of a global supply chain alliance that is forged strongly from the beginning?

It will still need constant maintenance.

As a general rule, instituting Just-in-Time (JIT) in a manufacturing facility affects employees' jobs in which of the following ways?

Job responsibilities expand.

If a restaurant chain performs hourly forecasting, which of the following will likely be reduced, assuming that there is acceptable forecast error?

Labor costs

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.

What risk is run when an organization outsources the entire manufacturing and assembly process of its product to overseas factories?

Loss of intellectual property

An efficiency-focused supply chain strives for which of the following?

Low forecasting errors, limited product variety, and a long product life cycle

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 supply chain management functional area runs its operations as a series of agile projects. The product owner suggests that an integration project with a key supplier should be started now even though it is lower on the kanban board than other planned mini-projects. This is because the supplier is now ready to integrate. What should the team do?

Move the integration project to at or near the top of the kanban board.

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

Inside a demand time fence, can customer orders still be promised without needing higher authority approval?

Only when available-to-promise quantities exist

Which type of supply base analysis would best reveal areas where giving more business to selected suppliers would have the most bottom-line impact?

Pareto ranking of categories by their average spend per supplier, ranked from lowest to highest average spend

Which of the following performance measures would be expected to increase with a successful sales and operations planning (S&OP) implementation?

Percentage of on-time deliveries

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?

Poor listening skills

An organization wants to categorize risk at one of its factories. It identifies the likelihood of the risks as follows: Power outage: 80% Flood at facility: 5% Supply disruption: 70% Quality issues: 5% The potential impacts of these risks are rated as follows: Power outage: 5% Flood at facility: 95% Supply disruption: 70% Quality issues: 10% What are the resulting percentages for use in a probability and impact matrix?

Power outage: 4%; flood at facility: 5%; supply disruption: 49%; quality issues: 1% Power outage: 80%*5% Flood at facility: 5%*95% Supply disruption: 70%*70% Quality issues: 5%*10%

Volume growth is a key performance indicator for which of the following?

Product merchandizing

A firm produces a wide variety of coaxial cable assemblies to customer order. They have been committed to shipping orders within 96 hours of receipt of the customer order. However, the firm has now decided to produce the most common configurations to stock and ship within 24 hours of receipt of the order. Customers will still be able to request specific configurations of the product, but those orders will be shipped within ten business days of order receipt. This shift in strategy is an example of which of the following product design strategies?

Product standardization

When investing in new capacity in an industry with ever shorter product life cycles, which of the following would represent the best investment?

Purchasing fast changeover general-purpose equipment

Which of the following is a benefit of effective supply chain management?

Reduced variability of flows

A group of trading partners is collaborating to improve supply chain operations. Which of the following actions is most likely to reduce the variability of demand experienced by the manufacturers?

Reducing the frequency of retail promotions

A company is most likely to achieve which of the following benefits when implementing time fence policies?

Reducing the number of schedule changes

Lean supply chains use which of the following actions to achieve their objectives?

Reducing waste

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

Which of the following elements of a cost justification for a warehouse management system should be made most conservatively?

Reductions in positions and resulting lower labor costs

Which of the following tasks is most likely to be performed by a purchasing agent/planner rather than a purchasing manager?

Resolving discrepancies in orders or accounts

Which is a reverse logistics best practice for an organization that places a strategic priority on efficient, cost-effective returns processing and has the infrastructure to do this at high levels of customer satisfaction?

Retain the functions, but restrict returns processing to selected facilities.

A toy manufacturer wants to use an auction to procure a large shipment of common screws at the lowest possible cost. Which type of auction should the manufacturer use?

Reverse auction

Component D is pegged to parent items A, B, and C. If a last-minute authorized change is made to the production run of D, which of the following should the scheduler do?

Review items A, B, and C to verify that the change was not made in error.

What needs to be phased out as part of an end-of-sales plan from a material requirements planning perspective?

Safety stocks and buffers

Using primarily a pull system in the distribution network offers which of the following benefits to the supply chain as a whole?

Sensitivity to demands of the final customer

Which of the following approaches to production scheduling accurately incorporates the theory of constraints?

Slow the process down to the bottleneck's speed.

When determining the transportation mode for servicing distribution warehouses, which of the following factors should be considered?

Speed, dependability, capability

Which of the following categories of cost would a retailer typically include in the cost of carrying inventory?

Spoilage

An organization decides to right-size its supply base in a given category by retaining the top 20 percent of suppliers ranked by purchasing spend in that category. What is a risk of this method?

Suppliers who are dropped might be better than those retained.

Prioritizing demand in which of the following situations is typically considered a component of demand management?

Supply is less than demand for a product family.

Which of the following actions is an example of a reverse logistics strategy?

Supplying packaging to a consumer for returning goods

Which of the following is a likelyoutcome of asking suppliers to participate in an organization's product design effort? Answers

The product quality could be improved without significantly increased costs.

Which is true of transitioning from a traditional buyer-supplier relationship to a strategic alliance?

The relationship will have multiple contact points aligned by the business process.

An organization has decided to reduce the number of distribution warehouses it uses to fulfill customer orders. What will be the most likely result?

Total safety stock will decrease.

Which is a best practice for expediting transportation?

Track the percentage of orders expedited and the marginal costs of expediting.

What can be done about the risk of non-malicious information system failures causing an inability to conduct business for a period?

Trade disruption insurance

A group of employees is discussing which features would be best for a new product they will be launching. Using a flipchart, they have written their overarching product goal and the four product features they want. They're now in the midst of adding further details about each of the product features. Which of the following tools are they using?

Tree diagram

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?

Uncertainty and risk

If you were a supply chain manager for IKEA, which strategy would you promote with your suppliers according to IKEA's IWAY initiative?

Use the code of conduct to encourage long-term relationships with a limited number of suppliers.

For smaller or less market-dominant organizations, which of the following would best ensure that suppliers are complying with ethical standards?

Use third-party auditors agreed to by both parties.

A manufacturer in a highly competitive industry wants to improve efficiency and lower overall costs for its products by increasing information sharing and collaboration with multiple suppliers and distribution partners. It is exploring a business-to-business exchange to facilitate this effort. Which ownership model would work best for the manufacturer?

Virtual trading exchange

Which could be used to produce a more accurate and useful SWOT analysis?

Voluntary use of ISO 31000 Series Standards

Supply chain participant priorities often conflict. Which of the following groups sets a priority on minimizing transportation costs and inventory levels?

Warehousing management

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?

What will the end date for this project be?

Implementing customer relationship management (CRM) will enable a company to:

align resources to manage new and existing customers.

A check cashing company has developed a strategic supply plan for opening a number of new stores. If a risk assessment shows that many organizations are considering converting from paychecks to providing payroll cards, avoiding the need for their service, the supply plan developer should:

call out this risk to decision makers.

An organization is failing to achieve its envisioned savings from its new supplier contracts and web-based ordering system, and it discovers that some employees are still using old, personally preferred suppliers. This is a failure in:

compliance management.

A company manufactures a wide range of industrial and commercial cleaning supplies that it sells to independent distributors that in turn sell to the end users. The market in which the company operates demands a variety of package sizes and short delivery times. The action by the company that is most consistent with its strategy and the demands of the marketplace in which it operates would be to:

convince key distributors to share demand data.

A business is attempting to create more powerful bonds with its customers by delivering greater customer satisfaction and mutual dependence. This business is pursuing a strategy of:

creating lifetime customers.

A chain of grocery stores has implemented a customer loyalty program that includes sending customers coupons four times per year. The coupons are for items each customer has frequently purchased in the past but has not purchased in the past three months. This program would typically be considered an element of:

customer relationship management.

A salesperson makes a delivery promise that is prior to the customer's delivery request date because this customer is in the most valuable customer segment. If the order arrives instead at the delivery request date, the customer will most likely be:

dissatisfied due to heightened customer expectations.

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:

does not have documented objectives for the effort.

If an organization's executives say they want to improve customer service from its current level of 95% to 100%, as measured by number of stockouts, the supply chain manager should:

explain that this level would be prohibitively expensive.

An appropriate use of an advanced planning and scheduling (APS) system is:

identifying constraints within a facility.

A company keeps running out of several inexpensive items that are critical to production. The best solution for this problem is to:

increase the minimum inventory levels for the items.

When communicating requirements and priorities for managing supply from internal resources, a best practice is to:

learn key engineering terminology for use in discussions with engineers.

A men's clothing retailer operates three chains of stores in a single country. Each of the chains serves a specific age group with very little overlap. The strategy of having each chain focus on a specific age group is an example of:

market segmentation.

A company has stated in its annual business report that its management philosophy is based on the principles of total quality management (TQM). In order to ensure that TQM is effectively implemented, the company should focus on:

meeting customer wants and needs.

Organizations implementing a six sigma strategy are attempting to:

reduce variability.

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 bestway to improve this supply chain would be to:

replace the process value supply chain partners who have poor quality.

Successful implementation of customer relationship management (CRM) and supplier relationship management (SRM) philosophies usually requires:

revision of decision-making processes.

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.

If an organization wants to gain access to the U.S. Customs-Trade Partnership Against Terrorism (C-TPAT) membership list of certified suppliers, it must:

spend funds on supply chain security enhancements as needed in accord with C-TPAT guidelines.

You receive an e-mail from a supply chain manager asking if you have any ideas about how to improve the bottom line. In order to impact the bottom line, your recommendations must affect:

the company's net income (profit or loss).

An advantage of cycle counting over annual physical inventory is:

timely detection of problems.