Quizzes

A key performance indicator for merchandizing products is: scrap. returns. volume growth. publicity efforts.

volume growth. Volume growth, market share, and total supply chain inventory returns are key performance indicators of merchandizing products.

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 Distance, innovation, agility Time, innovation, collaboration Responsiveness, flexibility, financial strength

Collaboration, time, distance Time, distance, and collaboration are basic elements in modern supply chains that impact a supply chain's ability to respond to competitive changes in the global marketplace. The relationships of time, distance, and collaboration weave like three bright threads through the fabric of any supply chain on the globe.

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

License per user 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.

In a distribution network with decentralized ordering, where in the chain do you find the most variance in order quantity? Constant along the chain Customer end of the chain Raw materials end of the chain Middle of the chain, diminishing toward either end

Raw materials end of the chain In many chains, variance in order quantity tends to increase as you move upstream away from the end customer. This is the bullwhip effect.

Which of the following is the primary limiter on the spread of radio frequency identification (RFID)? Relatively high RFID tag prices High cost of readers and software Small battery needed for all tags Continued fight over RFID standards

Relatively high RFID tag prices Because the price of a bar code label is very low, the price of an RFID tag is quite a significant factor in its applicable uses. Currently it is constrained to case- and pallet-level tagging and for high-value goods where the tag price is relatively small compared to the value of the item.

Which of the following techniques is a street food vendor using to mitigate the risk of insufficient demand by moving the cart to near an event such as a fireworks show? Redundancy Sense and respond Agility Audit and control

Sense and respond The ability to sense and respond to issues can help reduce risks as they arise, such as moving the food stand to where sufficient demand is more likely to occur.

The triple bottom line refers to which of the following? The financial impact of sustainability on the balance sheet, income statement, and cash flow statement The last three figures on an income statement The financial impact of energy reduction, waste reduction, and recycling to a company The collective measure of the economic, social, and environmental consequences of one company's activities at a point in time

The collective measure of the economic, social, and environmental consequences of one company's activities at a point in time The triple bottom line refers to the collective measure of the economic, social, and environmental consequences of one company's activities at a point in time.

An organization working to minimize surprises and get buy-in by key people for a new alliance should first: align internally by identifying key issues and stakeholders. select the proper partners by evaluating corporate culture and operating style. appoint a dedicated alliance manager to oversee the partner relationship. establish ground rules for how partners will work together and resolve conflict.

align internally by identifying key issues and stakeholders. Before entering alliances, start by identifying key issues and decisions and involving key stakeholders for fewer surprises and greater buy-in by key people.

An organization's sales and operations planning (S&OP) process is only as good as the organization's: functional area strengths. linear processes. technology. communications.

communications. Good communications skills, using both technology and interpersonal communications, is necessary to transform plans into action. Therefore, your S&OP is only as good as your communications.

A warehouse management system (WMS) should: update inventory quantities on a periodic basis several times a day. coordinate bulk discounts with maximum pallet capacities. profitably increase safety stocks. automate periodic counting so that cycle counting is not needed.

coordinate bulk discounts with maximum pallet capacities. A WMS should increase distribution efficiency, for example, coordinating pallet sizes and bulk discounts (e.g., 80 items per pallet = 80-item order for discount).

Allowing suppliers to participate in improving the supply chain system helps supplier relationship management (SRM) participants in which of the following ways? Reduced marketing costs Higher customer satisfaction Increased control by alliance manager Cheaper products

Higher customer satisfaction In SRM's collaborative relationships, suppliers can participate in improving the system, which results in better product, higher customer satisfaction, and better customer retention.

In the development stage of customer relationship management (CRM), customer ownership has which of the following characteristics? I. Sense of partnership and mutual investment II. Uncertainty due to incomplete CRM strategy III. Involvement of key customers in crafting the product or service IV. Increased likelihood of early sales I, II, and III II, III, and IV I, III, and IV I, II, III, and IV

I, III, and IV Customer involvement in developing a product or service, as well as a sense of partnership and mutual investment, are key components of customer ownership.

The fifth step in the process for creating and maintaining a customer-centric business (monitor, measure, and report) displays what characteristics? I. It is based on measures arising from ongoing customer contact. II. It is an event that should be performed at least annually. III. It involves continuous research. IV. It is iterative. I, II, and IV I, III, and IV II, III, and IV I, II, III, and IV

I, III, and IV Step 5 in the customer relationship management (CRM) model involves constantly learning more about customers and the way they prefer to do business, researching continuously, and documenting what is working and not working. It is iterative, based on the measures arising from ongoing customer contact and exchange.

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? I. Create an independent, stand-alone policy for the new line. II. Link the item's policy to the production line product family. III. Link the policy to the organization's other product families stocked on the same shelves. I I and II II and III I, II, and III

II and III When determining inventory policy, the organization should link its inventory policy to the product family and also to inventory policies for items that are competing for retail shelf space.

Which of the following statements about the matrix chart are true? I. There are two shapes of matrix charts—L- and roof-shaped. II. It can show the relationships between two or more groups of information. III. It can show strengths of relationships between variables. IV. It shows how variables interact and respond with each other. I and II II and III II, III, and IV I, II, III, and IV

II, III, and IV The matrix chart is a useful tool for showing the relationships between two to four groups of information, the strengths of those relationships, and how those variables interact and respond to each other. Matrix diagrams can be in a variety of shapes: L-, T-, Y-, C-, X-, and roof-shaped. The most commonly used is the L-shaped matrix, which illustrates how two groups of items relate to each other or one group to itself.

Which of the following actions contributes to the triple bottom line? Decrease tax liabilities on exports. Improve communication between functions. Improve fuel efficiencies of supply chain processes. Reduce the number of employees on the production line.

Improve fuel efficiencies of supply chain processes. Examples abound of companies changing their supply chains to become more sustainable. A company could develop more effective shipping schedules to reduce the amount of miles traveled by its fleet, use alternative, replenishable fuel sources such as wind or solar energy, or improve the efficiencies of its processes to use less fuel to create more product.

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 Senior management Supply chain manager The salesperson can make this change without needing approval.

Master scheduler A zone marked off by a planning time fence is slushy rather than frozen. Capacity and materials are not as strongly committed as those inside a frozen zone. There is room to negotiate in a slushy zone in the form of tradeoffs, and the master scheduler is allowed to make these decisions.

What is a drawback to using U.S. GAAP, which is country-specific, as opposed to using the International Financial Reporting Standards? The financial statements differ widely between the two systems. There is no effort toward convergence of the standards. The system uses less detailed rules that may not address all of the specifics. Organizations may find legal ways to be less transparent.

Organizations may find legal ways to be less transparent. U.S. GAAP uses rules-based accounting, meaning that the standards for accounting are detailed and specific. The intent is to ensure that all of the details are addressed. However, a drawback to this system is that organizations can operate within the rules while still finding loopholes to exploit, which can mean that organizations might be less transparent than the rules intend.

Which of the following modes of transporting petroleum involves the lowest operating costs? Rail Pipeline Ocean vessel Tanker truck

Pipeline Pipelines are costly in other ways, but their operating costs are relatively low (no drivers or pilots, for one thing).

During which sales and operations planning meeting might a demand-side professional get vital information on a need to shorten time to market? Demand planning meeting Pre-meeting Supply planning meeting Product review meeting

Product review meeting The product review meeting involves updating the status of new product developments, product changes, or other organizational process change initiatives that could affect supply or demand. Since a product or product feature's time to market strongly impacts demand management activities, this meeting provides demand-side professionals with vital information on which to base their assumptions.

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 Distributor integration Vendor-managed inventory Continuous replenishment

Quick response program 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.

Benefits of a fourth-party logistics provider (4PL) arrangement include which of the following? Greater technological flexibility More current logistics technology Reduced costs and/or higher-quality logistics operations More workforce and resource flexibility

Reduced costs and/or higher-quality logistics operations Benefits of a 4PL arrangement include reduced costs and/or higher-quality logistics operations. The other benefits listed are related to third-party logistics providers (3PLs).

Which would help reduce interorganizational suboptimization and thus total costs? Reducing fill rates and on-shelf-in-stock percentage Reducing total supply chain inventory dwell time Building time fences between suppliers and the organization Selling inventory to independent distribution centers earlier in the season

Reducing total supply chain inventory dwell time Dwell time is a measure of all inventory idle time in all parts of the supply chain. Idle inventory is nonproductive inventory for the most part, and shifting dwell time elsewhere is still a cost to all.

What is the current trend regarding the number of warehouses in a system? Increase in the diversity of geographic locations in case of a natural disaster Increase in the number where customers can conveniently pick up product Increase in the number in order to rent out storage space for a premium price Reduction in the total number in relation to product movement

Reduction in the total number in relation to product movement The general trend in logistics is toward reduction of the total number of warehouses in relation to the volume of product movement. The savings in other areas, coupled with increased efficiencies in warehouse operations and other logistics areas, makes it possible to maintain acceptable service with fewer warehouses.

Which of the following components of a risk assessment process might result in shareholders requiring a greater minimum return on their investment? Risk tolerance Risk identification Risk definition Risk level

Risk tolerance Organizations tend to have characteristic tolerances for risk such as risk-tolerant or risk-averse. Organizations that are willing to accept higher risks should have a higher potential for return on their investments, since investors will expect a higher return in compensation for their increased risk.

Why do the Level 1 SCOR metrics for the source process differ for make-to-stock when compared to make-to-order or engineer-to-order operating environments? Make-to-stock and the other operating environments are the same at Level 1 and differ only at Level 3. Make-to-stock envrionments do not need any asset management metrics, at least for the source process. Since there is buffer inventory in a make-to-stock environment, perfect order fulfillment is not applicable for the source process. Since make-to-stock does not need to emphasize responsiveness, this aspect is not measured.

Since there is buffer inventory in a make-to-stock environment, perfect order fulfillment is not applicable for the source process. Make-to-stock creates a buffer inventory between source, make, and deliver. Since perfect order fulfillment is a measure of performance for the deliver process, it doesn't apply to make-to-stock. However, it does apply to the other two methods, because delays in production could affect the final delivery time to the customer.

Which of the following is true of a warehouse management system (WMS)? WMS automated replenishment automatically generates advanced shipment notifications when the internal system signals a demand for more of a particular item. WMS must wait to add picking steps due to incoming orders until the current pick list is complete. WMS cross-docking sends goods from an inbound truck directly to an outbound truck without any staging. WMS portals allow data to be pushed to the user, or the user can initiate, or pull, the information transfer.

WMS portals allow data to be pushed to the user, or the user can initiate, or pull, the information transfer. WMS portals allow better visibility and control because users can push data and inventory to supply chain members or they can pull the data and inventory themselves. Cross-docking generally still requires a staging area, yard management refers to both empty trailers and stock stored outside, and picking steps can be added on the fly.

Which is usually planned in manufacturing and can be somewhat controlled even though it isn't value-added? Hazardous material Waste Risk Scrap

Waste The APICS Dictionary, 15th edition, defines waste as follows: "1) Any activity that does not add value to the good or service in the eyes of the consumer. 2) A by-product of a process or task with unique characteristics requiring special management control. Waste production can usually be planned and somewhat controlled. Scrap is typically not planned and may result from the same production run as waste."

Use of a fixed order quantity model is most likely to be effective in which of the following cases? When a shipper is looking for quantity discounts When production is run on lean assumptions When demand is highly unpredictable and light When lead time is highly variable

When a shipper is looking for quantity discounts Fixed quantity ordering is generally used to fill containers, qualify for quantity discounts, or both. The model works best when demand is known and stable with predictable lead times.

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? Functional area modularity and business process harmony Cost savings and controls Single provider and stability Adaptability and scalability

Adaptability and scalability Technology links between partners should be seen as a continuous improvement initiative, and adaptable and scalable software solutions should be used when possible.

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? Outsourcing to a supplier of durable raw materials Collaborative design for a unique look Lean manufacture for aggressive pricing Multiple warehouses for responsiveness

Collaborative design for a unique look A niche marketing strategy, such as selling specialized shoes, is most compatible with collaborative design to achieve a distinctive product for limited use on special occasions. Price, responsiveness, and durability are important characteristics but are most likely not key competitive factors in this type of market.

Which of the following is true of ISO standards for the EPC Gen 2 standard for radio frequency identification tags? ISO 9000-1 covers the Gen 2 standard. ISO 14000-2 covers the Gen 2 standard. ISO 18000-6 covers the Gen 2 standard. The ISO has no plans to make a standard for Gen 2 tags.

ISO 18000-6 covers the Gen 2 standard. EPC Gen 2 is recognized by the International Organization for Standardization (ISO) as the ISO 18000-6 class of standards.

When planning for change, what are the most important aspects to plan from a change management perspective? People and relationships Processes and events Policy and procedure Technology and equipment

People and relationships Regardless of the method of planning for change, from a change management perspective, the most vital aspect of these plans is people and relationships. While a new technology system will have many challenges and costs that can occupy a great deal of attention and time, it is critical to invest significant time in training people on how to use this new tool. People and relationships will also be a top concern when change involves moving from a transactional relationship with suppliers to a partnering relationship. These paradigm shifts are difficult to achieve and so require serious attention and planning.

During which part of the change management process do you get approval and funding for a potential change? Execute change. Prepare for change. Plan for change. Monitor change.

Plan for change. After a change has been identified, the strenghts and weaknesses assessed, and buy-in has been secured it is time to plan for the change. At this point, planning for change begins. This includes determinig success criteria, creating plans, and securing approval and funding.

An example of a supplier performance reporting mechanism is: an automated performance alert. a rejected materials rate. a supplier certification document. a floor failure event rate.

an automated performance alert. Rates, such as number of floor failures, rejected materials, or delays in shipment, are used to compile reports of supplier performance but are not themselves reports. Reporting mechanisms include such tools as scorecards, performance failure alerts (which are online and in real time), and surveys. A certification indicates that a supplier has met criteria but does not report ongoing performance.

For which of the following items should demand be calculated rather than forecast? All Chevrolets All Chevrolet Cruzes All steering wheels for new Chevrolet Cruzes All Chevrolet replacement parts

All steering wheels for new Chevrolet Cruzes Steering wheels are a dependent demand item; the demand for dependent items should be calculated from the forecast of demand for their parent items. Steering wheels are a component; the new cars they go into are the parents. Replacement parts are sold, manufactured, and forecast as independent items, not as dependent components.

The two outer pillars of the House of Toyota represent which of the following? Just-in-Time and jidoka Jidoka and kaizen Culture of continuous improvement and operational stability Kaizen and Just-in-Time

Just-in-Time and jidoka The two outer pillars represent Just-in-Time (JIT) and jidoka. JIT includes takt time, one-piece flow, and pull systems. Jidoka includes manual or automated line stop, separate operator or machine activities, mistake proofing, and in-station control.

Which of the following modes of transportation is most appropriate for carrying small, highly valuable, fragile or perishable cargo? Air Rail Road Water

Air Air transport is especially appropriate for valuable fragile and perishable items, because it is relatively secure, smooth, and rapid.

Sales training to increase business-to-business (B2B) customer loyalty should focus on: understanding the customers' business requirements. learning about the customers' core competencies. educating customers on the organization's core competencies. teaching customers the best way to resell the organization's product or service.

understanding the customers' business requirements. B2B customers value a provider's understanding of how their business operates, what its limitations and concerns are, how the product or service fits into the customers' business, and what requirements may be part of the purchasing process. They would rather not re-educate each provider.

Which of the following conditions is generally associated with lot-for-lot replenishment? Master scheduling Just-in-Time (JIT) manufacturing Safety stock buffers Large batches

Just-in-Time (JIT) manufacturing Lot-for-lot replenishment is typically used with JIT and the production of expensive, infrequently ordered items in order to produce just the required amounts of dependent demand items. It is used as part of the material requirements planning (MRP) process, not master scheduling.

Which of the following provides a point of reference for formulating sales and operations planning? Business plan Financial plan Production forecast Marketing plan

Business plan The sales and operations plan takes the business plan as its point of reference for developing a plan that balances supply and demand by merging input from sales and marketing on the one hand and operations on the other.

Which of the following software systems has the power to tie together supply chain partners? Closed-loop material requirements planning (MRP) Manufacturing resource planning (MRP II) Material requirements planning (MRP) Enterprise resources planning (ERP)

Enterprise resources planning (ERP) More advanced versions of ERP systems have reached through the corporate wall to tie supply chain partners together.

If inventory turnover decreases, which of the following must also decrease? Total inventory value Inventory velocity Variable inventory costs Total inventory levels

Inventory velocity The APICS Dictionary, 15th edition, states that inventory velocity is "the speed with which inventory passes through an organization or supply chain at a given point in time as measured by inventory turnover."

Which of the following would contain information such as machine setup and run time? Route sheet Order release form Component bill of material Master production schedule

Route sheet The route sheet lists the work centers that a component passes through in temporal order along with the operations performed at each work center and the standard setup and run times.

Under the theory of constraints, after a bottleneck is removed, what happens next? A new bottleneck will form elsewhere. The drum slows in tempo. No more buffers are needed. The system runs smoothly until entropy eventually creates another bottleneck.

A new bottleneck will form elsewhere. After removing a bottleneck, an organization may start the process over by identifying the new constraint. There is always at least one constraint in a system.

Which of the following modes of carrying cargo requires the least durable packaging? Ocean shipping Rail Inland water carriage Air

Air Air transport subjects cargo to the least likelihood of damage en route, because it is relatively smooth and fast. It places the most restrictions on the weight of packaging, so it both allows and requires the least durable packaging.

What is a key aspect of campaign management for vulnerable customer campaigns? Generating automated responses to vulnerable customers Analyzing the customer data to predict customer behaviors Generating segmented contact databases with high quality leads Analyzing the customers' needs and providing alternatives that pique their interest

Analyzing the customer data to predict customer behaviors One of the key goals of campaign management is to analyze the customer data to predict customer behaviors.

Who can perform SA8000:2014 certification audits? International Organization for Standardization Any certification body Anybody accredited by Social Accountability Accreditation Services Social Accountability International only

Anybody accredited by Social Accountability Accreditation Services Social Accountability Accreditation Services (SAAS) provides certification bodies with information on the steps that need to be done to be accredited to perform SA8000:2014 certification audits.

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

Efficiency and utilization 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.

Which of the following illustrates an emphasis on the affordability aspect of customer value? Cement-mixing tub of greater durability and flexibility than similar offerings Same-day delivery of goods via courier No-hassle, no-negotiation sales prices on new cars at a dealership Luxury boat priced lower than other luxury boats of similar size and features

Luxury boat priced lower than other luxury boats of similar size and features Affordability does not refer solely to discount goods but to goods that have a price at the lower end of an appropriate price level for the value received.

A logistics manager concerned with avoiding breakage of cargo would be least inclined to choose which of the following modes of transportation (ignoring tradeoffs)? Water Air Rail Truck

Rail Rail provides a rough ride for cargo and can jar products when train cars are coupled, resulting in more breakage than occurs in cargo transported by truck, water, or air.

Which is an example of a return that could be part of the reverse supply chain? Return initiated by a manufacturer and directed to an outgoing distribution center Return initiated by a customer and directed to an end user Return initiated by a component supplier and directed to a raw material supplier Return initiated by a customer and directed to all other supply chain partners simultaneously

Return initiated by a component supplier and directed to a raw material supplier Any supply chain participant can initiate a return, which would need to go to an upstream supply chain partner for it to be part of the reverse supply chain.

What would be a reason to assign percentage ratings to both probability and impact levels? The percentages can help assessors agree on the value of the rating level. Risk and impact percentages are both needed when calculating expected monetary value. The percentages can be added to find the risk rating. The percentages can help in conforming to ISO 14000 risk management labeling requirements

The percentages can help assessors agree on the value of the rating level. Percentages can help estimators come to a common idea of the value of each category. For example, labels and percentages might range from insignificant (5%), to minor (10%), to moderate (20%), to major (40%), to extreme (80%). The organization can decide on how to label the categories and assign percentages to these labels. Percentage impact ratings are not needed for expected monetary value calculations, but they could be used indirectly when calculating the monetary impact for those calculations.

Two red flags are (1) separate forecasts causing the bullwhip effect and (2) a general attitude that forecasts should remain trade secrets. What subcategory of risks do these red flags relate to? Inter-organizational communications risks Capacity and flexibility risks Intellectual property risks Customer product launch risks

Inter-organizational communications risks Both of these red flags relate to the risk that supply chain partners will fail to communicate information on demand to one another.

Which of the following would be used in the process assessment stage of the continuous improvement model? Process chart or flowchart Benchmarks Change management initiatives Interview questions for stakeholders

Benchmarks In the process assessment stage, benchmarks can be set with reference to the KPI "score" of a competitor or of a superior performer worldwide. In addition to benchmarks that set a specific performance goal, such as reducing cycle time by a set percentage, process benchmarks that describe the qualities that make up process excellence can also be used.

Which of the following aspects of a customer relationship management technology system would be used for channel partner management and pipeline management? Account management Sales force automation Marketing automation Business intelligence

Sales force automation Sales force automation features include sales force management, channel partner management, lead tracking, and pipeline management.

Target costing is: researching the competition's prices and setting the product price accordingly. designing a product to have a specific price point that remains the same. designing a product and then subtracting profit from the planned selling price. designing a product to meet a specific cost objective.

designing a product to meet a specific cost objective. Target costing is the process of designing a product to meet a specific cost objective. It involves setting the planned selling price and subtracting the desired profit as well as marketing and distribution costs, thus leaving the required manufacturing or target cost.

Establishing clear ground rules for collaboration and conflict resolution benefits both alliance participants by: encouraging participants to redefine problematic connections rather than break them. preventing any sources of tension between participant organizations. ensuring strict adherence to the established alliance contract by both participants. providing clear channels of legal redress for each participant.

encouraging participants to redefine problematic connections rather than break them. In a dynamic marketplace, a static consultant contract without clear and flexible guidelines and processes to manage the relationship simply encourages consultants to break their connection with the company rather than redefine it.

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. implementation of basic materials-handling equipment in addition to manual operations. some departments implementing strategies that make jobs more challenging. participating in periodic sales and operations planning meetings. Next question

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.

Operational performance measures related to machine, worker, or department efficiency or utilization are usually: the largest component of the tracking signal portion of bias. poorly correlated with organizational performance. more important than forecast accuracy in measuring organizational performance. measured using mean absolute deviation.

poorly correlated with organizational performance. operational performance measurements in traditional management are defined as "performance measurements related to machine, worker, or department efficiency or utilization. These performance measurements are usually poorly correlated with organizational performance."

The developers of the balanced scorecard approach to performance were concerned that traditional metrics placed too much emphasis on which of the following considerations? Past financial performance Future performance objectives Current profitability Customer complaints

Past financial performance The developers of the balanced scorecard, Robert S. Kaplan and David Norton, believed that the traditional reliance on financial measures of performance placed too much emphasis on the past and too little on the present and future and, in addition, ignored other types of measures that contribute to success.

Which of the following would be a typical time horizon for sales and operations planning? One week to one month One month to one quarter 12 to 18 months 18 months to three years

12 to 18 months The sales and operations plan typically extends out at least a year and no more than 18 months and involves both short- and medium-term planning.

Planning and execution are: Level 1 SCOR process types. Level 2 SCOR process types. Level 3 SCOR process types. Level 4 SCOR process types.

Level 2 SCOR process types. Planning and execution are Level 2 SCOR process types.

A company wants to improve its customer service. Which of the following should it focus on to achieve that goal? Availability Efficiency Sustainability Effectiveness

Availability Availability is the capacity to have inventory when it is wanted by a customer.

What is a common method of aggregating products for demand planning purposes? By customer By stock keeping unit (SKU) By forecast accuracy By life cycle stage

By life cycle stage The APICS Dictionary, 15th edition, definition of demand planning states in part that "items can be aggregated by product family, geographical location, product life cycle, and so forth, to determine an estimate of consumer demand for finished products, service parts, and services."

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? Mergers and acquisitions Collaboration/strategic alliance Ongoing relationship Buy on the market

Collaboration/strategic alliance Collaborations or strategic alliances are long-term arrangements ruled more by agreements than contracts. The suppliers are fully aware of the purchaser's goals and strategies and work with the purchaser to develop and implement tactics. Trust levels are high.

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 Action plan Simulation Nucleus firm

Conceptual model Conceptual models are guides to shared understanding and can be as simple as a flowchart with descriptions or examples.

You work in the information technology group supporting the supply chain. Which of the following would be one of your primary concerns regarding supply chain design while in that role? Determining how to best assist supply chain partners with their IT needs Determining how to increase information velocity Determining which data are not important and thus can be ignored Determining how to track product variability

Determining which data are not important and thus can be ignored The primary concern today in this area is determining what data should be transferred, which is significant to the effective management of the supply chain, and which data are not of importance and can therefore be safely ignored.

How often, under normal circumstances, does a pre-S&OP meeting take place? Weekly Monthly Quarterly Annually

Monthly Sales and operations planning (S&OP) is a monthly process.

Where would a wholesaler find information on an organization's hazardous waste if they are using the Globally Harmonized System of Classification and Labeling of Chemicals? United Nations web portal Safety data sheets Incoterms Risk register

Safety data sheets The APICS Dictionary, 15th edition, defines the Globally Harmonized System of Classification and Labeling of Chemicals (GHS) as follows: "An International standard, created by the United Nations Economic Commission for Europe (UNECE), for classifying chemicals according to their health, physical and environmental hazards. The system defines and classifies the hazards of chemical products, and communicates health and safety information on labels and material safety data sheets." Note that material safety data sheets are now called safety data sheets (SDS).

Which of the following is another name for the "one size fits all" type of design? Standardization Mass customization Component commonality Modular design

Standardization Standardization, also called universality, is the strategy of designing a product to work in multiple markets rather than in only one. Modular design and mass customization may reach multiple market segments, but they do so by product differentiation, not standardization.

Which of the following is the best example of risk mitigation in a strategic alliance? Surmounting limited availability of component suppliers Improving overall financial position Overcoming barriers to market entry Improving operations by lowering system costs

Surmounting limited availability of component suppliers From a purely reactive stance, companies with certain types of supply situations may be able to manage risk better in a strategic alliance. Purchasers must consider the strategic importance of the component, the complexity of the component-product interface, the number of component suppliers available, and the uncertainty of the supplier relationship.

Perfect order fulfillment is equal to: total perfect orders multiplied by the rate of reliability. total perfect orders divided by the total number of orders. the total number of orders divided by total perfect orders. total customer orders minus any complaints or negative feedback from customers.

total perfect orders divided by the total number of orders. Perfect order fulfillment is equal to total perfect orders divided by the total number of orders.

Which of the following is the correct term for the situation in which a firm exports a product at a lower price than it sells for in the country in which the firm operates? Under-pricing Duping Competitive pricing Dumping

Dumping When a firm exports a product at a price lower than it normally sells for in the country in which the firm operates, it is called dumping.

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

Project planning 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.

As measured by millions of tons, which of the following modes of transportation moves the most cargo in the United States? Pipeline Rail Truck Water

Truck According to the Freight Analysis Framework, trucks move the largest amount of commercial cargo in the U.S. as measured by millions of tons per year.

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 Product review, supply planning, demand planning, pre-meeting, financial review Pre-meeting, demand planning, product review, financial review, supply planning Pre-meeting, product review, demand planning, financial review, supply planning

Product review, demand planning, supply planning, financial review, pre-meeting The meetings in the S&OP process may include a product review, demand planning, supply planning, a financial review, a pre-meeting, and the executive S&OP meeting. Note that the product review and the financial review are meetings suggested by Crum in Demand Management Best Practices, while the other meetings are part of Wallace's S&OP process steps from Sales and Operations Planning: The How-to Handbook.

The prior period's projected available balance (PAB) is 40 units. The master production schedule for the period plans 30 units. Customer orders are 20 units, and the forecast is 30 units. What is the PAB if this period is within the slushy zone? 40 units 50 units 60 units 90 units

40 units PAB after the demand time fence = Prior Period PAB + MPS - Greater of Forecast or Customer Orders; 40 units + 30 units - 30 units = 40 units.

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? Metric - Scale Score Risk tolerance - 2 Probability of occurrence - 4 Magnitude of loss - 5 Cost to mitigate - 4 15 20 25 40

20 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 true of electronic data interchange (EDI)? EDI is no longer commonly used in business interfaces. EDI can transfer complex communications as required in supply chain collaboration. EDI still often needs to be batch-processed. EDI and applicability statement 2 (AS2) are completely different transfer protocols.

EDI still often needs to be batch-processed. While EDI still often needs to be batch-processed, it is commonly used. However, it can transfer only transactional information and not more complex communications.

Which of the following phases or meetings in the sales and operations planning (S&OP) process might end with professionals recommending reducing the demand plan but only as a last resort? Product review meeting Financial review meeting Supply planning phase Demand planning phase

Supply planning phase The supply review meeting uses the consensus demand plan to generate a production plan. If supply cannot match demand in total units or in product mix, then the meeting involves generating one or more alternative plans that propose solutions to the supply and demand mismatch. Reducing the demand plan is a solution that is used only if other methods cannot be devised to solve the problem. Note that the product review and the financial review are meetings suggested by Crum and Palmatier in Demand Management Best Practices, while the supply and demand planning phases are part of Wallace's S&OP process steps from Sales and Operations Planning: The How-to Handbook.

Which of the following constitutes a major, direct output of material requirements planning? Marketing plan Planned production/purchase orders Master production schedule Rough-cut capacity planning

Planned production/purchase orders Material requirements planning produces a make/buy action plan indicating what should be ordered, produced, expedited, or de-expedited.

Which of the following elements of a cost justification for a warehouse management system should be made most conservatively? Increased profit due to more efficient use of direct materials Days' inventory reduction in cash-to-cash cycle More reliable quality assurance reducing return percentage Reductions in positions and resulting lower labor costs

Reductions in positions and resulting lower labor costs While none of the items in the list should be exaggerated, staffing reductions and anticipated layoffs often prove incorrect in the long run. It is best to position staffing changes as redeployment of the workforce.

Which type of supply chain has a short product life cycle, unstable customer demand, and a high number of forecasting errors? Responsive Efficient Effective Brand new

Responsive A responsive supply chain has a short product life cycle, unstable customer demand, and, potentially, a high number of forecasting errors. It is also noted for adapting to changes in market structures and using real-time data and multiple warehouses. Many use third-party rapid transit providers for speedy product delivery.

What has transformed global trade in manufactured goods as dramatically as jet planes have changed the way we travel and the internet has changed the way we communicate? Overnight delivery services Insect-free shipping pallets Improved customer service practices Shipping containers

Shipping containers The use of shipping containers, also known as containerization, has transformed global trade in manufactured goods as dramatically as jet planes have changed the way we travel and the internet has changed the way we communicate.

You are purchasing an item online and receive the following automated message: "Other customers like you have also ordered X. Would you like to learn more about this product now? If so, click here." This is an example of: a win-back program. up-selling. cross-selling. a vulnerable customer program.

cross-selling. Cross-selling is a customer relationship management tactic made possible by the accumulation of data about a customer's buying habits. Customers are offered related products in addition to their current purchase.

Which intermediary would be best to help a company prepare their goods to survive rough handling but with the least bulk and weight? Shipping association Export packing company Consolidator Ship agent

Export packing company Export packing companies provide specialized packaging that can help products survive the rough handling and adverse changes in climate that can occur when cargo travels long distances. The packing company can choose packaging materials that provide adequate protection with the least bulk and weight.

Which of the following happens most often when an organization uses available-to-promise (ATP)? Obsolete or damaged inventory could be mistakenly promised to a customer. Inventories of cycle stocks could increase dramatically as safety stocks decrease. Goods that are still in the process of being assembled could be promised to a customer. Two salespersons could promise the same inventory.

Goods that are still in the process of being assembled could be promised to a customer. ATP is "the uncommitted portion of a company's inventory and planned production maintained in the master schedule to support customer-order promising" (APICS Dictionary, 15th edition).

"Customer interest is high, and supply must be managed to meet demand and avoid stockouts that could boost growing competition." This sentence best describes what phase of the product life cycle? Development Introduction Growth Maturity

Growth During the growth phase, the customer base increases and competitors begin to enter the market. Data on the growing customer base must be analyzed for new opportunities, and supply must be managed to meet growing demand.

Which of the following conditions is a potential drawback of lot-for-lot replenishment when items must be ordered frequently? Incompatibility with Just-in-Time (JIT) Inventory build-up High inventory costs High setup costs

High setup costs Typically used with JIT, lot-for-lot replenishment delivers the exact amount needed when it is needed, thereby eliminating inventory buffers. Frequent delivery of small lots requires more setups.

Which of the following performance measures pertain to availability in customer service? I. Stockout frequency II. Fill rate III. Consistency IV. Flexibility I and II II and III II and IV I, II, III, and IV

I and II Availability is the capacity to have inventory in stock when wanted by a customer. It is measured by stockout frequency, fill rate, and orders shipped complete. Consistency and flexibility are performance measures of operational performance.

Which of the following statements about the World Trade Organization (WTO) are true? I. The WTO helps less-developed nations with better access to world markets for their exportable products. II. The WTO can arbitrate disputes and complaints between member nations. III. Businesses located in a member nation can open a branch in another member nation to gain access to that country's markets. I and II I and III II and III I, II, and III

I, II, and III The WTO pays special attention to providing less-developed nations with better access to world markets for their exportable products. Disputes and complaints by one member nation against another may be submitted for arbitration. Membership in the WTO also means that businesses headquartered in one member nation should be able to open branches in another member nation and be subject to the same rules applying to domestic businesses in that nation, thus gaining access to their markets directly rather than through imports.

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 Agility Visibility Flexibility

Innovation Innovation clearly plays a major role in keeping supply chains flexible enough to respond to rapid changes in demand and to the more gradual evolution of markets and technologies. Innovation is the key to strategic flexibility—not just innovation in product design but in organizational design and supply chain processes as well.

Which of the following describes the best mix of different continuous improvement methods working together? Just-in-Time and lean are compatible with each other but not with six sigma. Just-in-Time and six sigma are compatible with each other but not with lean. Six sigma and lean are compatible with each other but not with Just-in-Time. Just-in-Time, lean, and six sigma work best when combined.

Just-in-Time, lean, and six sigma work best when combined. When a system is running at the speed necessary to satisfy customer demand, lean and Just-in-Time tactics can be used to reduce waste and optimize delivery timing while six sigma controls smooth out system variability.

Kevyn and Terry both work in the supply chain. Kevyn focuses on supply-related issues; Terry focuses on demand-related issues. Which of the logistics components would each one tend to consider first? Kevyn considers stockouts first, and Terry considers safety stock first. Kevyn considers shipping modes first, and Terry considers safety stock first. Kevyn considers warehousing first, and Terry considers transportation first. Kevyn considers transportation first, and Terry considers warehousing first.

Kevyn considers transportation first, and Terry considers warehousing first. Logistics requires a balancing act for tradeoffs between transportation and warehousing. Since Kevyn works on the supply side, she considers transportation first. Terry works on demand issues, so she considers warehousing first.

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 trend in the demand plan numbers to see if the forecast is low. Look at the assumptions to see if they support changes in the demand plan. Look at the supply plan from the same month last year to see if there is a pattern. Look at the annual business plan targets to see if the new numbers will meet the plan.

Look at the assumptions to see if they support changes in the demand plan. For periods in which demand is projected to change significantly, managers can question why the change occurred. Information on changes in assumptions for each period should indicate why the demand plan was revised. The scenario mentioned in the question might show that there was a significant change in demand but no significant change in assumptions during the given period.

Which of the following fixed versus variable cost scenarios correctly identifies the cost structure of trucking? Low fixed costs, high variable costs Low fixed costs, low variable costs High fixed costs, high variable costs High fixed costs, low variable costs

Low fixed costs, high variable costs The public (taxpayers) builds and maintains the infrastructure used by trucks, so they have low fixed costs. But they have relatively high variable costs for operation and maintenance.

An efficiency-focused supply chain strives for which of the following? Frequent product introductions, low forecasting errors, and a short product life cycle A long product life cycle, speedy product delivery, and use of real-time data High product variety, a long product life cycle, and stable demand Low forecasting errors, limited product variety, and a long product life cycle

Low forecasting errors, limited product variety, and a long product life cycle An efficiency-focused supply chain strives for stable customer demand, low forecasting errors, little or no adaptation to changes in market structures, a long product life cycle, infrequent product introductions, and limited product variety.

Once a collaborative partnership has been formed, which of the following should be avoided? Sharing information with external parties and internal staff Identifying and holding each party accountable for specific contributions Striving for equity in profits Maintaining existing incentives from each of the respective firms

Maintaining existing incentives from each of the respective firms The managers of both firms need to work together from the start: sharing information with external parties and with internal staff, modifying incentives to match collaborative goals, enforcing agreements by departments and staff, stabilizing pricing and ordering, and improving operations.

Supply chain managers can be useful as intermediaries between manufacturing professionals and which area that is often otherwise underrepresented in production planning? Procurement Marketing Logistics Shop floor control

Marketing Interfacing between the demand side of the organization and manufacturing planning and control is a vital task for demand management, because most operations professionals are highly specialized. According to research by Showalter and White, operations management literature "exhibits a pronounced lack of marketing perspective." They also state that when the marketing perspective is included it is treated "simply as a complicating constraint on the production planning process." A formal demand management function and/or a demand manager can represent product and brand management, marketing, and sales interests in operations-specific technical terms.

Which of the following processes results in production numbers driven by dependent demand? Sales and operations planning Material requirements planning Master scheduling Market planning

Material requirements planning Material requirements planning schedules delivery of dependent demand items (which are in turn based upon independent demand forecasts). The other processes work with independent demand or product families.

A vertically integrated enterprise can grow by doing which of the following? Merging with or acquiring other companies Outsourcing its logistics function Adding suppliers Streamlining its organizational structure

Merging with or acquiring other companies A vertically integrated enterprise may grow from an entrepreneurial base by adding departments and layers of management to accommodate expansion, or it may be built through mergers and acquisitions.

What is the "voice of the customer" (VOC)? Method of customer segmentation Method of determining customer value Method of customer research Including customers in key marketing decisions

Method of customer research The VOC is a customer research and measurement tool used to gain answers to complex marketing questions. It may include focus groups in which customers contribute to product or process design.

What is a Level 1 SCOR metric for planning demand and supply? Cost of goods sold Upside supply chain flexibility Perfect order fulfillment Order fulfillment cycle time

Order fulfillment cycle time Order fulfillment cycle time is a Level 1 metric that measures responsiveness for the plan process.

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 revise the plan at most on a quarterly basis. Organizations should use a one-year maximum planning horizon. Organizations should include a mechanism for recording uncertainty in inputs.

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.

Which of the following can be a result of a carefully designed reverse logistics chain? Need for more incinerators and landfills Disposal of hazardous metals in other distant locations Ability to move items down the reverse logistics hierarchy, toward its base Potential for very lucrative customer service contracts and extended warranties

Potential for very lucrative customer service contracts and extended warranties A carefully designed reverse logistics chain has the potential for very lucrative customer service contracts and extended warranties, particularly if the products are well designed and reliable.

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? Price Product Promotion Placement

Promotion Promotion comprises a variety of marketing activities, from customer research through strategy setting and advertising. Customer-driven strategies such as those using customer relationship management enhance both the gathering of information about customers and the use of that information in marketing activities.

Why should positive variances from standards be tracked by an organization? They could show where someone was taking a dangerous shortcut. They could show where processes have inefficiencies. They could show which machines are in need of maintenance. They could show which employees to praise.

They could show where someone was taking a dangerous shortcut. Positive variances could indicate where a process improvement could be formalized or where a dangerous shortcut was taken.

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. Yes. All communications should be going through you anyway. No. Controlling conversations would be intrusive and counterproductive. No. If people have communications problems, they will notify you.

Yes. It is important that communications stay complete, accurate, and respectful. The final step in any communications plan is to continually monitor communications between stakeholders to ensure that they are complete, accurate, and respectful at all times.

For a product or service, six sigma means that: the average opportunity for a defect is a target plus/minus three sigmas. the average opportunity for a defect is a target plus/minus six sigmas. the average opportunity for a defect is 34 defects per million. the product or service is 100% defect-free.

the average opportunity for a defect is a target plus/minus three sigmas. Assuming that one million opportunities for a defect will result in the familiar bell curve with the target value in the center, then about 99.9997% of those opportunities will fall within six sigmas (or standard deviations) from the target value.

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 Hedge inventory Safety stock Cycle stock

Anticipation inventory Anticipation inventory is "additional inventory above basic pipeline stock to cover projected trends of increasing sales, planned sales promotion programs, seasonal fluctuations, plant shutdowns, and vacations" (APICS Dictionary, 15th edition).

Which of the following components of demand is generally forecast by economists? Trend Cycle Random variation Seasonality

Cycle Forecasting of cycles, which tracks demand over a span of years or even decades, is a job generally performed by economists.

What is a chief customer officer (CCO) in charge of? Assigning account managers to high-value customers Responding to customer dissatisfaction Identifying and responding to customer care opportunities Identifying opportunities for enhancing revenue and profit through customer interactions

Identifying and responding to customer care opportunities A CCO may supervise management of customer dissatisfaction, but the job entails more activities, including identifying customer touchpoints, defining and enforcing service standards, enriching the customer experience, and helping customers navigate within the organization.

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 Spend analysis Supplier relationship management Strategic sourcing

Total cost of ownership Part of the APICS Dictionary, 15th edition, definition of total cost of ownership is that "the main insight that TCO offers to the supply chain manager is the understanding that the acquisition cost is often a very small portion of the total cost of ownership."

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? Routing, load matching, and optimization TMS tools Automatic identification technologies Web-based TMS services Collaborative planning, forecasting, and replenishment (CPFR)

Web-based TMS services Because all of the items listed in the question change dynamically, they are best dealt with using a dynamic method of updating the data in real time, such as by keeping the information on the web so only current information is used for planning.

Referring to the table below, calculate a seasonalized forecast for the month of June, assuming that the deseasonalized demand for January to June in a future year is 115. (Round answer to whole numbers.) Month: January | February | March | April | May | June Monthly Demand Per Year: 102, 99, 100 | 101, 101, 105 | 105, 102, 108 | 106, 103, 109 | 108, 105, 109 | 111, 108, 110 Seasonal Totals: 301 | 307 | 315 | 318 | 322 | 329 = 1,892 Seasonal Average: 100 | 102 | 105 | 106 | 107 | 110 = 630 Deseasonalized Demand: 105 | 105 | 105 | 105 | 105 | 105 Seasonal Index: .95 | .97 | 1.00 | 1.01 | 1.02 | 1.05 109 110 115 121

121 The seasonal index is the seasonal average demand divided by the deseasonalized average. The seasonal index and the deseasonalized demand for a future year are provided, so you can multiply the seasonal index by the deseasonalized demand to find the seasonalized forecast for that future June. Since the seasonal index for June is 1.05, the June forecast in the upcoming year would be the deseasonalized average of 115 multiplied by the June seasonal index: 115 x 1.05 = 120.75 (rounds to 121).

For product development, which is considered to be value-added? An extra-low price when most customers rank quality over price Ability to customize the product for the small number of customers who want this An unnecessary handle that most customers say boosts confidence Speed of delivery when most customers buy well in advance of need

An unnecessary handle that most customers say boosts confidence When demand management is allowed to influence product and brand management, products and services can be designed and branded to reflect what is valuable to the customer. Elements that are not perceived as a value by the customer should be eliminated from the design of the product/service package. This is a principle of lean thinking: If the customer does not understand or value the results of a supply chain activity, it is not value-added and can be eliminated.

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? Design for remanufacture Design for logistics Design for the environment Component commonality

Component commonality Component commonality is the design strategy of substituting one common component for a variety of similar components.

According to the law of demand, what is likely to happen if the price of a good or service increases? Competitors increase their prices more. Each additional unit purchased will have less utility than the last. Consumption of substitute goods may increase. Demand for the good or service increases.

Consumption of substitute goods may increase. There are goods and services that might be almost as good as the scarce item that is desired. These are called substitute goods. The substitution effect states that prices of substitute goods are interrelated. As the price of one good increases, consumption of the substitute good may increase

The U.S. Department of Transportation identifies which four characteristics of concern due to health and U.S. EPA requirements? Corrosivity, ignitability, toxicity, reactivity Reactivity, corrosivity, solubility, flammability Toxicity, reactivity, corrosivity, solubility Ignitability, toxicity, solubility, reactivity

Corrosivity, ignitability, toxicity, reactivity The U.S. Department of Transportation identifies corrosivity, ignitability, toxicity, and reactivity as being of concern due to health and U.S. EPA requirements.

Which of the following is true of contracts for partnerships? Contracts should be fixed at the start of the relationship, because alterations are difficult to enact between multiple parties. Cultural differences in contracts and problem resolution styles should be a primary consideration when arranging formal contracts in the U.S. Contracts should always be used in the negotiation process to keep the relationships true to the agreement. Courts can become involved in conflicts in most Asian countries without long-term detriment to the relationship. Next question

Cultural differences in contracts and problem resolution styles should be a primary consideration when arranging formal contracts in the U.S. Contracts, policies and procedures, and informal conflict resolution must be sensitive to cultural differences. While courts can become involved in conflicts in the United States without long-term detriment, the opposite is true in most Asian countries.

Which of the following is true of the people or metrics involved in supply chain management? Supply chain management is the responsibility of a department-level manager who is equal in hierarchy to other department heads. Current supply chain performance is better quantitatively benchmarked against the firm's desired performance than qualitatively benchmarked. Supply chain strategy and control of the related processes depend on having people educated in functional thinking rather than supply chain thinking. Performance must be measured by ratios of profitability and velocity, not by a checklist.

Current supply chain performance is better quantitatively benchmarked against the firm's desired performance than qualitatively benchmarked. Numbers (quantitative) generally provide the most convincing supporting evidence in the boardroom and investment analyst's office. If you're bragging about your cash-to-cash cycle, for instance, you might say, "We've got it down from 50 days to 20, and that's below the industry average."

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? Online trade exchange Data-oriented middleware Custom linkage Process-oriented middleware

Custom linkage A related term to data-oriented middleware is custom linkages, which are custom-programmed data-oriented links that are developed from scratch rather than using middleware software as a template. Custom linkages could be less expensive than purchasing and configuring a data-oriented middleware package or can be used when no package is a close enough fit for the applications.

Capacity control is most closely related to which of the following activities? Daily input/output Sales and operations planning Monthly rough-cut capacity Annual resource planning

Daily input/output Capacity control takes place at the level of everyday activity. It is a form of input/output control.

Which of the following authorities has issued directives mandating reporting, reduction, and recycling of heavy metals in end-of-life electronics products? Chinese government United States government European Union United Nations

European Union The European Union has issued several directives regarding hazardous components of electronics products, including the Waste from Electronic Equipment directive (WEEE) and the directive restricting the use of heavy metals and retardants in electrical and electronic equipment (RoHS).

Which of the following areas in the collaborative planning, forecasting, and replenishment (CPFR) model corresponds to the order-to-cash cycle? Order fulfillment Execution Demand and supply management Logistics/distribution

Execution The area of CPFR that corresponds to the order-to-cash cycle is execution, which includes the collaboration tasks of order generation and order fulfillment. Order fulfillment includes the enterprise task of logistics/distribution.

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? Horizontal Informal Unofficial Formal

Formal Even if the tone or format seems casual, a formal communication is designed and intended to convey an official message that should be adhered to. Typical examples of formal communication include mission and vision statements.

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? I. Standardization II. Simplification III. Customization IV. Design for service I and III II and III II and IV I, II, and III

II and III Simplification is "improving quality and cutting costs by removing complexity from a product or service" (APICS Dictionary, 15th edition). Customization is a design goal that allows products or product families to be adapted to changing customer demand over time. The service still allows for options and can be changed on a regular basis, so it is not standardized. Design for service refers to designing products for ease of serviceability, not the design of a service.

The costs of an organization's initial customer marketing and relationship building consistently result in expenses in excess of the revenues that are generated. Which of the following describes this situation? It is unsustainable, and the strategically set prices should be raised. It is sustainable if some customers can be retained long term. It is normal if the product is in the development stage but not if it's in the growth stage. It is normal if the product is in the growth stage but not if it's in the maturity stage.

It is sustainable if some customers can be retained long term. The costs of acquiring new customers tend to be front-loaded in the relationship. If enough customers can be retained over the long term, the cost of retaining them declines as the profits derived from them increase.

Which of the following is a primary benefit of risk categorization? It may be possible to address several risks with one action. Categories automatically form as risk levels are assigned. The categorization process will identify the organization's risk tolerance. Each category will tend to have a similar response such as transfer or mitigate.

It may be possible to address several risks with one action. Each organization will define categories of risks in such a way that it helps the organization cluster planned risk responses, perhaps finding actions that can address more than one risk simultaneously.

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 a good strategy, because it will give you an edge over competitors. It's a good strategy if it results in more speedy delivery of products to customers. It's not a good strategy, because it will require more reliance on 3PLs and 4PLs. It's not a good strategy, because the company could incur additional expenses that are counterproductive.

It's not a good strategy, because the company could incur additional expenses that are counterproductive. In trying to improve its customer service level to 100%, a company would likely incur many additional expenses. This is not a good strategy, because it could be financially ruinous.

Which has the potential to reduce customs clearance delays? Joining national trade partnerships Maintaining all foreign staff as contractors Disclosing use of conflict minerals Making unofficial facilitating payments

Joining national trade partnerships Security regulations are a customs role that has increased in importance as laws designed to combat terrorism have come into force. The impact on organizations is that this increases the potential for delays at borders as goods are checked. One way to improve the chances of getting goods through smoothly is to participate in a trade partnership with each government that offers such a program. A facilitating payment is another name for a bribe and is illegal.

What supply chain function do customers usually take for granted? Product design Packaging Logistics Information technology

Logistics Logistics includes the various related tasks required to get the right goods to the right customers at the right time. This requires that the logistics function operate 24/7, every day of the year, since customers expect product delivery to be done as promised.

Which of the following factors distinguishes total quality management (TQM) from other approaches? Management's ongoing support of all process improvements related to a product Primary focus on eliminating constraints in production processes Hands-on executive-level involvement in continuous improvement teams in the manufacturing facility Suppliers that are considered partners

Management's ongoing support of all process improvements related to a product Part of what distinguishes TQM from other approaches is that it is based on the premise that management will support the ongoing improvement of every process involved in the development and distribution of a product. This implies continuous improvement of all processes over time.

Redundancies between members of an extended supply chain could be discovered through which of the following processes? Forming extended supply chain IT action plans Mapping the end-to-end supply chain processes Incorporating advanced planning and scheduling into partner systems Developing shared-access distributed servers for partners

Mapping the end-to-end supply chain processes Mapping the end-to-end supply chain processes should reveal where a process is being performed by more than one partner. Both partners may benefit by having the more capable partner perform that process for the supply chain.

Which would improve economies of scale in recycling? Product designs that use larger amounts of recyclable packaging Performing only in-house recycling National recycling standards that supersede local standards Creating returnable bottle deposits

National recycling standards that supersede local standards Recycling can run into problems when different regulatory regions enact different requirements. When each different region requires an altogether different process, this creates diseconomies of scale. Organizations are often forced to customize programs for every local area, which entails different methods, different training, and so on.

The return SCOR process impacts which income statement element? Wages Warranty reserves Net sales Cash

Net sales Net sales is impacted by returns because returns reduce net sales. The other elements are either not affected by returns or are not income statement elements.

Obsolescence or theft risks are included in which inventory cost category? Carrying costs Ordering costs Lost customer or sale costs Risk management costs

Carrying costs Carrying costs include all the expenses involved in housing the inventory, including risk costs.

Which of the following is the primary focus of master scheduling (MS)? Production amounts for individual products Aggregate production amounts for product families Production amounts for individual product components or ingredients Aggregate production amounts for product components or ingredients

Production amounts for individual products MS weighs various priorities and factors to arrive at weekly production schedules for individual products.

When embracing continuous improvement in implementing a supplier relationship management (SRM) program, which of the following actions should partner companies take? Maintain separation between strategic sourcing and contract deployment. Empower internal buyers to innovate on supplier selection outside of agreements. Treat continuous improvement as a series of large-scale events. Share innovative ideas with each other without asking for compensation.

Share innovative ideas with each other without asking for compensation. Rather than a static business principle, SRM is a dynamic process where the pursuit of collaborative joint objectives and sharing of innovative ideas can result in the achievement of profitable common goals.

In the majority of situations, the benefit-cost impact of a logistical failure is: directly related to the amount of effort expended by the business to replace a customer. indirectly related to changes in customer satisfaction levels. directly related to the importance of the service to the customer. a function of the profits lost by the customer over "x" number of days.

directly related to the importance of the service to the customer. The benefit-cost impact of a logistical failure is directly related to the importance of the service to the customer.

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 transportation costs. increasing velocity. eliminating product damage. reducing the variability of products.

increasing velocity. Reducing the time in which inventory is not moving by using JIT delivery and lean manufacturing is a method for increasing the velocity of transactions. The less time inventory spends at rest, the less likely it is to suffer damage or spoilage. Increased velocity reduces the expenses involved in warehousing inventory.

An organization outsources a key activity and stays involved with the supplier, monitoring and controlling on a daily basis. The resulting quality is not what was desired, but the supplier insists that its quality is superior to that of its competitors. Which of the following is the most likely reason for this problem? Failure to define quality metrics Failure to establish clear performance expectations Failure to maintain ultimate responsibility Failure to coordinate the activities between buyer and supplier

Failure to establish clear performance expectations Rather than failing to define quality metrics, the organizations in this scenario failed to agree on a common standard or target for those metrics.

Revenues, profit margin, market share, expenses, image, and reputation are values for which stakeholder group? End customers Lenders Investors Firms in the supply chain

Firms in the supply chain Revenues, profit margin, market share, expenses, image, and reputation are values of supply chain firms.

Which of the following types of third-party logistics firms schedules cargo transport but operates no carriers? Export trading company Export packing company Freight forwarder Shipping association

Freight forwarder Freight forwarders function like "travel agents for cargo," arranging for transport but not operating their own carriers.

Which of the following describes a manager's movements as he or she adopts the SCOR model? From a process orientation to a functional area orientation From a process orientation to a product or service orientation From a functional area orientation to a process orientation From a functional area orientation to a cost reduction orientation

From a functional area orientation to a process orientation As a manager adopts the SCOR model, he or she moves from a functional area orientation to a process orientation. The SCOR model is composed of a set of linked processes (plan, source, make, deliver, return).

Corporate participants in the U.S. C-TPAT (Customs-Trade Partnership Against Terrorism) receive which of the following benefits? Reduced tariffs Exemption from border inspections Increased protection for overseas shipments Greater reliance on self-policing

Greater reliance on self-policing Corporate partners in C-TPAT benefit from a greater emphasis on self-policing rather than customs verification.

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 alone Gross requirement minus scheduled receipts Gross requirement minus projected amounts on hand and scheduled receipts Gross requirement plus projected amounts on hand and scheduled receipts

Gross requirement minus projected amounts on hand and scheduled receipts In a lot-for-lot schedule, the planned order receipt is equal to net requirements, which are defined as gross requirements minus on-hand items and scheduled receipts.

Which of the following variables are typically monitored when shipping perishable products? I. Packages adjacent to and above perishable items that may leak, spill, or contaminate the items II. Transit times III. Temperature I I and II II and III I, II, and III

I, II, and III Perishable shipments include (but are not limited to) foodstuffs, floral products, plants, animals, and medical and chemical products. Numerous domestic and international safety regulations and packaging standards are in place to ensure that perishable shipments are properly insulated and cushioned to prevent leakage, spillage, and contamination from other cargo during transit. Temperature extremes and transit times are also monitored.

When designing the customer relationship management strategy for computer algorithms for segmenting customers and prospects, which of the following is the best input data, according to best practices? I. Expert opinion or assumptions Ii. Demographics III. Projected behavioral traits IV. Historical purchasing patterns I and III II and III II and IV III and IV

II and IV Computer algorithms can be used to model customer behavior. A best practice is to base such algorithms on demographics and historical purchasing patterns and limit use of assumptions or projected behavioral traits.

A supply chain manager can apply the SCOR model to which of the following? Assessing market research efforts All market interactions, including understanding aggregate demand via order fulfillment Guiding product development activities Analyzing demand generation

All market interactions, including understanding aggregate demand via order fulfillment The SCOR model applies to all market interactions, including understanding aggregate demand through order fulfillment. It does not apply to sales and marketing (demand generation) and research and technology development. The model assumes that the product has already been designed and tested for production.

Pilferage contributes to which of the following costs? Carrying costs Logistics costs Item costs Ordering costs

Carrying costs Pilferage is considered to be one of the potential costs of carrying inventory.

Which of the following is proved through actions more than words, such as by disciplining staff who violate a partnership agreement? Security Trust Cooperation Commitment

Commitment Commitment is the resolution of key decision makers for creating and sustaining collaborative relationships.

Which of the following expresses the costs that should be included in a total cost of ownership (TCO) analysis? Costs that differ between alternatives Costs that are ongoing Costs that are controlled by the supply chain manager Costs that will be part of the cost of goods sold

Costs that differ between alternatives Since a supply chain is a very complex system with multiple costs, effective analysis requires selecting only those costs that help differentiate between alternative strategies. Costs that are the same for each option can be omitted from consideration.

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 Design for the environment Design for quality Design for manufacture and assembly

Design for logistics Products that come in kit form are designed for logistics. This makes them easier to transport, store, and package.

Which of the following is a risk of ordering more inventory than required to fill forecasted demand? Higher per-item costs for purchasing the inventory Higher per-car costs for transporting the inventory Increased obsolescence Decoupling from supplier

Increased obsolescence The risk of having inventory items become obsolete increases when amounts ordered exceed the forecast significantly. Economies of scale in transport and purchase are potential benefits of larger orders, as is decoupling from the supplier.

A dock receipt is issued by which of the following entities? Customs officer Importer (or banker) receiving a shipment Customs house agent Ship agent

Ship agent The ship agent issues a dock certificate to signify that the steamship company has received cargo brought to port by the inland carrier.

Which of the following is a leading economic indicator? Media articles about the recession Yield curve Consumer price index Ratio of inventory to sales

Yield curve The line that results from plotting, at a certain time, the market interest rates of a financial instrument (for instance, a bond) over a range of maturity dates is called a yield curve. Changes to the yield curve usually accurately predict economic swings.

In a supply chain, distributors can refer customers to other distributors who have needed product on hand. This best describes a: collaborative transportation management network. distributor integration network. third-party logistics company. fourth-party logistics company.

distributor integration network. Using modern information and communication systems, distributor integration relationships allow distributors to share access to products and services.

A benefit-cost analysis shows that an IT project costs $154,000 in the first year and $20,000 per year for the next three years. The direct cost savings are $40,000 per year for four years, and intangible cost savings are $30,000 per year for four years due to improved customer service and retention. Which of the following is a correct benefit-cost ratio? 0.61 0.76 1.31 1.64

1.31 The benefits are $280,000 over four years, and the costs are $214,000 over four years. Benefit-Cost Analysis = Total Benefits/Total Costs = $280,000/$214,000 = 1.308

What is a good way to brand the supply chain management function within an organization's overall revenue model? As a profit center As a target for cost cutting As a cost center As a value-added service

As a value-added service A supply chain doesn't directly produce revenues unless the sales channels are included in what is defined as the supply chain. In the past, a supply chain was perceived as a cost center. This mentality led to cost-cutting measures that often destroyed value. More modern supply chain revenue models treat a supply chain as a value-added service that earns the organization a share of the revenue it is producing.

If each step of a supply chain adds value, what else can the customer expect to see aside from utility? Appealing features, multiple uses, and price Attractiveness, price, and availability Agility, availability, and price Special discounts; first come, first-served ordering; and product differentiation

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.

Which of the following is a primary method of ensuring data accuracy? Prohibiting manual data entry at the time and place of the event Automating and transferring real-time data only when feasible Maintaining duplicate records in more than one database Purchasing new software

Automating and transferring real-time data only when feasible Automating data capture and collecting and transferring data in real time are good ways to ensure data accuracy when these are feasible (cost-effective), but when this is not feasible, data entry at the time and place of the event is the best alternative. Acquiring new software without improving the quality of the data will lead to poor ROI for the software.

What are typically the main external ties for a company at Stage 2 of supply chain network technology optimization, the semifunctional enterprise? Software service contracts or software as a service Tier 2 suppliers and customers Providers of functions that are not core capabilities for the organization The organization typically has no external ties except at the transactional level.

Providers of functions that are not core capabilities for the organization At Stage 2, some companies have outsourced areas outside their core processes, and these outsource providers are their main external ties.

What would a retail organization most likely use as its measure of inventory when calculating inventory turnover? Average inventory at selling price Average inventory at cost Ending inventory in units Ending inventory at market value

Average inventory at selling price Since inventory at one point in time might be deceivingly high or low, most organizations calculate average inventory. Retailers favor measuring inventory value at selling price, because it is the most accurate valuation for them.

Supplier relationship management (SRM) structures and supports relationships with suppliers, thereby assisting in which of the following? Focusing on cost of materials and components Reducing procurement and excess inventory costs Targeting suppliers for cross-selling and up-selling opportunities Improving depth of purchased parts knowledge

Reducing procurement and excess inventory costs SRM reduces procurement and excess inventory costs, supports a customer-focused business that delivers product/service customization and quality in the desired time frame, and improves processes in an ongoing manner.

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. The EPCglobal Network's object naming service can detect counterfeit tags, but it takes several days. 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 RFID tags can be rewritten with new information and reused. Some tags are for single use only, while other tags can be updated and reused.

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? Compliance Materials handling Warehousing Transportation

Transportation Transportation expenses make up the largest portion of the logistics budget, so taking the discount on transportation costs would give you the largest cost reduction.

In distribution requirements planning (DRP), the key difference between a push system and a pull system is whether: production orders are scheduled or triggered by demand. area warehouses are authorized to order inventory replenishment. distribution centers can order from each other or only from the plant. materials are issued by job order or await a signal from an operator.

area warehouses are authorized to order inventory replenishment. A pull system is defined by the APICS Dictionary, 15th edition, in terms of distribution, as "a system for replenishing field warehouse inventories where replenishment decisions are made at the field warehouse itself, not at the central warehouse or plant." The push system is the opposite. It is defined by centralized inventory planning.

A supply chain project could come in on budget, or it could be over budget by US$200,000. There is a 90% chance that it will come in on budget. What is the net expected monetary value (EMV) of this scenario's two options? -US$180,000 -US$20,000 -US$10,000 $US30,000

-US$20,000 Since these are the only two options, the worst-case probability is simply 100% - 90% = 10%. Best case EMV = 0.9 x $US0 = $US0. Worst case EMV = 0.1 x -US$200,000 = -US$20,000. Net EMV = US$0 + -US$20,000 = -US$20,000.

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 differentiation Product focus Low cost niche marketing 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.

Which of the following describes customer-focused businesses? They gather information about customers but restrict its use to critical points in the supply chain. They focus on customer care rather than product/service design and delivery. They restrict communication and distribution channels to the most profitable options. They educate customers throughout the purchasing process.

They educate customers throughout the purchasing process. Customer-focused businesses try to make their customers feel better educated about what they are buying before, during, and after the purchase.

At what point are the direct materials, direct labor, and overhead associated with inventory put on the income statement as a product expense? When the inventory is sold When the inventory becomes finished goods inventory When the inventory becomes work-in-process inventory Never. They are period expenses.

When the inventory is sold Direct materials, direct labor, and overhead associated with inventory are booked as a product expense when the products are sold. Thus, these are called the cost of goods sold.

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? I. Cost of current logistics functions II. Potential savings in time III. Improved quality of customer service IV. Reduced business focus I, II, and III I, II, and IV II, III, and IV I, II, III, and IV

I, II, and III Costs can be determined by three factors: cost of current logistics functions, potential savings in time, and improved quality of service.

Which of the following items is not one of the three key components to successful change? Influence Desire Skill Knowledge

Influence While influence can be helpful in achieving successful change, it isn't necessary in order to successfully implement a change process. Someone with very little influence in the beginning of a change process can still implement successful change by using their knowledge, skills, and desire to harness the influence of others to help make the change a success.

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? Simple price comparison Landed cost of each source Relative price adjusted for currency exchange and import duties Relative price plus transportation

Landed cost of each source Landed cost includes the product cost plus the cost of logistics, such as warehousing, transportation, and handling fees.

Which of the following continuous improvement methodologies focuses on reduction of defects to statistical insignificance? Theory of constraints Six sigma Lean Just-in-Time (JIT)

Six sigma Six sigma seeks to limit defects to no more than 3.4 per million opportunities. Of course, no initiative sets out to increase defects, but six sigma makes defect reduction its specific objective.

When communicating with stakeholders, what can be both an asset and a liability and so needs to be directed toward a predefined purpose before being used? Abundance of data Knowledge of personality types Operations research Cultural diversity

Abundance of data The ability to communicate quickly, succinctly, and accurately is facilitated by the abundance and diversity of available information, data, and knowledge and by the vast array of technology and media. But equally important is the capability of knowing what information to communicate for a given purpose.

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? Difficulty moving from available-to-promise to capable-to-promise Lack of quality initiatives Company egocentrism Finding external partners of similar power

Company egocentrism Optimization requires a dose of reality: An organization's staff may loyally and optimistically assume that the organization is at a high level of development, especially one that has been at the top for a long time. This assumption may engender a failure to work toward optimization.

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? Its own TMS from the same vendor Its own TMS from any vendor Configuration for advance shipment notifications (ASNs) Process-oriented middleware shared with the requestor

Configuration for advance shipment notifications (ASNs) ASN configuration will allow the shipper and the receiver to automatically schedule freight shipments.

Supply chain participant priorities often conflict. Which of the following groups sets a priority on short order lead times and quick delivery turnaround times? Manufacturers Warehousing management Suppliers Retailers

Retailers Retailers need short order lead times and quick delivery turnaround times.

In the SCOR® model, which performance attribute is associated with the Level 1 metric, perfect order fulfillment? Supply chain adaptability Supply chain flexibility Supply chain responsiveness Supply chain reliability

Supply chain reliability Reliability is the supply chain attribute measured by perfect order fulfillment. The customer considers the organization to be reliable if it delivers orders perfectly a high percentage of the time.

In a process map, an oval shape is used to signify which of the following? A decision point The start and end of a process A process step An important subprocess

The start and end of a process An oval shape is used to symbolize the start and end of a process.

A customer relationship management (CRM) program is which of the following? Sequential An event Cyclical Linear

Cyclical The CRM business cycle is cyclical and involves setting CRM goals for a target customer, acquiring the customer, and fulfilling business terms for the customer, with the cycle starting again by setting new goals for the customer.

Which of the following is a production planning method that performs inventory calculations at the item level? Sales and operations planning Master scheduling ABC inventory classification Production planning

Master scheduling While master planning plans production at the aggregate level, master scheduling is used to schedule inventory production at the item level.

What is a key difference between certification and supplier rating systems? Certification programs incorporate data from supply chain information systems. Supplier rating systems are used more frequently to capture ongoing performance levels. Certification programs take steps to improve supplier performance. Supplier rating systems measure performance at predefined intervals.

Supplier rating systems are used more frequently to capture ongoing performance levels. Supplier rating systems take an approach similar to certification in setting supplier performance standards, measuring performance against those standards, and taking steps to improve supplier performance. However, supplier rating systems incorporate data from supply chain information systems and are used more frequently (sometimes in an ongoing, real-time manner) to paint a picture of performance levels.

Which of the following should be included in the performance measurement of suppliers if the organization wants to ensure long-term growth and continual improvement of supply chain visibility? Supplier's measurement of its own suppliers' performance Supplier's promptness of response to inquiries Supplier's ability to perform on a consistent schedule Supplier's financial stability and capital expenditures

Supplier's financial stability and capital expenditures Supply chain visibility requires investments in technology, which are capital expenditures that will not be possible unless the supplier is profitable and financially stable.

A key role for supply chain managers when dealing with risks related to security and regulatory requirements imposed by countries and trading blocs is to: minimize the financial impact of compliance. transfer as much liability for compliance to trade partners as possible. guarantee compliance regardless of cost. differentiate between voluntary and mandatory compliance to avoid the former.

minimize the financial impact of compliance. The management challenge is to meet requirements imposed by countries and trading blocs as well as those mandated by tax revenue, environmental, and security agencies and to do so with the least possible financial impact.

Creation of brand image is a concern related to: placement. pricing. product. promotion.

promotion. Pricing, product, and placement are all important strategy elements in implementing and maintaining brand image or identity, but creation of the desired image is a promotional activity.

If an organization with limited staff has a customer relationship management (CRM) system that allows customers to customize a product-service package, the organization should: ensure that future segmentation analysis of unique packages does not result in segments of just one person. reserve some fee-based service representative help for their more profitable segments. reserve some fee-based software downloads for their more profitable segments. provide equal access to all free service offerings for each customer segment.

reserve some fee-based service representative help for their more profitable segments. When services are either offered for free (but still have an associated cost) or are in finite supply (such as a limited amount of service representative help), the organization may need to offer them only to their more profitable customers to ensure that the product-service package remains profitable and serves to retain profitable, long-term customers.

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 62.9 standard hours 64.0 standard hours 72.0 standard hours

57.6 standard hours If the work site has 80 hours of available time (a function of hours worked by equipment and workers) and its utilization rate is 90% with an efficiency rating of 80%, the rated capacity would be 57.6 hours per week (80 x 0.90 x 0.80 = 57.6 standard hours). Demonstrated capacity is not needed for the equation.

The impact of seasonality on demand in a fast-food restaurant might be measured in which of the following ways? Time of the year Day of the week Hour of the day All of the above

All of the above As a demand planning concept, "seasonality" refers to demand patterns influenced by time, not just by the four seasons of the year. The restaurant business varies with the calendar, the day of the week, and the time of day.

Which of the following countermeasures against theft of intellectual property is most likely to be effective? Advertising the inferiority of counterfeits to customers Asking distributors to look for counterfeits and inform the organization Providing rewards to distributors for not purchasing counterfeits Advertising the legal dangers of buying counterfeits to customers

Asking distributors to look for counterfeits and inform the organization The key to reducing the impact of counterfeiting is to know when it is occurring. Organizations can encourage their distributors to look for counterfeits and inform them when counterfeits are found. They can educate employees and channel partners regarding counterfeit problems. Research by Chaudhry et al. (see bibliography) indicates that these steps can be effective. However, their research shows that advertising the inferiority or dangers of counterfeits to customers or providing rewards to distributors for not purchasing counterfeits have proven less effective.

After a firm selects its performance objectives and metrics, it must do which of the following next? Communicate them and their benefits throughout the extended enterprise. Use them as a means of weeding out suppliers that can't perform to those standards. Enforce the metrics with all of its supply chain partners. Ask that the managers keep them confidential.

Communicate them and their benefits throughout the extended enterprise. Once a firm selects its performance objectives and metrics, it must then communicate them and their benefits throughout the extended enterprise. While there is no guarantee of achieving the goal a firm decides to measure, it's a virtual certainty the firm won't achieve what it fails to measure.

Which two core lean principles are at the center of the House of Toyota? Continuous improvement culture, respect for people Continuous improvement, developed workforce Total quality management, process improvement Kaizen, respect for people

Continuous improvement culture, respect for people At the center of the House of Toyota are two core lean principles: a continuous improvement culture and respect for people. In order for lean to be successful, the continuous improvement mindset starts at the top, and everyone in the organization is involved. Showing respect for people includes customers, local communities, and employees. Safety is ensured, the wider community is served, and employee morale is boosted. Organizations give back and protect the wider community through green practices and other environmental initiatives. Employees are empowered and take ownership of their work. Teams facilitate creativity, effectiveness, and efficiencies. The supporting columns in the House of Toyota are Just-in-Time and jidoka.

Supply chain participant priorities often conflict. Which of the following groups sets a priority on product and feature variety and price reduction? Customers Retailers Suppliers Manufacturers

Customers Customers demand a variety of products and features as well as low prices.

Which of the following correctly indicates a feature of process-oriented middleware? Requires that the same process be adopted by each participating firm Translates messages between systems one data field at a time Used to perform the actual mapping out of business processes for a firm Does not require new code for each system to be integrated

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 describes the main drawback of the wagon crane? Lack of flexibility compared to forklifts High operator costs Requirement of wide aisles for maneuverability High fixed cost

High fixed cost Wagon cranes (also known as crane trucks or stacker cranes) are capital-intensive purchases, but they are available in driverless models to eliminate operator costs. They offer similar flexibility to forklifts and can move through narrow aisles.

In a customer-focused organization, what is the starting point for new product development? Identifying a new market niche Identifying a price point most acceptable to lifetime customers Identifying customer need Evaluating current customer product complaints

Identifying customer need In a customer-focused world, the starting point for a product is often customer need.

What is the term for a customer relationship management (CRM) tactic described as "an analytical model to identify vulnerable customers"? Win-back programs Loyalty programs Data mining Predictive churn

Predictive churn Predictive churn uses data about individual customer transactions and histories to identify trends that indicate that a customer may switch to a competitor or cease being a customer. As a result, the vulnerable customer may be offered incentives, such as loyalty programs. The data used in the model may be gathered through data mining.

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. Provide the best protection for B items. Provide the best protection for C items. Provide the same level of protection to all items.

Provide the best protection for A items. While protecting all items is obviously important, the most cost-effective approach may be to spend relatively more resources on A items than on the less valuable, but larger, percentage of inventory.

In the ideal world of supply chain inventory, which of the following should never be at rest in a warehouse? Safety stock Employees Raw materials Conveyors

Raw materials In the ideal network, raw materials, components, and resources might never be at rest in a warehouse. Instead, they would always be in motion until arriving, just in time, at each location along the chain.

What metric assesses the magnitude of an investment relative to a company's working capital position versus revenue generated from a supply chain? Return on working capital Return on fixed assets Return on investment Return on supply chain investment

Return on working capital Return on working capital assesses the magnitude of an investment relative to a company's working capital position versus the revenue generated from a supply chain.

An organization automatically detects when a frequent purchaser calls. The customer is not placed on hold and is offered a purchase upgrade discount. Which type of customer segmentation is this organization using? Segmentation by need Segmentation by demographics Segmentation by value Segmentation by channel

Segmentation by value Today more and more organizations are treating customers differently based on the differences in the customers' contributions to the bottom line. Segmentation by value shows a customer-driven business which groups are most profitable to them so they can focus marketing efforts on those customers.

The master schedule shows inventory on hand of 150 items, scheduled production of 500 items, and booked orders of 400 items. Which of the following is the correct number of available-to-promise (ATP) items for the first period? 150 250 500 650

250 The ATP equals the inventory on hand plus scheduled production reduced by orders already on the books (150 items + 500 items - 400 items = 250 items). It continues to decline as orders come in during the period.

What should be included for each risk during identification if it is applicable and known? Assumed root cause Accept, avoid, and transfer costs Probability and criticality Planned mitigation

Assumed root cause When identifying risks, one thing to specify is the root cause of the risk, if applicable and known. Responses and probability are analyzed for risks at a different step in the risk management process.

Which of the following warehousing functions is most like spot stocking but has a wider range of seasonal goods? Mixing Assortment Break-bulk Stockpiling

Assortment Assortment resembles spot stocking but with a wider range (assortment) of seasonal goods—such as clothing ensembles.

Which of the following is the type of contract that initiates all foreign shipments? Export license Bill of lading Commercial invoice Certificate of origin

Bill of lading All shipments intended to cross a border are initiated by a bill of lading (B/L). The B/L constitutes the carrier's contract and receipt for the goods to be transported.

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 S&OP meeting Supply planning meeting Demand planning meeting

Pre-S&OP meeting The purpose of the pre-S&OP meeting is to get stakeholders from both supply and demand planning in agreement prior to the main S&OP meeting presided over by executives.

Which of the following statements about purchased customer data is true? The data can be very broad. 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 may be more useful for new customer acquisition. 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.

Average actual cycle time (a Level 1 SCOR metric) is: the average speed at which the supply chain delivers products to customers. the actual time it takes for a customer to place an order online and receive confirmation. the actual time it takes to ship a product and for a customer to assemble it. the average time it takes to complete one production run of a product before shipping.

the average speed at which the supply chain delivers products to customers. Average actual cycle time is the average speed at which the supply chain delivers products to customers.

According to the APICS definition of waste, which is a type of waste? Any unique by-products requiring special management control Any scrap that is not planned Any involvement of parties outside the supply chain Wait time that makes a product more beautiful in the eyes of the customer

Any unique by-products requiring special management control 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."

Of the following methods of treating obsolete goods, which is considered to be the least responsible? Incineration Energy recovery Disposal at a recycling center Burial in a clean, responsible landfill

Burial in a clean, responsible landfill Among the least desirable methods of product disposal, delivery to a landfill scores last behind incineration, energy recovery, and recycling. However, some landfills are more responsible than others, and a landfill is a better place to deposit products at the end of their useful lives than rivers, lakes, and untended dumps.

Which of the following is a primary goal of companies at higher stages of development regarding the acquisition and use of data? Getting analytical systems to make decisions for management Putting all data collected to use Making forecasting become completely accurate Getting access to data outside the company

Getting access to data outside the company Getting access to pertinent data from suppliers and customers is a primary goal of information collection in advanced supply chains.

A great majority of international shippers use freight forwarders because they: I. arrange charters or book vessel space. II. handle payments. III. quote carrier rates. I and II I and III II and III I, II, and III

I, II, and III Forwarders may perform quite a number of different functions in the course of shepherding goods across international borders: arranging charters or booking vessel space, handling payments, quoting carrier rates. They also prepare and present documents, obtain insurance, provide translation, trace and expedite shipments, and arrange inland transportation.

Which level of SCOR is differentiated for operational strategy metrics such as make-to-stock? Level 1 Level 2 Level 3 Level 4

Level 2 Level 2 SCOR metrics are the operational strategy metrics. Examples of operational strategies include make-to-stock and make-to-order.

The sales and operations plan (S&OP) includes which of the following? Monthly production figures by product family Monthly production figures by individual manufacturing center Monthly production figures for individual stock keeping units (SKUs) Weekly production figures by individual stock keeping unit (SKU)

Monthly production figures by product family S&OP focuses on monthly production amounts for product families. Scheduling for individual products (SKUs) comes later in the planning process.

What is a recommended prerequisite to analyzing the core areas of concern of ISO 26000? Recognize social responsibility in the organization's sphere of influence. Determine how local regulators are applying the standard. Obtain ISO 26000 certification at each specific work site. Complete a Global Reporting Initiative sustainability report.

Recognize social responsibility in the organization's sphere of influence. Prior to analyzing the primary subjects of ISO 26000, the ISO encourages an organization to take the time to (1) recognize its social responsibility within its sphere of influence and (2) identify and engage with its stakeholders.

The value of inventory on the balance sheet is most often based on: current period cash flows. current market value. standard costs. financial accounting valuations reflecting depreciation and selling expenses.

standard costs. Inventory valuation is a financial accounting process that follows its own rules based on the age distribution of inventory. One frequently employed method is standard costing, which assigns a "should cost" amount to all material, labor, and overhead costs. Variances from these standard costs are then tracked and reflected in the value reported on the balance sheet.

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? Business-to-business (B2B) Buy-side Sell-side Content management

Sell-side ATP data helps customers in their purchase decisions, so this feature is part of an interactive sell-side e-commerce website.

To be most effective, design of a reverse logistics chain should begin during which of the following phases of the product life cycle? Product design Introduction Maturity Decline

Product design Product design should take reverse logistics into account by considering use of resources, potential for reuse, consumption of energy in the manufacture and use, recycling, etc.

Demand and which of the following types of information typically flow from the end customer upward in a service supply chain? Inventory status Requirements Order status Specifications

Requirements Quality is said to be achieved if a product meets or exceeds customer expectations or requirements. A simple supply chain involves participants from upstream (toward the origin) to downstream (toward the ultimate consumer). Information flows upstream from the customer to suppliers to aid in identifying the characteristics of the demand for the product.

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 6 17 29

4 The APICS Dictionary, 15th edition, defines an echelon as follows: "A level of supply chain nodes. For example, a supply chain with two independent factory warehouses and nine wholesale warehouses delivering product to 350 retail stores is a supply chain with three echelons between the factory and the end customer. One echelon consists of the two independent factory warehouses, one echelon consists of the nine wholesale warehouses, and one echelon consists of the 350 retail stores. Each echelon adds operating expense, holds inventory, adds to the cycle time, and expects to make a profit."

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? 0.85 1.175 1.295 10.213

1.175 The seasonal index for a given period is calculated as the average demand for the period divided by the deseasonalized averaged demand for the period. First, calculate the average demand for the period: (92 + 91 + 99)/3 = 94 units. Next, calculate the deseasonalized average demand by dividing the sum of the demand for the 12 months by 12. Deseasonalized average demand = 960/12 = 80 units. Finally, calculate the seasonal index: 94/80 = 1.175.

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 judgment of each participant's direct supervisor The four perspectives of the balanced scorecard The approval of top management The outcome of the change initiative

The four perspectives of the balanced scorecard 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).

Which of the following is a leading economic indicator? Average duration of unemployment Initial unemployment insurance claims Changes in company profits Outstanding business and commercial loans

Initial unemployment insurance claims Initial unemployment insurance claims is a leading economic indicator. Lagging economic indicators include the average duration of unemployment, changes in company profits, and outstanding business and commercial loans.

Suppliers are folded into the purchasing entity, business goals are shared, and competition has been eliminated. This best exemplifies which of the following types of business relationships? Collaboration/strategic alliance Buy on the market Ongoing relationship Mergers and acquisitions

Mergers and acquisitions In mergers and acquisitions, suppliers are folded into the purchasing entity. Business goals are shared; business areas participate in setting strategy and planning integration of capabilities, processes, and information. Competition has been eliminated.

Which of the following is a situation in which an exponential smoothing technique should have its smoothing constant reevaluated? Bias due to a one-time large order by a government agency Random variation due to bullwhip effect Random variation due to underlying demand variability Bias due to a worse effect from recession than expected

Bias due to a worse effect from recession than expected Bias is defined in the APICS Dictionary as follows: "A consistent deviation from the mean in one direction (high or low). A normal property of a good forecast is that it is not biased." In terms of measuring errors, random variation is any amount of variation that, when averaged over multiple periods, equals the average demand for the same periods. Bias requires correction; random variation does not. Bias from temporary situations may not require changes to forecasting models, but a change in a trend or seasonal effect requires changes to the model or its smoothing constants.

What is the focus of a rough-cut capacity check? Bottlenecks All operational capacity All supplier capacities Items inside the demand time fence

Bottlenecks The rough-cut check during the master production schedule stage takes a medium-term look at the system. Typically bottlenecks, gateway work centers, and critical suppliers are the only capacity checks that are done at this point.

Supply chain participant priorities often conflict. Which of the following groups sets a priority on flexible delivery times, large volumes, and consistent materials mixes? Warehouse managers Suppliers Logistics managers Retailers

Suppliers Suppliers of raw materials typically prefer flexible delivery times, large yet stable volume demands, and consistency in the mix of materials.

Which of the following smoothing constants would yield the same result as a naive forecast? 0 0.05 0.50 1.0

1.0 Generally speaking, firms use exponential smoothing constants that fall between 0.05 and 0.5. The higher the constant, the more weight your forecast gives to the actual demand data from the preceding period. A constant of 0.05 would give minimal weight to the preceding period. A constant of 1.0 would yield the same result as a naive forecast, because it would include the entire demand (100%) and none of the latest forecast amount (0%).

Which of the following correctly identifies the deseasonalized monthly demand (to the nearest whole number) for the first half of the calendar year in the example shown in the table below? Month: January | February | March | April | May | June Monthly Demand Per Year: 102, 99, 100 | 101, 101, 105 | 105, 102, 108 | 106, 103, 109 | 108, 105, 109 | 111, 108, 110 Seasonal Totals: 301 | 307 | 315 | 318 | 322 | 329 Seasonal Average: 100 | 102 | 105 | 106 | 107 | 110 Deseasonalized Demand: Seasonal Index: .95 | .97 | 1.00 | 1.01 | 1.02 | 1.05 100 105 186 630

105 The deseasonalized demand is the sum of the seasonal averages divided by the number of periods (months) listed: (100 + 102 + 105 + 106 + 107 + 110)/6 = 630/6 = 105.

Which is a red flag that could indicate that an organization may be facing supplier lead time risks? A key supplier is attempting to make numerous contract changes. Raw material costs for a key supplier are falling quickly. A key supplier's manufacturing process allows variability. A metric shows that a key supplier may have capacity issues.

A metric shows that a key supplier may have capacity issues. When suppliers have insufficient raw materials or insufficient capacity, these can be red flags of supplier lead time risk. Falling prices for raw materials is a sign that there is a surplus of that raw material on the market.

Which of the following best describes ISO 14000? A series of environmental standards that help companies minimize harmful effects on the environment and improve environmental performance The specific elements of an environmental management system and how to implement them The generic requirements for an environmental management system A group of regulations that help companies reduce their carbon footprint

A series of environmental standards that help companies minimize harmful effects on the environment and improve environmental performance ISO 14000 is a series of environmental standards that help companies minimize harmful effects on the environment and improve environmental performance.

Which part of a sender-receiver communication indicates that a message was received but doesn't necessarily mean that it was understood? Feedback Acknowledge Filter Noise

Acknowledge With the acknowledge part of a communication, the receiver acknowledges that the message was received. It does not necessarily imply comprehension or agreement, simply receipt of the message.

Which of the following is an example of the "voice of the customer" (VOC) technique? Analysis of customer buying behaviors Customer design groups Collated comments of sales representatives calling on specific customer groups Brief checkoff customer satisfaction surveys printed on invoices

Customer design groups Customer design groups are an example of open-ended information gathering used by VOC to make complex customer perceptions more visible to a business. A brief checkoff survey does not capture complex information. Analysis of behaviors and analysis by others does not present the customer's own voice.

Does a standard UPC bar code contain lot and batch information? Yes No Only if it includes a serial number Not directly, but retail systems can automatically get the data from a website.

No A UPC code cannot identify products by their serial number and therefore cannot identify lot and batch information.

Which of the following statements about successful strategic supplier relationships is true? No single restructuring of processes will be adequate. Small changes should be gathered into large movements that motivate the organization. Relationships should not be affected by the shifting partner priorities. Although the marketplace may change, relationship details should not change.

No single restructuring of processes will be adequate. Supply partners must accept and commit to the fact of change in their relationships. As conditions and individual priorities and strategies change, the processes that define the relationship should change as well. It is better if change can be accomplished incrementally.

A shipper whose exports are carried from a foreign port to the importer's dock by trucks that return empty to the port might hire which of the following types of firms to find goods to carry on the backhaul route? Freight forwarder Consolidator Export packager Non-vessel operating common carrier (NVOCC)

Non-vessel operating common carrier (NVOCC) An NVOCC's scope of work can vary based on the customer; therefore, it could cover the work outlined in the question. A consolidator combines small shipments into larger ones to qualify for full-vehicle discounts. Generally this service is provided to fill containers for intermodal shipment, such as turnarounds carrying cargo between an inland warehouse and a port. However, NVOCCs are better able to provide space to the client.

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.

Paint wholesaler 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.

Which of the following is available from an internal interface to a supplier relationship management (SRM) system? Managing online bidding sessions Managing EDI with suppliers Procurement history Product cataloging

Procurement history Internal interfaces could refer to an enterprise resources planning (ERP) system and its data warehouse. Internal interfaces collect and provide a repository for internal information in order to guide the purchasing processes, such as data on procurement history and accounting and information about suppliers and their performance.

Which of the following sources of customer information best provides insight into what customers are asking for and what they're not interested in? Service representatives Transaction records Purchased data Sales representatives

Sales representatives Sales representatives can relay information about what customers are asking for, what they're not interested in, what concerns they have in making the purchase, and why they may or may not be considering the competition.

What three factors determine cash flow for an organization? Capital requirements, sales, and taxes Sales, after-tax operating profit margins, and capital requirements Sales, profit margins, and capital requirements After-tax operating profit margins, capital requirements, and accounts payable

Sales, after-tax operating profit margins, and capital requirements There are three factors that determine cash flows: sales, after-tax operating profit margins, and capital requirements. Some organizations consider cash flow to be a better long-term indicator of financial health than net income.

Which of the following may be necessary to get the most out of an organization's sales and operations planning (S&OP) process? Engaging in collaborative demand planning with all direct suppliers Ensuring that attendees from each meeting are included in each subsequent meeting Hiring a demand manager to chair each S&OP meeting in the process Sharing some form of the results of the process with external partners

Sharing some form of the results of the process with external partners 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.

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 Disintermediation Lack of visibility Lack of normalization

Suboptimization When each part of a system is optimized without regard to the needs of the whole, the process is called suboptimization. Optimization must occur to all parts of the process, or it applies to none of them.

When segmenting suppliers, which is the best criterion to use in identifying the most important supplier segment? Organizational spend with each supplier Suppliers whose subcomponents would require redesign of other subcomponents if substituted Supplier's ability to advance strategic goals Suppliers who have established relationships with buyers

Supplier's ability to advance strategic goals One traditional way of segmenting suppliers was to focus on suppliers that did a lot of business with the organization. This may have prompted the organization to pursue a strategic relationship with that supplier. However, that supplier might only be supplying commodities or might be getting a lot of orders due to inertia (e.g., established relationships or design specifications that would require redesigning other subcomponents) more than because it deserves to have a strategic relationship.

What might be one reason to decentralize returns processing as opposed to centralizing it? To reduce the cost of returns To prepare the function for outsourcing To increase the speed of processing To generate economies of scale

To increase the speed of processing The location or locations that make the most sense may involve weighing cost, customer service, and speed. These activities could be centralized at one location or distributed at retailers, distribution centers, or suppliers. Centralization would create economies of scale and thus be likely to be less costly. Decentralization might improve speed and customer service.

What is the purpose of the five Ss? To create a supportive work environment for six sigma To ensure that the work area is simplified To keep the work environment steady and scrubbed To make everything in the workplace orderly and clean and to maintain it that way

To make everything in the workplace orderly and clean and to maintain it that way The purpose of the five Ss is to make everything about the workplace orderly and clean and to keep it so. The five Ss refers to a workplace organization method created by the Japanese: seiri, seiton, seiso, seiketsu, and shitsuke. Collectively they describe how to best organize a work space to optimize efficiency and effectiveness. Since order and organization are important concepts in lean, these five Ss (often referred to 5S) have been adopted and translated into English as "sort, simplify, scrub, standardize, and sustain."

Which of the following is a major goal of service-oriented architecture (SOA)? To use XML and web services to build a tightly coupled system To minimize information content, product categorization, and data storage To create smart products that sense and respond to changing needs To separate applications from data so that applications have universal functionality

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.

Which of the following types of waste is considered most serious? When there is a delay between activities When knowledge or capabilities are wasted When production is ahead of demand When there is scrap or rework

When production is ahead of demand Of the eight deadly wastes, overproduction (when production is ahead of demand) is considered the most serious.

When would shifting costs from an organization to its suppliers be a good idea from a long-term perspective? When supply chain total cost goes down When internal department suboptimization is reduced When suppliers are able to increase their order sizes When organizational profitability goes up

When supply chain total cost goes down One company attempting to shift costs to another supply chain participant is a good move only when the total supply chain cost is lower. If the total supply chain cost is higher, it ultimately means a higher price to the final end user, which reduces demand and provides more room for competitors to offer lower prices. The idea is to share the benefits of cost reductions fairly so that everyone benefits.

Processes in Level 4 of the SCOR model are determined by: an industry or a specific firm. the Supply Chain Council. the supply chain manager at an organization. a voting process by members of APICS.

an industry or a specific firm. The SCOR model does not detail Level 4, so organizations and industries create their own Level 4 processes. These processes would detail the industry- or firm-specific activities that are needed to perform Level 3 processes.

Many Japanese companies build keiretsu to: form totally independent groups of outsourced service providers. form cooperative relationships, usually through ownership of stock in member companies. form cooperative relationships among external service providers. create their own bank and trading company so that members are economically dependent.

form cooperative relationships, usually through ownership of stock in member companies. Keiretsu is an intermediate form of integration that differs from vertical or horizontal integration in that suppliers and customers are not completely independent but instead own significant stakes in one another. This helps the network of firms be more willing to consider each other's needs.

The only Level 1 SCOR measure of supply chain reliability is: perfect order fulfillment. fill rate. stockout frequency. delivery consistency.

perfect order fulfillment. The only Level 1 SCOR measure of supply chain reliability is perfect order fulfillment. It is defined as the percentage of orders meeting delivery performance with complete and accurate documentation and no delivery damage.

Maintaining a large safety stock of flu medicine in anticipation of a potential epidemic is an example of: influencing demand. communicating demand. managing and prioritizing demand. planning demand.

planning demand. Planning demand is a component of demand management that may include planning for disasters such as a potential epidemic by holding large amounts of safety stock.

As customers begin to assume that products and services will be of high quality, the competitive differentiator becomes: price alone. purely a matter of marketing message. regional closeness to the customer. price or value.

price or value. As customers begin to assume that products and services will be of high quality, the competitive differentiator becomes price or value. Technology like the internet makes it easy for customers to shop for lowest price. The market expands from the neighborhood retailer to a global marketplace of eager sellers.

Piggyback service refers to which of the following types of cargo transport? Combined plane and truck transport Combined train and ship transport Combined truck and train transport Any intermodal method of transport

Combined truck and train transport In piggyback service, either a truck trailer or a container is placed on a railroad flatcar. All the other intermodal methods mentioned in the options are available, and intermodal transport is an important option for the logistics manager to consider when navigating long logistics supply chains.

Which of the following types of carriers must be approved by the federal government and has heavily regulated rates and services? Common carriers Exempt carriers Contract carriers Private carriers

Common carriers Common carriers operate in the public interest. Granted the authority to enter the market by the federal government, they are also subject to the greatest amount of economic regulation governing rates and the scope of their service. Government licensing and regulatory restrictions are designed to guarantee that the economy will not suffer from a lack of commercial transportation at reasonable rates.

If a restaurant chain performs hourly forecasting, which of the following will likely be reduced, assuming that there is acceptable forecast error? Seasonal index variability Labor costs Underlying demand variability Overhead costs

Labor costs Hourly projections are useful in determining all the capacity requirements of a restaurant—numbers of workers to put on each shift, number of registers to maintain, number of tables, space requirements, and so on—as well as in making decisions about food items to stock. Therefore, labor and materials costs should be reduced. Overhead costs are generally fixed costs that could be reduced more effectively by longer-term forecasting. Even if an organization forecasts accurately, underlying demand variability will still exist. But if it is better planned for, supply variability can be reduced.

Rather than choosing the least expensive component for its computers, an electronics manufacturer factors in the costs of reverse logistics. This best exemplifies which of the following distinctions between traditional purchasing and strategic sourcing? Limited visibility versus entire supply chain visibility Transactional versus collaborative Boundary-specific versus realigned work processes and workflows Landed cost versus total cost of ownership

Landed cost versus total cost of ownership There is a distinction between landed cost and total cost of ownership. For example, a manufacturer of electronics may choose a component based on the lowest price, but that choice may not translate into low cost if the low-priced components are not reliable and fail early.

Which of the following would tend to reduce the amount of safety stock needed at a particular location? Periods of low demand followed by high demand Increased mean absolute deviation Less frequent ordering Longer order lead time

Less frequent ordering You are most vulnerable to a stockout at the time of replenishment because of the uncertainty of order timing and receipt. If you need to replenish only once a year, you have one point of vulnerability, while replenishing weekly creates 52 potential stockout situations. Therefore, more frequent ordering typically requires higher levels of safety stock. However, infrequent ordering involves larger orders and average inventory levels, so there is also a cost associated with less frequent ordering.

Which group of financial ratios helps determine whether a supplier is likely to be able to meet its debt obligations based on relative levels of debt versus equity? Activity ratios Profitability ratios Liquidity ratios Leverage ratios

Leverage ratios Leverage ratios measure how much debt is being used to finance the business and thus help show whether it is likely to meet those debt payments. Various types of debt divided by equity (financing from ownership/shareholders) are included in this group.

What is a risk of a conservative returns authorization policy? Short-term reduction in revenues Long-term reduction in revenues Increased risk of fraudulent returns Reduced sales of extended warranties

Long-term reduction in revenues A conservative returns authorization policy will not allow returns for as many reasons as a liberal returns authorization policy. A risk is that it may negatively impact customer service and thus reduce customer loyalty and long-term revenues.

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? Assemble-to-order Make-to-order Make-to-stock None of these types

Make-to-order Organizations that serve markets with more volatile demand and uncertain forecasting need to focus on responsiveness so they can adapt quickly to changes. These organizations tend toward assemble-to-order manufacturing strategies if sales volume is high. If sales volume is low, a make-to-order strategy is more appropriate.

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 innovative product Make-to-order functional product Make-to-stock functional product Make-to-stock innovative product

Make-to-order functional product An item with a very long lead time is likely a functional product that is not normally made-to-order but is in this case, such as a custom-sized pair of expensive boots. Innovative products stress aggressive reduction of lead times and generally have lead times of no more than two weeks.

When conducting network modeling and operations research, what is an important input because it can show where demand for particular products is the strongest and thus may influence where to put assembly facilities? Macroeconomic map Revenue model Market share Market plan

Market plan When designing a supply chain, one must carefully consider the market plan. For example, if the market plan shows that Europe will be the primary source of demand for product X, it may make sense to assemble that product in Germany instead of China, despite comparatively higher labor costs.

Which of the following is a process change that would improve the time to market of customer relationship management (CRM) activities? Focusing attention on planning and executing rather than on analysis and feedback Minimizing the number of tasks that need to be performed sequentially Omitting customer value from measures of the number of win-back customers saved Removing value-added demand management tasks when feasible

Minimizing the number of tasks that need to be performed sequentially CRM process strategy should focus on improving time to market by: Reducing demand management tasks to just those that are value-added. Executing demand management tasks as quickly as is feasible. Maximizing the number of tasks that can be performed concurrently rather than needing to be done sequentially.

What should receiving personnel do when a shipment of goods comes in from an ISO 9001-certified supplier? Match the invoice, purchase order, and ISO 9001 testing seal against the goods. Record the receipt, and accept the certification as assurance of product conformity to quality and quantity. Perform standard quality control procedures. Match quantity against the purchase order, but omit quality testing.

Perform standard quality control procedures. While ISO 9001 certification indicates conformity to the quality process, it is never a statement of product conformity. It relates to the ability to be consistent and high quality rather than to specific goods or services.

Which quality tool could help a supply chain manager provide the logical inputs that a software engineer would need in order to build an automated decision support system to route shipment orders to the proper carrier given a series of decision points? Process map Control chart Check sheet Histogram

Process map A process map is simple to construct on paper or by other tools but it shows the logical flow and branching decisions of a process, so it could help get the process automated correctly.

Which of the following could help limit the size of product recalls to goods produced just at a specific factory between specific dates? Export management companies Proprietary bar codes UPC bar codes Automated storage and retrieval systems

Proprietary bar codes 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.

Which of the following correctly identifies the membership of shipping associations? Small ship owners seeking to compete with larger carriers Ship brokers banded together to hire lobbyists to seek regulatory relief from governments around the world Smaller export firms seeking discounted rates Ocean carriers of all sizes seeking benefits from membership in an industry association

Smaller export firms seeking discounted rates Smaller exporters band together in shipping associations in an effort to qualify for the rate discounts that carriers offer to larger shippers. Before deregulation, ocean liners were required to publish their rates. Smaller shippers, seeing the rate schedules, could ask for similar deals. Since deregulation, carriers and the larger shippers have been able to sign confidential rate agreements. In response, smaller shippers have formed shipping associations—usually nonprofit organizations—to negotiate with carriers on the same terms as larger shipping firms.

What is a benefit to multinational organizations for adhering to the Organization for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises? Lower risk of worker injuries, illnesses, and fatalities Up-front due diligence on conflict minerals for easier later compliance Stronger foreign investment climate Public commitment to sustainability

Stronger foreign investment climate One goal of the OECD Guidelines is to strengthen the foreign investment climate and augment contributions to sustainable development made by the enterprises.

Which of the following statements about the elements of a marketing strategy is true? Placement is determined primarily by product specifications. Price is determined primarily by the cost of production. Promotion in customer relationship management is distinctly different from traditional marketing strategies. The starting point for product design is customer need.

The starting point for product design is customer need. Successful product designs begin with knowledge of the customers' needs and buying habits. Promotional activities are greatly supported and enhanced by customer relationship management abilities, but promotion decisions, goals, and activities are, for the most part, unchanged from the traditional marketing model. Price is primarily a strategic decision, as is placement.

Which of the following (assuming work center- and period-specific data) would provide the number of units that can be produced at a work center during a single period of time? Total time available divided by lead time Total time available divided by load Lead time available divided by load Lead time available divided by total time

Total time available divided by lead time Dividing the total time available during a scheduled period at the work center by the lead time tells you how many units can be produced at the work center in the period.

Which of the following would you select to pull several trailers conveying pallets? Tow tractor with trailer Automated towlines Forklift truck Bridge crane

Tow tractor with trailer Tow tractors can pull several trailers conveying pallets. They are generally used, like towline conveyers, in order selection. Tow tractors are not automated, and because they require a driver they are more expensive to operate than towlines, but they are also more flexible in operation.

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? Relationship diagram Tree diagram Process decision program chart Ishikawa diagram

Tree diagram Using a tree diagram enables one to take broad categories and repeatedly break them down into smaller, more refined details. This tool can help an employee team delineate tasks and activities required to meet a specific goal. The desired product features then branch off to the right from the goal, and relative details are added for each feature. Each of these branches helps to clarify another aspect of the product.

According to the Pareto principle, a significant percentage of a company's revenue or profits is derived from: less than 10% of the customer base. about or less than 20% of the customer base. about or less than 40% of the customer base. about or less than 80% of the customer base.

about or less than 20% of the customer base. The Pareto principle posits that a small percentage of the customer base (usually about or less than 20%) accounts for a large proportion of a company's revenue or profit (80% or more).

When evaluating bids from carriers, the logistics employee needs to consider capacity constraints such as: conflicts of interest, volume, and port taxes. handling, liability concerns, and conflicts of interest. stowability, volume, and VAT (value-added tax) rates. liability concerns, density, and speed of delivery.

handling, liability concerns, and conflicts of interest. Capacity constraints include distance, volume, density, stowability, handling, liability concerns, and conflicts of interest. VAT rates, speed of delivery, and port taxes are not considered capacity constraints.

The economics of liability refers to: which party—buyer or seller—is responsible for shipping insurance. the cost of replacement if cargo is stolen in another country while en route. which party is responsible if the product does not arrive at its intended destination. how the cost of transportation varies along with the protection level of the cargo.

how the cost of transportation varies along with the protection level of the cargo. The economics of liability refers to how the cost of transportation varies along with the need to protect the cargo against various sorts of dangers. If carriers are required to insure the cargo or cover any claims on their own, they will pass the costs along. Liability concerns include damage, perishability, susceptibility to theft, value per pound, and susceptibility to spontaneous combustion or explosion.

An Ishikawa diagram is used to: show the relationship of two variables. identify all possible causes of an effect and then research the most likely ones. illustrate how the majority of problems come from just a few causes. identify measures to avoid undesirable consequences.

identify all possible causes of an effect and then research the most likely ones. The Ishikawa diagram, also known as the cause-and-effect or fishbone diagram, is used to identify all possible causes of an effect and then to research the most likely ones.

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: too much capacity at the highest and lowest loads. just the right amount of capacity at both the highest and lowest loads. too little capacity at the highest load and just the right amount of capacity at the lowest load. the right amount of capacity at the highest load and too much capacity at the lowest load.

just the right amount of capacity at both the highest and lowest loads. The APICS Dictionary, 15th edition, defines a chase production method as "a production planning method that maintains a stable inventory level while varying production to meet demand." Balancing capacity against load in this strategy means that capacity is able to increase to meet peak load and is able to be reduced in time for the period of low load.

According to the ABC system of classifying inventory, the greatest share of revenue will be generated by approximately what percentage of total inventory items? 80% 55% 30% 15%

15% The ABC system of classifying inventory asserts that the A items in inventory will constitute from 10 to 20% of the total number of items but will create 50 to 70% by projected dollar volume. This is an approximate application of the Pareto principle, or 80-20 rule, which holds that about 20% of possible causes account for about 80% of outcomes.

A make-to-stock organization with stable demand is expanding plant capacity using an overlapping demand stepwise expansion strategy. When it has capacity in excess of demand, it should produce goods at: the average level of expected demand. the current level of actual demand. maximum capacity. minimum capacity.

maximum capacity. An organization that is pursuing stepwise expansion with overlapping demand will expand in steps that are sometimes ahead of and sometimes behind demand. Therefore, when the organization has excess capacity, it can build-to-stock in anticipation of the later period when it will have insufficient capacity. Because this organization uses make-to-stock and has stable demand, it should have low risk of obsolescence for the excess inventory it is building.

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.

measured relative to competitor product features. 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.

In the customer-driven business model, strategic pricing: is calculated by adding a firm's standard profit margin to the total costs of creation, sales, and overhead. is calculated by a sliding scale based upon customers' ability to pay. must be consistent across targeted customer segments. must be continually analyzed to ensure that it is attractive to customers but still profitable to the business.

must be continually analyzed to ensure that it is attractive to customers but still profitable to the business. Pricing is generally a strategic decision, based on competition, perceived value, and brand identity. Strategic pricing must be carefully and frequently analyzed to ensure that the pricing structure is attractive to customers but still profitable to the business.

Complete the following sentence with the best answer. The network configuration of a supply chain: should promote the interests of the key partners. includes physical facilities and the technology that connects them. should be designed to reflect trading partners' capacities. is limited by its size and locations.

should be designed to reflect trading partners' capacities. Supply chains should be configured to reflect customers' needs as well as trading partners' capacities. Specifically, a supply chain's network consists of physical facilities and the transportation links among them. As supply chains grow in length and complexity, these facilities may be spread out among numerous regions, countries, and continents.

Enterprise resources planning (ERP) systems can be considered as all of the following except: multiple modules from the same vendor plus several bolt-on systems. systems created by custom in-house development on a department-by-department basis. systems made up of multiple modules from the same vendor. systems cobbled together from multiple best-of-breed vendors.

systems created by custom in-house development on a department-by-department basis. Systems created in-house on a department-by-department basis are legacy systems, which ERP is meant to replace. The other systems can be considered to be ERP.

The U.S. Food and Drug Administration (FDA) has developed regulations requiring more thorough documentation of: imported spices and flavorings. powdered drink mixes. imported bath salts that may be absorbed by the body. the chain of custody or audit trail of drugs.

the chain of custody or audit trail of drugs. The U.S. FDA has developed regulations requiring more thorough documentation of the chain of custody or audit trail of drugs.

According to the SCOR® model, total cost to serve is made up of: the costs to strategize and plan, source, deliver, and return. the costs to strategize and plan, source, deliver, and return and the cash-to-cash cycle time. the cost of goods sold minus the costs to strategize and plan, source, deliver, and return. the costs to strategize and plan, source, make, deliver, and return.

the costs to strategize and plan, source, make, deliver, and return. According to the SCOR® model, the total cost to serve equals the sum of the cost to strategize and plan, the cost to source, the cost to make, the cost to deliver, and the cost to return.

Maintaining a high level of customer care is critical to customer-driven brand image promotion because: price and placement are no longer of importance to today's service-conscious customer. brand image awareness has become independent of product satisfaction. the internet has given dissatisfied customers the means to make their dissatisfaction quickly and widely known. customer loyalty no longer extends from an individual product to the supplier of that product.

the internet has given dissatisfied customers the means to make their dissatisfaction quickly and widely known. Dissatisfied customers have the means to make their dissatisfaction very well-known by the internet. Complaints posted on websites, blogs, chat rooms, or electronic bulletin boards can have a significant impact on today's internet-savvy customer and can destroy a once-strong business relationship.

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 inventory due to better visibility. reducing the cash-to-cash cycle due to streamlined processes. increasing the internal speed and availability of information.

increasing flexibility by allowing changes to their conceptual models. ERP systems incorporate best practices in their conceptual models, which enables process improvements but also means that an upgrade is required to utilize innovations such as moving from a product-oriented push model to a customer-oriented pull model.

A company fears that it will be overcome in the marketplace by a competitor who is developing a new technology. In response, the company forms an alliance with a supply chain partner. They invest equally in creating the alliance infrastructure, revise their corporate visions and organizational structure, and create processes to share information and merge workflows. This alliance may fail because it lacks: investment. individual excellence. integration. information.

individual excellence. Successful alliances begin from a position of mutual strength and excellence. In this case, one partner is driven primarily by a desire to escape the problem of looming competition. This will be a hard obstacle to overcome even though the partners have invested in the relationship and integrated their organizations.

Who promotes relationships between alliance partners, identifies opportunities for collaboration and improvement, and builds joint initiatives to capitalize on those opportunities? Chief executive officer (CEO) Channel master Manager of purchasing Alliance manager

Alliance manager The alliance manager's job is to promote the alliance itself by sustaining relationships between partners, building joint initiatives, and bringing them to market to generate revenues and acquire customers.

As part of a continuous improvement program, you've been asked to run some tests to determine if a new component conforms to quality specifications. Which cost type does this task fall under? Internal failure costs Appraisal costs Prevention costs External failure costs

Appraisal costs Appraisal costs include those incurred to determine the degree of conformance to quality requirements.

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 manipulation language Aggregation Expert systems Data mining

Data mining Data mining is a method of finding hidden patterns or relationships in data.

Which of the following numbers gives the correct March forecast using the data below and the exponential smoothing approach? February forecast of 10,150 units February sales of 9,950 units with returns for refund of 50 units Exponential smoothing constant of 0.20 10,100 units 10,110 units 10,120 units 10,150 units

10,100 units Demand for February is 9,900 units (sales minus refunds). The forecast is 10,100 units if you use the exponential smoothing equation as follows (alpha is the smoothing constant): (Alpha x Last Period's Demand) + [(1 - Alpha) x Last Period's Forecast](0.2 x 9,900) + [(1 - 0.2) x 10,150] = 10,100 units

Which of the following is an aggregate-level inventory process? Material requirements planning ABC inventory classification Economic order quantity Order point system

ABC inventory classification Aggregate inventory management is accomplished through inventory policy setting and master scheduling and by classifying inventory, using a system such as ABC inventory classification. The other options are item inventory management systems.

Which of the following often accompanies goods that are intended to travel in sealed containers across borders, including goods intended to be admitted only temporarily for use in events such as tradeshows? Consular invoice ATA Carnet Bill of lading Order waybill

ATA Carnet ATA stands for Admission Temporaire/Temporary Admission. The Carnet convention was adopted for western Europe in 1961 and was intended primarily to apply to commercial samples, professional equipment, and items for presentation at tradeshows and other similar events. Despite their original use for these specific purposes and items, Carnets now cover almost any type of goods, excluding disposable and consumable items, and they are used worldwide.

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? 0 units 100 units 200 units 700 units

100 units 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

When conducting a supplier certification process for an ISO (International Organization for Standardization) standard, which of the following is necessary when asking a supplier to commit to a process defined in a formal agreement? Trust that the information will not be used to their competitive disadvantage Requirement to commit to incoming inspections Supplier audit conducted by the ISO Commitment in return that the supplier will be the supplier of choice

Trust that the information will not be used to their competitive disadvantage To create a partnership with suppliers, an atmosphere of trust and commitment must be established. It must be made clear to suppliers that information arising from the certification process will be used for mutual benefits, not to place the supplier at a competitive disadvantage.

Which supplier relationship management (SRM) technology allows information collected by one application or supply chain partner to be shared by all applications or allied partners? Value analysis Supplier databases and rating systems Visibility and decision support systems (DSS) Open order file

Visibility and decision support systems (DSS) An analytical SRM solution helps facilitate the gathering, cleansing, and presentation of procurement information to allow organizations the visibility they need to support their business decisions. DSS analytical systems assist with optimizing suppliers, material quality, etc.

According to the House of Toyota, Just-in-Time is facilitated by: one-piece flow, poka yoke, and jidoka. pull systems, one-piece flow, and takt time. jidoka, pull systems, and takt time. push systems, one-piece flow, and takt time.

jidoka, pull systems, and takt time. According to the House of Toyota, Just-in-Time is facilitated by pull systems, one-piece flow, and takt time. With lean's emphasis on activities such as one-piece flow and pull systems, queue times (wait times for a product awaiting the next step in a process) often shrink significantly. One-piece or continuous flow improves quality because the next (downstream) process uses the piece shortly after it has been produced at the previous (upstream) process. Takt time is when a lean system is ticking along at the perfect rate and its production of finished goods is exactly synchronized with the rate of customer demand. This reduces inventories to a minimum, eliminating all but work-in-process and in-transit inventories.

A true supply chain metric is one that: measures the highest priority. measures the financial impact of a process. measures a process that crosses tiers. measures performance against strategy in functional areas.

measures a process that crosses tiers. A true supply chain metric measures a process that crosses tiers of the chain.

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. Begin the implementation process by first developing formal concepts and processes. Start with a large project that addresses all affected areas of each organization. Empower employees to try some design initiatives on their own.

Create simple graphics that make the goals easy to understand at a glance. A proof-of-concept phase should precede development of formal concepts and processes. The proof of concept should start with small projects that can show results quickly. Successes can be advertised using simple graphics that make the goals easy to understand and accept.

Which of the following describes a vulnerable customer? Customer who owns one of the firm's products that is becoming obsolete Customer to whom the competition has been selling intensively Customer who is about to discontinue service or stop purchasing the product Customer who is segmented into a low-value group and offered few incentives

Customer who is about to discontinue service or stop purchasing the product The most accurate answer is that a vulnerable customer is one who is about to stop being a customer. This may be due to factors described in some of the incorrect choices. A vulnerable customer may perceive little value in the relationship, may have developed little loyalty, and may be willing to try a competitor. A customer with an obsolete product who does not receive customer care may soon become vulnerable.

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. Invest in highly competent project managers. Redesign contracts with partners to require compliance with this initiative. 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.

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? Cross-docking Fixed location storage Random location storage Point-of-use storage

Random location storage Random location storage maximizes cube utilization and can be rapid if the organization uses warehouse automation systems such as directed pick and put-away.

In what type of auction does the buyer post the equivalent of an online request for quotation, many sellers bid on the contract, and the lowest bidder has a binding contract to fulfill the buyer's needs? Reverse auction Dutch auction Forward auction Demand management auction

Reverse auction The APICS Dictionary, 15th edition, defines reverse auctions as follows: "Internet auction[s] in which suppliers attempt to underbid their competitors. Company identities are known only by the buyer."

What can a risk manager use to shorten the risk identification process? Delphi technique and interviews Risk checklists and documentation and assumption reviews Root cause analysis and brainstorming Risk diagramming and SWOT analysis

Risk checklists and documentation and assumption reviews Risk checklists and documentation and assumption reviews look at past risk identification processes conducted by the organization. Reviewing these sources can give a new risk identification process a jump start.

In enterprise resources planning (ERP) system manufacturing modules, the result of master scheduling is the master production schedule (MPS), which is evaluated for constraints by which of the following? Material requirements planning (MRP) Rough-cut capacity planning (RCCP) Integrated process control Distribution requirements planning (DRP) and capacity requirements planning (CRP)

Rough-cut capacity planning (RCCP) The output of master scheduling is an MPS that is evaluated for constraints by RCCP.

Which of the following is an example of a loyalty program? Introductory rates Customer profiling system Free shipping for high-volume customers "Buy one, get two" offer

Free shipping for high-volume customers A loyalty program simultaneously rewards repeat or high-value customers and encourages continued business through special incentives.

A stock keeping unit (SKU) in a distribution system can identify which of the following? Serial number Geographic location Quantity discount Purchase order

Geographic location The APICS Dictionary, 15th edition, defines a SKU in a distribution system as follows: "An item at a particular geographic location. For example, one product stocked at the plant and at six different distribution centers would represent seven SKUs."

An organization has completed certifying its key suppliers. Which of the following can be used to confirm if the organization is obtaining the returns it was expecting from its investment? Certification registration Supplier quality rating Joint quality planning Contract deployment

Supplier quality rating The certification process and/or a benchmarking system may be used to reevaluate suppliers periodically. This will confirm if the organization is obtaining expected returns and identify new ways to improve the process. As supplier reviews are conducted, the organization must ensure that the supplier is maintaining the levels of performance expected and take corrective action if the supplier has fallen below certification standards.

Inventory turnover is a metric for which of the following approaches to product design? Design for service Design for reverse logistics Design for quality Design for supply chain

Design for supply chain Inventory turnover measures the relative speed at which inventory is produced and then sold and so is an important metric used to measure the effectiveness of design for the supply chain.

Which is an example of a service supply chain making investments now to satisfy the demands of its manufacturing customers for environmentally sustainable options? Coffee shop encouraging customers to bring in their own cups Logging company replanting trees Electric utility adding wind turbines Law firm adding risk management services

Electric utility adding wind turbines Supply chain management incorporates sustainability efforts such as the replacement of resources as they are used (as in the planting of seedlings as part of forest management) and increased use of and reliance on wind and solar energy to generate power for manufacturing processes. While both of these are examples of sustainability, the electric company is a service supply chain while the logging company is a raw materials manufacturer.

Which of the following represents a sound approach to tracking data to use in demand forecasting? Include data by ship date, not order date. Forecast using gross sales rather than net sales. Include all products in a family. Exclude consideration of competitors' activities.

Include all products in a family. Accuracy generally increases with the size of a product group, assuming that forecasts for each item in the group are as likely to be too high as too low. You want to know when items were in demand, not when they were shipped. Competitors' product introductions are likely to affect your forecasts. Returns and cancellations should be subtracted from gross sales to arrive at net sales when estimating actual demand. Ideally, an estimate of actual demand would also account for lost sales and so on.

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. Develop plans for Initiating, Planning, Executing, Monitoring and Controlling, and Closing. Develop a project life cycle plan to define and plan the project phases. Start Executing and Monitoring/Controlling.

Complete the schedule and budget to reflect the impact of the later Knowledge Area plans. When all subsidiary plans have been completed, the project schedule and budget can be completed. This is an example of progressive elaboration, elaborating the high-level summary milestone schedule and budget included in the project charter based on information in the subsidiary plans.

Which of the following are benefits of a vertical supply chain? Complete control and visibility of operations Economies of scale and scope for individual functions Improved business focus and expertise Technology to handle the increased complexity

Complete control and visibility of operations The benefits of vertical integration include control and completely visibility to the parent company (at least in theory).

Which of the following is/are common currency-related trends? I. Use of cash-on-delivery payment terms II. Use of currency hedging when available III. Use of letters of credit I I and II II and III I, II, and III

II and III Companies that are often involved in global transactions with parties from other countries can use currency hedging and letters of credit to minimize their risks. Very few transactions are financed by cash-on-delivery payments.

An organization's supply chain uses decentralized forecasting. If the organization executes a promotion that generates much higher sales than initially communicated, which of the following is the most likely result? Resupply rationing due to sustained demand after the end of the promotion Increased distortion of future upstream supplier forecasts Higher profits and temporarily reduced demand variability for all partners Shortage gaming on the part of the manufacturer to its customers

Increased distortion of future upstream supplier forecasts Uncommunicated price fluctuations and promotions can cause a spike in buying that inflates orders for a time, after which orders stop until the extra inventory has been depleted to the level that triggers an order. This variation in demand can distort forecasts up the chain if they are not properly communicated with enough time for all participants to accommodate the changes.

Which of the following levels of technology integration is described as various systems that feed into each other, creating some capacity for integration of the data? Multi-enterprise integrated technology Disconnected technology Interfacing technology Internally integrated technology

Interfacing technology Interfacing technology is characterized by various systems feeding into each other. Disconnected technology involves using a variety of noninterfacing databases, internally integrated technology involves one main system storing all data, and multi-enterprise integrated technology involves multiple business lines sharing stored data internally.

"A period marked by high costs and low sales." This phrase best describes what phase of the product life cycle? Development Introduction Growth Maturity

Introduction Because of costs associated with marketing, establishing inventory, and developing the distribution system, and because a customer base has not yet been acquired, the introduction phase of the product life cycle is marked by high costs but low sales.

Which of the following types of warehouse ownership might a firm choose to minimize storage costs when adding distribution capacity for a new product with a highly seasonal demand pattern? New construction private warehousing Remodeled and expanded private warehousing Public warehousing Contract warehousing

Public warehousing Public warehousing is a good choice to accommodate market fluctuations. The other choices require longer-term commitments of resources.

Which is a category of operational metrics in the manufacturing industry? Customer satisfaction Quality Cost SWOT analysis

Quality Quality is an operational metric, because it relates to accuracy, manufacturing goods to quality standards, avoidance of damage to goods at various stages, and so on.

The major purpose of the sales and operations plan (S&OP) is to: develop a single set of supply/demand numbers for all stakeholders. balance sales and output of end items. provide a binding contract between sales and operations. obtain start-up financing from bankers and investors.

develop a single set of supply/demand numbers for all stakeholders. 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.

If a supply chain has 80 inventory days of supply, 60 days of sales outstanding, and 45 days of payables, its cash-to-cash cycle time is: 25 days. 65 days. 95 days. 185 days.

65 days. If a supply chain has 80 inventory days of supply, 60 days of sales outstanding, and 45 days of payables, its cash-to-cash cycle time is 95 days (80 inventory days + 60 days of sales outstanding - 45 days of payables = 95).

The antiterrorism measures developed by the Customs-Trade Partnership against Terrorism (C-TPAT) apply to which of the following entities? All U.S. importers C-TPAT corporate participants only All U.S. exporters All domestic and foreign firms involved in U.S. supply chains

C-TPAT corporate participants only Participation in the Customs-Trade Partnership Against Terrorism is voluntary, and compliance with its regulations is required only of participants.

Which of the following would best help marketing professionals plan marketing programs, including program launch, scheduling of activities, continuous performance measurement, and response management? Opportunity management Campaign management Account management Order/provisioning system

Campaign management Campaign management automates the campaign process through various tools such as customer intelligence and data extraction, campaign definition, detailed campaign planning and program launch, scheduling of activities, continuous performance measurement, and response management.

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. Manage the expectations and engagement of stakeholders. Begin with the end in mind and get formal authorization for that work. Use quality control procedures.

Clearly state what will not be done. Use project scope management to state what you will be doing—and what you will not be doing—and to validate that what was in scope got done (and only those things got done).

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 Break-bulk and spot-stocking Stockpiling and mixing Cross-dock and postponement

Cross-dock and break-bulk Break-bulk and cross-dock facilities provide the benefits of consolidated, full-trailer shipment, either into the facility, out of the facility, or both.

What tool can be used to augment an expected monetary value (EMV) analysis and help organizations decide between two alternatives, each with possible best- and worst-case results? Scenario analysis Overall value at risk Qualitative risk analysis Decision tree analysis

Decision tree analysis EMV can be used to decide between two alternatives. A decision tree is a way of diagramming a decision point where chance may be involved in some of the decisions.

Which of the following stages of the product life cycle is an ideal opportunity in which to create a sense of customer ownership of a product or service? Development Introduction Growth Maturity

Development In some business types, the development stage offers an opportunity to create customer ownership. By involving key customers in the product- or service-crafting phase, the business creates a sense of partnership and mutual investment that will translate into greater potential for lifetime customers.

Which practice would reduce an organization's cash-to-cash cycle time? Ordering only full truckloads Getting a major vendor to use vendor-owned inventory (VOI) Ending consignment sales Purchasing a major customer

Getting a major vendor to use vendor-owned inventory (VOI) Strategies such as VOI or consignment reduce inventory and decrease the cash-to-cash cycle time. An organization that is vertically integrated will own its inventory for much longer than one in a horizontal supply chain.

Which of the following scenarios presents the most risk related to product documentation or labeling? Hazardous goods are shipped within Spain with only domestic documentation. Goods from England going to Germany are labeled only in German, however, documentation is in both languages. All customs documentation for shipments from Italy to Switzerland are sent electronically. Goods passing through France do not have trade documentation in French.

Goods passing through France do not have trade documentation in French. Documentation must comply with regulations. Such documentation may be required to be multilingual, not only for the country of import and export but for every country through which the goods pass. Product labeling and documentation regulations for imports and exports often require organizations to label goods in the import country's local language(s). As such, the scenario with the most risk is the goods passing through France, since the trade documentation is not available in French.

Which of the following is a primary benefit of entering into a vendor-managed inventory (VMI) agreement? Decreased inventory carrying costs Decreased ordering costs Greater visibility of inventory management Decreased labor costs

Greater visibility of inventory management In VMI, both partners benefit from increased visibility of the inventory management process, because they share information about retail demand on the one hand and supplier processes on the other. Under vendor-owned inventory (consignment sales), ordering and carrying costs increase for the supplier, though they should decrease for the overall supply chain as forecasting improves.

What type of supplier segmentation would help develop an apples-to-apples benchmarking system for delivery consistency? Grouping suppliers by similar lead time Grouping suppliers by level of innovation Grouping suppliers by custom versus standard solutions Grouping suppliers by capabilities

Grouping suppliers by similar lead time Grouping suppliers by similar lead times might help organizations when scheduling orders for goods, when tracking supplier performance (it will highlight lead time consistency since suppliers can be tracked against their peers in terms of average lead times), and possibly by allowing certain shipments to be grouped together (if feasible).

Some organizations use safety lead time to address lead time variations in which of the following? Work-in-process inventory Anticipatory inventory In-transit inventory Fluctuation inventory

In-transit inventory Organizations may keep supplies on hand to fill orders while the next lot is in transit as in-transit inventory. When order lead times vary significantly or are lengthy, it increases the chances that a stockout could occur while waiting for an order to arrive. Some organizations solve these risks by placing orders early.

What is one way that an organization could improve its risk management maturity level for process risks such as those related to supply chain strategy and implementation? Reduce the volatility of its stock price levels. Incorporate risk inputs into sales forecasting models. Incorporate risk inputs into inventory planning and scheduling models. Add supplier risk assessment tools.

Incorporate risk inputs into inventory planning and scheduling models. Many organizations have lower risk management maturity levels for process risks than for supply or demand risks. One reason for this is that many supply chain inventory planning and scheduling models exist, but most do not contain methods to account for risk.

In a Just-in-Time (JIT) system, which of the following may occur? Increased holding costs Increased frequency of order entry Increased lead times Increased inventory accumulation

Increased frequency of order entry JIT pulls items through the system when they are needed, not according to preset schedules. Materials don't move from supplier to plant until requested. Similarly, work-in-process (WIP) doesn't move from one work center to another until a signal indicates that the time is right. Lots sizes are kept small, and orders are entered more frequently.

A company creates a bar chart showing the causes of customer returns on its new dinner plates. What key message does the following illustrate? y-axis:Occurrence % x-axis: Attribute Finish 80% Weight 15% Shape 4% Etc. 1% It shows that 40% of customer returns are due to weight, shape, and miscellaneous problems. It shows that all of the customer returns can be attributed to just four specific problems. It shows that the vast majority of customer returns (80%) are due to one of four reasons—plate finish problems. It shows the major causes and effects of customer returns.

It shows that the vast majority of customer returns (80%) are due to one of four reasons—plate finish problems. This Pareto diagram shows that 80% of customer returns are due to plate finish problems and that the related processes should be improved. Money and improvement efforts should be focused on improving the finishing process where the biggest gains will be seen.

What will happen with a time-series forecast if strong seasonality is not removed prior to forecasting? It will contain more random variability. It will predict a downward swing in demand to keep on going down indefinitely. It will be more subject to the groupthink effect. It will lead changes in trend.

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

Supply chain participant priorities often conflict. Which of the following groups sets a priority on high production output and low production costs? Retailers Manufacturers Customers Suppliers

Manufacturers Manufacturing organizations strive for high production output and low production costs.

What is often an unintended consequence of expediting supply or manufacturing? One customer is happy, but several others are upset. Quality controls are ignored. The master scheduler complains that the liquid zone is being misused. Turnover metrics are artificially improved.

One customer is happy, but several others are upset. Expediting of supply is something that should be very rare in a well-managed system, because it often reduces profitability and causes other unintended side effects such as harming customer service for customers being bumped.

Which continuous improvement tool can be used in two different manners: to identify measures that can be taken to avoid undesirable, intermediate consequences and to lay out a plan to predict future foreseeable problems that can then be resolved successfully? Relationship diagram Tree diagram Activity network diagram Process decision program chart

Process decision program chart The process decision program chart visually captures things that might possibly go wrong in a plan being developed. This tool can be used in two ways: to identify measures that can be taken to avoid undesirable, intermediate consequences and to lay out a plan to predict future foreseeable problems that can then be resolved successfully.

In general, the largest portion of a product's final cost can be attributed to which of the following? Product design Transportation Handling Production/assembly

Product design As much as 70% of a product's delivery cost is attributable to its design.

Volume growth is a key performance indicator for which of the following? Supply chain variability Customer service Replenishment Product merchandizing

Product merchandizing Volume growth measures the success of merchandizing efforts.

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? Bill of material Resource profile Kanban Action plan

Resource profile For each product family, the resource profile identifies the setup and run hours needed of each critical resource.

Selection of processes for improvement, according to quality methodology, should be done at which of the following levels? Regular employees (shop-floor labor, service workers, etc.) Top management Teams comprising all levels from top management to regular employees Middle management

Top management Quality initiatives are to be directed from the top down and implemented from the bottom up. Top management selects processes to improve.

Which of the following is a method of replacing physical inventory with better information? Use postponement centers. Keep the same stock keeping units (SKUs) on every pallet. Use barges or railcars to transport products. Store excess inventory in remote, less costly warehouses.

Use postponement centers. Avoid filling warehouses with the wrong mix of finished goods by setting up postponement centers to delay product assembly until an actual order has been received.

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? Delivery team Inventory team Buying team Technology team

Technology team The technology team must agree on methods of connecting systems and then implement these methods to create real connections before the other teams can get past the conceptual stage of network planning.

Which of the following is a good example of a virtual organization? Company that sells products only through online means Strategic alliance of four companies to develop a new drug under one company's name Raw materials supplier that agrees to be a contingent supplier Merger of two competitors to capture a majority of market share

Strategic alliance of four companies to develop a new drug under one company's name A virtual organization is a short-term alliance between independent organizations in a potentially long-term relationship to design, produce, and distribute a product. Organizations cooperate based on mutual values and act as a single entity to third parties.

Which of the following strategies represents the traditional "over the wall" approach to product design? Supplier plays no role in design. Supplier informally makes recommendations to design engineers. Formal design team includes supplier. Supplier designs a subcomponent.

Supplier plays no role in design. In the traditional design process, the supplier plays no role in the design. The design is created by design engineers and passed "over the wall," figuratively, to manufacturing and other stakeholders.

Which of the following statements describes the financial consequences to a U.S. firm under NAFTA when it transfers assembled materials from a maquiladora subcontractor back into the United States? The U.S. firm pays a tax based only on the value added in Mexico. The U.S. firm pays use (sales) tax on the value of the finished goods. The U.S. firm pays no duty or tax. The U.S. firm pays a duty but receives a duty drawback.

The U.S. firm pays a tax based only on the value added in Mexico. In the usual case, a U.S. firm either operates the maquiladora or subcontracts operations to it, such as manufacturing, processing, or assembly. The U.S. company sends a partly finished product to a maquiladora and then reimports the finished goods. Because of NAFTA, the duty on the transfer of materials and goods across the border is assessed only on the value added in Mexico, which is primarily attributable to labor costs.

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 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. The zone between the two points allows for cancelling orders if demand is low.

The zone between the two points allows for shifting schedules or priorities. 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.

What is the biggest difference between railroads in Europe and those in many other parts of the world? They generally require smaller freight loads. They are not standardized. They don't run as often as other commercial rail lines. They tend to travel more slowly than other commercial rail lines.

They are not standardized. In Europe, the railroads' track gauge widths are not uniform, electrical current is supplied by different systems, management systems vary, and signaling systems are not uniform (requiring crew changes at borders). Such impediments are on the EU's agenda for reform as it seeks to build an efficient EU-wide system of commercial and passenger transport.

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 more open architecture To minimize metadata To provide a faster learning curve To fully integrate disjointed systems such as customer relationship management

To minimize metadata Maximizing, rather than minimizing, data about data (metadata) is one reason to upgrade an ERP system.

If unexpected customer orders are received and must be filled within 30 days, what metric would be used to measure the manufacturer's performance on the order? Upside supply chain adaptability Upside supply chain flexibility Delivery consistency Response accuracy

Upside supply chain adaptability Upside supply chain adaptability is the amount of increased production an organization can achieve and sustain in 30 days' time.

Which of the following can be used in a balanced scorecard to both measure compliance and provide goals for continual improvement? Use of graphics and charts Use of custom categories for measurements Use of actual results Use of more than one target per measure

Use of more than one target per measure Some organizations use multiple targets or performance standards so that the item being rated can be measured for minimal compliance and a more challenging target can be included as a continual improvement goal.

Lean supply chains strive to reduce: inventory turns. the need for working capital. the number of employees. worker flexibility.

the need for working capital. Lean supply chains strive to reduce the need for working capital.

Which of the following is a benefit associated with customer segmentation? Shorter sales cycle Lower production costs Shorter time-to-market Better ROI (return on investment) on promotion budgets

Better ROI (return on investment) on promotion budgets Customer segmentation allows businesses to learn customer desires and habits and design more effective promotional programs, resulting in a better ROI on promotional budgets.

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 Automated guided vehicle systems (AGVS) Stacker crane Forklift truck

Bridge crane Bridge cranes can lift very heavy objects, and they operate from overhead, so they leave the floor space below them free for other activities and allow aisles to remain narrow to free up storage space.

Pick-to-light systems speed inventory retrieval when used in conjunction with which of the following materials-handling equipment? Automated storage and retrieval systems (AS/RS) Automated conveyers Carousels Automatic sorting devices

Carousels Pick-to-light systems add lights to carousels to provide information such as the location and number of items to retrieve.

Which of the following is not a goal of design for manufacture and assembly (DFMA)? Designing components with very tight tolerances Simplifying the process steps for assembly Using concurrent and parallel processing to reduce work-in-process time Reducing the number of parts

Designing components with very tight tolerances DFMA designs components that do not require extremely tight tolerances.

"The most profitable period but also the period most vulnerable to competitive inroads." This best describes what phase of the product life cycle? Development Introduction Growth Maturity

Maturity During the maturity phase of the product life cycle, the costs of acquiring sales are declining, so profit is higher. At the same time, growing competition places pressure on prices. Increased sales promotion and aggressive customer acquisition help balance this influence.

Which of the following describes mass marketing? Organizations can use it only if they are offering a standardized product. Organizations can use it only if they are offering a simplified product. Organizations advertise based on the shared values of multiple segments. Organizations must have a product that has just one market segment.

Organizations advertise based on the shared values of multiple segments. Mass marketing is "the strategy of sending the same message to all potential customers" (APICS Dictionary, 15th edition). These customers may constitute more than one market segment, but since the same message is sent to all segments, it must have broad appeal.

Which is an example of reuse from the waste hierarchy? Putting returned items in new boxes and back on the sales floor after inspection Using shredded tires to make new tires Adopting clean technology Writing off excess inventory

Putting returned items in new boxes and back on the sales floor after inspection Reselling returned products that pass quality control is a form of reuse.

Customer relationship management (CRM) and supplier relationship management (SRM) share a focus on: providing superior marketing decision support. gathering and sharing information. understanding the buying habits of retail customers. choosing appropriate strategic partners.

gathering and sharing information. Both CRM and SRM focus on gathering information but for different purposes: CRM to understand customers better and support marketing, SRM to develop and manage relationships with key partners in the supply chain.

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. profitable. effective. sustainable.

efficient. 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.

What is ISO 26000? A way to go beyond legal compliance on social responsibility An ongoing goal for continuous improvement in quality A social accountability standard appropriate for supply chain manager certification A social responsibility compliance management system

A way to go beyond legal compliance on social responsibility According to the APICS CSCP ECM Supplemental Glossary, ISO 26000 is "an international standard adopted by the International Standards Organization to assist organizations in contributing to sustainable development beyond legal compliance through a common understanding of social responsibility. ISO 26000 is not a management system standard and it's not intended or appropriate for certification purposes or regulatory or contractual use."

Cycle counting is usually paired with which of the following to minimize the total cost of inventory shrinkage? Inventory adjustment ABC inventory classification Periodic counting Echelon inventory policy

ABC inventory classification Inventory shrinkage is "losses of inventory resulting from scrap, deterioration, pilferage, and so forth" (APICS Dictionary, 15th edition). ABC inventory classification groups inventory into categories of relative value, and when paired with cycle counting, can be used to count A items more frequently, thus reducing the likelihood of shrinkage for the most valuable inventory.

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? Enterprise resources planning (ERP) Collaborative planning, forecasting, and replenishment (CPFR) Supply chain event management (SCEM) Advanced planning and scheduling (APS)

Advanced planning and scheduling (APS) APS systems remove pressure from bottlenecks in systems as they occur or in simulations. In a multi-plant environment, when the same item can be manufactured at different facilities, APS optimizes and accelerates the use of available materials, labor, and plant capacity.

A supply chain team is going to brainstorm a list of causes of product returns. Which tool would be most appropriate for this purpose? Activity network diagram Affinity diagram Process decision program chart Control chart

Affinity diagram An affinity diagram is a tool for organizing and consolidating a large number of brainstormed ideas by employees striving to solve a particular issue. It begins with a discussion leader presenting the topic or problem, which the employees then brainstorm about, recording each idea on a slip of paper or index card. The ideas are then posted in one place and the group determines how to group them by category or theme. Each group is then given a descriptive title. The team discusses the categories and then identifies which should be further researched.

Six sigma emphasizes the importance of training at which of the following levels? Customer-facing employees only All management levels All employee levels Top management only

All employee levels Six sigma emphasizes the importance of all process participants, from top management to basic service or shop-floor employees, and it includes training at all levels.

Which tool or technique formally connects the strategies and overall objectives of a business to goals and measurements that go beyond just financial metrics? Operations research SWOT analysis Network modeling Balanced scorecard

Balanced scorecard The APICS Dictionary, 15th edition, defines the balanced scorecard as a "list of financial and operational measurements used to evaluate organizational or supply chain performance. The dimensions of the balanced scorecard might include customer perspective, business process perspective, financial perspective, and innovation and learning perspectives. It formally connects overall objectives, strategies, and measurements. Each dimension has goals and measurements."

Which of the following is true of bar codes? EPC is the most common bar code standard, but it isn't the only standard. UPC bar codes include a unique serial number. From the center to either end of a bar code is identical so it can be read upside down. Bar codes are often integrated with RFID tags printed as a single label.

Bar codes are often integrated with RFID tags printed as a single label. Combination bar code/RFID printers allow the technologies to coexist.

Which of the following descriptions applies most accurately to a quick response program (QRP)? Complex and evolving guidelines for coordinating multiple aspects of supply chain partnership Partnership in which a supplier and a retailer collaborate on development of shipping schedules Basic type of collaboration that involves the sharing of point-of-sale (POS) information Arrangement in which a supplier may handle some aspects of inventory management for a retailer

Basic type of collaboration that involves the sharing of point-of-sale (POS) information A QRP is one of the earliest and most basic forms of customer-supplier partnerships, in which the retailer shares POS information with the supplier but doesn't collaborate on forecasting.

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? Networking, such as determining needed interface devices Business modeling, such as profit allocations Process modeling, such as allocating processes among partners IT change requirements mapping, such as systems architecture reengineering

Business modeling, such as profit allocations Extended supply chain business modeling includes building a strategic model of technology integration, setting financial goals and measurements, and deciding on profit allocation between partners. The results of this process are used to plan extended supply chain communications. These communications plans involve integration of partner policies, work processes, and tasks and roles. The other answers describe activities performed after this step is complete.

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 Collaboration/strategic alliance Partnership Ongoing relationship

Buy on the market "Buy on the market" is a traditional approach to purchasing, in which organizations buy in response to immediate needs, choosing freely from among all the suppliers who can meet those needs and sharing technical purchasing requirements rather than strategies or plans.

Which of the following documents is used to bolster an importer's claims for favorable import duty rates granted by treaty to the exporter's country? Certificate of origin Consular invoice Export bill of lading (B/L) Letter of credit

Certificate of origin A certificate of origin states that the cargo originated in the exporter's country and is therefore eligible for the favorable import duties granted to goods originating in that country.

What is needed to prove that hazardous waste was transported properly to an incinerator and incinerated? Chain of custody Receipt from the incinerator Copies of the permits No proof is needed, as the waste is not being put in a landfill.

Chain of custody A chain of custody provides documentary evidence of each point of transfer or contact with a material. Here the chain would include information on the hazardous waste origination site, details on the transporter and the incineration site, and the time of each transfer. Information on permits and the like would be part of the chain of custody. The other answers are incomplete or wrong.

Proactively managing risk rather than being reactive provides which of these benefits to the organization? Ability to be risk-seeking Risk elimination Competitive advantage 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.

Which third-party logistics provider (3PL) contract clauses need to be robust because 3PLs will likely see details on supplier and manufacturer costs? Financial stability clauses Confidentiality clauses Cost accounting clauses Profit-sharing clauses

Confidentiality clauses Since 3PLs or 4PLs (fourth-party logistics providers) are working so closely with your suppliers and customers and likely have direct access to organizational data, confidentiality clauses need to be robust.

Which of the following is typically a function of a warehouse management system (WMS)? Creating put-away algorithms Load matching and optimization Routing and mode switching Centralizing control over shipping

Creating put-away algorithms A WMS performs storage location management and optimization, which involves creating put-away algorithms and determining location by type, size, volatility, and velocity.

"Customer care should, at this stage, promote strong brand identity and development of lifetime customers." This sentence best describes what phase of the product life cycle? Introduction Growth Maturity Decline

Decline As sales decline, customer care becomes more critical. As distribution and sales decrease, customers with products that are becoming obsolete must be supported. Success now can win customers loyal to the brand.

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 Specific work center according to the routing file Capacity plan according to the master production schedule Demand forecast according to the master production schedule

Demand for the parent according to the material requirements plan Pegging is the ability to track dependent demand for a component back to demand for the parent by referring to the material requirements plan.

Why is it important to study enterprise environmental factors at the start of a project? Sustainability standards may dictate certain project constraints. Internal failure costs can be reduced by studying lessons learned from prior projects. External events may make the project infeasible at this time. Internal guidelines, standards, and templates can shorten planning.

External events may make the project infeasible at this time. Enterprise environmental factors (EEFs) refer to conditions not under the control of the project team that influence, constrain, or direct the project. EEFs are important to consider right from the start of a project, because they may influence whether the project is even feasible at the current time given the current state of the organization.

What does a U.S.-based organization need to do to become ANSI Z.10-certified if it is already ISO 9001- and 140001-certified? Focus on its safety principles; no changes are needed for it to work with ISO 9000 and 14000 Series Standards. Go beyond minimum OSHA requirements, and adapt the process to ISO 9001 and 14001 requirements. Comply with minimum OSHA requirements. Focus on its safety rules, but adapt them to quality and sustainability principles.

Focus on its safety principles; no changes are needed for it to work with ISO 9000 and 14000 Series Standards. ANSI Z.10 uses recognized management system principles in order to be compatible with quality and environmental management system standards such as the ISO 9000 and ISO 14000 series.

What specific help do the ISO 14000 Series Standards provide to organizations? Framework for an environmental management system with audits Guidance on how to comply with laws and regulations for social accountability. Generic management system standard for a supply chain Way to make a statement of product conformity to quality

Framework for an environmental management system with audits The ISO 14000 series provides a framework for a company to develop an environmental management system as well as an audit program.

Which is an expense that may still be needed in multiple countries prior to a new product launch even after the organization files an international patent application? Obtaining a foreign filing license Facilitating payments to patent assertion entities Filing separate patents in each country addressed by the USPTO service Getting in-country patent, liability, and tax law review

Getting in-country patent, liability, and tax law review From a compliance perspective, it is important to get in-country representation and legal review to protect the organization's interests. Organizations need to review not only each country's patent, trademark, and copyright laws but also product liability laws and relevant tax laws.

Which of the following changes tend to occur as a result of adding warehouses to a logistics network (assuming no other changes)? Inventory increases, and the ratio of storage space to total square feet increases. Inventory decreases, and the ratio of storage space to total square feet decreases. Inventory increases, while the ratio of storage space to total warehouse square feet decreases. Inventory decreases, while the ratio of storage space to square feet increases.

Inventory increases, while the ratio of storage space to total warehouse square feet decreases. Increasing the number of warehouses tends to cause an increase in inventory as each adds a buffer of supply stock. On the other hand, the ratio of storage space to total square feet tends to decrease as each facility contains non-storage areas that could be consolidated in a single warehouse.

Which is the primary benefit of a horizontal marketplace or trading exchange? Lowers transaction costs Secures interorganizational communications Results in higher cash-to-cash cycle time Encourages creative vendor solutions

Lowers transaction costs The APICS Dictionary, 15th edition, defines a horizontal marketplace as follows: "An online marketplace used by buyers and sellers from multiple industries. This marketplace lowers prices by lowering transaction costs."

If an organization primarily favors a push approach to managing a supply chain, which of the following production strategies would it be most likely to adopt? Just-in-Time Make-to-stock Make-to-order Assemble-to-order

Make-to-stock A make-to-stock strategy "pushes" materials and products through the system in accordance with preset schedules rather than letting them be "pulled" through by actual orders.

Which of the following statements about the challenges of implementing customer relationship management (CRM) and supplier relationship management (SRM) strategies is true? Decision making must be made more from the top down. Managers must acquire new skill sets. "Soft" skill sets must be replaced by more focused technical skills. Decision making must become more centralized and uniform.

Managers must acquire new skill sets. As structures and processes change, managers will need to acquire new skills to support implementation of SRM and CRM. Decision making will actually move downward throughout the organization, closer to critical points in the supply chain.

Just-in-Time (JIT) "cells" are laid out to accommodate which of the following? One product family with similar manufacturing processes One type of machine One production process One specialized type of worker

One product family with similar manufacturing processes "Work cells" are arranged to allow for the most efficient production of a product family manufactured with similar production processes. This minimizes the distance the products travel through production and, ideally, allows production of one unit at a time in response to an order.

Which SCOR metric for the source process is used for make-to-order or engineer-to-order but is not needed for make-to-stock environments? Perfect order fulfillment Total cost to serve Order fulfillment cycle time Return on working capital

Perfect order fulfillment Make-to-stock environments do not use perfect order fulfillment to measure reliability of the sourcing process.

In a customer-driven marketing strategy, which of the following must include getting information about the product to the consumer and giving the consumer a sense of being listened to? Price Promotion Product Placement

Placement In the customer-driven model, placement includes the way in which the customer gains information about the product and post-purchase support.

Which of the following is the most significant drawback of specialized package carriers such as FedEx and TNT? Lack of multimodal capability Lack of flexibility in pickup and delivery locations Price Too slow

Price With their intermodal networks, FedEx, UPS, and TNT offer door-to-door delivery on rapid timetables, but they are expensive. As delivery services, they are perhaps best used when speed is more important than price.

Which of the following might cause cyclical movements in a time series of demand data? Random changes in consumer sentiment Steady decline in buying related to the product cycle Holiday shopping Recession

Recession The business cycle correlates with alternating medium-term advances and declines in consumer buying patterns. Cycles are not short-term fluctuations related to holidays or random events, nor are they steady trends in only one direction, such as might be caused by factors such as a product cycle or demographics.

Which of the following describes human-friendly code that allows users without extensive training to perform custom database searches? Data dictionary Process-oriented middleware Structured query language (SQL) Data definition language

Structured query language (SQL) SQL is a common data manipulation language. It allows fairly easy search and manipulation of databases, especially when paired with a user-friendly interface.

Which of the following materials-handling options uses space efficiently, has the potential to improve inventory identification and accuracy, and is flexible? Towline Wagon crane Forklift truck Roller conveyer

Towline Towlines may be equipped with scanners to read the bar codes of the goods being conveyed. They provide several advantages: efficient use of space (they fit into narrow aisles) and the potential to improve inventory identification and accuracy. They are also more flexible than roller conveyers. Although forklifts are more flexible, they do not have the potential to improve inventory identification and accuracy.

A boat manufacturer whose customers want unique boats could do which of the following to increase customer satisfaction in this area while staying profitable selling competitively priced midsize luxury watercraft? Track customization decisions by geographical area and use it to advise customers. Move to a make-to-order business model and have customers participate in design. Allow customers to view boat progress and make changes once the demand time fence has been set. Follow a make-to-stock business model and market that the organization increases its product variety every year.

Track customization decisions by geographical area and use it to advise customers. Designing boats to allow for a considerable degree of customization can keep costs down and the company profitable. Tracking customization decisions by geographical area can allow salespersons to advise customers on what choices are truly distinctive in their area. The other choices may not be as profitable.

Which is a best practice for expediting transportation? Expediting is profitable so long as you always pass on its costs to the customer. Track the percentage of orders expedited and the marginal costs of expediting. Customers should never be charged for expediting of transportation that is already en route. Track the total transportation costs only.

Track the percentage of orders expedited and the marginal costs of expediting. Organizations can measure the amount of expediting that is being done and its costs so they can determine the savings that could be achieved by avoiding these costs. While tracking the total transportation costs is important, failing to track expediting costs would be an error.

Grouping customers according to distinct values or needs refers to the tactic of: predictive analysis. customer segmentation. demographic analysis. market prioritization.

customer segmentation. Customer segmentation is a key component of implementing customer-driven strategy, since it leads to a better understanding of customer values and needs and increased potential for success in responding to those values and needs.

The steps for successfully implementing a strategic supplier alliance include: developing employee negotiation and joint problem-solving skills. establishing a well-defined purchasing contract with potential partners. thinking in terms of the overall goals of the channel master. avoiding conflicts throughout the relationship.

developing employee negotiation and joint problem-solving skills. Because collaboration skills may not come naturally to everyone, firms must develop their employees' skills for resolving conflicts, negotiating, solving problems jointly, and conducting difficult conversations. Conflicts are unavoidable but must be treated as learning experiences. Agreements must be flexible. Alliance managers must focus on the overall goals of the alliance rather than those of the channel master.

All of the following are required elements of a transportation management system except: visibility of transportation across managers, sales, customers, and shipping personnel. distributed control over the planning of transportation. integration of transportation planning with order management and fulfillment. tracking to ensure that the plan is being followed at the execution level.

distributed control over the planning of transportation. Transportation planning must provide centralized control for optimized networkwide transportation planning.

The United Nations Global Compact was designed to: encourage companies to integrate its principles into their global business activities. get companies to form regional groups to fight corruption. promote peace among all nations to ease shipping issues through war zones. help companies resist the formation of collective bargaining groups.

encourage companies to integrate its principles into their global business activities. The Global Compact has two complementary objectives: to encourage companies to incorporate its ten principles into their global business activities and to support the broader goals of the United Nations.

A company is effective if it: uses one or more quality philosophies and the related measurement tools. demonstrates its vision and values via decisions made by top management. focuses on improving its operational processes and key performance indicators. focuses on and meets its customers' needs and wants while still meeting its cost objectives.

focuses on and meets its customers' needs and wants while still meeting its cost objectives. Effectiveness is being outward-focused—on the customers' needs and wants while still meeting the company's cost objectives.

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: flattening of the world. glocalization. globalization. mass marketing.

glocalization. Coined by Japanese economists in the 1980s and popularized by sociologist Roland Robertson, "glocalization" refers to the globalization of a product that is then adapted specifically to the local culture in which it is marketed.

The demand management person wants to execute an inventory reduction strategy in part by first prioritizing sales of inventory nearing obsolescence. This person may best get buy-in from the sales department by finding ways to: reduce safety stocks for other products. minimize order backlogs for other products. lengthen the time to market for the new replacement product. increase the lead time for orders shipped to customers.

minimize order backlogs for other products. Salespersons desire to eliminate order backlogs, which means that sales staff is not typically interested in minimizing inventories. To get buy-in for the inventory reductions, the demand management person would need to provide some guarantees that the reductions would not harm customer service such as would occur with order backlogs.

In a supplier relationship management (SRM) environment, a framework of performance metrics should be established to: penalize partners who do not adhere to agreed rules. inform suppliers from the start of the metrics the organization has chosen. monitor and identify opportunities for improvement. allow suppliers to monitor themselves.

monitor and identify opportunities for improvement. One of the reasons to establish metrics and then monitor performance is to identify opportunities to improve supplier performance. Metrics are best established in collaboration with suppliers.

A proven method of estimating the amount of a risk budget to devote to a particular risk response is: multiplying the expected cost of the risk by its likelihood. subtracting the cost of the possible risk from the cost of business and dividing that by the likelihood of its occurrence. subtracting the cost of the possible risk from the cost of business. adding accumulated risk associated with all strategic suppliers.

multiplying the expected cost of the risk by its likelihood. A best-cost analysis of risk is performed by multiplying the anticipated cost of the business disruption by the likelihood of its occurrence.

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: submit to customs verifications rather than self-policing its organization's shipments. not disclose the agreements made with C-TPAT to other supply chain partners. be located in a country that has a mutual recognition security arrangement with the U.S. spend funds on supply chain security enhancements as needed in accord with C-TPAT guidelines.

spend funds on supply chain security enhancements as needed in accord with C-TPAT guidelines. Gaining access to the C-TPAT list of certified suppliers is a benefit of voluntary membership, which in part requires that the organization develop and implement a program to enhance supply chain security in accord with C-TPAT guidelines.

A relational database links tables: that share a common data element. by creating a database subset separated by file structure but not by physical structure. in a hierarchy of many parents to many children. in a hierarchy of one (and only one) parent to many children.

that share a common data element. A relational database allows any tables (sets of database records for items such as orders or suppliers) to be related to one another provided they share at least one common data element or field such as Part_Number or Supplier_Number.

The House of Toyota is often used to explain the entire scope of lean. Toyota's sudden acceleration quality issues have underscored the importance of aligning: the short-term growth strategy with product features. engineering improvements with the value proposition. the long-term quality strategy and the value proposition with the short-term growth strategy. cost-saving measures with the short-term growth strategy.

the long-term quality strategy and the value proposition with the short-term growth strategy. Toyota's quality issues around sudden acceleration reaffirm the critical importance of a firm aligning its long-term quality strategy and value proposition with its shorter-term growth strategy, thereby ensuring that value will continue to exist.

In an SCM implementation effort, the channel master is: the organization that drives the implementation process. the organization that designates the optimal delivery channels. the person who designates the optimal communications channels. the person designated as strategic team leader.

the organization that drives the implementation process. Designating one organization as channel master positioned at the center of the initiative during its inception can contribute to the strategy's success. The channel master should be capable of rallying supporters and driving the implementation beyond the preoccupation with improving internal competencies.

A process expert says that most likely, the cost per unit of a new product should be $12, but, in the worst case, it could be as much as $16. He says that if commodity prices stay low, unit costs could be as low as $9. If a PERT weighted average is used, what should the risk analysis use as the cost per unit? 12 12.17 12.33 13

12.17 PERT Weighted Average = (Optimistic + [4 x Most Likely] + Pessimistic)/6 = ($9 + [4 x $12] + $16)/6 = $12.17

Referring to the demand table below, calculate a three-month weighted moving average forecast for April using a 1-2-3 weighting for January, February, and March, respectively. Which of the following identifies the correct forecast for April using this method? Month: January, February, March, April, May Demand: 21, 17, 22, 22, 23 Forecast: X, X, X, 20.17 20.33 20.67 40.33

20.17 The three-month weighted moving average forecast for April is 20.17: [(1 x 21) + (2 x 17) + (3 x 22)]/6 = (21 + 34 + 66)/6 = 121/6 = 20.17. Did you remember to divide by the sum of the weights (6) instead of by 3?

Which of the following documents is a standardized form listing items being shipped directly to the titleholder? Air waybill Credit letter Ship's manifest Ocean bill

Air waybill The air waybill, or airway bill of lading, is a standardized form used for all air shipments. Use of one uniform document has reduced processing costs for air shipping and facilitated faster clearing through customs.

Which of the following is a true prerequisite for developing collaborative relationships central to supply chain strategy? The most advanced communications hardware and software Sharing some benefits but none of the burdens of collaboration with partners Auditable information exchange to share knowledge, not just data Allowing employees to manage the relationship rather than the firm's leaders

Auditable information exchange to share knowledge, not just data Auditable information exchange and technology for connectivity should allow sharing of knowledge, not mere data. The required technology itself may not have to be the most powerful, but it must be compatible to allow information exchange.

Which of the following conditions contributes to the supply chain phenomenon known as the bullwhip effect? Small batch sizes Shortened lead times Just-in-Time production strategies Inaccurate demand forecasting

Inaccurate demand forecasting A major contributor to the bullwhip effect is inaccuracy in demand forecasting, which can lead to ordering too much or too little stock, thus contributing to the effect's exaggerated peaks and valleys of demand.

Which of the following statements about the role of supplier relationship management (SRM) in the supply chain model is correct? It helps ensure the same profitability for all supply chain elements. It focuses on meeting demand. It focuses on gaining information about customers. It measures success only by satisfaction of end customers.

It focuses on meeting demand. SRM helps ensure that demand created by customer relationship management (CRM) can be fulfilled in a manner profitable for all supply chain partners while maintaining customer satisfaction. The success of supplier relationships may be measured by various means, including time-to-market, cost efficiency, competitive advantage, and end customer satisfaction.

Which of the following capability improvement goals is a proactive reason for forming a strategic alliance? Learning new skills from the alliance partner Acquiring technological expertise in weaker areas of the company Improving management compensation programs Acquiring competitive high-tech equipment

Learning new skills from the alliance partner Proactive reasons for an organization to consider a strategic alliance are the alliance's ability to add value to products, enable strategic growth, increase market access, strengthen operations, increase organizational expertise, build organizational skills, and enhance financial strength.

Which of the following is an element of an e-business supply chain as opposed to a traditional supply chain? A few long-term partnerships and a moderate number of transactional relationships Production focus on engineering competitive supply chains Fixed industry structures with suppliers limited by each buyer's relationships Reactive customer service model

Production focus on engineering competitive supply chains Instead of the production focus being on economies of scale and scope, the new e-business model focuses production on engineering competitive supply chains.

Which of the following is the best example of a promotion activity in a customer-driven marketing strategy? Charging less if a customer orders through the internet Creating a product and service agreement (PSA) Segmenting customers according to their value to the business Deciding where to distribute one's products

Segmenting customers according to their value to the business Segmenting customers is an essential part of creating a promotional strategy, one of the four Ps of traditional marketing and customer-driven strategies such as those using customer relationship management (CRM). The other choices relate more to other components of the four Ps of marketing.

Which of the following loads constitutes the most appropriate shipment to send by truck? Small, high-value items traveling a long distance Small, high-value items traveling a short distance Heavy, low-value items traveling long distances Bulky items traveling between cities

Small, high-value items traveling a short distance The strong suit of trucking is accessibility, since trucks can go to virtually any commercial location. This, along with size and weight limits, makes trucking the most appropriate for carrying high-value items of smaller size for short hauls.

Product traceability and configuration management can help the organization with compliance in what area? ISO 31000 compliance Use of vendor-managed inventory Use of a trading bloc Labor law compliance

Use of a trading bloc Product traceability and configuration management would help when determining whether goods qualify for preferred treatment under trade bloc provisions. Configuration management can ensure that product attributes may be accepted in a trading bloc, i.e., country of origin of raw materials.

The economic order quantity (EOQ) calculation will work adequately under which of the following conditions? When lead times vary When seasonal demand varies When order intervals vary When orders arrive in stages

When order intervals vary Using the economic order quantity for fixed ordering systems effectively assumes a number of conditions, such as constant, known demand, constant lead times, and the simultaneous arrival of all items ordered. Order intervals may vary, but the quantity (EOQ) is fixed.

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. dissatisfied due to unacceptable speed of performance. satisfied due to perfect order fulfillment. satisfied due to the perfect fill rate.

dissatisfied due to heightened customer expectations. Customers have expectations about supplier availability, performance, and service reliability. Organizations can go a long way toward customer satisfaction by setting realistic expectations with their customers. One phrase that sums this up is to under-promise and over-deliver.

Through the use of Just-in-Time (JIT) and other lean techniques, velocity produces products and services: as quickly as possible. with features that exceed customer expectations. at the lowest price. only as fast as customers want them.

only as fast as customers want them. Through the use of JIT and other lean techniques, velocity produces products and services only as fast as customers want them.

Vendor-managed inventory is an example of a collaborative initiative that can benefit supply chain participants by: shortening production times. enhancing demand. reducing inventory costs. lengthening intervals between restocking.

reducing inventory costs. In this arrangement, the manufacturer receives better information about market demand, enabling more efficient production and better inventory management, thereby reducing costs.

The most productive, cost-effective packaging needs to: support the marketing message, be cost-effective, and have low environmental impact. attract the customer's attention, protect the product, and be recyclable. first protect the product, communicate information, and have low environmental impact. support efficiency, be protective, be labeled, and have low environmental impact.

support efficiency, be protective, be labeled, and have low environmental impact. The most productive, cost-effective packaging needs to support efficiency, be protective, be labeled, and have low environmental impact.

A method to determine the best mode of transportation for shipping specific product types is to compare: the profit margin of an item per cubic foot or meter versus the amount packed per cubic foot or meter. the profit of an item per cubic foot or meter versus the amount packed per cubic foot or meter. the net profit of an item per cubic foot or meter versus the amount packed per cubic foot or meter. the value of an item per cubic foot or meter versus the amount packed per cubic foot or meter.

the value of an item per cubic foot or meter versus the amount packed per cubic foot or meter. A method to determine the best mode of transportation for shipping specific product types is to compare the value of an item per cubic foot or meter (value density) versus the amount packed per cubic foot or meter (packaging density).

All of the following are prerequisites for companies wanting to invest in radio frequency identification (RFID) except: very high inventory accuracy. internally integrated demand signals. collaborative planning tools. a single view of data across the supply chain.

very high inventory accuracy. High inventory accuracy is a product of an RFID implementation and a reason for using it, not a prerequisite. The other items imply that the firm should be at a high stage of supply chain development before implementing RFID.

An organization sets a goal of reducing its lead time from four days to two because another firm in its industry can offer two-day lead time. This is an example of which of the following? Oliver Wight benchmarking Best-in-class benchmarking Competitive benchmarking Process benchmarking

Competitive benchmarking Setting a competitor's performance on a process as your goal for the process in your organization is an example of competitive benchmarking.

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 benefit from economies of scale in transportation To increase flexibility to test new geographic markets To increase flexibility of budgeting for warehousing expenses To increase control over warehouse design decisions

To increase control over warehouse design decisions A firm can build or remodel its own warehouses with no needs in mind other than its own. Contractors offer flexibility and economies of scale.

Which of the following is at the center of operations in enterprise resources planning (ERP) systems because it was among the first systems to be automated? Master scheduling Material requirements planning Advance planning and scheduling Manufacturing resource planning

Material requirements planning Material requirements planning forms the basis for all other ERP modules.

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? Branding Educating supply chain partners Placement Packaging

Placement The organization achieves greater control over product placement by using automated systems to track when promotional displays are in stores, so that marketing promotional timing can be synchronized.

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? Raise their prices to counter decreased demand for their exports. Avoid any sales transactions with the bloc countries. Resort to protectionist tactics. Establish premium tariffs for future transactions with bloc members.

Resort to protectionist tactics. 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.

Does an organization need more than one order status reporting system? Yes. Intermediate customers might need the information to automatically link with their systems. Yes. Different systems are needed for each final customer segment. No. A single order status reporting system is a best practice. Yes. One system may inform customers of a new, later delivery date; another lets them change this date.

Yes. Intermediate customers might need the information to automatically link with their systems. Intermediate customers and ultimate customers may need separate reporting systems so that each type of customer sees just what is relevant to their needs. For intermediate customers, this data could be automatically sent via EDI to their information systems.

E-business vision and strategy should: be set by the nucleus firm and then communicated to concerned parties. never get too specific such as indicating how the organization will connect with partners. be tightly integrated with and driven by a valid business strategy. ignore profitability concerns during the development and growth stages only.

be tightly integrated with and driven by a valid business strategy. A primary cause of early e-business failure was lack of a valid business strategy or a valid e-business strategy. Both must exist and be tightly integrated, and they must be guided by a realistic vision communicated and accepted throughout the extended supply chain by involving these partners in strategic planning. The nucleus firm or largest firm is typically the driving force; however, e-business vision and strategy should not be developed in isolation but should include representation from each concerned functional area and company that will be involved.

What is the fill rate for a product if 200 units are shipped to a customer and stockout frequency is 5% but the customer ordered 400 units? 2.5% 10% 25% 50%

50% Fill rate is a percentage of available items to requested items, which can be calculated by dividing the units delivered by the number ordered by the customer (200 units/400 units = 0.5 = 50%). Stockout frequency is not needed for the calculation.

Approximately what percentage of U.S. Fortune 500 companies have kidnap and ransom insurance for their key management? 15% 30% 75% 95%

75% With the increase in kidnapping for ransom, many companies have now purchased kidnap and ransom insurance for their key management. Currently about 75% of Fortune 500 companies have it. The world's largest provider of kidnap and ransom insurance, The Chubb Group, reported a 15 to 20% increase in the number of firms seeking such insurance between 2007 and 2010.

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? Identifying how to get cooperation for the plan with the entire supply chain Strategies to close any gaps between the demand plan and business plan revenue goals Strategies to propose solutions to any supply and demand mismatch Identifying areas where supply, demand, and finance plans can reach consensus

Strategies to close any gaps between the demand plan and business plan revenue goals After discussing demand consensus for product families and changes since the last meeting, the rest of the demand review meeting within the demand planning phase should be spent on what strategies can be employed to close any gaps between the demand plan and business plan revenue goals.

Supplier A's plexiglass costs US$10 per square meter and has a nonconformance cost of US$3 per square meter. Supplier B's plexiglass costs US$12 per square meter and has no nonconformance costs. What is the supplier performance index for each supplier? Supplier A: 1.03; supplier B: 1.0 Supplier A: 1.3; supplier B: 1.0 Supplier A: 1.33; supplier B: 1.1 Supplier A: 3.3; supplier B: 12.0

Supplier A: 1.3; supplier B: 1.0 The supplier performance index is calculated as follows: SPI = (Material Cost + Nonconformance Cost)/Material Cost. Supplier A SPI = (US$10 + US$3)/US$10 = 1.3. Supplier B SPI = US$12/US$12 = 1.0.

What are the three essential elements of a performance measurement system? A metric, a gap, and an interpretation A comparator, a benchmark, and a point of reference A target, a goal, and an objective A criterion, a standard, and a measure

A criterion, a standard, and a measure

Which of the following scenarios shows proper application of the principles of communicating demand? An organization uses its modern information systems to provide sufficient structure for ensuring that demand communications occur. A demand manager produces a consensus demand plan in units and sends this version to all stakeholders. A salesperson delays noting that a large order is still uncertain so the order can still ship on time if finalized. 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.

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. Communicating soon to minimize surprises is based on the principle that information communicated promptly is of far greater value than communications delayed for any reason. Developing a culture that rewards early sharing of good and bad news could improve demand communications significantly.

Which of the following could appear in a planning (modular) bill of material? All the parts required to produce a component for use in mass customization All the parts necessary to manufacture one car radio All the #10 nails intended for delivery to a chain of home improvement stores All common components used in all of the organization's tabletop radios

All common components used in all of the organization's tabletop radios A planning or modular bill of material (BOM) is used to manage product options in master scheduling. The master scheduling process is used to forecast the number of planning BOM items needed in total for the period's production.

What is the most important benefit of supply chain event management (SCEM) software? Decentralized collaboration tools providing extended supply chain integration Active visibility providing knowledge of existing problems Inventory reduction and lower safety stocks across the supply chain Simulation tools allowing answers to "what-if" scenarios

Active visibility providing knowledge of existing problems Active visibility is SCEM's most important benefit. Before a problem can be addressed, the organization must be aware that it exists.

The first step in setting strategy for moving toward greater collaboration in regard to the firm's enterprise resources planning (ERP) system is to do which of the following? Design a business architecture plan and an implementation plan. Analyze the current ERP system and understand its limitations. Create a conceptual and simulation model. Customize the ERP system to allow the needed functionality.

Analyze the current ERP system and understand its limitations. Before determining a strategy for greater collaboration, the firm must know what it can and cannot do with its current system, such as by performing a technology audit. Then the firm can set a strategy for where it wants to be and test the strategy's validity.

Realigning an organization from product-focused to customer-focused requires which of the following changes? Replacing the chief operations officer with a chief customer officer Analyzing each customer contact point to determine how key players can maximize the customer's experience Lowering production and distribution costs in order to increase customer support and marketing expenditures Focusing all changes on how the sales and customer service departments with direct customer contact do business

Analyzing each customer contact point to determine how key players can maximize the customer's experience Every customer contact point must be analyzed to identify key players within the organization who can affect customer satisfaction and to determine what they can do to maximize the customer's experience. This requires a high level of collaboration across sections of the organization and a clear articulation throughout the organization, to every member, of this new priority.

Which of the following should be done using item inventory management rather than aggregate inventory management? Optimizing the size of buffers between supply chain stages Optimizing the flow of inventory Calculating the size or timing of inventory orders Calculating inventory costs by category

Calculating the size or timing of inventory orders Management specifies rules to follow for individual inventory items using inventory policy and/or information technology systems. These rules specify when to order inventory and how to determine order size per order. The other options are better done using aggregate inventory management.

Which of the following types of customer relationship management (CRM) campaigns are different enough that they typically require separate planning and cross-training of marketing and sales professionals? Campaigns for customer types such as prospects or loyal customers Campaigns for television versus radio advertising Campaigns for up-selling versus cross-selling Campaigns for customer segments such as those preferring contact by direct mail or by email

Campaigns for customer types such as prospects or loyal customers Organizational structure is an issue for CRM strategy because of the different types of customers that each require different types of sales and marketing campaigns: prospective customers, vulnerable customers, win-back customers, and loyal customers. CRM teams can specialize in each type of campaign or perform job rotation to learn the most effective approaches to succeeding with each type. Cross-selling and up-selling are both part of loyal customer campaigns; television and radio are both part of media-based advertising campaigns; and segment preference for direct mail or email is part of direct marketing campaigns.

A supplier is resistant to certification. Which of the following would be the best argument to help convince the supplier to make the effort? Certification can improve throughput and reduce costs. Certification will help with the buyer's ongoing performance evaluations. The buyer will have lower risks for safety issues and lawsuits. The buyer's assertions of corporate social responsibility can be extended to the supplier.

Certification can improve throughput and reduce costs. Certification is a benefit for the supplier if best practices can improve throughput and reduce costs, which will increase profits. The other arguments are primarily benefits for the buyer.

The continuous improvement (CI) team you're working with has decided to track when specific manufactured components are too wide, too thin, or too bendable during the first week of production next month. Which of the following CI tools would be best for this purpose? Scatter diagram Relationship diagram Affinity diagram Check sheet

Check sheet A check sheet is a simple and easy tool for summarizing a tally count of the occurrences of certain defects in a product in a specified period of time.

An organization has a diverse sales force, and salespeople frequently work from home or on the road. The organization wants to add customer relationship management (CRM) technology solutions very quickly. Which of the following would best help this organization meet these goals? CRM software solution with a single integrated logical database Cloud-based CRM system available as purchased software Enterprise resources planning (ERP) CRM solution with a customer data warehouse (CDW) Cloud-based CRM system available as a software as a service (SaaS) subscription from a vendor

Cloud-based CRM system available as a software as a service (SaaS) subscription from a vendor Cloud-based technology is virtual software and/or a database that can be accessed from anywhere over the internet. SaaS is technology hosted by a third party and accessed over the internet, so it can be immediately accessed from anywhere. These solutions would satisfy the organization's need for remote and fast access to CRM technology.

Which of the following combinations of inventory management and ownership models would be best for slow-moving inventory that must be on site if it is to sell at all? Consignment-based, retailer-managed inventory Consignment-based, vendor-managed inventory Non-consignment-based, retailer-managed inventory Non-consignment-based, vendor-managed inventory

Consignment-based, retailer-managed inventory Because the inventory is slow-moving, management of the inventory by the retailer should be more cost-effective than having the vendor manage the inventory. Consignment-based sales are lower risk for the retailer and provide the supplier with the opportunity to have the products on hand when and where they are needed.

When monitoring lead times, which of the following is most directly related to a customer's required level of safety stock? Consistency Malfunction recovery Flexibility Speed of performance

Consistency Greater value is typically placed on consistency rather than speed of service, because consistency has a direct impact on the customers' ability to conduct their activities. For example, if cycles vary, then a customer must carry safety stock to ensure against possible late delivery, with the overall degree of variability directly impacting safety stock requirements.

A supplier uses an escape clause in a new contract, citing unexpected expenses. The project needs a new supplier quickly. Which is the best corrective action? Move the work in-house. Advertise for suppliers in a trade journal. Contact request for proposal (RFP) finalists. Offer to amend the contract as the supplier desires.

Contact request for proposal (RFP) finalists. Since the organization recently awarded this contract, it should have a list of other suppliers who submitted responses to the RFP. It can contact one of these suppliers. While renegotiating the contract with the current supplier is an option, the organization should be wary of offering the supplier nothing but concessions.

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. RFID tags cannot be burned without a specific tag burner available only to the manufacturer. EPCglobal Network's RFID tags are susceptible to counterfeiting because of their public availability, and proprietary tags must be used to prevent counterfeiting. Counterfeit tags cannot be created since the password is encrypted on the tag.

Counterfeit tags can be made, but the EPCglobal Network's online registry will identify a mismatch and detect the fraud. The EPCglobal Network's Gen 2 tag data standard adds a level of security against counterfeiting to RFID tags. Although a counterfeiter could make a tag with someone else's company and product SKUs, only EPCglobal's object naming service can issue headers for a tag. Because the product identifier is checked against this online registry, counterfeit tags would be immediately detected.

A letter of credit offers security from which risk? Regulatory risk Refusal to accept delivery Acceptance of substandard goods Counterparty risk

Counterparty risk The letter of credit offers security from counterparty risk. Governments could still intervene in the transaction if there are regulatory issues. The party receiving the goods could still refuse to accept delivery and the party accepting the goods could accept them and pay only to find out the goods are substandard after the fact.

Which of the following is the next step in an intraenterprise strategy development process after the first step of determining goals and the desired end state of the supply chain? Creating a conceptual model that will explain the process to all involved parties Designing change management and training for all parties and setting performance metrics Creating cross-functional and cross-business teams to guide the transformation Semantically organizing the supply chain's operational processes and IT's mission

Creating cross-functional and cross-business teams to guide the transformation Cross-functional and cross-business teams must be formed to involve all parties in the other steps.

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? Provide notice of layoffs and plant closings. Acquire a local representative in a global sourcing hot spot. Send out a request for proposal and select the lowest bidder. Do a detailed assessment of offshoring requirements.

Do a detailed assessment of offshoring requirements. Only when an organization has thoroughly assessed its needs for offshoring is there a sound basis for evaluating and selecting specific countries and suppliers. The organization is then ready to consider how potential global suppliers can support the organizational value proposition.

What is an essential component of any risk management system? Economical application of resources Response to all high impact, high probability risks regardless of cost Segregation of risk management by business area Complete mitigation of all risks

Economical application of resources The APICS Dictionary, 15th edition, defines risk management as "the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities."

According to the waste hierarchy, which is the best disposal method listed? Electric company trash burner Presorted landfill Unregulated overseas landfill Landfill with runoff treatment pools

Electric company trash burner Recovering energy during disposal ranks higher than disposal in a responsible landfill, so the trash burner that generates electricity is the best option of those listed.

An organization is performing inventory planning and network design. Why would the organization find considering echelons helpful in the process? Fewer echelons always equate to lower total supply chain costs. Entire echelons could be omitted from the supply chain. The total number of echelons equals the total number of inventory locations. The overall number of retailer echelons impacts market awareness.

Entire echelons could be omitted from the supply chain. Consideration of echelons can be helpful in planning the locations of inventory. Each echelon adds to material, labor, overhead, and inventory costs. However, echelons can also provide particular benefits, and increasing their number does not always increase total supply chain costs.

Which of the following types of firms, known in Japan as sogo shosha, may be a large conglomerate that actually buys goods in one country for sale in a foreign market? Export trading company Ship broker Consolidator Foreign carrier

Export trading company An export trading company looks for companies making goods that it wants to buy and resell in a foreign market. Such firms are especially significant in Japan, where they may own steamship lines, warehouses, insurance services, a communications network, and a sales force.

ISO 26000:2010 provides companies with guidance on being socially responsible. Which topics are covered in these guidelines? Human rights, consumer issues, fair operating practices, and employee communication messages Labor practices, human rights, consumer issues, and use of advertisements Environment, consumer issues, labor practices, and human rights Consumer issues, labor practices, human rights, and use of social media

Environment, consumer issues, labor practices, and human rights 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.

Which of the following is helping businesses develop reverse logistics key performance indicators to asses and improve their environmental performance? International Organization for Standardization (ISO) Global Reporting Initiative (GRI) Lead logistics providers United Nations Global Compact

Global Reporting Initiative (GRI) The GRI also has strategic partnerships with the United Nations, UNGC, ISO, and the Organization for Economic Cooperation and Development. In effect, the GRI is helping businesses develop reverse logistics key performance indicators to assess and improve their environmental performance. It is doing so in advance of binding laws and regulations likely to be developed by governments.

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? Sole reliance on quantitative data in associative forecasting Use of intuition Culture permissive of dissent Groupthink effect

Groupthink effect Groupthink can distort the conclusions of a panel if a strong leader emerges with a convincing but wrong-headed view or if all participants reinforce one another in reaching an exaggerated conclusion. An entire sales force acting in concert may, however, benefit from experience, collective knowledge of the broad market served by the organization, and even intuition.

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. Raise prices for the organization's products. Increase cash reserves. Increase investments in diversified financial products.

Hire high-quality new employees at reasonable salaries. Near the troughs, employment and output are low. The leading indicators are pointing toward a period of expansion, and a risk-seeking organization will want to start investing before its competition does. This may involve investing in new capital equipment while interest rates are low and hiring new employees while the talent pool is large and wages are relatively low.

Which of the following is a benefit of lateral supply chains? Improved business focus and expertise Increased size of supplier network Increased control High visibility of operations

Improved business focus and expertise Lateral supply chains can benefit from focusing entirely on the particular business and can develop more expertise than an in-house department, leading to more attractive pricing, higher quality, or both.

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 Decreased need for technology spending Decreased culture change spending Increased inventory holding costs

Increased outbound transportation costs Moving more business to the internet means that transportation costs will increase due to the need to ship anywhere in a short window. While inbound transportation can be optimized or centralized, outbound transportation increases because the company is doing work performed by the customers themselves in a retail environment and many smaller outbound shipments are needed.

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 taxes on property and equipment Increased inventory holding costs Increased transportation costs for extra miles of carriage Increased inventory handling costs

Increased transportation costs for extra miles of carriage Removing a tier from the network should reduce all the costs specified in the options except for transportation costs. Removing one level of warehousing, for example, will most likely increase the number of miles goods are carried from the points upstream from the tier to the points downstream.

You're the supply chain manager responsible for the overall performance of the chain. Which of the following is the most desirable? Increased variety, reduced variability, increased velocity Increased volume, reduced variability, increased visibility Increased variety, reduced variability, increased volume Increased velocity, reduced variability, increased visibility

Increased velocity, reduced variability, increased visibility No matter what the specific competitive priority of a supply chain is, the goal of supply chain management is to increase visibility and velocity while reducing variability. The success of supply chain management lies in continued pursuit of that goal.

Which of the following statements about virtual organizations is correct? Information belonging to member organizations remains proprietary. Member organizations retain their original, distinctive cultures and values. Customers perceive the member organizations as distinct entities. Individual organizations must preserve their own identity and integrity.

Individual organizations must preserve their own identity and integrity. In a virtual organization, there is integration of many systems and extensive sharing of information, often proprietary information. Forming virtual organizations thus requires trust and a cultural shift that embraces the common identity of the virtual organization. At the same time, the member organizations must evaluate the risk of the relationship and preserve their own identity and integrity.

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 Radio-frequency-enabled supply chain with an economies-of-scale technology model Traditional enterprise resources planning (ERP) supply chain with an economies-of-scale technology model A smaller firm will still not be able to be the channel master.

Internet-enabled supply chain with an efficient technology model In an internet-enabled supply chain, also called an electronic business supply chain, a firm with the most brand equity and the most efficient model can become the channel master. Even small firms gain global reach from the internet.

A company's product is basically a cheap but branded plastic toy that doesn't require much quality. Which would be a type of material that is tightly linked to the company's brand equity? Bottleneck materials Commodity materials Direct/core competency materials Leveragable materials

Leveragable materials Leveragable materials are of high strategic importance but of low supply chain difficulty, so they are key areas where supply chain leverage can be applied to increase efficiencies and lower costs.

Which of the following is an advantage of using enterprise resources planning (ERP) vendor offerings versus best-of-breed vendor offerings? Better niche market applications Specific functional area expertise Leveraged ownership of enterprise data Faster to market with innovative functions

Leveraged ownership of enterprise data In general, ERP vendors can leverage ownership of data and knowledge of the formatting of that data because they run the remainder of the transactional systems.

What information needs to be tracked at each point along the reverse supply chain? Customer satisfaction and lifetime customer value Value of the product for resale and information on the customer making the return Marginal costs/revenues and the status of each product or subcomponent Regulated materials being accepted and their source only

Marginal costs/revenues and the status of each product or subcomponent The status of each product or subcomponent needs to be tracked from its entry into the reverse flow until its final disposition, along with the costs or revenues accumulated at each step. Marginal costs are the costs accumulated at each step. The actual resale value of a returned item may be difficult to determine until the sale actually occurs.

Which of the following objectives was most important in earliest warehousing practices? Rapid response to customer orders Minimizing inventory amounts Market presence in each sales territory Full support throughout product life cycles

Market presence in each sales territory Originally the goal was to have a warehouse located near each market and have it stocked with sufficient inventory to ensure uninterrupted order fulfillment.

Which of the following is an input to the material requirements plan (MRP)? Gross to net calculations Rough-cut capacity planning Master production schedule Resource planning

Master production schedule There are several sources of input to the MRP. The master production schedule, inventory status, planning data, and bills of material are the primary inputs.

Can a highly efficient cross-docking system achieve the goal of no inventory ever at rest? Yes, a major retailer has done so successfully. No, because truckload shipments have overstock. No, due to inherent variability in demand. This is not a goal of cross-docking.

No, due to inherent variability in demand. Unpredictable demand, along with other factors such as accidents and adverse weather conditions, mean that maintaining some levels of inventory at various locations along the supply chain is generally necessary.

Which of the following are usually components of the market plan? Programs and projects, sustainability goals, and current market position Pro forma profit and loss (P&L) statement, management controls, and opportunity and issue analysis Current market position, objectives, strategies and action plans, and production plans Management controls, current market position, and staff development goals

Pro forma profit and loss (P&L) statement, management controls, and opportunity and issue analysis The market plan includes the current market position, opportunity and issue analysis (SWOT results), marketing objectives and strategies, action plans, programs, projects, budgets, a pro forma P&L statement, and management controls.

Which of the following is valid advice for contingency planners preparing for a potential business disruption? Protection against production disruptions should not rely solely on having extra stores of inventory. Contingency plans are the responsibility of each departmental manager in addition to their regular duties. After assessing all potential risks, ensure that each supply chain activity has a plan for continued functioning regardless of the cost. Create contingency plans for yourself and for your supply chain partners.

Protection against production disruptions should not rely solely on having extra stores of inventory. Don't rely only on extra stores of inventory. There can never be enough of it to cover all potential problems, and it, too, is vulnerable. You need alternate processes to keep functioning after a disaster.

In the collaborative planning, forecasting, and replenishment (CPFR) model, which of the following tasks would be performed jointly by the manufacturer (seller) and the retailer (buyer)? POS (point-of-sale) forecasting Sales forecasting Market data analysis Vendor-managed inventory

Sales forecasting In the CPFR model, certain tasks are performed by the buyer/retailer (POS forecasting in this case), certain tasks are performed by the seller/manufacturer (market analysis in this case), and those tasks are reconciled in a joint session. The joint session to reconcile POS forecasting and market analysis results in a shared sales forecast.

Which of the following benefits of a customer data warehouse (CDW) can result from the strategic allocation of human and technology resources according to customer channel preferences and purchasing patterns? Strategic marketing Sales productivity Channel management One-to-one marketing

Sales productivity Sales productivity can be increased by using resources specific to customer channel preferences and purchasing patterns.

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? Local government; increase interest payments. Suppliers; increase their profitability. Shareholders; increase dividend income. Federal government; increase rate of capital growth.

Shareholders; increase dividend income. Stakeholders external to the supply chain's business partners and end customers include public or private investors, lenders, and communities and governments. To investors and lenders, supply chain value may be defined as interest payments, capital growth, or dividend income and eventual return of invested capital.

Which of the following is a current global force shaping supply chain management strategies? Shortening product life cycles Shrinking markets Increased difficulties in communications and application sharing Increased influence of trade unions

Shortening product life cycles As industries mature, high levels of quality and service become expected norms and product life cycles grow shorter in response. Thus, long-term demand varies more.

Which of the following types of warehousing is most appropriate for agricultural supplies that might be used only once during the year? Assortment Spot stocking Postponement Stockpiling

Spot stocking Spot stocking is used for limited product lines and highly seasonal products that can be centrally stored during most of the year and spot-stocked in season at warehouses near the places where they will be purchased and used. Manufacturers use spot stocking for agricultural products used only during one limited operation, such as harvesting.

Some companies that operate a particular kind of transportation are trying to minimize their costs by running their vehicles more slowly to minimize fuel consumption, even though it increases delivery time. Which mode is most likely using this strategy? Pipelines Trailer trucks Rail Steamship lines

Steamship lines Steamship lines are trying to minimize their costs by running their ships more slowly, which consumes less fuel and thereby reduces costs but increases the delivery time.

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? Specify customer segments and their requirements. Influence the macroeconomic market. Study market share and do consumer research. Determine locations for warehouses and other facilities.

Study market share and do consumer research. Marketing research includes market analysis, which studies the size, location, nature, and characteristics of markets; sales analysis, which is the systematic study and comparison of sales (or consumption) data and market share; and consumer research, the discovery and analysis of consumer attitudes, reactions, and preferences.

The widest demand variability in the bullwhip effect generally occurs at which of the following nodes? Retail customer Supplier Distributor Manufacturer

Supplier A small amount of variability at the retail end of the supply chain is generally magnified at each node back up the chain toward raw material suppliers. This occurs most noticeably when each partner develops an independent forecast including some safety stock as a buffer against variability in orders from its customers down the chain.

Which of the following would allow an organization to more confidently select suppliers and could serve as a tool for continual improvement of suppliers? Supplier certification Supplier rating systems Contract deployment Strategic sourcing

Supplier certification Certification is both a selection tool and a means to improve supplier performance, since the process of certification usually requires organizations to acquire new knowledge and abilities and improve existing performance.

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. Temporarily increase safety stock. Permanently increase cycle stock. Permanently increase safety stock.

Temporarily increase cycle stock. One reason to hold more inventory is to hedge against price fluctuations. A temporary increase in cycle stock would help accomplish this. The APICS Dictionary, 15th edition, defines cycle stock as inventory that "depletes gradually as customer orders are received and is replenished cyclically when supplier orders are received." Since safety stock is an assigned level of stock held to hedge against supply variability, this purchase should not be classified as an increase in safety stock.

What does an organization need to do if it publicly commits to maintaining ethical labor standards for itself and its suppliers? Terminate contracts of suppliers who fail to improve between audits. Purchase a controlling interest in each supplier. Add a supplier tier that can take responsibility for its suppliers' labor issues. Audit suppliers for local labor law compliance as a proxy for ethical standards.

Terminate contracts of suppliers who fail to improve between audits. An organization that sets a sustainability policy needs to take measures to enforce those policies with suppliers. One way to do this is to terminate the contractors who fail to improve their practices after a suitable period, such as between audits.

Which is the best method for communicating with remote stakeholders? Emailed attachments Video chat Telephone conference call The method they say they prefer

The method they say they prefer Stakeholder communication preferences can be determined by interviewing stakeholders.

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. The planning horizon is less than or equal to the cumulative lead time. The planning horizon is always equal to the cumulative lead time. The planning horizon is always less than the cumulative lead time.

The planning horizon is equal or greater than the cumulative lead time. The planning horizon should be at least the cumulative lead time for the product.

Since reverse logistics affects the entire product life cycle, one can expect which of the following? Different packaging should always be supplied to the customer for returns. If product returns are low, rapid improvements should be made to the product. There will be increased use of customer service with products in early life cycle stages. Product design should make reverse logistics its top priority to ensure success.

There will be increased use of customer service with products in early life cycle stages. Since reverse logistics affects the entire product life cycle, one can expect an increased use of customer service with products in early life cycle stages so that the bugs and product failures can be worked out and documented for future improvement.

Which of these proactive reasons to form strategic alliances focuses on shared technology that can add to the skills base of both organizations? To build organizational skills To enable strategic growth To strengthen operations To increase organizational expertise

To increase organizational expertise Partnering with an organization that has expertise in a certain area makes it easier to implement new technology but also results in increased knowledge and experience that will benefit both organizations.

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 Tying results to improvements in customer satisfaction Tying results to a target number of reported defects in goods produced Tying results to a post-implementation review of the software's ROI

Tying results to the stock price of the firm While all of the items listed are attempting to tie incentives to measurable results of the project, the company's stock price is dependent upon many more factors than the outcome of the project alone and is therefore the least likely to be perceived as a fair indicator. Managers should be reminded that the stock price of the firm can be affected by the outcome of the project but should not be measured by it.

A mining process produces a slurry of liquid and mineral debris as waste. Finding an asphalt manufacturer who can use it as an ingredient in new asphalt is an example of what? Recycling Waste exchange Waste hierarchy Hazardous waste disposal

Waste exchange A waste exchange is an arrangement to the benefit of both parties in which the waste product of one company's process becomes the raw materials for another company's process.

If you were a supply chain manager for IKEA, which strategy would you promote with your suppliers according to IKEA's IWAY initiative? Provide training on sustainability practices to suppliers through local educational institutions. Encourage open bidding by suppliers to reduce pricing in exchange for volume purchases. Create virtual communities of suppliers online to share their ideas about sustainability practices. 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. IKEA's strategy is to engage in long-term relationships with fewer suppliers, and IKEA is committed to helping the suppliers do their best environmentally. The company has developed a code of conduct that suppliers must adhere to in order to work with IKEA. The code delineates the requirements for the outside environment and the social and working conditions in an initiative they call IWAY.

In response to increasing consumer economic and environmental concerns, auto industries have developed new products such as hybrids and electric-powered vehicles. This is an example of which of the Vs of supply chain management? Velocity Variety Variability Volume

Variety Variety is the ability to alter the mix of products offered in response to changes in market demand. (It might also have been an increase in volume, but the strategy focuses on a new variety of products, not a new amount of existing products.)

Which could be used to produce a more accurate and useful SWOT analysis? Voluntary use of ISO 31000 Series Standards Accreditation under ISO 9000 Series Standards Certification under ISO 26000 Series Standards Certification under ISO 14000 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.

During which part of the change management process do you explore the costs and benefits of a potential change? Execute change. Monitor change. Prepare for change. Plan for change.

Prepare for change. Before you can even plan for a change, it is important that you first assess if the change should even occur. This assessment includes an analysis of the costs and benefits of making the change in the first place.

Which Altman Z-score would indicate that a publicly financed organization is at risk of bankruptcy but would be just a watchlist score if it were for a private organization? 0.9 1.5 1.9 3.3

1.5 A score of less than 1.8 would be a bankruptcy risk for a public organization, but the score would need to be less than 1.1 to be a bankruptcy risk for a private organization.

An investment in a warehouse will cost $1 million now and will provide $300,000 per year in increased profits for four years. What might make this investment seem less advantageous to a finance professional? Economic value added Operations research and network modeling Time value of money Nothing. A 1.2 return on investment is very respectable.

Time value of money Since money that is borrowed requires interest payments and money that is earned earlier can be invested to earn interest, financial analysts factor what is called the time value of money into the analysis. Briefly stated, money to be received in the future is discounted to the value that it would be worth if received today at current interest rates, called the present value. Depending on the interest rate, this investment may or may not make financial sense.

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 Transportation network design and delivery scheduling Routing and manifesting Load matching and shipment tracking

Transportation planning and order fulfillment A TMS package must include integration between transportation planning and order fulfillment, which should increase cost control, customer service, and automation.

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? Foundation Aggregation Business Application

Aggregation The aggregation layer consists of applications designed to take information and services from various locations and package them for easier access and consumption. This layer includes portals and intermediaries such as brokers and service providers.

Which of the following items makes up the majority of rail cargo in the United States and Great Britain? Agricultural commodities Forest products Heavy industrial products, such as automobiles and equipment Coal

Coal Coal makes up the bulk of rail cargo in both the United States and Great Britain. Rail transport is most appropriate for heavy, durable items of low value like raw materials, agricultural products, chemicals, construction materials, and industrial metals.

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? Increasing wages to surpass minimum wage laws Hiring a sustainability officer at each plant Effectively reducing product packaging Replacing plant equipment with green technology

Effectively reducing product packaging Reductions in manufacturers' orders for durable goods and an inverted yield curve are both indicators that a recession is likely. Reducing product packaging will reduce costs while improving sustainability. The other options would all increase costs at a time when this may not be economically sustainable.

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? Multiple dysfunction Semifunctional enterprise Integrated enterprise Extended enterprise

Extended enterprise At Stage 4 of supply chain development, extended enterprise, companies typically have moved beyond simple participation in exchanges and have automated trading and have moved past available-to-promise (ATP) to CTP.

In which of the following ways are non-vessel operating common carriers (NVOCCs) different from freight forwarders? I. They perform the physical work of consolidating and loading and unloading cargo. II. They buy and resell space on carriers. III. They arrange transportation for commercial cargo. I and II I and III II and III I, II, and III

I and II NVOCCs can be distinguished from forwarders in three ways: they actually buy and resell space on carriers, they perform the physical work of consolidating and loading and unloading cargo (using nonunion labor to undercut the rates charged by carriers), and they can handle the freight door to door in many cases. Freight forwarders do not do these tasks, nor do they provide the labor to do them.

The Green SCOR model uses which of the following attributes? I. Costs II. Asset management III. Flexibility I and II I and III II and III I, II, and III

I, II, and III The Green SCOR model uses the following attributes: costs, asset management, flexibility, responsiveness, and reliability.

Which of the following is the Level 1 SCOR management process that entails converting materials or creating content for services? Source Make Deliver Plan

Make The make processes describe the activities associated with the conversion of materials or the creation of content for services.

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? Design for service Quality function deployment Modular design Integral design

Modular design The power supply is a module that, along with other modules, can be mixed and matched to assemble devices for use in countries with different power supply infrastructures.

Voluntary sustainability program compliance can reduce which of the following risks? Scrutiny by the press or activists Loss of customers who view the product as a commodity More expensive compliance if program elements become mandatory Fines from government sources

More expensive compliance if program elements become mandatory Voluntary sustainability program implementation can allow an organization to implement sustainability at a measured, cost-effective pace rather than waiting until mandatory compliance requires frantic effort.

Which type of organization has made filing a patent after a reasonable patent search a much riskier endeavor? Patent assertion entities Organizations with patent-pending status International patent treaty organizations Government audit agencies

Patent assertion entities While any company owning a patent can do this, a special class of organization called a patent assertion entity (PAE), or "patent troll" has come to exist. According to a U.S. White House report, "Patent Assertion and U.S. Innovation," PAEs "focus on aggressive litigation ... asserting that their patents cover inventions not imagined at the time they were granted."

Which of the following is a benefit of using a third-party trading exchange that spends time preparing for its auctions? The third party focuses on aggregating buyers into purchasing groups, creating bulk purchasing options. The third party performs traditional procurement activities for many consumers, creating economies of scale. The third party focuses on aggregating sellers among a similar industry tier, forcing price concessions from larger buyers. The third party lowers the cost of trading compared to public auctions, creating transaction efficiency.

The third party performs traditional procurement activitiesc for many consumers, creating economies of scale. Although auction preparation costs a bit more for the involved parties, the cost may be lower than in traditional procurement because the third-party exchange can perform these services for multiple consumers and generate economies of scale.

When considering methods of sharing their performance ratings with suppliers, which of the following provides quantitative feedback? A. Scorecards B. Voice of the customer C. Surveys D. Both A and C

A. Scorecards Scorecards capture quantitative and qualitative data and provide historical, plan (current), and predictive views of supplier performance. Suppliers have access to their own scorecard and can address specific areas of concern immediately.

A control chart can be used to track which of the following? Time Size Percentages All of the above

All of the above The control chart can track process variation for a variety of process outcomes like component size, wait time, percentages, thickness, etc.

Organizations that have high sales volume and serve markets with more volatile demand and uncertain forecasting tend to focus on what type of manufacturing strategy? Make-to-order Make-to-stock Assemble-to-order None of these types

Assemble-to-order Organizations that serve markets with more volatile demand and uncertain forecasting need to focus on responsiveness so they can adapt quickly to changes. These organizations tend toward assemble-to-order manufacturing strategies (product components or modules are produced based on forecasts and are assembled when customer orders are placed) if sales volume is high. If sales volume is low, a make-to-order strategy is more appropriate.

Which of the following was a drawback in the early versions of material requirements planning (MRP) software? Assumed infinite capacity Made extra work for the scheduler Failed to include component lead times Lacked an automated bill of material

Assumed infinite capacity The earliest versions of MRP software assumed infinite capacity and therefore would sometimes create impossible schedules.

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? Just at the consumer end of the chain Just at the next stop upstream in the chain Just at the next stop downstream in the chain At the next stop downstream in the chain and at the consumer end

At the next stop downstream in the chain and at the consumer end Watch trends in demand at the consumer end of the chain, not just at the next stop downstream. Visibility to the end of the chain can speed up response to changes in the market.

A manager decides to source the key Just-in-Time (JIT) manufacturing goods from a local producer even though an overseas producer sells identical goods for less, even with the added cost of shipping. Which of the following is this manager most likely emphasizing? Positive supply chain contribution Affordability Availability Quality

Availability The availability of the good is being emphasized; the manager needs a reliable supply of goods even if it costs more to get the goods when they are needed for the JIT process.

Which of the following statements about technology and customer relationship management (CRM)/supplier relationship management (SRM) is true? A. Both CRM and SRM are essentially technological. B. The effects of technology are more significant in SRM than CRM. C. Technology plays a supporting role in CRM and SRM. D. Both A and B

C. Technology plays a supporting role in CRM and SRM. While CRM and SRM are not synonymous with technical tools (they are philosophies and competitive strategies), they are both greatly supported by technological solutions.

Which of the following statements about outsourcing customer relationship management (CRM) is true? CRM vendors may provide seamless customer service. Separation of CRM vendors should be strictly enforced to protect the outsourcing business's autonomy. CRM should not be outsourced. The only good reason for outsourcing CRM is cost savings.

CRM vendors may provide seamless customer service. If CRM vendors train their employees in the client's business and products and if they have adequate resources, they can convey the impression of seamless customer service. CRM may be outsourced for various reasons. Cost is not the only consideration; vendors may offer advanced capabilities, for example. Information gained by one vendor should be shared with all vendors to create a learning organization.

Which of the following phrases best characterizes the approach to change in total quality management initiatives? Tight focus on the improvement of end-item features "Big step" overhaul of whole systems Changing processes so they naturally result in more satisfied customers Short-term initiatives with precisely defined endpoints

Changing processes so they naturally result in more satisfied customers According to the definition in the 15th edition of the APICS Dictionary, TQM is "a management approach to long-term success through customer satisfaction." Total quality management is associated with the strategy of continuous improvement, which focuses on small-stem changes in processes (not products). Continuous process improvement (as it is also called) defines itself as "the never-ending search for perfection," not short-term initiatives with definite endpoints.

Which of the following design strategies offers streamlined production and lower purchasing costs with a possible tradeoff against reduced design flexibility and lower quality? Universality Mass customization Component commonality Integral design

Component commonality Using common components for a variety of purposes provides economies of scale in purchasing and manufacture but can limit design flexibility and reduce quality.

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? Data-oriented middleware Data aggregation Data mining Dashboard

Dashboard A presentation dashboard provides role-specific sorting of the voluminous data created by data mining in a DSS.

Which tool provides organizations with the advantages of timely information and self-management? Risk management Dashboards Audits SWOT analysis

Dashboards The key advantages of using dashboards are timeliness and self-management.

A supply chain has a large variety of SKUs that sell quickly but at different rates at each retail location. The distribution centers are independent and have knowledge of local demand that is hard to quantify. Which of the following inventory planning strategies is best for this supply chain? Decentralized inventory planning with break-bulk warehouses Decentralized inventory planning with consolidation warehouses Centralized inventory planning with break-bulk warehouses Centralized inventory planning with consolidation warehouses

Decentralized inventory planning with break-bulk warehouses Centralized planning can minimize overall inventory levels but may respond slowly to local demand. Decentralized inventory planning involves each supply chain stage determining its own inventory requirements and placing orders independently, so there is no coordination expense. Due the large variety of SKUs, it should use break-bulk warehouses to receive large shipments while shipping out individual orders so that no individual distribution center need receive a large supply of the same SKUs. Consolidation warehouses are for receiving items from multiple suppliers for consolidated bulk shipments to later supply chain partners (the opposite of break-bulking).

Which of the following is most likely to be the main reason why the total warehouse inventory count of a key raw material would understate the organization's actual investment in that raw material? Doesn't include in-transit inventory Unaccounted entry into work-in-process inventory Shrinkage or theft Failure to include maintenance/repair/operations (MRO) inventory

Doesn't include in-transit inventory In-transit inventory is frequently overlooked but is often a significant portion of overall inventory.

Import duties are generally assessed as a percentage of: I. landed cost. II. Cost, Insurance, Freight (CIF) amount. III. Free on Board (FOB) amount. I II II and III I, II, and III

II and III Import duties are generally assessed as a percentage of either the CIF or FOB value.

Which of the following entities is responsible for issuing and updating Incoterms? International Chamber of Commerce (ICC) World Trade Organization U.S. Department of Commerce United Nations

International Chamber of Commerce (ICC) Incoterms were first issued in 1936 by the International Chamber of Commerce, which has updated them several times since then to reflect the changing conditions of international trade. The ICC maintains a website that provides detailed information.

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. Job tasks are simplified. Jobs become more specialized. Jobs are not a focus of change.

Job responsibilities expand. In JIT, there is an emphasis on training and cross-training to boost employees' skills and knowledge to keep up with their growing responsibilities. As a result, job responsibilities tend to expand.

Which of the following is the technique of using visual signals to "pull" components through the manufacturing process? Lean Kanban Six sigma Just-in-Time (JIT)

Kanban Kanban systems provide a visual signal to indicate when a workstation needs a component. Kanban is a Japanese term, and the system originated among Japanese manufacturers.

Which of the following is required for successful implementation of customer relationship management (CRM) and/or supplier relationship management (SRM) strategies? New job definitions Greater emphasis on task-focused responsibility centers A new workforce Greater control from the top down

New job definitions Organizations implementing CRM and SRM must move toward greater collaboration and away from more hierarchical structures defined by task-focused responsibility centers and top-down decision making. CRM and SRM call for a new attitude and new skills in the existing workforce.

Which is the most cost-effective example of Monitoring and Controlling in project management? Performing inspection of deliverables Performing validation of scope Performing process audits at the start of Executing Presenting project changes for approval

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 documents constitutes a price quote in export-import trade? Commercial invoice Dock receipt Consular invoice Pro forma commercial invoice

Pro forma commercial invoice A pro forma commercial invoice may be sent to a potential buyer in advance of the actual sale. It may contain the same information as a regular commercial invoice and serve as both a price quote and documentation for the potential buyer to use in securing a letter of credit to finance the purchase. Carefully documenting all costs in the pro forma invoice can help the exporter properly price the product by including hidden costs, such as unforeseen costs arising from risks and human errors.

In postponement of product design, which is the supply chain strategy being used? Push-pull strategy Pull-push strategy Push-based strategy Pull-based strategy

Push-pull strategy Postponement, or delayed differentiation in product design, is an excellent example of a push-pull strategy. Prior to product differentiation, a push-based strategy is used, where a generic product is built based on aggregate forecasts. Later, at the time of differentiation, a pull-based strategy is implemented in response to customer demand for a specific product.

Powder coating is a type of painting that uses electrical charges to attract the sprayed material to the object being coated. It is an example of which of the following when compared to standard spray painting? Recover energy Reuse Reduce Recycle

Reduce Powder coating reduces the amount of sprayed material that becomes waste in comparison to standard spray painting.

Which is an industrial hardware manufacturer's fastest method of capitalizing on overseas markets and local expertise? Technology licensing Joint venture with an overseas partner Fully owned foreign sales office Internet sales and international shipping

Technology licensing Technology licensing can be an advantage when expanding overseas. Rather than opening overseas facilities or starting a joint venture, in exchange for royalties, an organization can license its technology to a partner who is already established and knows how to operate in that country.

In order for a key performance indicator to be a true supply chain metric, it must measure: the increase in market share by the manufacturer compared to its competitors making the same product. a process that is implemented by each supply chain partner. a process that crosses nodes. the degree to which the customers' needs and wants are met.

a process that crosses nodes. In order for a key performance indicator to be a true supply chain metric, it must measure a process that crosses nodes.

Pipeline inventory is the products that: are ready to leave the manufacturing facility. are in transit between locations. need to shipped out of the country. are sitting at the cross-dock.

are in transit between locations. Pipeline inventory is the product inventory that is in transit between locations.

With a laterally integrated supply chain, an organization may: make gains in control and scale but lose its ability to see the larger processes. make gains in scale and scope as well as increase its ability to see the larger processes. make gains in scale and scope but lose its ability to see the larger processes. decrease the complexity of its activities but be able to see the larger processes more clearly.

make gains in scale and scope but lose its ability to see the larger processes. Synchronizing the activities of a lateral chain with a network of independent firms can be enormously challenging. What each firm gains in scale, scope, and focus, it may lose in ability to see and understand the larger supply chain processes or to care about them.

All of the following are included in supply chain event management's active visibility except: simulation tools. notification of exceptions to unplanned events. multiple application workflow capability. measuring of key performance indicators and metrics.

multiple application workflow capability. Active visibility is provided by monitoring, measurement, notification, simulation, and control tools.

A warehouse ideally should: optimize inventory shrinkage against inventory velocity by consolidating safety stock. maximize real estate utilization by providing several stories and freight elevators. maximize cube utilization by using at least 90% of total space on rack storage with no more than 80% accessibility. optimize cube utilization and inventory velocity in part by providing 100% accessibility.

optimize cube utilization and inventory velocity in part by providing 100% accessibility. A good warehouse layout will optimize inventory velocity and cube utilization. The ideal system also has 100% accessibility, meaning that all inventory can be accessed without having to first move other inventory.

Logistics adds value to the supply chain process if: it can successfully deal with export and import regulations. transportation costs can be kept to a minimum. product variation does not change packaging requirements. sales are achieved through strategically placed inventory.

sales are achieved through strategically placed inventory. Logistics adds value to the supply chain process if inventory is strategically positioned to achieve sales.

You are ordering a camping tent through the call center for a recreational equipment manufacturer. The operator notes that for a little more money you could receive significantly more value in another tent model. This is an example of: a loyalty program. cross-selling. a win-back program. up-selling.

up-selling. Up-selling is a customer relationship management tactic in which customers are offered higher-priced or more profitable items instead of the item they were originally considering. The operator in this case may be supported by a workflow that suggests specific models and links to more data in an electronic catalog or data about the customer's previous purchases that suggest a tendency toward higher-priced purchases.

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) Collaborative planning, forecasting, and replenishment (CPFR) Quick response (QR) Continuous replenishment (CR)

Vendor-managed inventory (VMI) VMI is a form of collaboration in which a supplier performs some or all of the inventory operations traditionally handled by a retailer, including display design, replenishment, inventory counting, record keeping, and so on. (VMI can overlap with other systems.)

Moving average forecasts are generally superior to naive forecasts in correcting for which of the following sources of variability? Long-term trends Short- to medium-term trends related to the seasons of the year Very short-term fluctuations in demand attributable to no known cause Cyclical movements correlated to economic indicators

Very short-term fluctuations in demand attributable to no known cause Moving averages are intended to even out random variations, but they don't react quickly enough to account for cycles and trends.

An organization's balance sheet shows €10 million in inventory in year 1 and €8 million in inventory in year 2. If the organization's year 2 after-tax income (with depreciation added back) is €70 million and there are no changes in accounts receivable or payable, what is the organization's net cash flow from operations in year 2 on its statement of cash flows? €61 million €68 million €72 million €79 million

€72 million Cash flow from operations in this example is calculated by determining the increase or decrease in inventory, which is €10 million minus €8 million or a decrease of €2 million. A decrease in inventory increases net cash flow from operations, so this €2 million is added to the €70 million.

A health-care provider in the Midwest revamps the procedures in its endoscopy clinic by borrowing from a car manufacturer's lean production system. Which of the following describes this? Continuous improvement solution adaptation Competitive benchmarking Best-in-class benchmarking Process benchmarking

Best-in-class benchmarking A Midwest health-care provider that revamps the procedures in its endoscopy clinic by borrowing from a car manufacturer's lean production system is an example of best-in-class benchmarking.

Which of the following documents would a banker consult for information about the value of export-import cargo in connection with a letter of credit? Order bill of lading Commercial invoice Ship's manifest Dock receipt

Commercial invoice The commercial invoice is the document that states the value of commodities in a shipment. (It does not include other amounts, such as freight.) It may be required for the letter of credit and by other entities that need to know the value of the goods for insurance or assessment of duties.

Which of the following is true of collaborative relationships in the supply chain? Companies will always have a good reason to treat competitors in a different class from other types of supply chain members. Incompatible hardware or legacy systems are no longer a barrier to collaboration due to new methods of integration. Power-based relationships place long-term gains ahead of short-term results. The most technologically advanced supply chain partner will determine the level of supply chain development for the network.

Companies will always have a good reason to treat competitors in a different class from other types of supply chain members. Competitors can often find a way to collaborate with each other for mutual gain, but since each competitor is actively trying to gain market share from the other, the relationships should be kept at arm's length to ensure fairness, and extra caution must be devoted to sharing information. Companies may pretend to embrace collaboration when they really only want access to information for their own benefit. Companies will always have a good reason to treat competitors warily.

Which of the following companies is most likely to be interested in customer relationship management (CRM)? Company that fabricates fiberglass insulation for a heating equipment manufacturer Company that manufactures testing equipment for a laboratory builder Company that manufactures power tools for professional contractors Company that develops billing application software for a health-care provider

Company that manufactures power tools for professional contractors Companies that can benefit from knowing more about the end customer or shaping the needs and wants of the end customer will be most interested in CRM. The manufacturer of power tools must design, manufacture, and sell tools that appeal to customers. The other companies are suppliers that must satisfy purchasers' technical qualifications or expectations.

A retailer is growing tired of one of its supplier's frequent promotions because they invariably lead to overstocks after the sale and produce no net gain in profits. The supplier also dislikes the promotions for similar reasons, but each season a new promotion is rolled out. Which of the following would best help these firms resolve their problems? Frequent personal communications and relationship building between the firms Implementing supply chain event management (SCEM) software between the firms Implementing customer relationship management (CRM) software between the firms Implementing advanced planning and scheduling (APS) software between the firms

Frequent personal communications and relationship building between the firms Because both firms already know about the problem and share a common desire to change it in the same way, simply increasing communications between the partners would help. Software solutions would not necessarily resolve this problem, because personal communication is what is not working.

Which of the following must champion the relationships to be formed across an extended supply chain? Retailer Cross-enterprise technology team Manufacturer Nucleus firm

Nucleus firm While the nucleus firm may be a manufacturer or a retailer, it is defined as the firm that has the most power or brand equity in a relationship, and this firm must take the initiative to move the extended supply chain network to a higher stage of supply chain development.

The best case for a risk scenario is that a supply disruption will not occur and the subsidiary will spend US$100,000 in prevention costs for the period. The worst case is that a supply disruption will occur and will cost US$2 million in lost revenues and remediation costs. The worst case has a 20% probability. If these are the only two options being considered, what is the net expected monetary value (EMV) for this scenario? -US$480,000 -US$400,000 -US$320,000 -US$80,000

-US$480,000 Since these are the only two options, the best-case probability is simply 100% - 20% = 80%. Best case EMV = 0.8 x -US$100,000 = -US$80,000. Worst case EMV = 0.2 x -US$2,000,000 = -US$400,000. Net EMV = -US$80,000 + -$US400,000 = -US$480,000.

Understanding process interdependencies and responsibility for each substep and identifying bottlenecks will provide which supply chain ability? Ability to eliminate supply chain risk Ability to partner successfully with competitors Ability to streamline operations Ability to offer more variety than the customer requires

Ability to streamline operations As supply chains evolve, their ability to streamline key operational processes and flows also increases. Each of the competencies listed in the question relate to the ability to successfully streamline operations.

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? Design for maximum performance at minimal cost Inventory reduction High inventory turns Aggressively reducing lead times

Aggressively reducing lead times 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.

What risk management action would produce the best results in mitigation of the possibility that risk response plans will not be implemented? Identify and rate specific risks. Assign individual responsibilities. Use project management to implement contingency plans. Get commitment from supply chain partners.

Assign individual responsibilities. Preventive action plans that are never implemented are useless. However, many plans just remain plans. Failure to implement preventive (or contingency) plans is a risk in itself. Organizations need to assign an individual the responsibility of turning a plan into a project. However, project management is more applicable to preventive action plans than contingency plans, since contingency plans by definition are not implemented until after a risk event has occurred.

If the organization offers a corporate customer trade credit of 1/10 net 30, what does this encourage? Slower buying and thus a reduction in the bullwhip effect Buying in greater quantities, since payment is not due right away Fast payment, since there is a penalty for late payment after 10 days Forming a relationship with a bank to finance purchases and get the 1% discount

Buying in greater quantities, since payment is not due right away Trade credit encourages sales because it allows the buyer time to convert the good or service into revenue themselves before making payment. Trade credit is a way of providing cash discounts on purchases. It means that if the bill is paid within 10 days, there is a 1% discount. Otherwise, the total amount is due within 30 days. The vendor has to decide on quick payment for a 1% discount vs. a 30-day deferral of payment.

Which of the following is a solution for a manufacturer who wants to outsource some non-core manufacturing competencies but doesn't want to increase the risk of miscommunications, integration failures, or process delays in a currently highly efficient production process? Supplier rating system Compliance management Contract deployment Co-location

Co-location Supplier co-location (or colocation or collocation) is a term often used to describe the practice of locating a supplier or multiple suppliers within a single location. Locating suppliers at the plant should reduce the risk of miscommunications, integration failures, or process delays.

Which of the following forecast techniques relies upon an expert panel that responds to questionnaires and never meets face to face? Delphi method Historical data comparison Sales force consensus forecasting Associative forecasting

Delphi method The Delphi method uses information from a panel of experts who respond anonymously to questionnaires. After several rounds of responses and critiques, a moderator produces a report expressing the collective opinion of the group.

Choice of a warehouse management system (WMS) should hinge on which of the following areas? Cross-docking, break-bulking, and consolidation Echelon inventory, ABC inventory analysis, and postponement Directed picking, replenishment, and put-away Routing, load matching, and manifesting

Directed picking, replenishment, and put-away A WMS selection should hinge on three key areas: directed picking, directed replenishment, and directed put-away. WMS performs these tasks by tracking and analyzing data on item, quantity, location, unit of measure, and order information.

Which of the following is the best technique to mitigate the risk of a supplier failing to implement a risk response plan? Ensure that one individual is accountable for each response. Audit the supplier at the end of the response period. Have the organization implement the response plan itself. Warn the supplier of the dire consequences of failure.

Ensure that one individual is accountable for each response. When one person is accountable for a response plan, that person can run the response as a project and ensure that it occurs. When no one is accountable, the risk of it not getting done is much higher, because everyone can assume someone else will do it. The other answers are either not mitigation techniques or are not as likely to be as effective as the correct answer.

Which of the following types of firms generally acts as a shipper's long-term consulting partner, smoothing the way through foreign customs and politics but not buying or selling cargo? Export management company (EMC) Export trading company (ETC) Customs house broker Freight forwarder

Export management company (EMC) A common reason to hire an EMC is to acquire representation in a particular market where the EMC has special knowledge and connections. By working with an EMC as a consulting partner, the exporter gains access to current information about the preferences of consumers in that market and about local customs and government regulations.

If a government is providing incentives to encourage organizations to use higher forms of the waste hierarchy over lower forms, which action would capture the highest incentive benefits? Finding ways to reduce the amount of hazardous materials in new products Researching landfill sites and soliciting only ones that use space efficiently Designing products for easy removal of recyclable or hazardous materials Setting up return centers and advertising that old devices can be returned there for free

Finding ways to reduce the amount of hazardous materials in new products While all of the answers could be beneficial and rewarded, the correct answer is at the top of the waste hierarchy.

Which of the following would be best for showing frequency distribution? Pareto diagram Tree diagram Histogram Radar chart

Histogram A histogram is a bar graph that displays the frequency distribution of measurement data such as dimensions, temperature, weight, etc., for a process. It shows the amount of variation and the range of variation within a process.

Which information technology steps can translate a policy for retailer-specific delayed packaging for generic products into a functioning practice? Enterprise information strategy Information content definition Information infrastructure design Selection of databases, networks, software, and configuration

Information infrastructure design Information infrastructure design involves determining how to translate policies and controls into a cohesive and cost-effective information system that minimizes data duplication and errors, provides access to information at all necessary internal and external points, and supports effective analysis and efficient transaction processing. A policy to pursue delayed packaging would require visibility of data from external points.

What is a benefit of visualizing prior sales data in chart form when trying to determine future sales? It can be used in place of forecasting by projecting the obvious patterns forward. It will indicate how the data need to be prepared. It will prove that forecasts are always wrong. It will reveal whether qualitative changes are helpful.

It will indicate how the data need to be prepared. Visualizing data can help show seasonality and trend and help forecasters determine how to prepare the data properly and which type of forecasting method to use.

Which of the following is true of a global supply chain alliance that is forged strongly from the beginning? One quality issue related to consumer safety should be acceptable. It will still need constant maintenance. It will typically need only annual review. It should result in shorter lead times than domestic sourcing.

It will still need constant maintenance. Organizations sometimes fall into complacency after the initial excitement of a new alliance or supplier integration effort. It is important to view communicating requirements and priorities with suppliers as a never-ending process needing constant maintenance rather than a one-time event.

Suppliers involved in online marketplaces/exchanges may experience which of the following risks? Increased replenishment lead time Reduced channels for slow-moving items Less chance of process improvements Slower order-to-cash/payment receipt

Less chance of process improvements When suppliers face tighter margins due to global competition on exchanges, they frequently have less capital to invest in long-term process improvements. Exchanges generally offer sellers benefits that match the opposite of the other items.

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? Raw materials Maintenance/repair/operations (MRO) Work in process (WIP) Finished goods (retail)

Maintenance/repair/operations (MRO) MRO inventory is a period expense. As such, it is expensed on the income statement during the period in which it is purchased.

Which of the following processes develops the master production schedule based on demand and inventory levels? Operations planning Resource planning Sales planning Master scheduling

Master scheduling The master scheduling process has to disaggregate the product family data into numbers of individual products based on inventory levels, forecasts, demand plans, order backlogs, and other considerations used to decide what you need to produce and how much of each item to produce.

Where in the planning process does the capacity requirements planning process occur? Material requirements planning Sales and operations planning Resource planning Master scheduling

Material requirements planning Capacity requirements planning takes place as part of the material requirements planning process.

Which of the following can happen when you customize an enterprise resources planning (ERP) system? May have multiple incompatible sources of data Can add flexibility to rollout upgrades May unintentionally alter a different module Can reduce the need for training and change management

May unintentionally alter a different module ERP systems are highly integrated, so adjusting one process may affect other areas unintentionally.

Which of the following is the least important goal of warehousing? Supporting the end of the product life cycle Providing high quality and continuous improvement Minimizing variances Minimizing the need for physical labor

Minimizing the need for physical labor Although warehousing does strive to find a cost-efficient balance between automation and the need for human laborers, minimizing the need for physical labor is not one of its key objectives.

After selecting the proper partner, what is the next step in creating a successful alliance? Appoint an alliance manager. Negotiate a win/win deal. Establish ground rules. Engage in a collaborative corporate mindset.

Negotiate a win/win deal. Before the rules, supervision, and improvement of the relationship can be pursued, a win-win deal must be negotiated. This sets the tone for the future alliance.

Which of the following component purchasing goals are reactive or defensive reasons for forming a strategic alliance? Need to add value to products Need to open new markets Number of suppliers able to provide the component Need to build organizational expertise

Number of suppliers able to provide the component From a purely reactive stance, companies with certain types of supply situations may be able to manage risk better in a strategic alliance. If only one supplier is available, the organization may need to maintain a close relationship with that supplier to ensure availability and opportunities for developing individualized components that could provide competitive differentiation.

Which of the following could be a key performance indicator (KPI) for replenishment? Order fill rate Volume growth Inventory turns Introduction lead time

Order fill rate Order fill rate provides a measure of the success of the key process of replenishment. A high fill rate indicates good performance.

Which of the following is a risk to an organization's recent bulk purchase of soft-wood shipping pallets? Pest prohibitions Pallets damage too easily Obsolescence due to slip sheets Inability to recycle

Pest prohibitions A number of countries such as the United States and China and regions such as the European Union have adopted international restrictions on incoming materials packed on pallets made of soft woods that may contain harmful insects. Acceptable methods of heat and chemical treatments are governed under International Standards For Phytosanitary Measures regulation ISPM15. Therefore, the organization's chief concern will be the need to heat or chemically treat the pallets or to verify that this has occurred.

In the implementation phase of the ISO 31000 process framework for risk management, what step comes before assessing risks? Identify risks. Analyze risks. Place risks in appropriate context. Assess risk levels.

Place risks in appropriate context. Before assessing risks, organizations should place risks in the appropriate context. All of the incorrect answers are actually part of the assess risks phase.

In which of the following stages of the continuous improvement model would a process map be used? Process analysis Process assessment Project planning Implementation and change management

Process analysis Analysis of a specific process requires breaking the process down into each constituent step from beginning to end across functions and partners. A process can be mapped with a process map.

Which of the following decisions should include a consideration of landed costs? Real property acquisitions Transfer cost decisions Purchase of a component domestically or offshore Warehouse safety stock level decisions

Purchase of a component domestically or offshore Landed costs include the purchase price of goods plus all other costs involved in getting the goods from the seller to the place where they will be used, such as a manufacturing facility. They provide a more accurate means of comparing the real costs of goods purchased in different geographic locations for use in the same facility.

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 Stable Reactive efficient Customer-responsive

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.

Which of the following is the most critical aspect of influencing demand with extended supply chain partners? Fulfilling orders to the most profitable supply chain partners first Selling the benefits of changes using soft skills such as leadership Preventing shortage gaming by relying on partner order history over stated needs Clearly setting current requirements and expectations for each party

Selling the benefits of changes using soft skills such as leadership Influence over departments such as marketing and operations is not a given, and this is especially the case when dealing with multiple organizations. Developing and maintaining influence requires leadership skills and a certain amount of humility.

What value can a customer service group add when a product is no longer available in the assigned facility? Sending an apologetic note to a customer Sourcing a product from an alternate facility if a stockout occurs Providing the customer with a similar product to the one ordered if there's a stockout Having a team available to fix the manufacturing equipment during regular business hours

Sourcing a product from an alternate facility if a stockout occurs Effective customer service programs know that malfunctions and service breakdowns will inevitably occur and have contingency plans in place. For example, if a stockout of a customer item occurs, an alternate facility may provide a replacement.

Which of the following statements identifies a beneficial result of including more periods in a moving average? Forecasting becomes more sensitive to cyclical changes. The impact of random variations is reduced. Forecasts don't lag so far behind sales data. The impact of the seasonal effect on demand is reduced.

The impact of random variations is reduced. Including more periods in the calculation (six or 12 months instead of three, for example) further reduces the effects of random variation. This is the only benefit. Otherwise, the data gathering and calculations become more difficult and the forecasts lag further behind changes in demand, making the forecasts less sensitive to trends and cycles.

Which of the following statements about effective supplier performance measurement systems is true? They automate key supplier performance measurement activities. They enable each department in an organization to define its own supplier performance metrics. They track the performance of a narrowly defined portion of the supply chain base. Their performance metrics, reporting, and improvements should be defined by the purchasing organization only.

They automate key supplier performance measurement activities. Effective supplier performance measurement systems track performance; collaborate with suppliers on performance measurements, reporting, and improvements; automate key supplier performance measurement activities; and standardize supplier performance measurement procedures across the organization.

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 To make data gathering and forecasting calculations simpler To take account of mean average deviation To put more emphasis on long-term influences on demand

To be more sensitive to recent trends in demand A weighted moving average puts more emphasis on the most recent demand numbers than a simple moving average does. Because of the weighting, it doesn't lag as far behind demand data as a simple moving average does. Its focus is on recent trends, not the long term.

For U.S. companies exporting products to all countries except Canada, companies must file electronic export information online if the export is valued at: US$250 or more. US$2,500 or more. US$25,000 or more. None of the above, because the minimum is on a sliding scale.

US$2,500 or more. For exports valued at US$2,500 or more, companies exporting from the U.S. must file electronic export information online through the Automatic Export System Direct. Shipments to Canada are exempt from this regulation.

Which of the following is not a main feature of lean production? Practices that simplify support processes Identification and elimination of non-value-adding activities Use of teams of employees with very specialized technical skills Use of automated machines

Use of teams of employees with very specialized technical skills Lean production employs teams of multiskilled employees so that they can successfully handle a variety of lean-related tasks. The other are features of lean production.

For smaller or less market-dominant organizations, which of the following would best ensure that suppliers are complying with ethical standards? Inform suppliers of potential sanctions and enforce them. Perform auditing of suppliers using one's own employees. Require suppliers to audit their own compliance using their employees. Use third-party auditors agreed to by both parties.

Use third-party auditors agreed to by both parties. Sanctions may be less effective for less dominant partners. Employing third-party auditors that both parties agree to can be one way for less dominant partners to perform monitoring and enforcement that seems fair.

Which of the following allows developers to wrap otherwise incompatible electronic messages in a shell for universal message receipt? Service-oriented architecture (SOA) Web services Extensible markup language (XML) Electronic product codes (EPC)

Web services B2B web services consist of XML and other XML-based standards that wrap electronic messages in a shell for universal message receipt, advertise the existence of web services, and specify how requests and responses must be formatted.

Cost-effective and efficient collaboration between supply chain partners requires: a conflict resolution model specified within the buyer-supplier contract. maintaining separate decision-making structures to avoid conflicts. structuring communication and decision making so that conflicts do not occur. defining an early point at which to dissolve a troubled relationship.

a conflict resolution model specified within the buyer-supplier contract. Forging supplier relationships represents an investment that must be protected by developing ways to identify potential and actual conflicts, resolve them without endangering the relationship, and learning from the conflict. Specifying the conflict resolution model in the contract protects both parties from excessive costs and sets expectations.

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 fourth-party logistics (4PL) company. a distributor integration (DI) network. a collaborative transportation management network. a third-party logistics (3PL) company.

a third-party logistics (3PL) company. 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 the internet, the client of the client/server model is represented by: a personal computer. a web browser. middleware. a web server.

a web browser. The internet is a network of networks in which the web browser is the client connected to a web server.

If an organization has a demand manager position, this person's direct supervisor should: still take the lead in pre-S&OP meetings because this position lacks sufficient authority. expect this position to provide item-level sales forecasts. base performance measurements on the reliability of the overall demand plan. place more weight on statistical forecasts than on demand planner overrides.

base performance measurements on the reliability of the overall demand plan. Demand managers should be subject to metrics and challenging goals; performance measurement and rewards should be based on the reliability of the overall demand plan. This position should have sufficient authority to insist upon realistic plans and to generate consensus among stakeholders.

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: assume that this risk was considered during corporate strategy development. minimize this risk because it will be part of a contingency plan. adjust the supply plan to a new strategic direction prior to presentation. call out this risk to decision makers.

call out this risk to decision makers. The risks of a supply plan must be spelled out for decision makers at a high level, including an assessment of the likelihood of each identified risk, its impact if it occurs, and possible means and costs involved in mitigating the risks.

When working to extend risk management to supply chain partners, one best practice to generate lowest supply chain risk is to: transfer as much risk as possible from partners to the organization itself. transfer as much risk as possible to other partners. create business rules prioritizing high-impact risks regardless of their probability. create business rules prioritizing suppliers and production and transportation routings.

create business rules prioritizing suppliers and production and transportation routings. 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.

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: competitive differentiation. customer segmentation. niche marketing. creating lifetime customers.

creating lifetime customers. While businesses may employ customer segmentation, competitive differentiation, and niche marketing to appeal to customers, this strategy describes the creation of lifetime customers.

An organization is implementing ISO 31000 risk management in response to an executive-level mandate. This mandate should include a commitment to: address uncertainty in a loosely structured manner. adapt the organization to the standard's processes. develop a transparent process inclusive of all stakeholders. implement the program despite its net cost.

develop a transparent process inclusive of all stakeholders. The ISO framework starts with an executive-level mandate and commitment toward risk management that is based on the ISO 31000 principles, which include being inclusive of all stakeholders, auditable, and transparent. Rather than considering the program to have a net cost, it should be considered to add value to the organization. Also, it should be customized to the organization rather than requiring the organization to conform to a rigid set of processes. Finally, it should unambiguously address uncertainty in an orderly, structured, and well-timed manner.

In an organization that uses cross-functional teams for managing supply from its external resources, the supply chain manager's role should involve: ensuring that each functional area attains its individual priorities. educating functional team members on cultural sensitivities. being the intermediary between each set of functional counterparts. ruling in favor of one or another functionality when priorities conflict.

educating functional team members on cultural sensitivities. If the organization has built cross-functional teams, it means that there are far more contacts between buyer and supplier. Sometimes this means far more places for cultural misunderstandings or other problems to occur. Supply chain managers can work with extended team members to initiate, maintain, and manage these multiple relationships with the proper sensitivity. Collaborations involve finding ways to come to consensus on supply chain priorities rather than just individual priorities.

If an organization owning a brand is looking to establish an ongoing relationship with a supplier but does not desire an alliance, it should: use online open market bidding to find the lowest-cost supplier with fast lead times. establish prices, discounts, and delivery timing cooperatively. use hard negotiations to win low prices, discounts, and lead times. consider the lowest total cost of ownership as the only selection criterion.

establish prices, discounts, and delivery timing cooperatively. Supply chain thinking requires a strategic view of sourcing that focuses on the long-term success of all partners along the chain. Pricing, discounts, delivery timing, and related matters can be established cooperatively, taking into account the needs of supplier and buyer. The emphasis is on establishing ongoing relationships or alliances rather than simply making a series of transactions, pitting suppliers against one another to drive down prices. In addition to lowest total cost of ownership, organizations must also consider the effect of the supplier on their reputation.

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: increase safety stock by 5% to make the adjustment. increase safety stock by 10% to make the adjustment. postpone inventory deliveries to retailers to ensure low safety stock and perfect customer service. explain that this level would be prohibitively expensive.

explain that this level would be prohibitively expensive. While it may be tempting to attempt to achieve 100% order fulfillment, in point of fact it takes a very large increase in safety stock to approach perfection.

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: identifying wasted resources. focused on the balance sheet. focused on identifying large retailers that pay manufacturers in cash. focused on outsourcing processes.

focused on outsourcing processes. Relative to financial performance, spend management is managing the purchase of goods and services in a supply chain, including outsourcing and procurement activities. It often deals with consolidating internal demand across business functions, divisions, or extended partners and/or consolidating suppliers to find areas for purchasing and transportation quantity rate discounts.

A company performs transportation of both materials and finished product for a global manufacturer. To manage fluctuations in demand, they contract with service providers in geographical regions, who in turn manage contracts with individual suppliers. This best describes a: distributor integration (DI) network. fourth-party logistics (4PL) company. collaborative transportation management (CTM) network. third-party logistics (3PL) company.

fourth-party logistics (4PL) company. Fourth-party logistics providers are often found in global markets where they can combine the resources of suppliers and often 3PLs to meet the challenges of time zone, geographical, and cultural differences.

The transport of hazardous materials or dangerous goods requires: informal training of those who must handle hazmat and dangerous goods. that they are concealed from view for security reasons. signed documentation by the carrier that regulations were followed in cargo preparation. identification and classification for shipping containers and some vehicles.

identification and classification for shipping containers and some vehicles. The transport of hazardous materials or dangerous goods requires identification and classification for shipping containers and some vehicles. This includes a shipping name and, if necessary, a technical name, both on the container and on any packaging inside the container.

Continuous process improvement is supposed to: improve worker satisfaction by eliminating unnecessarily strenuous or stressful work. fix or remedy all the problems and defects in any supply chain organization. focus just on the quality of goods and services produced by the chain. tap into the intuition of long-term employees who have extensive supply chain experience.

improve worker satisfaction by eliminating unnecessarily strenuous or stressful work. One of the common purposes of continuous process improvement is to improve worker satisfaction by improving workplace safety, eliminating unnecessarily strenuous or stressful work, making performance assessments more rational, and enhancing the quality of jobs and career options.

An example of a proactive benefit driving a strategic alliance would be a concern about: the complexity of the component's interface with the final product. improving time to market or increasing quality. the strategic importance of the component being purchased. a sourcing relationship's potential to jeopardize attaining business objectives.

improving time to market or increasing quality. Proactive reasons an organization should consider a strategic alliance are the alliance's ability to add value to products, enable strategic growth, increase market access, strengthen operations, increase organizational expertise, build organizational skills, and enhance financial strength.

The key to synchronizing supply and demand is to: alter the demand plan to match the business plan goals. develop a sales and operations planning process that can be accomplished using one meeting per month. reach consensus on a demand plan and a production plan and share relevant changes with supply chain partners. develop a process that results in sales, marketing, and operations independently arriving at the same demand numbers.

reach consensus on a demand plan and a production plan and share relevant changes with supply chain partners. The key to synchronizing supply and demand is to reach internal consensus on a demand plan and a production plan and to share relevant plan changes with supply chain partners as they relate to short-, medium-, and long-term plans and activities. Internally, supply and demand synchronization takes place through sales and operations planning (S&OP), which takes place in a series of meetings. Differences between the various internal department plans should be expected.

Successful implementation of customer relationship management (CRM) and supplier relationship management (SRM) philosophies usually requires: common business goals and mission statements for all supply chain members. outsourcing to companies with special expertise. revision of decision-making processes. redefinition of core competencies.

revision of decision-making processes. Implementing CRM and SRM does not require that companies change their core competencies, although employees may need to acquire new skills. Nor do organizations need to form common goals or mission statements. They will need, however, to revisit work processes, job definitions, and decision-making structures.

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). the company's cash flow. cost savings from sustainability activities. the company's tax liability.

the company's net income (profit or loss). Bottom line refers to the line at the bottom of a financial report that shows a company's net income (profit or loss).

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? 32 times 20 times 16 times 10 times

16 times The inventory turnover ratio requires calculating average inventory, which in this case uses the balance sheet values for years 1 and 2, which are ($6 million + $4 million)/2 = $5 million. The inventory turnover ratio is COGS divided by average inventory: $80 million/$5 million = 16 times.

What is the return on supply chain fixed assets if supply chain revenue is US$500,000, cost of goods sold is US$350,000, supply chain management costs are US$75,000, and supply chain fixed assets cost US$300,000? 0.62% 2.5% 6.25% 25%

25% The return on supply chain fixed assets is 25%: [$500,000 (supply chain revenue) - $350,000 (cost of goods sold) - $75,000 (supply chain management costs)]/$300,000 (supply chain fixed assets cost) = 25%.

If an organization has the following sales and forecasting results over a three-month period, what is the mean squared error? (Assume a smoothing constant of 0.3 and exponential forecast rounding to the nearest whole unit.) April: Actual sales of 20 units, exponential forecast of 18 units May: Actual sales of 16 units, exponential forecast of 19 units June: Actual sales of 15 units, exponential forecast of 18 units -4.6 3 5.3 7.3

7.3 To find the mean squared error, first calculate the error for each month:April = 20 - 18 = 2May = 16 - 19 = -3June = 15 - 18 = -3 Mean Squared Error = Sum of Squared Errors for Each Period/Number of Periods[(2)2 + (-3)2 + (-3)2]/3 = (4 + 9 + 9)/3 = 22/3 = 7.3

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

Business models intending to use the internet as one of many sales channels and owning some of their own physical distribution means 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.

An organization wanting to create supply chain resilence is make-to-order and lean. How can it follow these principles while becoming more resilient? Build more safety stocks of finished goods. Develop response plans and methods of detecting red flags that trigger those actions. Buy more safety stocks of raw materials. Order full containers of raw materials from multiple suppliers whenever prices are low.

Develop response plans and methods of detecting red flags that trigger those actions. Organizations can increase their resilience by building in redundancy or flexibility. To increase an organization's flexibility, mechanisms or indicators need to be put in place that can sense threats and react quickly and accordingly.

Which component of the triple bottom line is tangible and has the longest-term effect? Economic or financial performance Reputation of a business in the community Environmental issues Societal issues

Environmental issues The three components of the triple bottom line are economic or financial performance, societal issues, and environmental issues. Environmental issues and efforts like resource use, sustainable and safe production processes, reverse logistics, etc., are tangible and can be measured, usually over a period of a few years.

Rachel Carson's publication of Silent Spring in 1962 conveyed which of the following key messages? Pesticides and industrial chemicals have a very limited afterlife. The pesticide DDT impacts only insects that exist in crop fields. Human activities often impact the environment with unintended consequences. Biodegradable items quickly and harmlessly fade away into the environment.

Human activities often impact the environment with unintended consequences. With the publication of Silent Spring by oceanographer Rachel Carson, we learned about the unacknowledged side effects of the use of the pesticide DDT on all living beings, including humans. The world has never again been able to view the impact of our activities on the environment with casual disregard for unintended consequences. That concern is one root cause of the now-growing attention to the afterlife of commercial products, especially hazardous materials such as pesticides and industrial chemicals.

Which of the following factors has led to strategic sourcing and greater integration in the supply chain? Decreasing customer response time Greater fragmentation on both sides of the supply chain Shrinking global markets Increased expectation of high quality

Increased expectation of high quality As customers begin to assume that products and services will be of high quality, the competitive differentiator becomes price or value. The supply chain has, in fact, consolidated rather than fragmented; global markets have grown rather than shrunk. Consolidation may necessitate strategic sourcing as the number of sources narrows. Growing global markets present opportunities but also costs and risks that must be managed.

What was Gap Inc. able to achieve with its supply chain strategy for its stores? Lower transportation costs Use of one central supply chain that produced clothing for all its stores Lower manufacturing overhead Lower-scale economies for purchasing and production

Lower-scale economies for purchasing and production Gap Inc., which owned three major brands, Old Navy, the Gap, and Banana Republic, had three separate but overlapping supply chains on three different continents in order to fit each one to the types of products it produced. Because of these three distinct supply chains, Gap Inc. had lower-scale economies for purchasing and production but higher overhead and higher transportation costs than if it had just one supply chain.

Which of the following is an objective of production activity control (PAC)? Providing input to the rough-cut capacity plan Developing the monthly production schedule Minimizing work in process Executing sales and operations planning

Minimizing work in process Minimizing work in process (that is, speeding up production) is one objective of PAC. It takes place at the day-to-day level, putting the master production schedule and the material requirements plan into action.

Which warehouse function typically benefits from a full load discount and more efficient use of storage space in the warehouse? Mixing Break-bulk Postponement Stockpiling

Mixing Mixing typically benefits from a full load discount and more efficient use of storage space in the warehouse. In a typical mixing setup, the warehouse receives full-vehicle shipments of different products from manufacturers in diverse locations, with each shipment receiving the full-load discount.

In which directions do the four basic flows within a supply chain move? Physical materials and services flow downstream, cash and the reverse supply chain flow upstream, and information flows in both directions. Physical materials and services, cash, the reverse supply chain, and information all flow downstream. Physical materials and services, cash, and the reverse supply chain flow upstream; information flows downstream. Physical materials and services flow upstream, cash and the reverse supply chain flow downstream, and information flows in both directions.

Physical materials and services flow downstream, cash and the reverse supply chain flow upstream, and information flows in both directions. Physical materials and services flow downstream from suppliers to customers, cash and the reverse supply chain flow upstream from customers toward suppliers, and information flows in both directions.

Which of the following statements about the role of purchasing in a supplier relationship management (SRM) model is correct? Purchasing roles have become more layered between strategic management and buying. Strategic sourcing has greatly simplified the tasks associated with purchasing. Under an SRM model, strategic decisions such as the selection of alliance partners are pushed down to subordinate purchasing roles. SRM technology has greatly complicated the tasks of purchasing managers and agents.

Purchasing roles have become more layered between strategic management and buying. Purchasing has, in fact, become more complex with the use of strategic sourcing. Roles have become more stratified, with senior-level managers focusing on strategic decisions and lower-level managers focusing on procurement and monitoring. They are aided by SRM technology, which has automated and supported many of their new tasks, such as partner research and contracting and invoice development.

Which of the following processes is part of the Supply Chain Operations Reference (SCOR) process model? Return Marketing Design Customer relationship management (CRM)

Return The five main processes of the SCOR model are plan, source, make, deliver, and return.

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.

Which of the following statements about the supplier certification process is correct? Suppliers should be clearly informed of certification process criteria. Criteria should be adjusted to individual suppliers' capabilities. Certification is a supplier selection tool only. All potential suppliers should go through the certification process.

Suppliers should be clearly informed of certification process criteria. To achieve certification's highest potential, companies must clearly communicate what they will be measuring and how. Criteria should be consistent from one supplier to the next. The outcome can be used not only for selection but also for supplier improvement. Companies usually opt to pursue the certification process only with actual or key suppliers.

Which of the following is a likely outcome of asking suppliers to participate in an organization's product design effort? The product could take longer to be introduced to the market. The product quality could be improved without significantly increased costs. The supplier could introduce lower-quality materials into the design. The organization might develop enough trust in the supplier to have them take the lead on overall design.

The product quality could be improved without significantly increased costs. Higher quality for the price is a typical benefit of involving suppliers in design.

Supplier capacity measurements show that supplier X consistently has had three times as many units available as its top competitors. Based on only this metric, what can the organization determine? The supplier looks promising but could have low quality. The supplier is less likely to be able to fulfill all orders. Based on only this metric, this is the supplier to use. The supplier looks promising but should be carefully checked for signs of financial distress.

The supplier looks promising but should be carefully checked for signs of financial distress. The supplier capacity metric can be used when selecting a supplier by comparing the units available of various suppliers. However, too much available capacity could be a red flag of supplier distress.

Which of the following could improve the perceived reliability of the master scheduling process if previous last-minute changes approved by salespersons have created schedule havoc? Available-to-promise (ATP) Projected available balance (PAB) Time fences Planning horizons

Time fences Time fences can help balance the need for a production system to maintain schedules and control costs against the need for it to be flexible. Rescheduling, additional setups, rerouting, expediting, overtime, and disrupted schedules for other items can all be direct costs of late changes, not to mention the toll it takes on the perceived reliability of the master production schedule and on customer service.

Which of these proactive reasons to form strategic alliances focuses on lowering system costs and using resources more effectively? To strengthen operations To increase organizational expertise To build organizational skills To enable strategic growth

To strengthen operations Building alliances between organizations can help improve operations by lowering system costs and using resources more effectively. For example, a summer garden tools manufacturer and a winter sporting goods manufacturer may share a warehouse to save on overhead storage costs.

Which of the following would be most likely to reduce variability from standard time allowances? Avoiding equipment shutdowns just for cleaning Empowering employees to try process changes Rewarding lowest-cost raw material sourcing Training operators in basic tasks

Training operators in basic tasks Training operators increases consistency, because poorly trained operators tend to be inconsistent in achieving standard work times.

A new manufacturing process produces wastewater with higher levels of acidity than can be discharged. What can the organization do to solve this issue in a way that is also high on the waste hierarchy? Buy a base material on a waste exchange and combine the two to reduce acidity. Burn off the water as steam. Lobby to get the allowed acidity levels increased. Use a waste exchange to advertise acidic water as a possible raw material.

Use a waste exchange to advertise acidic water as a possible raw material. Finding out if there is a buyer for this waste product would put the solution in the reuse category of the waste hierarchy. A waste exchange starts by exchanging information, since it is unknown whether anyone has a use for this waste product.

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 Smart cards and magnetic stripes Radio frequency identification (RFID) systems Bar code systems

Vision systems Only a vision system can read text printed on a box. The other systems require some form of tag or encoded symbol to work.

What is the best reason why a supply chain manager would decide to use a trailer or railcar for temporary storage? When it is less expensive than storing it at another facility or warehouse When the product needs to be stored but is scheduled to be moved again shortly When expensive products are very fragile and are easily damaged When there is political unrest at the destination area

When the product needs to be stored but is scheduled to be moved again shortly Trailers and railcars sometimes park without being unloaded at a facility if the contents need to be stored but are scheduled to move again in a few days.

Which is a principle that would be in accordance with SA8000? Employ young workers only for daytime hours during the week. Request overtime in each period when it is needed on a regular basis. Collect and safeguard employee's ID papers. When unions are prohibited by law, allow employees the right to elect representatives.

When unions are prohibited by law, allow employees the right to elect representatives. The freedom of association and right to collective bargaining principle of SA8000 includes respecting the right to form unions through word and deed, unless prohibited by law, in which case employees have the right to elect representatives.

The minimum total cost on an economic order quantity (EOQ) curve is: always directly above the intersection of the carrying and ordering cost curves. often exactly at the intersection of the ordering and transportation cost curves. often at a different point than above the lowest cost for either curve or their intersections. always at the same point as a full truck shipment.

always directly above the intersection of the carrying and ordering cost curves. The EOQ is the point on the total cost curve that lies directly above the intersection of the carrying cost and ordering (setup) cost curves. The curves are determined mathematically, and they always produce the same result, with the minimum total cost lying directly above the intersection of the other two cost curves.

From a supply chain management perspective, which of the following would be the best source of information to use for calculating average inventory as an input to cash-to-cash cycle time? Amounts reported on balance sheet Amounts reported on income statement Actual inventory level divided by average daily demand Total inventory currently in stock at all distribution centers and warehouses

Actual inventory level divided by average daily demand Note that while cash-to-cash cycle time can be calculated using historical data, a preferred method for supply chain management is to base the inventory portion of the calculation on more current data such as dividing the current inventory level by average daily demand.

The sales force out in the field is persisting in using manual methods for entering their hours and sales orders instead of using the new extranet web forms. Which of the following would be the best method of resolving this issue? Discharge employees failing to adopt the new methods after a certain grace period. Allocate more funds and time to training. Allow sales to use manual forms and have a data entry person enter the data at the home office. Add a new enterprise resources planning (ERP) module for better time- and job-tracking capabilities.

Allocate more funds and time to training. Often insufficient attention is paid to change management and training in terms of time, energy, and money. Many companies still face the challenge of connecting individual employees with the interconnected business process. Adding new layers to the ERP system will not fix this gap between functionality and training. Only thorough change management can fix this issue.

Which of the following would be included in a list of dependent demand items? Shirts delivered to a retailer for stocking on shelves Computer audio subsystems delivered to a computer superstore for sale as upgrade items Computer hard drives delivered to the computer manufacturer for installation depending on customer request Car mirrors delivered to an automotive dealership as repair parts

Computer hard drives delivered to the computer manufacturer for installation depending on customer request Dependent demand items are components delivered for installation in finished products. The same items may also be subject to independent demand when, like hard drives in the option above, they are sold separately for purchase in repair operations or as upgrades. If the item is ordered directly by the consumer, it is part of independent demand; if it is ordered for installation in a parent product only, it is the subject of dependent demand.

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? Upgrading hardware until the architecture is homogeneous Upgrading databases and operating systems to make them homogeneous Customizing the ERP system to match the company's best practices Changing company processes to align with the ERP's best practices

Customizing the ERP system to match the company's best practices Companies are better off investing their resources in upgrading their existing hardware, databases, operating systems, and other architecture up to an acceptable standard and then implementing an ERP system. Without improving the underlying company processes and systems and aligning them with best practices, companies may be investing in customization of an ERP system that has many hidden and embedded costs.

An importer will often give which one of the following independent operators power of attorney to pay import duties on its behalf? Customs house broker Ship broker Foreign carrier Export trading company

Customs house broker The customs house broker specializes in moving imported goods through customs, expediting paperwork (which now takes place electronically), and paying the import duties under a power of attorney from the importer.

Which of the following best describes a customer data warehouse (CDW)? Database for transactional processing of orders, billing, and customer care issues Data about customers, products, and the marketplace from internal and external resources Current customer profiles created by salesperson notes and stored in a database Purchased data on specific customer segments and other external market research only

Data about customers, products, and the marketplace from internal and external resources A CDW stores data about customers, products, and market trends, consolidating it in a manner that can facilitate future analysis to spot trends and relationships. A CDW is linked to a customer relationship management (CRM) transactional database but is not used for transactional processing.

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? Month: January, February, March, April, May Demand: 21, 17, 22, 22, 23 Forecast: X, X, X, Demand and forecast are the same. Demand exceeds forecast by 1. Demand exceeds forecast by 2. Demand exceeds forecast by 3.

Demand exceeds forecast by 2. The average demand for the three months from January through March is 20: (21 + 17 + 22)/3 = 60/3 = 20. Therefore, the forecast for April is 20, which is two less than the actual demand.

What is the key benefit of using an echelon inventory policy? Demand from all lower echelons (excluding in-transit inventory) can be aggregated. Demand from all lower echelons (including in-transit inventory) can be aggregated. It could optimize decentralized inventory planning by helping all echelons order together. It could optimize decentralized inventory planning by helping each echelonimplement distributor integration.

Demand from all lower echelons (including in-transit inventory) can be aggregated. An echelon inventory policy considers inventory at a particular echelon to include all inventory at that echelon and at all later points in the supply chain, including all in-transit inventory after the given point. The benefit of thinking in this way is that the demand from all lower points can be aggregated for more accurate calculation of order quantities and order levels. An echelon inventory policy is not designed for decentralized planning except in the case of hybrid systems that use a centralized policy up to a point.

An organization's extended supply chain has both domestic and foreign demand for its products and has multiple owned and partner-owned production plants. Which of the following can synchronize all of these various plans for demand and supply? Combination forecasting Supplier relationship management Master production scheduling Demand management

Demand management Demand management is the art of synchronizing marketing and operations plans. Sources of demand that could require coordination may include domestic and foreign demand or wholesale and retail demand. Sources of supply that could require coordination may include plant capacities or specialization and inventories in plants, warehouses, and retail locations.

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? Simplification Design for service Design for quality Standardization

Design for service Clear instructions or a help line can reduce the number of returns based on user error. This can be described as design for service.

A channel master or nucleus firm is finding that many of its current partners have begun to look for ways of bypassing the firm, while others are performing redundant functions that cause unnecessary competition among supply chain members. Which of the following is a likely cause of this behavior? Individual incentives conflicting with organizational goals Weakest collaborative links becoming bottlenecks Working with competitors as peers Exploitation of power-based relationships

Exploitation of power-based relationships Power-based relationships occur where a channel master or nucleus firm dictates the terms of the relationship to the other members. While its profits increase, other members of the network may suffer losses. When this occurs, the disadvantaged partners may rebel. Resistance may result in redundancy, loss of overall profitability for the chain, or an actual reversal of the power relationship.

In a service industry such as an electrical utility supply chain, which of the following is a Tier 1 supplier? Commercial customer Manufacturer of coal excavator equipment Facility maintenance Steel manufacturer for electric transformers

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.

What can get in the way of a message being received or properly understood by the intended recipient? Filters or noise Feedback or communications dimensions Communications dimensions or filters Feedback or noise

Filters or noise A filter is any factor influencing how the communication is received or interpreted. Filters may take many forms, such as feelings and emotional states (mood), individual perceptions, experience, and culture. Because of filters, a message may not be received at all. Noise is essentially anything that distorts a message. Noise can take many forms, including background sounds, another person trying to enter into a conversation, or any other distractions that prevent the receiver from paying attention or accurately understanding what is being communicated. Similar to filters, noise interferes with and can inhibit the communication process.

Other than competitive priorities, what does the organizational strategy feed to the supply chain strategy to ensure alignment? Capabilities, including gaps that need to be corrected Specific metrics to use Future direction, such as new products Strategies for other functional areas, such as finance

Future direction, such as new products Organizational strategy drives the future direction and competitive priorities, which then help determine the appropriate strategies of the various functional areas like finance, marketing, other departments, and, of course, the supply chain.

Which of the following steps can an organization take to best ensure that a risk response plan remains a "living" document? Hold a monthly risk meeting. Require monthly drills to test preventive action plan readiness. Repeat the risk assessment process annually. Keep the plans separate from regular business processes.

Hold a monthly risk meeting. The risk response plan is a living document that should be revisited regularly, such as at weekly or monthly meetings. The status of planned actions should be tracked at these meetings and signed off on once completed. New items can be added as new risks arise. In this way, an annual risk assessment process may not be necessary and risk plans can be adapted quickly to changing risks.

Which of the following would be the most effective method of keeping the demand plan from being consistently biased toward overstated demand? Treat the demand plan as a tentative request for product until a decision point is reached. Treat the demand plan as a best estimate that will naturally be subject to error. Hold the demand side of the organization accountable for its request for product. Hold the supply side of the organization accountable for its production levels.

Hold the demand side of the organization accountable for its request for product. A key control to keep demand plans realistic is to treat the demand plan as a request for product from the supply side of the organization. In making this request, the demand side of the organization is stating that it is committed to creating this amount of demand and selling the products in the requested amounts. Holding the demand side of the organization accountable for the consequences of producing too much inventory can be an effective control over unrealistic demand plans.

Which of the following statements about free trade zones (FTZs), also known as foreign trade zones or export processing zones, are true? I. They can help manufacturers with potentially noncompliant shipments avoid customs fines by repacking or remarking imports. II. Streamlined retail sales can occur. III. They are geographic areas where duties, tariffs, and quotas are delayed and/or avoided. I and II I and III II and III I, II, and III

I and III An FTZ is a geographic area in a country where duties, tariffs, and quotas are delayed and/or avoided and bureaucratic requirements are lowered in hopes of attracting new business and foreign investments. One of the many advantages for importers and manufacturers is that imports can be processed, remarked, and repackaged in an FTZ before going through customs. Therefore, a shipment with potential compliance problems can be brought into compliance in the FTZ. No retail trade of any sort is allowed in a free trade zone.

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? I. Plan demand. II. Communicate demand. III. Influence demand. IV. Manage and prioritize demand. II IV I and II III and IV

III and IV Waiting in queues such as waiting in line is a demand management and prioritization activity that allocates available supply (checkout tellers) to regulate peaks and valleys in demand (number of customers needing to check out at a given time). Providing an automated kiosk is a method of influencing demand to reduce the amount of demand on human checkout services.

How can a manufacturer in a supply chain best reduce its costs of product transport? Research how customers store products. Always select the cheapest mode of transportation. Improve product stowability. Make packaging more substantial to increase protection.

Improve product stowability. Items with odd shapes that prevent them from efficiently sharing cargo space may cost more to ship than items of similar density and weight that stow more efficiently. If the product is redesigned to improve its stowability—that is, make it fit more efficiently in the space—then the manufacturer can reduce the costs of transport and warehousing.

In today's world, supply chains can be described as moving toward which characteristics? Interdependence, collaboration, and playing a strategic role Dependence, self-contained, and playing a strategic role Independence, collaboration, and playing a tactical role Interdependence, self-contained, and playing a tactical role

Interdependence, collaboration, and playing a strategic role As demonstrated in the aftermath of the March 2011 Japanese earthquake and tsunami, companies and their supply chains around the globe are connected and interdependent, causing them to evolve into a more strategic role. Managers now recognize that the actions taken by one organization in the supply chain can influence the success of the rest of the network. The new focus is on implementing total supply chain solutions that require collaboration from upstream and downstream partners.

Which of the following can best promote acceptance of custom scorecards for use in rating suppliers? Including compliance with the scorecard as a contract stipulation Using the four perspectives of the balanced scorecard Development of one customized scorecard that can be used with all suppliers Involving suppliers in the selection of measurements to use

Involving suppliers in the selection of measurements to use When an organization has key, indispensable suppliers or alliances, it may be best to develop the scorecard in consultation with these organizations rather than handing the results down from above. Suppliers who are involved are more likely to accept the measurements and may be able to provide suggestions or innovations.

Which of the following describes a successful continuous improvement project that has the best impact? It requires implementation teams of random employees throughout the chain. It is directed from the top down and implemented from the bottom up in the supply chain. It requires only the employees involved in the revised process. It works mostly on a process within an individual department.

It is directed from the top down and implemented from the bottom up in the supply chain. A successful continuous improvement project is directed from the top down and implemented from the bottom up. Projects must be selected based on overall business strategies with the collaboration of the executive team. Management should be the driving force that gives the continuous improvement its momentum and credibility. Implementation is accomplished by the employees involved in the processes themselves, and they should make up the implementation teams. The members' intimate knowledge is required to define the process, analyze weak points, suggest improvements, and implement solutions.

In order to integrate triple bottom line thinking into a business, what must occur beforehand? Employees on the front lines must support the approach. It must be integrated into the business model from the start. Suppliers should adapt the same triple bottom line thinking before becoming a supply chain partner. It should be integrated into the marketing plan.

It must be integrated into the business model from the start. In order to integrate triple bottom line thinking into the various aspects of the business, it must be fully integrated into the business model from the start, rather than adding it as an afterthought.

Which of the following is the best basis for moving to formal remedies after a supplier has been warned that it is in violation of its contract and has been given a deadline for further review? Formal remedies triggered automatically by the contract If the supplier has not completed all changes by the deadline Results of audits constituting a legal requirement to pursue formal remedies Judgment call on supplier's intent to make changes

Judgment call on supplier's intent to make changes Contracts usually specify both incentives and penalties to ensure compliance, and it is partly a judgment call to determine when to move beyond informal to formal contract remedies. The choice may relate to a perception of the supplier's (or buyer's) intent to make changes to honor the agreement.

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? Supply capacity Separate demand plans from each demand-side department Metrics on demand for future months Key events, risks, and notes on where demand-side departments disagree

Key events, risks, and notes on where demand-side departments disagree The demand manager can facilitate the demand review meeting by preparing demand plan dashboards that consolidate the various departments' plans, highlighting where significant disagreements exist. Note that the dashboard also lists examples of key historical (not future) performance metrics, assumptions, events, opportunities, risks, and decisions.

A supply chain channel master develops a balanced scorecard approach to SCM, only to have it fail to improve the performance of SC partners. Which of the following would be the most likely cause of failure? Reliance on an outside SC consultant for setup Spreading ownership of the approach among too many partners Lack of executive-level leadership of the initiative across the chain Delaying setup several months to obtain agreement from mid-level management

Lack of executive-level leadership of the initiative across the chain A balanced scorecard initiative requires executive-level agreement across the chain to overcome natural resistance to change and other obstacles. Particularly in supply chains made up of different firms, agreement needs to be established first at the executive level.

When it comes to choosing the method of transporting goods, what does the logistics manager first need to determine? Most effective mode that minimizes costs, risks to inventory, and delivery time Fastest mode that fits with the overall logistics needs for the product and the marketing channel Most environmentally friendly mode that fits with the company's sustainability strategy Mode that best fits with the overall logistics needs for the product and the marketing channel

Mode that best fits with the overall logistics needs for the product and the marketing channel When it comes to the method of transporting goods, a logistics manager first decides which mode of transportation best fits with the overall logistics needs for the product and the marketing channel.

Buyers involved in online marketplaces/exchanges may experience which of the following risks? Less control over negotiated purchasing agreements Slower responses to needs Higher unit costs More product rework and returns

More product rework and returns Buyers using online marketplaces often face the risk of greater inconsistency of products purchased because they aren't working with trusted suppliers. Exchanges generally offer buyers benefits that match the opposite of the other items listed.

An organization is using the Global Reporting Initiative comprehensive reporting option. What does it need to report about the "effluents and waste" aspect of the environmental category? The comprehensive option requires reporting on even insignificant amounts. Nothing, if omitting it would have no effect on stakeholders' decisions. Even trace amounts need to be reported to satisfy the completeness principle. It can omit this aspect if its effluents and waste passed the most recent compliance audit.

Nothing, if omitting it would have no effect on stakeholders' decisions. Only those aspects that are material need to be included in the report. Material means that reporters must include aspects that are significant or would influence stakeholders' assessments and decisions.

An organization's product is in decline and losing market share. Which of the following is most likely to generate innovative ideas on how to develop the next-generation product? Marketing research on purchased customer data Ongoing use of unstructured voice of the customer (VOC) initiatives Fast multiple-choice questionnaires sent to customers Ideas from distribution point managers

Ongoing use of unstructured voice of the customer (VOC) initiatives VOC initiatives should give voice to things that a business would not normally hear. It should allow the business to hear, straight from its customers, insightful things that do not surface through conventional marketing research. While all of the answers can produce meaningful information for marketing and product development, the VOC initiative is most likely to generate new ideas.

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 Collaboration and strategic alliance or higher for the natural rubber producer; partnership for the tire recycler Merger or acquisition for the natural rubber producer and the tire recycler Buy on the market for the natural rubber producer; partnership or higher for the tire recycler

Partnership or higher for the natural rubber producer; buy on the market for the tire recycler Because the natural rubber is becoming more rare, the tire producer should consider some form of partnership or better for this partner. The tire recycler is not offering a unique value-added service but a commodity service, so these transactions should be kept at arm's length.

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? Price Promotion Product Placement

Placement The traditional marketing definition of placement has been expanded to include not only getting product into the hands of customers (distribution) but also the customers' ability to access the business (e.g., for information, actual sales, or support).

Which of the following best defines a virtual organization? Merger of separate entities with common business values and goals to gain better market position and have seamless communications Potentially long-term relationship between separate business entities to design products and immediately share all customer data Short-term tactical alliance in which partnering companies remain distinct and visible to end users but immediately share customer data Separate entities that collaborate to design and sell intangible products and services by promoting internal competition between the partners

Potentially long-term relationship between separate business entities to design products and immediately share all customer data A virtual organization is best described as an alliance of independent businesses for a potentially long-term relationship. Businesses cooperate to design, create, and distribute product (including services) based on shared values and are perceived by third parties as a single entity.

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? Custom linkages Data-oriented middleware Online exchanges Process-oriented middleware

Process-oriented middleware Process-oriented middleware (also called business process management or BPM software) can help in implementing an internal solution that can be extended to integrate external partners who resist standardizing because it maps software to business processes and then allows those processes to be adapted as needed. The linkages automatically change along with the process changes.

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 deflation. Real GDP decreases, because there is less consumption spending. Real GDP decreases, because suppliers are less motivated to produce. Real GDP increases, because there is more real wealth.

Real GDP increases, because there is more real wealth. As price decreases, the total real GDP increases. This happens in part because there is more real wealth and thus more consumption spending and in part because as more money is circulating, interest rates fall, which increases capital spending and more goods are demanded in the aggregate.

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? Individual item-level review Replanning Maximum 12-month planning horizon Allowing functional areas to develop separate demand plans

Replanning A key aspect of the S&OP process is replanning. Only changes since the last meeting need to be reviewed; this promotes meeting brevity. Since the plan is reviewed each month and decisions can be revisited, replanning promotes consensus building.

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? Resource allocation Resource management Demand management Requirements optimization

Requirements optimization The requirements optimization module considers customer service and cost, recommending the optimum systemwide solution for procurement, manufacturing, transportation, and storage. It also allows planners to simulate the effect of changes in demand, capacity, etc.

An organization's business plan calls for directly competing in developing markets rather than working through intermediaries as before. Which of the following would identify a deficiency in capacity resulting from this change? Resource planning Capacity control Capacity requirements planning Cross-functional planning

Resource planning Resource planning is defined as follows according to the APICS Dictionary, 15th edition: "Capacity planning conducted at the business plan level. The process of establishing, measuring, and adjusting limits or levels of long-range capacity. Resource planning is normally based on the production plan but may be driven by higher level plans beyond the time horizon for the production plan (e.g., the business plan). It addresses those resources that take long periods of time to acquire."

Which of the following are customer-focused metrics? Response accuracy, backorders, flexibility Backorders, repeat purchases, the percentage of customers willing to provide testimonials Customer complaints, repeat purchases, employee turnover Response time in inquiries, safety stock, fill rate

Response accuracy, backorders, flexibility Customer-focused metrics include response accuracy, backorders, and flexibility. Safety stock, employee turnover, and the percentage of customers willing to provide testimonials may provide customer information but are not considered metrics.

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? Complete a variance analysis. Perform internal benchmarking. Perform brainstorming. Scan what the competitors are offering.

Scan what the competitors are offering. Organizations need to scan the market for what the competition is offering and at what price. They need to know who has what market share in each region in which they would like to compete and whether there are any customer requirements that are going unsatisfied at present. While internal analysis can reveal gaps between what the organization is offering and customer requirements, only an external scan can show whether the market is satisfying these needs at present.

What are the top three factors, in order of importance, that influence most retail customers' decisions to purchase products? Price, design, quality Service, quality, price Quality, price, service Price, service, quality

Service, quality, price According to research, retail customers' decisions to purchase products are influenced most by the bundle of services surrounding the products, followed by the quality of the product and, finally, price.

What does the term "flattening of the globe" refer to? Flattening of organizational structures around the globe Shrinking of the world into one global economy Decreasing complexity of vertical supply chains around the globe Diminishing height or structure of global supply chains

Shrinking of the world into one global economy Supply chains and their management reflect the revolution in electronic communication and the shrinking of the world into one global community—what author Thomas Friedman calls the "flattening of the globe."

When contracting logistics to a third-party provider (3PL), what should the contract specify, especially for the first six to 12 months of the relationship? Specific relationship-building efforts by each party That the 3PL be neither controlled nor micromanaged How the 3PL will bear all logistics risks Zero tolerance for imperfect orders

Specific relationship-building efforts by each party Many 3PL or 4PL (fourth-party logistics provider) relationships have poor initial start-up periods that can cause the relationship to fail or reduce benefits and harm the long-term relationship, so an important contract consideration is to specify what each party will do to ensure that the first six to 12 months of the relationship go smoothly. This difficult period will require commitments of time and energy from both parties as well as formal specification of shared risks and rewards.

Which of the following is a preventive action that would be the most effective way to mitigate the risk of fraud and corruption on the part of suppliers? Supplier co-management Review of larger-than-normal supplier payments No-bid contracts Enforcement of compliance violations

Supplier co-management A way to combat fraud and corruption on the part of suppliers is supplier co-management, which involves using a third-party supplier vetting and monitoring organization with expertise and mature processes and systems to ensure thorough due diligence and ongoing compliance.

Which of the following is a potential risk of using a third-party logistics provider (3PL)? The fees for using its service can add up, and it may have contracts with the firm's competitors. The firm can lose direct control over the logistics process and all specific functions. The 3PL employee represents the firm to the client, and the 3PL may have contracts with the firm's competitors. It might write special contracts with favored suppliers and increase the costs.

The 3PL employee represents the firm to the client, and the 3PL may have contracts with the firm's competitors. A 3PL employee represents the firm to the client, and the 3PL may have contracts with the firm's competitors. The other risks listed are associated with fourth-party logistics providers (4PLs).

What is a key thing to understand about an organization's macro environment? Only the marketing department has any influence over the macro environment. The macro environment's sustainability safeguards need to be economically cost-effective. The organization's strategic decisions can have a large impact on the macro environment. The macro environment cannot be controlled, only understood.

The macro environment cannot be controlled, only understood. External influences on strategy cannot be controlled, only understood. The 15th edition of the APICS Dictionary defines macro environment as "the environment external to a business including technological, economic, natural, and regulatory forces that marketing efforts cannot control."

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 toward the retailer but at the risk of inventory obsolescence or the bullwhip effect. The push/pull line moves back to the manufacturer but at the risk of inventory obsolescence or the bullwhip effect. The push/pull line moves back to the manufacturer but at the risk of greater overtime or rush orders. The push/pull line moves toward the retailer but at the risk of excessive safety stock.

The push/pull line moves back to the manufacturer but at the risk of greater overtime or rush orders. The firms have decided to change to a make-to-order environment, moving the push/pull line back to the manufacturer, which will reduce the bullwhip effect and the risk of inventory obsolescence but at the risk of greater overtime and rush orders if there is a sudden spike in demand.

A local supplier is selected as a supply partner over an international supplier who had a lower total cost of ownership. An audit reveals that the supplier was given more weight for being local. Which of the following would make this weighting valid? The weight is based on the shorter lead times available from local suppliers. The weight is based on landed cost rather than total cost of ownership. The weight is based on the lower cost of transportation offsetting the higher price. The weight is based on the organization's corporate social responsibility policy.

The weight is based on the organization's corporate social responsibility policy. If an organization's corporate social responsibility policy requires that more weight be given to local suppliers to support a decision to reinvest in the local community, then the use of such weighting is valid. The other answers are incorrect because the total cost of ownership already factors in transportation costs and lead time differences, and it is a more complete version of landed cost.

Which of the following situations applies to lifetime customers? They increase the need for customer relationship management (CRM) activities. They tend to have a null effect on revenue but a positive effect on profit. They increase total marketing costs. They are more difficult to satisfy than first-time or short-term customers.

They increase the need for customer relationship management (CRM) activities. Lifetime customers increase the need for CRM, but they also make it a little easier, as the business learns more about them over time. Total marketing costs decline, satisfaction increases with better customer understanding, and both revenue and profits increase.

Which of the following is true of the use of data for decision making? Take all available data and create a model to deal with each element. To smooth out variability in forecasts, use aggregated data rather than item-level data. The sum of individual item standard deviations will produce lower deviation than if the aggregate is used. Data should be analyzed at a granular level whenever possible.

To smooth out variability in forecasts, use aggregated data rather than item-level data. Analysis shows that aggregating the data for a forecast will lower the variability in the data and lead to a better forecast than if granular level data are used. The APICS Dictionary, 15th edition, defines aggregation as follows: "The concept that pooling random variables reduces the relative variance of the resulting aggregated variable. For example, the relative variance in sales of all models of automobiles sold by a firm is less than that for a single model."

Which of the following is part of the correct definition of customer relationship management (CRM)? Primarily a software system for transactions and decision making Tool to support existing and potential customer needs Focused on forecasting and analysis of information Tool to manage marketing, sales, supply planning, and production scheduling

Tool to support existing and potential customer needs'' Information gathered in the CRM process is used to support service to customers and potential customers and sales and marketing decisions, not resource and production planning.

If supply chain partners agree to make information technology upgrades but a specific vendor cannot be agreed upon, which of the following standards could allow for both diversity and low-cost compatibility? Collaborative IT over a peer-to-peer network Web services and service-oriented architecture Data-oriented middleware and data communications methods Proprietary electronic data interchange standards

Web services and service-oriented architecture The use of interface devices and data communications methods can resolve complex differences between software, but if an organization or extended supply chain is planning to invest in new technology, it can coordinate this effort to make the systems natively compatible. Newer systems using web services and service-oriented architecture may be compatible even when from different vendors.

A partner organization that restructures some of its internal methods to align with the supply chain network before automating has asked which of the following key business questions? What type of information is to be shared? What application is optimal for all supply chain partners? What business processes must change? How will the supply chain partners collaborate?

What business processes must change? Automating business practices is typically expected to improve performance by eliminating manual processes. However, an organization will realize substantially more benefit if it first restructures its processes to align with the supply chain network before automating.

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? How will funding for the project be proposed and approved? Who will be available to help on this project, and will they be full-time? Will we have sufficient budget for this project?

What will the end date for this project be? 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.

A logistics chain may benefit from adding warehouses in which of the following instances? When the manufacturer is planning on adding a new product that is bulky When land in warehouse districts is at its lowest price per square foot or meter When small-scale customers require fast, frequent shipments that are more readily accommodated by a decentralized system of warehouses When a large retailer places sizable orders for delivery throughout the country

When small-scale customers require fast, frequent shipments that are more readily accommodated by a decentralized system of warehouses A logistics chain may benefit from adding warehouses when small-scale customers require fast, frequent shipments that are more readily accommodated by a decentralized system of warehouses. This may also be advisable when local customers demand rapid delivery and competitors can provide it or when transportation is inadequate to provide the required service without adding warehouses.

What lesson can be learned from studying a humanitarian and disaster relief supply chain? A cost-efficient supply chain is much more valuable than a resilient supply chain. When a supply chain needs to be built up quickly, it is best to centralize distribution management down to the final distributor. The high but balanced supply and demand in disaster relief situations help other supply chains adapt quickly. When social and physical infrastructure breaks down, long-term relationships based on trust become invaluable.

When social and physical infrastructure breaks down, long-term relationships based on trust become invaluable. Humanitarian and disaster relief supply chains become agile in operating a supply chain where supply and demand are routinely unbalanced, where demand can spike quickly, and where roads, electricity, or the full rule of law may be compromised. One way that they stay agile is by developing ongoing relationships with persons in the community whom they can trust.

Under International Commercial Terms (Incoterms), when is the risk of loss transferred from the seller to the buyer in a standard FOB Origin contract? At the time of title transfer, which is after the buyer inspects and accepts the goods At the time of title transfer, which is upon payment settlement When the carrier duly delivers the inventory to the buyer When the seller duly delivers the inventory to the carrier

When the seller duly delivers the inventory to the carrier Who bears the risk of loss during transfer of goods is not ruled by who currently holds the title to those goods. Under Incoterms Section 2-509, the risk of loss in a FOB Origin contract passes to the buyer when the inventory is duly delivered to the carrier.

Microeconomics focuses on the decisions that businesses and people make: that contribute to incremental improvements in quality. that increase the incremental speed of the supply chain flow of products. in terms of resource allocation and the prices of products and services. that save them incremental amounts of cash over a period of time.

in terms of resource allocation and the prices of products and services. Microeconomics focuses on the decisions that businesses and people make in terms of resource allocation and the prices of products and services. It hones in on supply, demand, and other factors that impact price levels for certain firms in specific industry sectors. By taking microeconomic factors into consideration, a company can determine how to optimize its production and capacity in order to lower its prices and be more competitive.

If customer demand for smartphones is running at 1,000 units per day and the available manufacturing capacity is 650 minutes per day, then takt time equals: 13 seconds. 39 seconds. 78 seconds. 154 seconds.

39 seconds. When a system is producing goods at takt time, the rate of goods produced exactly equals the rate of customer demand. Takt time is determined by dividing the available production time by customer demand (650 minutes/1,000 units = .65 minutes; .65 x 60 seconds = 39 seconds per phone).

Which of the following statements about strategic alliances and joint ventures (JVs) is true? Alliances differ from JVs because alliances do not create a new entity. Unlike JVs, alliance relationships are marked by organizational integration at a few critical points. Unlike in JVs, in alliance relationships processes must be rigidly followed and enforced. Alliances differ from JVs because JVs do not pool capital expenditures.

Alliances differ from JVs because alliances do not create a new entity Alliance relationships are marked by organization integration at many points in the partners' organizations, from information systems through marketing and sales to finance. Alliances should not be confused with joint ventures. A JV is "an agreement between two or more firms to risk equity capital to attempt a specific business objective" (APICS Dictionary, 15th edition). In joint ventures, the parties typically agree to create a new entity by both contributing equity, and they then share in the revenues, expenses, and control of the enterprise.

An organization is looking to help its supplier with continuous improvement. It would like to seek certification that reflects its narrow focus in a specialty field. Which of the following would be the best place to start searching for appropriate certification standards? ISO series of quality management system standards ISO standards related to measurement and testing Industry-specific nonprofit association Internet

Industry-specific nonprofit association Because of its worldwide recognition, the ISO certification has achieved great reach. However, some industries and nonprofit organizations have created their own certification programs that more narrowly reflect the capabilities of the potential supplier. These programs tend to have more depth than ISO certification in their respective specialty. For example, engineering standards for measurement, terminology, test methods, or product specifications are quite different than the ISO series of quality management system standards.

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 1, multiple dysfunction Stage 2, semifunctional enterprise Stage 3, integrated enterprise Stage 4, extended enterprise

Stage 2, semifunctional enterprise At the semifunctional stage, many companies have completed an MRP II (manufacturing resource planning) implementation and can demonstrate cross-functional integration of planning processes involving automated capacity planning. They are taking steps to reach Stage 3.

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

Stage 3: Integrated 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.

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 management (SCM) Collaborative planning, forecasting, and replenishment (CPFR) Advanced planning and scheduling (APS) Supply chain event management (SCEM)

Supply chain event management (SCEM) SCEM provides active notification of unplanned events and exceptions to planned events, and it helps to control events by providing timely and simple methods for reversing previous system choices when an exception indicates that a change could prevent a problem or be less costly.

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 management (SCM) systems Supply chain event management (SCEM) Enterprise resources planning (ERP) Advanced planning systems (APS)

Supply chain event management (SCEM) SCEM provides decision makers with tools to define when to automatically implement an alternate plan based on information that the SCEM system is monitoring. The implementation may include notifying other key decision makers of required actions.

Which of the following statements most accurately identifies the effect of increasing order sizes on inventory carrying and ordering costs in the economic order quantity calculation? Ordering costs remain constant, while carrying costs drop steadily. Carrying costs remain constant, while setup costs rise steadily. Economies of scale lower all carrying and ordering (setup) costs equally and steadily. Total costs drop up to a point and then rise steadily.

Total costs drop up to a point and then rise steadily. The larger the order, the higher the carrying costs, because there is more inventory to hold. Ordering costs tend to go down as orders grow larger because of economies of scale. Larger orders can be placed less frequently than smaller orders, thus reducing the number of orders or setups.

What is a best practice when sales or managerial overrides are used in combination with seasonally adjusted exponential smoothing? Adjust future weightings so that sales or managerial overrides are not needed in the future. Use recomposition to produce one set of forecast numbers for everyone. Track the quantitative and qualitative forecasts separately. Use decomposition to incorporate the overrides prior to seasonal adjustment.

Track the quantitative and qualitative forecasts separately. When using combination methods, both the quantitative forecast and the qualitatively adjusted forecast can be measured separately for error to determine the degree to which qualitative methods are helping or hindering forecasting.

A purchaser and its suppliers form an ongoing relationship in which they all participate in improving the system. This best exemplifies which of the following distinctions between traditional purchasing and strategic sourcing? Landed cost versus total cost of ownership Boundary-specific versus realigned work processes and workflows Limited visibility versus entire supply chain visibility Transactional versus collaborative purchasing

Transactional versus collaborative purchasing Traditional purchasing sees each purchase as a discrete transaction. Since strategic sourcing involves ongoing relationships, there is opportunity for collaboration between the purchaser and suppliers that can result in improving the profitability of the supply chain and adding value to the final product or service.

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? Net profit Total revenue Triple bottom line Profit margin

Triple bottom line The term "triple bottom line," coined by author and sustainability expert John Elkington in 1994, refers to the concept that corporate success should be measured in three dimensions—economic, social, and environmental—reinforcing that it is not only the traditional bottom line of relative profitability that's important to organizational leaders.

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 a lower price than the competitor's product. It can reach the market quickly. It has more features than the competitor's product.

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.

How can a company best introduce a brand-new product type that has no sales history and ensure its availability? It can design the new product for minimum supply chain flexibility to increase assembly efficiencies. It can send product directly from production to central distribution centers that ship only per actual customer orders. It can relocate its production facilities to locations where high demand is forecasted. It can change its production schedules and stock inventory at all warehouses.

It can send product directly from production to central distribution centers that ship only per actual customer orders. Toyota Motor Corporation faced this issue when it brought out the Prius, its first hybrid car, which used a combination of gasoline-powered internal combustion energy and electricity. There was no demand history to use in forecasting sales and no data to use in setting its production schedules. So it focused on changing its logistics network so that the new cars were sent directly from production to central distribution centers for shipping to dealers only when actual customer orders had been submitted.

Which of the following is the best example of employing metrics for supply chain reliability? A manager increases the warranty expense budget after receiving the quarter's warranty and returns numbers. A manager notes that a worker has a low percentage of faultless installations and waits to use this information in the worker's annual review. A worker tracks defective components coming off a line and takes the initiative to reduce the "orders delivered defect-free" conformance metric. A worker starts double-checking quantities after receiving automated feedback indicating that shipment quantity accuracy is below the standard.

A worker starts double-checking quantities after receiving automated feedback indicating that shipment quantity accuracy is below the standard. Metrics are useful only if they provide feedback for system correction and improvement. Automated feedback in this situation results in immediate measures to correct the problem. In the incorrect answers, the feedback either doesn't deal with reliability or is unnecessarily delayed or not used to correct the root cause of the problem.

Which of the following could substantially reduce the risk of an organization's products being counterfeited? Avoiding doing business in countries with poor intellectual property laws Auditing suppliers for ethical standards Offering rewards to distributors for turning in counterfeiters Advertising the dangers of counterfeits

Auditing suppliers for ethical standards In addition to managing the organization's supplier relationships ethically, the organization has an obligation to ensure that their suppliers also follow ethical policies. Failure to do so could have serious consequences. For example, working with an unethical supplier could result in loss of intellectual property and a supplier either becoming a competitor or releasing pirated versions of an organization's intellectual property. However, research by Chaudhry et al. indicates that advertising the inferiority or dangers of counterfeits to customers or providing rewards to distributors for not purchasing counterfeits have proven less effective against intellectual property loss.

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) Automated storage and retrieval system (AS/RS) Automated sorting device Radio-controlled crane truck

Automated guided vehicle system (AGVS) Automated guided vehicle systems (AGVS) ride along magnetic wire or optical tape. They are fully programmable, require no rider, and can be equipped with forks for lifting pallets.

Which type of warehouse has an advantage over other types because its warehouses are managed more efficiently and can often also provide economies of scale in transportation? Private Public Contract Foreign-owned

Contract The contract warehouse may gain a pricing edge on the private warehouse in several ways. First, because the contractor is a specialist, its warehouses may be run more efficiently than warehouses owned and managed by the manufacturer. This may result from the contractor's ability to hold down wages and benefits provided to labor and to provide economies of scale in transportation.

Which of the following are attributes of an efficient supply chain? A. Infrequent product introductions B. Short product life cycle C. Stable customer demand D. Only A and C

D. Only A and C An efficient supply chain has stable customer demand and infrequent product introductions. It is also noted for its low number of forecasting errors, little or no adaptation to changes in market structures, a long product life cycle, and limited product variety.

In the supplier certification process, before evaluating alternative suppliers and selecting suppliers, which of the following should already have been done? Decide who should be carrying out testing or auditing. Create supplier quality ratings. Conduct quality improvement programs. Define the formal certification commitment agreement.

Decide who should be carrying out testing or auditing. Before the certification process begins, it is important to decide who will be carrying out each role. Third parties performing the testing or auditing should be identified. If the organization is performing some or all of the testing, the key players on the team must be identified and their tasks documented.

Which of the following variables differentiates supply chains in terms of efficiency and responsiveness? Demand uncertainty and volume Demand levels and number of suppliers Volume and quality Volume and variety

Demand uncertainty and volume Demand uncertainty and volume are the variables differentiating efficiency and responsiveness. The higher the demand uncertainty and the higher the volume, the great the need for a supply chain to be responsive. Efficiency is especially important when there is low demand uncertainty with either low or high volume.

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 intuitive knowledge Expert opinion guided by purchased customer data Data mining guided by customer segment information Data mining guided by sales and operations planning

Expert opinion guided by purchased customer data Because the organization is new and has an innovative product, it likely has no transactional or customer service data to mine. Expert opinion will be needed to develop a qualitative forecast. Purchased customer information may not be specific to the product, but customer information can help shape expert opinions so they can be based on more than just intuition.

Which of the following is true of portals? Portals gather external information, but transactional systems gather internal data. A portal is another name for an online marketplace. External portals can provide company- and role-based access and authentication. Most portals allow users to update data on remote databases and send secure messages.

External portals can provide company- and role-based access and authentication. Portals are a common method of collaboration with external parties, and they customize what can be viewed and accessed based on company and role.

If an organization pursues a level production strategy, which of the following occurs in a period with inventory buildup and low sales in relation to the income statement items of cost of goods sold (COGS) and general and administrative expenses? General and administrative expenses will continue to reduce profits during the period. Increased COGS and general and administrative expenses during the period will both lower profits. Increased COGS will reduce profits during the period. Decreased COGS and general and administrative expenses during the period will each increase profits.

General and administrative expenses will continue to reduce profits during the period. Supply chain managers should understand that general and administrative expenses are expensed on a periodic basis and are not tied to inventory in regard to financial statement accounting. Strategies that build inventory in advance of actual sales cannot defer the general and administration expenses in those periods.

Evolving delivery patterns caused by increased online ordering may require a retail organization to move toward which practice? Getting suppliers to ship directly to the organization's customers Adopting multimodal transportation Moving toward less-than-truckload transportation Heavier use of traditional 3PLs (third-party logistics providers)

Getting suppliers to ship directly to the organization's customers The direct-to-consumer delivery pattern involves the steps of getting goods and consolidating them at distribution centers, but from there it becomes a series of small package deliveries directly to consumers. In some cases, the direct-to-consumer delivery pattern involves forwarding individual packages directly from suppliers to customers with no intermediaries.

A U.S. organization imports chemicals from Mexico. Since September 11, 2001, customs delays checking for contraband have become onerous, and lead time has become highly variable. Which of the following are ways to reduce this risk? I. Work with U.S. customs by enrolling in C-TPAT. II. Work to gain the trust of Mexican customs. III. Get the supplier to voluntarily register on the U.S. OFAC list. IV. Source the chemicals domestically. I and II I and IV II and III III and IV

I and IV Most countries place their strongest protections on imports rather than on exports, so the organization should work to gain the trust of the importing (U.S.) customs agents if possible, such as by voluntarily registering with C-TPAT. (The U.S. OFAC maintains a list of prohibited individuals and entities.) If this action does not produce positive results, sourcing the goods domestically may be the only way to reduce this risk.

Which of the following constitutes a potentially appropriate way to segment a market? I. Geography II. Market potential III. Commonsense assumptions IV. Age I, II, and IV I, III, and IV II, III, and IV I, II, III, and IV

I, II, and IV Market segmentation and the deployment of the sales force can be based upon any of a number of criteria, including but by no means limited to geography, market potential, or age. Historically, market segments were based, in the worst case, on preconceptions about the behaviors or desires of certain groups or, in the best case, on research into small "representative" groups of customers. This type of predictive segmentation can be inaccurate.

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? Delaying improvements to inventory systems until postponement systems are online Incrementally improving data capture rather than pursuing system reengineering Discarding ancillary data to improve aggregation Capturing and updating all data in real time

Incrementally improving data capture rather than pursuing system reengineering Incremental improvements may be the best policy, because each increase in the amount of data captured can immediately be put to use in improving the bottom line.

Which of the following demand management techniques is being employed when an organization keeps a planned new version of its software system secret until after the busiest shopping season is over? Managing and prioritizing demand Communicating demand Influencing demand Planning demand

Influencing demand Influencing demand involves analyzing the impact of product development, marketing, sales, and operations decisions on demand and then working to change processes or the timing of certain actions to meet system constraints. In this case, a new product introduction is timed to minimize the impact on the old product's sales.

Which supply chain strategy could provide the dual benefits of better sustainability and faster delivery to customers? Using container ships that prioritize fuel savings Centralizing manufacturing at an air shipping hub Locating final assembly closer to key customers Vertically integrating the supply chain

Locating final assembly closer to key customers Choosing optimal plant locations can be a sustainable practice when the final products will be as near to the largest base of consumers as possible. Nearness to customers has the additional benefit of faster delivery.

Organizations can use ISO 31010 to improve their risk management processes in which way? It provides management with risk management principles to encourage full adoption. It uses a common glossary of risk terms to improve communications. It helps in aligning executive and management risk agendas. It supplies information on the selection and application of risk assessment techniques.

It supplies information on the selection and application of risk assessment techniques. The standard shows how to select techniques based on what resources are available, how much uncertainty is present and its nature, and the relative complexity of the system.

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 or making other internal process changes? Management incentives rewarding organizational cost reductions Less emphasis on total quality initiatives at the offshored organization Legal, tax, and regulatory differences in the foreign country Foreign country bureaucracy issues that could potentially delay shipments

Management incentives rewarding organizational cost reductions TCO can be difficult to implement at an organization, much less across a supply chain. Organizations have long-standing department-specific cost reduction policies, management incentives, and accounting practices in place that would penalize individuals for failing to minimize costs in their departments. A TCO strategy in this case requires extensive external process changes starting at the executive level, realignment of management incentives toward total cost, and a method of measuring and rewarding success based on achieving least total cost. These change issues are magnified in an extended supply chain.

A sporting goods store sells some items at a low margin and steady demand (such as tennis balls), some items at a high margin and unpredictable demand (such as jogging outfits), and some items only during certain seasons (such as snowboarding equipment). Which of the following would provide the simplest and most effective supply chain solution for this company? One supply chain for seasonal goods and one for the remaining goods One supply chain for all goods One supply chain for steady low-margin goods, one for unpredictable high-margin goods, and one for seasonal goods One supply chain for steady low-margin goods and one for exceptions

One supply chain for steady low-margin goods, one for unpredictable high-margin goods, and one for seasonal goods According to Jonathan Byrnes, one supply chain is not enough; two, three, or more would be preferable. "One size fits all" supply chains may have been sufficient in the past, but new information technology makes it possible to have multiple, dynamic chains that can accommodate different product and information flows. Byrnes breaks products into three categories: staples, seasonal products, and fashion. Separating the flows into these categories can better allocate shipping, response time, and other resources to the appropriate areas.

Which of the following is a best practice for managing and prioritizing demand? Organizations should make commitments for production sooner rather than later. Organizations should retain demand management and prioritization power solely within the demand side of the organization. Organizations should delegate lower-risk prioritization decisions to individual salespersons. Organizations should manage and prioritize demand when unexpected changes in demand occur and capacity changes can be made without impacting costs or other operations.

Organizations should retain demand management and prioritization power solely within the demand side of the organization. A best practice is to retain demand management and prioritization power in the demand side of the organization rather than delegating the power to the supply organization. While the supply side of the organization will provide critical input to the decision regarding the cost of changing ongoing production activities, only the demand side of the organization has information on the most valuable customers and marketing and sales goals.

Which of the following levels of intensity of supply chain relationships consists of longer-term contracts, limited business with competitors, and joint new product development? Ongoing relationship Partnership Mergers and acquisitions Collaboration/strategic alliance

Partnership The partnership level shares knowledge and processes to remove redundancies in the supply chain and finds a strategic fit for each of the core competencies of the members at this level.

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? Purchase a new warehouse management system and institute role-based access policies, procedures, and software limits for adding, deleting, and modifying information. Perform data cleansing and institute role-based access policies, procedures, and software limits for adding, deleting, and modifying information. Purchase a new warehouse management system and use a standardized product hierarchy with data duplicated automatically where it is used in different product families. Perform data cleansing and use a standardized product hierarchy with data duplicated automatically where it is used in different product families.

Perform data cleansing and institute role-based access policies, procedures, and software limits for adding, deleting, and modifying information. After data cleansing, the firm must take steps to ensure that the data quality doesn't degrade to its original state by instituting role-based access policies, procedures, and software limits for adding, deleting, and modifying information and investing in data maintenance/continuous improvement process training for current and future users. A new software system will not help maintain data accuracy in and of itself without these steps.

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 interpersonal affiliation skills Good influencing skills Poor listening 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 manager declines a partnership because the information requested for greater visibility between the extended supply chain is closely connected to data that produce a competitive advantage for the firm. This is an example of the failure of which of the following to be established? Dependence Security Dependability Commitment

Security Security is the issue. If the manager could be assured that sharing one type of data would not endanger the more proprietary data, then this manager may decide to establish the partnership.

A company that has multiple disconnected legacy systems notes that a competitor is sharing real-time information and collaboration with first-tier suppliers and customers. The company wants to leap quickly forward to match or surpass the competitor's supply chain functionality. What stage can this firm achieve with a single upgrade project, assuming that they have enough capital to invest in the effort? Multiple dysfunction Semifunctional enterprise Integrated enterprise Extended enterprise

Semifunctional enterprise The company is starting at Stage 1, multiple dysfunction, and wants to get to Stage 3, integrated enterprise, or higher to match or surpass the competitor. However, the firm must proceed through each stage of supply chain development due to the massive complexity required to get to each major stage. Therefore, even with a large budget, the firm must proceed to Stage 2, semifunctional enterprise, first.

Which of the following approaches to production scheduling accurately incorporates the theory of constraints? Speed up production in front of the bottleneck. Speed up production after the bottleneck. Slow the process down to the bottleneck's speed. Decrease inventory after the bottleneck.

Slow the process down to the bottleneck's speed. The theory of constraints focuses attention on slowest-moving part of a manufacturing process because it determines the maximum output of the process. Speeding up production before the constraint only produces an oversupply of inventory in front of the constraint, while speeding up the process after the constraint will result only in a lack of inventory after the constraint. Avoiding either of these problems requires running the process at the speed of the constraint.

Which of the following statements is true about changing market conditions such as those in the fashion industry? Many companies offer a variety of products to appeal to the masses. Creating safety stock will help companies better deal with changing market conditions. Some companies focus on non-fluctuating product orders from their high-volume customers. Some companies manage this by starting their seasonal product design process early.

Some companies manage this by starting their seasonal product design process early. In the market for fashionable apparel, change is a given rather than a surprise. Every season can bring a shift in taste that makes all processes, designs, and materials outmoded. So fashion-conscious clothing companies have found ways to begin the seasonal design process early. By paying careful attention to trends on the street, they can get a head start in ordering materials and developing prototypes of designs that seem likely to appeal to their target customers in the upcoming season. They delay final design decisions and the start of manufacturing until real data come in.

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 Number of workers or machines Available time Utilization

Standard hours of output The efficiency of a work center is the ratio of actual output to standard output. In other words, it is a measure of how well the work center is producing in relation to what it can reasonably be expected to produce.

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. Start planning and staffing, but state that it is important to have the charter signed before execution begins. Start planning, but state that you cannot acquire staff until the charter is signed. Start planning, but state that the staffing occurs only after planning is complete.

State that the charter needs to be signed before you can start. The project charter formally authorizes the project to begin and provides authority to the project manager. Without a signed charter, there is no project.

Which of the following is the primary measurement of whether a supplier certification process is valid? Supplier procedures should be effective in meeting the organization's needs. Supplier procedures should be in conformance with relevant ISO standards. Supplier procedures should be efficient enough to meet the organization's price requirements. Supplier procedures should be related to the customer's requirements.

Supplier procedures should be related to the customer's requirements. The first part of the APICS Dictionary, 15th edition, definition of supplier certification describes it as "certification procedures verifying that a supplier operates, maintains, improves, and documents effective procedures that relate to the customer's requirements."

Which of the following statements regarding technology audits is true? Technology audits are best performed by internal IT staff, who also develop a business case for the software. Technology audits are critical for determining the adequacy of financial reporting controls. 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 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.

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 collected data on shipments is forwarded to supply chain partners in real time. Ten percent of data is collected automatically; the rest is entered at the time and place of the event. Ten percent of shipped items have missing cube or weight data. Ten percent of actual truck arrivals differ from the system's planned arrival times.

Ten percent of shipped items have missing cube or weight data. If the cube and weight data are wrong or missing from even a small percentage of items when a transportation management system calculates how to load trucks, the system could recommend overloading the trucks. If this occurs too frequently, workers and managers may stop trusting in the integrity of the system.

A seller of industrial equipment uses a letter of credit with a buyer in a foreign country. What is a risk that still exists after the goods have passed customs in the buyer's country but before the transaction is complete? The buyer could refuse to accept the goods. The buyer could fail to be cleared to accept the goods from customs. The buyer could fail to receive a bill of lading. The buyer could have insufficient funds to pay the seller.

The buyer could refuse to accept the goods. After the goods have arrived and passed customs, an unethical buyer might refuse to accept delivery and leave the cargo sitting on the wharf while attempting to negotiate a better price with the seller, who cannot afford to ship the goods back home. However, by this point, the buyer will owe its bank the money for the transaction, not the seller.

Which is the most important criterion for making the decision to contract out a business function to a third party? The third party has low overhead from equipment and infrastructure. The third party can do the function for the lowest total cost of all options. The function is a core competency for the third party. The function is a core competency for the organization.

The function is a core competency for the third party. Organizational leaders are increasingly focused on core competencies as the most reliable way to deliver shareholder value and capture market share. Because of this, cost is a reason for contracting out, but it is not the only reason. Contracting with companies whose core competencies are in the specified area means that the supplier may have substantial investments in related infrastructure, equipment, technology, and hiring/training. The result may or may not be lowest total cost. It could be better value or more reliable service than the organization could provide.

An organization that owns a popular brand and its tier 1 and 2 suppliers are all in compliance with every local and national labor law in their countries of operation. What risk can the organization still face from labor issues? There may be counterparty risks from customers violating individual rights. The organization and its suppliers could still violate collective rights. A foreign supplier may fail to meet the organization's headquarters country labor laws. There may be reputation risk from a supplier's actions.

There may be reputation risk from a supplier's actions. A key point for supply chain managers is to gain enough familiarity with the country and local labor laws of their suppliers to know when they are in compliance. Organizations may have less legal liability in these cases, but they can face significant reputation damage and loss of customers if a supplier is operating in violation of laws or if even if it is in compliance with all laws but is violating international ethical standards. For example, it may be legal for a supplier to use child labor, but this choice can cause significant reputation damage to the brand.

Which of the following describes lifetime customers? They can increase revenue but have a neutral effect on profit. They have forged a win-win relationship with the business in question. They are increasingly more expensive for a business to maintain as they increase demands. They are common in commodity markets driven by price rather than value.

They have forged a win-win relationship with the business in question. Lifetime customers have a win-win relationship with the businesses they frequent. The customers gain greater satisfaction, while the business enjoys decreased marketing costs and increased revenue and profit potential. Lifetime customers are not common in markets competing on price rather than added value.

To qualify as a private carrier, a firm must own or lease vehicles for its use and manage their operation. Which of the following is another characteristic of private carriers? They must not be primarily in the transportation business. They must not be primarily in the warehousing business. They are forbidden from transporting dangerous goods/hazmat. They are forbidden from carrying goods for other companies.

They must not be primarily in the transportation business. To qualify as a private carrier, a firm must own or lease vehicles for its use, manage their operation, and not be primarily in the transportation business. While private carriers are free from economic regulations that apply to other legal types of carriers, they must, of course, follow regulations that apply to hazardous materials, safety, and other matters regulated by the government. Since deregulation in 1980, they have been allowed to carry goods for other companies.

What is the purpose of the Harmonized Tariff Schedule (HTS)? To have a standard set of numerical identifiers that provide descriptions of products for import and export To have a standard time schedule of vessel departures and arrivals at primary ports To have a standard set of value-added tax rates for countries/regions around the globe To have a standard set of tax rates for manufacturers around the world

To have a standard set of numerical identifiers that provide descriptions of products for import and export The HTS is a system of numerical identifiers that provides standardized descriptions of goods for import and export. The coding system, which is administered by the World Customs Organization (WCO) in Brussels, is used by more than 200 countries and economies as a basis for their customs tariffs and for the collection of international trade statistics. Over 98% of the merchandise in international trade is classified in terms of the HTS. It is important to note that an HTS code is required for businesses selling merchandise internationally. Currently, however, an HTS code is not required for individuals.

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 Universality Modular design Mass customization

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."

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? How it will respond to the competition and gain market share Whether to compete on cost, focus, or differentiation What its core capabilities are and what will be outsourced Whether to use make-to-stock or some other operating model

Whether to use make-to-stock or some other operating model The missing element of Porter's five fundamental elements of any business is the operating model, which is the way plan, make, source, deliver, and return operations are arranged to meet working capital and cost objectives at the proper level of customer service. Make-to-stock, make-to-order, and engineer-to-order are types of operating models.

A SWOT analysis is: an internal organizational audit to identify marketing processes for improvement. a tool used to analyze an organization's current state and opportunities. a tool used to determine the degree of alignment between the strategic business plan and the marketing plan. a market analysis done only by certified market research firms.

a tool used to analyze an organization's current state and opportunities. A SWOT analysis is an assessment of a firm's current state divided into four categories—strengths, weaknesses, opportunities, and threats—that are due to internal and external factors. It may include some items that are helpful and others that are detrimental to the firm.

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. increase net sales volume. do not conflict with other features. are the best the customer segment demands.

increase net profit margin. Some prospects may feel strongly that the new product should contain certain features, while others may desire the opposite features. The features that contribute to profit margin should be adopted, and unprofitable variations should be avoided. Increases in sales volume are also important, but increasing sales volume does not guarantee increases in profits, so it is a secondary consideration.

To keep supply chains competitive, warehousing focuses on: keeping labor rates low. speed of order assembly. investing in sophisticated materials-handling systems. value-added activities.

value-added activities. Value-added warehousing plays a vital role in keeping supply chains competitive. In both the forward and reverse supply chains, attention to packaging plays a role in effective product movement, marketing, and recycling. Warehouses may even participate in the later stages of production, as workers receive training enabling them to do final assembly of products for mass customization or to perform reassembly of products returned for repair or replacement. These value-added activities are increasingly important as supply chains grow longer, reaching into more diverse international markets.

Which of the following numbers (rounded to the nearest whole number) is the correct seasonal average demand for February using the table below? Month: January - February - March - April _ May - June Monthly Demand Per Year: 102, 99, 100 - 101, 101, 105 - 105, 102, 108 - 106, 103, 109 - 108, 105, 109 - 111, 108, 110 Seasonal Totals: 301 - 307 - 315 - 318 - 322 - 329 Seasonal Average: 100 - ? - 105 - 106 - 107 - 110 Deseasonalized Demand: 105 - 105 - 105 - 105 - 105 - 105 Seasonal Index: .95 - .97 - 1.00 - 1.01 - 1.02 - 1.05 99 100 102 105

102 The seasonal average demand for February is the monthly average demand for the three Februarys listed: (101 + 101 + 105)/3 = 102 (rounded).

An organization uses a periodic review system. At the review period, for one stock keeping unit (SKU) the organization currently has 40 units of cycle stock and 50 units of safety stock. The order lead time is one week. Average weekly sales are 30 units. Its maximum-level inventory is 200 units. How much inventory should the organization order? 110 units 130 units 140 units 160 units

110 units The quantity ordered is the maximum-level inventory level less the quantity of inventory on hand at the review period, which is the cycle stock plus the safety stock: 200 units - (40 units + 50 units) = 110 units.

Which of the following forms the basis for a naive demand forecast? Data from the last demand period Analogy Intuition Data from the average of the last several demand periods

Data from the last demand period Naive forecasting assumes that demand in the next period will equal demand in the last period. It is a form of quantitative forecasting but lacks any analysis.

Which of the following is not a true statement about levels of collaborative intensity? If it's a complex process or an item with multiple parts, many contractors can form an alliance to get all the components to work together. If there are limited suppliers of a particular component, the firm should consider forming a strategic alliance with that supplier. If there is uncertainty about good or service availability, price, or quality, then the firm should form partnerships with one of more suppliers who can meet the product/service criteria. If there is little room for error in sourcing and the company has the internal capability, it should still form an alliance with one or more suppliers.

If there is little room for error in sourcing and the company has the internal capability, it should still form an alliance with one or more suppliers. The primary sourcing consideration is the strategic importance of the product or service. If the company cannot afford to make mistakes in sourcing, it should produce the item in-house, even if this is more expensive, rather than having it made by an external supplier. If the company lacks internal capability, it should form an alliance with one or more firms that can make the item or perform the service. Multiple sources provide a backup.

The sales and operations planning (S&OP) team might decide to adopt a chase production strategy because it offers which of the following benefits? More predictable production scheduling Protection against a sudden need to hire temporary workers in production Reduced inventory holding costs Reduction of resource costs during demand periods

Reduced inventory holding costs The chase production strategy, also called demand matching, attempts to match production to demand in each period of the schedule. If the strategy succeeds, inventory costs can be kept to a minimum. The tradeoffs include the possibility of extra hiring (or layoffs) if demand and production don't match or a need to ramp up capacity to match peak demand.

Performance metrics for an organization's suppliers indicate that the number of shipments that were not precleared was between 40 to 50 percent all year. If the target for this metric is five percent, which of the following are valid options? I. Work with the supplier to reengineer the clearing process. II. Make small incremental suggestions for continual improvement. III. Review the target to ensure that it is accurate and feasible and, if not, make changes. IV. Find a different supplier. Start with I and, if it fails, do III or IV. Start with I and, if it fails, do II or IV. Start with II and, if it fails, do I or III. Start with II and, if it fails, do IV.

Start with I and, if it fails, do III or IV. Since this metric's actual value differs significantly from its target, a major change initiative or reengineering process may be called for. If the supplier is unwilling or unable to make the change, the organization should either find a target that can be achieved or find a supplier willing or able to meet the standard.

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%

19% 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%.

Which of the following is true of ISO standards in relation to supplier certification? ISO performs registration and supplier audits on a rotating three-year cycle. ISO certification must be renewed every three years. Standards are reviewed at least every three years, and some are withdrawn. Conformance to ISO standards requires registration every three years.

ISO certification must be renewed every three years. ISO certification must be renewed every three years. Standards do not require registration. They are reviewed at least every five years. The ISO does not perform registration or supplier audits.

What is the key question to ask when setting a customer service strategy? Is the level of service sufficient to achieve all perfect orders? Is the cost to achieve the level of service justified? Is the cost of service as low as it can be (lean)? Is the level of service greater than customer expectations?

Is the cost to achieve the level of service justified? When developing a customer service strategy, the key question to ask is "Is the cost to achieve the level of service justified?" In other words, does the cost associated with achieving specified service performance represent a sound investment? Comprehensive evaluation of competitive performance and customer response to service attributes can be used to formulate a basic strategy.

Which of the following is true of service-oriented architecture (SOA)? Software is organized into a single indivisible block of code. Services depend upon other services to function. Messages must be descriptive rather than prescriptive. Applications and their data are fully integrated.

Messages must be descriptive rather than prescriptive. SOA rules state that messages must be descriptive, not prescriptive. In other words, they tell the system what needs to be accomplished but not how to accomplish it.

What quality attribute of communications relates most to the need for efficiency? Timeliness of data provided Accuracy of data provided Quantity of data provided Avoiding the feedback step

Quantity of data provided Supply chain managers should work toward efficient communication, which means providing no more or less than the information the receiver needs. Important points can be hidden when they are surrounded by less relevant data.

Which of the following actions is most likely to mitigate the consequences of the bullwhip effect? Reducing lead times by simplifying processes Rationing Using multiple demand forecasts along the chain Making special offers at the end of a quarter if sales targets are not yet met

Reducing lead times by simplifying processes Reducing lead times improves forecasting because forecasts can be for shorter periods. Forecasting accuracy is higher for shorter periods versus longer periods. Automation or process justification and simplification to just those steps customers perceive as value-added can reduce manufacturing lead times or demand lead times (from order placement until the item reaches the customer), with an added benefit of reducing labor costs.

Which of the following supplier relationship management (SRM) analytical applications would quantify how much it is costing the organization when buyers resist using national agreements for some categories of purchases? Spend analysis Value analysis Operations synchronization Strategic sourcing/RFQ (request for quote) analysis

Spend analysis The spend analysis application allows the organization to identify who they are buying from, what they are purchasing from each supplier, and when and how it was purchased. These comparative data can assist in sourcing and developing strategic relationships and consolidating purchasing.

The main focus of the SCOR model is on: the supply chain's management processes. the number of processes each entity performs. the members or partners of the supply chain and the value each one adds. the functions that coordinate the processes.

the supply chain's management processes. The main focus of the SCOR model is on the supply chain's management processes: plan, source, make, deliver, and return.

You work on a continuous improvement (CI) team, and yesterday you attended the first team meeting. Which of the following comments that you heard at the meeting doesn't fit with what you know about CI? "It's going to take a while to get this big issue fixed...it won't be resolved soon." "It's good to now know about these previously hidden steps in this process." "You're such a perfectionist...you just keep on raising the bar for us." "I'll bet money that it's the old die that's causing those scratches on that component."

"I'll bet money that it's the old die that's causing those scratches on that component." The phrase that would be of concern, particularly when stated by a CI team member, is the one about the die causing the scratches on a component piece. When practiced as intended, continuous improvement does not allow a CI initiative with a preliminary bias about causes or solutions.

Which of the following is true of sustainable supply chain management? It dramatically increases customer sales due to an improved company reputation. It increases regulatory pressures and government constraints favored by the public. It increases long-term costs associated with environmental cleanup. It makes good business sense, because it is viewed favorably by market analysts.

It makes good business sense, because it is viewed favorably by market analysts. Without forward-looking environmental and social policies and supply chain practices, an organization's reputation may suffer among investment analysts. Sustainable supply chain management adds important stakeholder value.

Which of the following is true of service-oriented architecture (SOA)? It uses defined, proprietary, prescriptive standards. It uses extensible, universally available, descriptive standards. It uses defined, proprietary, descriptive standards. It uses extensible, universally available, prescriptive standards.

It uses extensible, universally available, descriptive standards. SOA uses simple and universally available standards such as web services, which constrain the semantics but are extensible, meaning that they can be enhanced without destroying existing services. Descriptive systems are endorsed by SOA because they tell the system what it is they want to do but leave the system to determine how to do that task.

Which of the following is not true of e-business strategy? A nucleus firm needs to upgrade its own systems and organization to the desired level of interorganizational connectivity before seeking partners. A well-designed e-business strategy should be able to bring a company directly from Stage 2 to Stage 4 of supply chain development. Interorganizational strategy should begin with a nucleus firm that determines how it intends to connect with its partners. Successful linking of organizational strategy and e-business strategy often requires using advanced optimization tools such as supply chain event management (SCEM).

A well-designed e-business strategy should be able to bring a company directly from Stage 2 to Stage 4 of supply chain development. Organizations cannot skip stages of supply chain development but must progress through each stage due to the immense complexity and cost of achieving each stage. Organizational change also requires that these stages not be skipped.

The supply chain manager needs to better understand what is important to customers. Which of the following should be used to measure this? Reliability, responsiveness, and costs Responsiveness, costs, and assets Agility, reliability, and responsiveness Agility, responsiveness, and costs

Agility, reliability, and responsiveness Agility, reliability, and responsiveness are customer-focused attributes. Costs and assets are internally focused attributes.

Which of the following production strategies sometimes meets resistance from distribution centers because of the increased demands for skills training and capacity expansion? Make-to-stock Assemble-to-order Just-in-Time (JIT) Make-to-order

Assemble-to-order An assemble-to-order strategy may require warehouse or sales personnel to complete the final stages of finishing a product, thus requiring workers to acquire new skills and, in some cases, the facility to expand capacity to accommodate the finishing operations.

You are working in an organization that is in the second developmental stage of organizational design. What should you be prepared to do? Participate in a cross-functional product design team. Communicate upward or laterally in functional teams. Communicate across functional boundaries. Participate in coaching discussions.

Communicate upward or laterally in functional teams. In the second stage, organizational design follows functional lines, with each department ensconced in its own silo and focused on meeting its own goals. Supply chain decisions, such as number and location of warehouses, inventory management, or modes of transportation, are made entirely within their separate silos. Communication flows upward through the chain of command or, perhaps, horizontally in departmental teams.

A U.S.-based organization uses gold in its electrical leads to provide a superior sound system product. In regards to conflict minerals, what does it need to do if this gold comes from South Africa? Nothing. The materials are sourced far from any official conflict region. Nothing. Gold is not a conflict mineral. Conduct a reasonable country-of-origin inquiry, including supplier audits. File Form SD with the SEC claiming that it does not use any conflict minerals to the best of its knowledge. (No proof is needed.)

Conduct a reasonable country-of-origin inquiry, including supplier audits. Conflict minerals are tantalum, tin, gold, or tungsten mined in the Democratic Republic of Congo (DRC) or adjoining countries. The practical impact for supply chain managers is that any company that uses any of these minerals needs to conduct a reasonable country-of-origin inquiry. It will need to verify its suppliers' addresses, audit each supplier, and get each to certify that all materials are in compliance. If it does not use or has no reason to believe it uses conflict minerals, it must file this in Form SD and publish it on a publicly available web page along with the process used to make the determination.

An organization has a small warehouse with numerous tiny parts. Which of the following could help this organization reduce its time spent in physical inventory verification counts? Group functionally related items together. Use ABC inventory classification to reduce the number of parts to count. Label items with clearly visible tags and bar codes. Create bins with a maximum number of parts in them.

Create bins with a maximum number of parts in them. A warehouse can use bins and space arrangements that make counting easy. If storage bins are limited to a certain number of items, you can estimate at a glance and count by groups instead of individual items. The top bin may not have a full amount and only this bin need be counted. Tiny parts may not be conducive to labeling, which would be another way to improve tracking.

Which of the following could have the unintended consequence of increasing demand variability for an organization's product or service? Policy of avoiding promotional discounts Increased velocity of sharing sales data Culture of optimism in demand forecasting Centralized demand planning

Culture of optimism in demand forecasting Demand plan error, such as incorrectly estimated results of marketing activities, and forecasting bias, such as from a culture of overly optimistic demand forecasting, are types of demand variability that directly contribute to supply variability because they result in producing too many or too few products or the wrong product family mix. This can create an excess of inventory that is not in demand and a shortage of inventory in demand.

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

Design About 70% of the cost to build something new is in the materials. By taking remanufacturing into account during the design phase, even before the new product is developed, companies can effectively address the larger cost component of reclaiming products after they have been used for one or more life cycles.

Which of the following actions would best aid a supply chain in becoming demand-driven? Producing to the forecast and sending finished products to inventory Replenishing field inventories at a central supply facility Adopting software to receive orders as quickly as possible Developing agility for more frequent changeovers or staffing or process switching

Developing agility for more frequent changeovers or staffing or process switching Demand-driven supply chains require access to real demand data along the chain (visibility), trust and collaboration (including changing processes as needed) among partners, and agility. No product is produced until an order comes in. There will be no room for long changeover times between runs of different products; therefore, equipment, processes, work center layouts, or staffing may have to change.

Which of the most commonly used Incoterms applies to both sea and inland waterway shipments? FCA EXW FOB DDP

FOB Only FOB, Free on Board, applies to both sea and inland waterway shipments. The other terms listed apply to any mode or combination of modes (not via water) of transport.

Which of the following statements about total productive maintenance is false? It is operator-oriented maintenance. It promotes continuous flows. It involves all levels and functions in an organization. It increases materials handling.

It increases materials handling. Total productive maintenance is preventive maintenance plus continuing efforts to adapt, modify, and refine equipment to increase flexibility, reduce materials handling, and promote continuous flows. It is operator-oriented maintenance with the involvement of all qualified employees in all maintenance activities.

Inventory status, capacity status and plans, production schedules, and shipment and demand forecasts are all shared by all parties on a real-time, online basis. This best exemplifies which of the following distinctions between traditional purchasing and strategic sourcing? Limited visibility versus entire supply chain visibility Landed cost versus total cost of ownership Boundary-specific versus realigned work processes and workflows Transactional versus collaborative purchasing

Limited visibility versus entire supply chain visibility When information from suppliers, manufacturers, distributors, retailers, and customers is available for analysis, there is enhanced visibility of the supply chain and opportunities for improvement. Demand information, inventory status, capacity status, capacity plans, production schedules, promotion plans, shipment forecasts, and demand forecasts are all shared and ideally can be accessed by all parties on a real-time, online basis.

Referring to the demand table below, calculate forecasts for May using both the three-month moving average (MA) and the naive forecasting methods. Which of the following statements correctly identifies the two forecasts? Month: January, February, March, April, May Demand: 21, 17, 22, 22, 23 Forecast: X, X, X, MA forecast = 20.33; naive forecast = 22 MA forecast = 20.67; naive forecast = 23 MA forecast = 21.33; naive forecast = 22 MA forecast = 22.00; naive forecast = 23

MA forecast = 20.33; naive forecast = 22 The three-month moving average forecast for May is 20.33, which is the average monthly demand for the months from February through April (17 + 22 + 22) divided by 3 (61/3 = 20.33). The naive forecast is taken from the period preceding the forecast period, which in this case is 22, the actual demand for April. Note that the naive forecast (22) is closer to actual demand in this situation, because it adjusts faster than the moving average. However, it could just as easily have been less accurate if demand had changed in a different direction or by a different amount.

When preparing different marketing messages for similar products, which tool is particularly useful in distinguishing between features? Histogram Matrix diagram Scatter diagram Tree diagram

Matrix diagram The matrix diagram or matrix chart is a tool that can be used to show the relationship between groups of information. It can be useful when trying to differentiate marketing messages and in comparing seemingly similar products. The closer the product line point is to the positive end of each variable, the stronger that feature is for that line, and vice versa.

A logistics manager might approach which of the following intermediaries to purchase cargo space that the intermediary purchased elsewhere and marked up for resale? Export trading company (ETC) Consolidator Freight forwarder Non-vessel operating common carrier (NVOCC)

Non-vessel operating common carrier (NVOCC) An NVOCC buys cargo space on inland carriers to resell to shippers.

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. Keep costs low and lower prices to increase sales. Research new technologies to develop a solution in-house. Outsource the activity to a supplier with the new equipment.

Outsource a non-core competency activity where the vendor will incur capital expense. Since some of the capital required to engage in the outsourced activity is supplied by the third-party provider, the enterprise has more capital available for research, payment of dividends, debt reduction, etc.

Which will help an organization and its trading partner better manage currency exchange risks between each other? Rate sampling clauses as part of contractual payment terms Transfer of ownership contract clauses to delay transfer until rates are favorable Pricing contract clauses based on absolute value rather than one currency Performance criteria clauses to reject bad quality before payment is made

Rate sampling clauses as part of contractual payment terms Payment terms should address not only timing and form of payment but special issues such as currency exchange. To manage risk, it may be possible to stipulate the exchange rate to be used in the contract with the supplier or a period of time during which a sampling of exchange rates will be used as a basis for currency exchange.

Why might a supply chain planner choose to use a contract carrier? There is a large supply to pick from, and they compete on price alone. They are better able to meet customers' specific shipping needs every time. They are more reliable and don't require government authorization to do business. Rates are usually lower than with common carriers, and they can better respond to customer needs.

Rates are usually lower than with common carriers, and they can better respond to customer needs. Contract carriers offer several advantages to logistics managers. Their rates are generally lower than those of common carriers, and because they aren't required to serve the general shipping public, they can adapt their business to a customer's specific needs by, for example, scheduling special deliveries or using specialized equipment. They rival private carriage in that regard while providing added flexibility.

Which of the following would promote accuracy and efficiency in the demand management process? Require headquarters sales staff to make detailed demand forecasts during the first week each month. Require the demand forecast to be based solely on the statistical forecast results. Require headquarters sales staff to provide assumptions used in demand plan numbers. Require headquarters sales staff and marketing to each provide just simple forecast numbers.

Require headquarters sales staff to provide assumptions used in demand plan numbers. Organizations should ensure that demand plan numbers are explicitly linked to their underlying assumptions. While input requirements should be simple, oversimplifying information requests by asking only for a number leaves the persons responsible for consolidating or assessing the various data and opinions with no information to help decide which of the various forecast values should carry more weight.

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? Outsource the functions to the lowest-cost third-party logistics provider available. Outsource the functions to a third-party provider that has reverse logistics as a core competency. Retain the functions, but restrict returns processing to selected facilities. Retain the functions and ensure that each facility does an equal amount of the work.

Retain the functions, but restrict returns processing to selected facilities. While reverse logistics is not a core competency for most organizations, this organization appears to have it as a core competency and a strategic priority. Therefore, it should retain these functions in house. The products in the reverse chain won't necessarily move through the same nodes as products in the forward chain because fewer, and different, warehouses, may be required.

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? Perform a net change on items A, B, and C to reflect the change in D. Start using time fences to prevent this type of system nervousness from recurring. Review items A, B, and C to verify that the change was not made in error. Regenerate the entire plan for A, B, C, and D to reflect the overall schedule change.

Review items A, B, and C to verify that the change was not made in error. In this example, if a change is made in the production schedule for D, it could have been because the production schedules for parent items A, B, or C were changed. Pegging is the ability to track dependent demand for a component back to demand for the parent by referring to the material requirements plan. When a pegged component is affected by a schedule change, someone can easily check to see what happened to its parent. It may turn out that the schedule change for the component was a mistake. Since this change was authorized, it likely already has a time fence.

Expenses involved in the reverse logistics chain may be offset by which of the following? Sale of service contracts Freight discounts on shipments of returned items Rebates from landfills More efficient use of warehouses set up for forward logistics

Sale of service contracts Revenue from the sale of service contracts can offset some of the expenses involved in the reverse logistics chain, including higher transportation fees for small, sporadic shipments, the addition of transportation lanes to reach specialized warehouses, and, of course, the costs to the company of making warranty repairs.

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 Announced promotions Seasonal fluctuations Excess supply liquidation

Safety stock Because bar soap has relatively steady demand, the small variations in demand seen in the forecasting at the retail stage of the supply chain are padded by safety stock.

Which practice would help organizations craft targeted messages that would be appropriate for groups of individuals needing a higher degree of care and attention than others? Frozen, slushy, and liquid time zones Segmenting other supply chain partners Project management process groups Voice of the customer

Segmenting other supply chain partners Other stakeholders may not count as supply chain partners but could still benefit from segmentation. These include regulatory bodies, auditors, the general public, specific communities, interest groups, unions, and so on. Segmentation could help the organization craft communications that were targeted toward the group. Segmenting these stakeholders by relative importance can help the organization decide how much time and money to devote to maintaining each relationship.

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? Quick response program Service-related distributor integration Inventory-related distributor integration Capacity requirements planning

Service-related distributor integration In service-related distributor integration, individual distributors build expertise in different areas. When a customer request comes in, it is routed to the distributor with the most expertise (application support, assembly, etc.). In this scenario, the regions that have an easier time acquiring expert labor for application support can support the areas that cannot easily acquire these services.

All things being equal, which example would improve organizational profit metrics the most? Investing in quality related to the top reason for returns, which reduces returns at no net cost (The quality investments and return cost reductions cancel each other out.) Sharing customer data with suppliers, which reduces raw materials inventory Paying workers a living wage, which increases revenues after advertising this fact Implementing sustainability programs, which increases sales with sustainability-minded consumers

Sharing customer data with suppliers, which reduces raw materials inventory Supply chain management cost reduction and efficiency efforts are a powerful lever that can improve organizational profitability with more impact even than increasing sales. (Sales increases also increase the cost of goods sold and other variable costs, while cost reductions directly increase profits.) Reducing inventory will reduce costs. The other answers are all good ideas, but they primarily increase sales (i.e., revenues) rather than reduce costs.

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 and plates of glass needed for window construction for the month Number of steel cans needed for canned paint production for the month Real-time point-of-sale (POS) data and profit margins for every buyer Sheets of steel required for metal door construction company for the month

Sheets of steel required for metal door construction company for the month Providing access to data involves not only sharing of data but sharing of data in the right format for the user—in this case, sheets of steel rather than the number of finished products. The visibility should also not contain too much information, such as plates of glass or profit margins, both to keep extraneous data to a minimum and to protect each partner's private information.

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 1: Multiple dysfunction Stage 2: Semifunctional enterprise Stage 3: Integrated enterprise Stage 4: Extended enterprise

Stage 2: Semifunctional enterprise A company at Stage 2 will have multiple initiatives to improve individual functional areas, but these will not generally be coordinated with one another and will therefore fall short of their potential for reducing costs, improving margins, expanding markets, or delivering better service.

A shipment of cash registers from Indonesia enters a bonded logistics park in China. When the cash registers are loaded on a container ship bound for South Africa, what is the appropriate customs procedure? The cash registers can be immediately loaded, because they were considered to be offshore the whole time. Occupiers need to pay Chinese customs duties before they can be loaded. Occupiers need to get customs clearance to load the goods, but the process is duty-free. Occupiers need to apply to get a tax refund for the duties paid upon entry to the park.

The cash registers can be immediately loaded, because they were considered to be offshore the whole time. Logistics warehouses in China are classified as either bonded or nonbonded facilities. In bonded logistics parks (BLPs), occupiers can transship products duty-free, receive value-added tax refunds upon entry, and conduct reimportation under customs supervision where goods are not required to leave the country. BLPs are often located near ports, and they serve as cost-effective holding areas where orders can be consolidated from various locations before being exported. They also offer a streamlined customs clearance procedure, since goods transported into BLPs are considered offshore and can be immediately loaded onto ships bound for overseas markets.

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 be the right size. The warehouse would have a large amount of excess capacity. The warehouse would not have enough capacity even if extra space is added for safety stock. The warehouse would not have enough capacity due to the need for safety stock.

The warehouse would have a large amount of excess capacity. While basing warehouse size on average inventory may seem to not leave enough room for when the order arrives and there is maximum inventory, on an aggregate basis, the inventory that is currently at a maximum level will balance inventory that is at a minimum level. (This assumes that the warehouse doesn't use fixed location storage.) That is, when storage is allowed to shift based on current individual item need and if warehouse space is assessed based on maximum inventory, the warehouse would always have a large amount of unused space.

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. Unlike traditional WMS, systems with portals can use merge-in-transit to create automated shipment notifications. Subscribers use dynamic databases to select optimum carriers, and carriers can indicate their availability to ship to a particular location. Users can either push data and inventory to others or pull inventory and data to themselves.

Users can either push data and inventory to others or pull inventory and data to themselves. 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.

A strategic profit model calculates return on assets (ROA) using net profit margin times asset turnover. The model also shows what ratios and calculations are used to calculate the latter ratios. Which is a good supply chain management use for this model? You can calculate how a small increase in net sales is far more valuable to ROA than cost of goods sold. You can calculate how much of a loss in sales it would take to make an inventory reduction unprofitable. You can use it to show how it would take a huge reduction in net sales to offset a small cost cut. You can use it to show how inventory reductions will increase variable expenses for a smaller benefit.

You can calculate how much of a loss in sales it would take to make an inventory reduction unprofitable. The benefit of looking at ROA in this way is that it shows there are multiple ways to increase ROA. Supply chain managers can see the areas where they can have influence. They can reduce inventory but will also see how ROA could drop if lack of inventory starts to hurt net sales. A loss of sales due to inventory stockouts would begin to affect ROA negatively. It would not take a huge reduction in net sales to offset the benefits of an inventory reduction. Inventory reductions also reduce inventory holding costs, so the variable expenses would also drop.

Companies outsourcing customer relationship management (CRM) should: transfer responsibility for CRM to vendors as a contractual obligation. develop an exit strategy. encourage vendors to establish their own performance standards that will be meaningful to their own resources and culture. consider outsourcing core competencies.

develop an exit strategy. The company outsourcing CRM should be the one to define the performance standards against which the vendor will be measured at regular intervals. CRM, after all, remains the responsibility of the outsourcing business, since these are their customers. These businesses should also maintain an exit strategy in case the relationship with the CRM vendor falters.

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? 360,000 square meters 720,000 square meters 1,000,000 square meters 9,000,000 square meters

360,000 square meters 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 last two steps can be done in either order.

Which of the following is true of a bribe in international trade? A bribe can be in the form of anything the recipient considers to be valuable. A bribe involves only cash. A bribe is illegal in all countries around the globe. A bribe must involve a company representative and a foreign official.

A bribe can be in the form of anything the recipient considers to be valuable. A bribe is when a person gives another individual something like a gift, money, or a favor intending to influence his or her decision, judgment, or conduct. The bribe can be in the form of anything the recipient considers to be valuable. According to authors Bowersox, Closs, and Cooper, although bribes are unethical and illegal in most developed nations, these types of payments may be necessary in the sale and movement of product through customs in developing countries.

For which of the following companies would implementing supplier relationship management (SRM) probably be most critical? A gift catalog company that offers a large number of items from a wide variety of suppliers An internet banking company seeking to expand use among high-value customers A company competing in a commodity market with little opportunity for adding value A company that uses raw materials and prefabricated components to create consumer goods

A company that uses raw materials and prefabricated components to create consumer goods SRM focuses on identifying opportunities for strategic relationships between supply chain partners and on developing and managing those relationships. The internet banking company is concerned primarily with customers rather than suppliers. The commodity-driven company may have some benefit, but it will be limited by the opportunities to add value. Similarly, the gift catalog company requires adequate supply at the right times but may rely on so many suppliers that strategic partnerships are not practical. The manufacturer of consumer goods will benefit from developing strategic relationships with suppliers that add value and make its products more competitive.

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? Reject the offer, because it would result in a loss of $0.10 per unit. Accept the offer and increase gross profits by $100,000. Reject the offer, because it would break even but not increase profits. Accept the offer even though it causes the organization to break even on the deal.

Accept the offer and increase gross profits by $100,000. Marginal analysis considers only the additional costs and additional benefits. The overhead is a sunk cost in this decision and thus is ignored. The additional cost is $1 per unit in variable costs and the benefit is $1.50 per unit in variable costs, for a marginal net benefit of $0.50 per unit, or $100,000 in gross profit for 200,000 units. Since the organization has available capacity that would otherwise go unused, the rational decision is to accept this offer.

An organization is preparing for organizational change in a customer relationship management (CRM) initiative. The organization's culture seems ready to embrace differentiation based on customer profitability as far as service packages go but seems resistant to providing a lower level of customer service to less-profitable customers. What should executives do about this? Tell employees that this issue will be resolved in a later change step, but eventually require a lower level of customer service for less-profitable customers. Indicate that customer service is important but must change since it impacts profitability. Change the culture as part of the change process so it is supportive of the entire CRM program. Adapt the CRM program to minimize the difference in service between customers.

Adapt the CRM program to minimize the difference in service between customers. Exploring the strengths and weaknesses of the organization is where the organization's culture is explicitly considered. A program such as CRM will have many standardized features, but some elements will work better with the organization's culture than others. Determining organizational and cultural strengths can help show where these will reinforce the change and make it uniquely this organization's initiative. Similarly, developing an understanding of organizational and cultural weaknesses will show which areas of the program will meet the most resistance. Some of these program areas might be modified to better fit the organization. Others will require changing the culture when the weakness would otherwise endanger the success of the strategy. In this case, putting customer service first is a positive cultural value that should likely be allowed to remain in place.

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? Aligning sales promotions and other strategic marketing activities Alignment with the retailer's corporate strategy to holistically maintain a profitable relationship Alignment with the strategic objectives of their suppliers to generate long-term stability of supply Setting the firm's own strategic objectives to leverage a more profitable margin from their customers

Alignment with the retailer's corporate strategy to holistically maintain a profitable relationship Because the retailer in this situation appears to be the nucleus firm, alignment of the retailer's corporate strategy with the manufacturer's own corporate strategy must take precedence over other considerations.

The principle of economies of distance refers to which of the following? All miles are not equally costly, and longer trips usually include a greater percentage of less expensive miles. All miles are not equally costly, with shorter trips being preferred by the carrier. All miles are equally costly, and longer trips require multiple stops for refueling. All miles are equally costly, and the vehicle depreciation is based on whether they are rural or urban miles.

All miles are not equally costly, and longer trips usually include a greater percentage of less expensive miles. All miles are not equally costly, and longer trips usually include a greater percentage of the less expensive miles. Starting and stopping use up more fuel and cause more stress on vehicles than cruising. Over-the-road trips especially benefit from this phenomenon, because they generally include a greater percentage of highway miles as opposed to urban miles.

Which of the following materials-handling devices would you purchase to get the maximum storage density per square foot of warehouse space? Automated guided vehicle system (AGVS) Bridge crane Forklift Automated storage and retrieval system (AS/RS)

Automated storage and retrieval system (AS/RS) The AS/RS moves both horizontally and vertically, and it can make the maximum use of floor space by lifting items into (and out of) very high storage racks.

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 Lead time, forecast accuracy, and demand variability by location and stock keeping unit Stock keeping unit group performance metrics by bill rate or wait time Exception reporting for out of stock, overstock, or past target turnover

Automatic identification technologies and paperless processing The benefits of automated identification devices include reduced errors and lead times, productivity increases, optimized storage density, better response times, and more accurate shipping and inventory leading to less shrinkage. The cost of purchasing, implementing, and maintaining such technologies should be offset by the benefits, especially if paperwork can be eliminated.

What are the attributes of basic customer service? Up-selling, cross-selling, and customer satisfaction Availability, operational performance, and customer satisfaction Wait time, respectfulness, and helpfulness 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.

An organization relies on average inventory from its balance sheets rather than cash-to-cash cycle time to measure how well it is managing its saleable assets. What error might this result in? Average inventory in units fails to account for accounts receivable. Average inventory in units fails to account for accounts payable. Average inventory might obscure a large seasonal inventory buildup. Average inventory is not useful for predicting maximum inventory levels.

Average inventory might obscure a large seasonal inventory buildup. Average inventory levels on balance sheets can be deceiving because inventory is measured at two specific points in time. In addition to there being some accounts payable and accounts receivable that would alter inventory levels in monetary amounts (not in units, but units are not shown on the balance sheet), a large amount of inventory built up for the season would not be properly captured since the measurement period is only at one particular time per year. (For example, holiday season inventory would already be sold off by the last day of the year if this is when measurement occurs.)

Which of the following strategies guides the others into alignment? Operations strategy Marketing strategy Supply chain strategy Business strategy

Business strategy The APICS Dictionary, 15th edition, defines business strategy as follows: "A plan for choosing how to compete. Three generic business strategies are (1) least cost, (2) differentiation, and (3) focus." The business strategy drives the organizational strategy, which, in turn, drives the supply chain strategy.

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? Planning demand Managing and prioritizing demand Influencing demand Communicating demand

Communicating demand The organization has a highly variable capacity strategy in which they attempt to match supply to demand as closely as possible by being flexible enough to increase or reduce capacity spontaneously as demand changes. Matching strategies such as these require a focus on communications so that the changes in supply can be proactive rather than reactive.

For which of the following companies would customer relationship management (CRM) probably be a priority? Company with a customer base with diverse needs and interests Company that provides raw materials for an extended supply chain in which value is added at later points in the chain Company with one large customer that specifies product/service features Company that performs purchasing for a large manufacturer from several strategic suppliers

Company with a customer base with diverse needs and interests CRM focuses on learning more about one's customers and using this knowledge to enhance product, increase customer satisfaction, and improve revenue and profit. The company with the diverse customer base can potentially benefit greatly from being able to gather and use more information about its customers.

Which of the following is true of data aggregation? Aggregating customer data for marketing purposes requires using a mass marketing strategy. 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 is growing less useful because markets are becoming more fragmented daily.

Data aggregation for customers can be by relatively equal demand, meaning that some zones will be larger than others. 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.

Which of the following statements about customer segmentation is true? Customer segmentation is a concept new to customer relationship management (CRM). Demographic segmentation is not based on data about actual customer buying behaviors. Customer segmentation does not apply well to business-to-business (B2B) customers. Customer segmentation may help increase revenue but is not a tool for increasing profitability.

Demographic segmentation is not based on data about actual customer buying behaviors. Customer segmentation predates CRM, but in the past it relied heavily on demographic segmentation, which does not use actual customer buying behavior as CRM segmentation methods do. Customer segmentation can increase both revenue and profitability for retail and B2B customers.

Which of the following is the best value proposition for the customer segments described below? Segment A value profile: ongoing relationships and consistent lead times but not fast delivery; 15% of the market and 65% of revenue. Segment B value profile: low price and fast delivery; 60% of the market and 18% of revenue. Develop a reliable supply chain with dedicated agents for segment A and a highly automated, low-cost, fast delivery supply chain for segment B. Develop a reliable supply chain with dedicated agents for segment A and do not pursue sales with segment B. Develop a single fast and reliable supply chain with equal access to sales agents and/or highly automated sales for all segments. Develop a single fast and reliable supply chain but provide access to sales agents only to segment A.

Develop a reliable supply chain with dedicated agents for segment A and a highly automated, low-cost, fast delivery supply chain for segment B. It is important for businesses to understand what customers want, why, and how much. This is called a value profile. Once the value profile has been created, a value proposition can then be drafted that details how each segment's perception of value will be fulfilled by the product or service. The value proposition is a key part of the promotional strategy and customer relationship. Value propositions are addressed in the customer-driven strategy, often in the form of segment-specific supply chains.

A new customer segment will buy an organization's product only if it has additional features that require a new product variant. This variant would increase sales volume and only slightly increase marginal profits. Based on a customer-driven marketing philosophy, what should this organization do? Develop the proposed new variant at the proposed price to gain lifetime customers. Develop the proposed new variant at a higher price to ensure increased profitability and sales volume. Reject the proposed new variant. Increase the size of this customer segment prior to making a decision.

Develop the proposed new variant at the proposed price to gain lifetime customers. A customer-driven marketing philosophy indicates that profitability is more important than sales volume. Since this variant increases profits by even a small amount, it should be developed. Increasing the price of a product will not necessarily increase marginal profits, since it could reduce sales volume.

When developing a partnership with a customer service supplier, an effective customer service management strategy would include which of the following? Developing an annualized contract or trading partner agreement Developing a general system but allowing flexibility for customer service personnel to develop specific procedures Restricting customer interactions to a limited set of defined scenarios that may be performed within the existing infrastructure Delivering consistent and identical customer service for all customer segments

Developing an annualized contract or trading partner agreement Once the decision to develop a strategic supplier relationship has been made, the management strategy must be developed and implemented throughout the partnership. Development of the annualized contract or trading partner agreement, procedures to handle all customer interactions, infrastructure (people and information) to perform the procedures, and metrics to measure success are all parts of a successful customer service management strategy. Annualized contracts or trading partner agreements can formalize more in-depth relationships with suppliers. Customer interaction scenarios are determined by customer needs, not by existing infrastructure. Specific responses should be developed and followed. Service levels may be customized for different customer segments.

If an organization is more responsive than efficient and more strategic than operational in its measurement focus, what would be the best place for it to be on a measurement frequency continuum? Diagnostic Daily Controlling Monitoring

Diagnostic A framework for helping organizations select the best metrics was developed by Griffis, Cooper, Goldsby, and Closs and described in an article titled "Aligning Logistics Performance Measures to the Information Needs of the Firm." In this framework oriented toward logistics metrics, there are three areas to focus on when prioritizing metrics. Each is a continuum, or range, between two opposite forces. The first is responsive versus efficient, the second is strategic versus operational measurement focus, and the last is diagnostic versus monitoring measurement frequency. Diagnostic measurements are used to decide between alternatives, while monitoring measurements are used to assess daily performance. Diagnostic measurement would complement this organization's focus on responsiveness and strategic measurement focus.

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? Try to make all internal versions match, but use electronic data interchange (EDI) to communicate between the two different ERP systems. Replace all ERP versions and vendors with the same homogeneous system. Don't replace any versions or vendors but use internet-based interface devices. Change the merged company's ERP system to the other system, but do not try to make all internal versions match.

Don't replace any versions or vendors but use internet-based interface devices. It is usually too expensive and time-consuming to replace all versions of and/or different vendors' ERP systems with the same vendor and version. Instead, focus on what really needs to change to enable the business strategy to move forward, which is generally better communications between the existing systems. This can be best accomplished using some form of internet-based interface devices.

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 potential patients Understanding pricing strategy Designing packaging Educating doctors

Educating doctors] While all of the answers should be part of the organization's demand generation activities, educating doctors is the most critical task because this supply chain partner must understand the benefits of the new device and how to use it. The doctors are in effect the primary customer for the product and the primary salesperson, since they have a direct responsibility to advise their patients.

For make-to-stock production, the master production schedule includes production dates for which of the following? Customer options Components End items Product families

End items The master production schedule includes dates of production for make-to-stock end items. (This can be either finished products or, in a modular approach, components.)

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. Executing is used to both gather and interpret project data. Monitoring and Controlling is used to gather data; Planning is used to interpret data. Monitoring and Controlling is used to both gather and interpret project data.

Executing is used to gather data; Monitoring and Controlling is used to interpret data. The Executing Process Group is where the work is done and data is collected. The Monitoring and Controlling Process Group is used to put the data into context and do the analysis and interpretation needed to decide on a course of action.

Which of the following types of carriers is the best choice for local transport of agricultural products? Private Contract Public Exempt

Exempt 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.

A bakery company buys an option for bushels of wheat for €20 per bushel, with a premium of €2 per bushel. When it comes time to purchase wheat, the market price is €21 per bushel. What should the organization do? Do not exercise the option, because it would be at a loss. Exercise the option because the net cost will be lower than the market price. Exercise the option even though the net cost will be higher than the market price alone. The option must be exercised despite the increase in market prices.

Exercise the option even though the net cost will be higher than the market price alone. The organization should exercise the option and pay €20 per bushel rather than €21 per bushel. However, it will still have to pay the €2 per bushel premium, so the option effectively costs €22 per bushel. Since the premium must be paid either way, not exercising the option would result in €21 + €2 = €23 per bushel, so exercising is still the better option.

A European organization's fully owned subsidiary operates in South Korea, producing a large amount of inventory valued in South Korean wons (KRW) in a make-to-stock strategy for the holiday season. Which is a risk that the European headquarters faces? Unlike inventory value, storage costs will fluctuate as exchange rates change. Financial ratios measuring current assets could be affected by currency fluctuations. There could be an inability to hedge when purchasing inventory. Cost of goods sold for the inventory held prior to the holiday season could fluctuate with exchange rates.

Financial ratios measuring current assets could be affected by currency fluctuations. The accounting value of inventory will fluctuate if it is produced and valued in the currency of a country that is not the organization's home currency. Such subsidiaries will have the value of their assets, including inventory, adjusted up or down for financial reporting purposes to account for exchange rates between the countries. This can, in turn, positively or negatively impact the organization's financial ratios and thus its market value (e.g., stock price) and ability to access credit.

When measuring the success of a supply chain management strategy by the balanced scorecard approach, each key performance indicator should be linked to which of the following? Customer perspective Innovation and learning Internal business process improvement Financials

Financials All four measurement categories on the balanced scorecard (financial, customer, business process, and innovation and learning) should be taken into account and balanced against one another, but all measures must ultimately contribute to the bottom line.

Which of the following is a valid general observation about forecasts? Typically, if aggregate-level forecasts are correct, item-level forecasts are also correct (dependent demand). Typically, forecasts are correct because they are based on dependent demand. Forecasts are always wrong, so supply planner estimates should be used instead. Forecasts are always wrong, but supply planner estimates should not be used instead.

Forecasts are always wrong, but supply planner estimates should not be used instead. While aggregation does reduce the variability in forecasts, the first principle of forecasting is that forecasts are (almost) always wrong. All forecasting techniques are subject to error, but it is incorrect to think that forecasting should be avoided because of these inevitable errors. Relying on supply planner estimates would be worse than relying on a forecast.

Which of the following pieces of warehouse equipment provides maximum flexibility in the movement, placement, and retrieval of pallets? Roller-type conveyer Tow tractor with trailer Forklift truck Crane

Forklift truck The forklift truck is designed specifically for moving, placing, and retrieving pallets. The other options either have less flexibility or are not especially suitable for moving small loads.

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? Independent brokers should be rewarded through social incentives and reminded that shareholders must come first. Gains must be fairly distributed among stakeholders. It takes money to make money. Tradeoffs must not be self-defeating.

Gains must be fairly distributed among stakeholders. Possibly the most common mistake in this regard is to send all the cost savings all the way to the consumers' end of the chain, which, in this case, is the stakeholders. And perhaps most challenging of all in a lateral supply chain is the need for productive sharing of any financial gains. A powerful nucleus firm can gather in the benefits of an alteration in the placement of inventory (or any other process change) at the expense of other stakeholders such as the independent brokers.

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 low variability of demand for the wholesaler Low inventory holding costs for the retailer and low variability of demand for the wholesaler Low inventory holding costs for the retailer and high variability of demand for the wholesaler High inventory holding costs for the retailer and high variability of demand for the wholesaler

High inventory holding costs for the retailer and high variability of demand for the wholesaler The retailer will have high inventory holding costs even though they are having a promotion to liquidate excess inventory, because they are perpetuating a cycle of overordering inventory due to uncertain demand forecasts. The wholesaler will have high variability of demand, because conventional forecasting and lack of communication about promotions will cause each stage of the supply chain to compensate with greater safety stock. In short, the situation describes the bullwhip effect.

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 develop capabilities and integrate sustainability practices How it will develop capabilities and sustain its competitive advantage How it will manage the organization and integrate sustainability practices How it will manage the organization and develop business capabilities

How it will manage the organization and develop business capabilities The APICS Dictionary, 15th edition, defines strategy as follows: "The strategy of an enterprise [organization] identifies how a company will function in its environment. The strategy specifies how to satisfy customers, how to grow the business, how to compete in its environment, how to manage the organization and develop capabilities within the business, and how to achieve financial objectives."

Which of the following correctly describes Incoterms? I. They are not legally binding in contracts of carriage. II. They are recognized only in European Union (EU) and North American countries. III. They identify which party assumes risk at certain points in the transportation process. I I and III II and III I, II, and III

I and III Incoterms clarify interpretations of shipping terms by outlining exactly who is obligated to take control of, assume the risk for, and/or insure goods at a particular point in the shipping process. Although Incoterms are not legally binding, exporters and importers around the world recognize and accept them as the standard terms to use in contracts of carriage (not in contracts of sale).

Which of the following factors has led to greater customer focus in business? I. Higher general quality of goods and services II. Trend of increasing profit margins III. Advances in technology IV. Greater global competition I, II, and III I, III, and IV II, III, and IV I, II, III, and IV

I, III, and IV Advances in technology and competition in a worldwide free marketplace have benefited customers by raising their expectations for quality, trouble-free products and services. Higher quality, made possible through technology, has created increased customer expectations, which has in turn led to price as a differentiating factor. This has created a downward pressure on profit margin. Greater customer focus helps counter this pressure.

Which of the following would promote proper implementation of demand plans and reduce demand variability? I. Altering the date of the preliminary sales and operations planning (S&OP) meeting to match when data are available II. Basing trend projections on as many extrinsic leading indicators of change as possible III. Using key drivers of change as a "sanity check" on forecasts IV. Using last year's sales data as a "sanity check" on this year's forecasts II and III I, II, and III I, III, and IV I, II, III, and IV

I, III, and IV Scheduling the preliminary S&OP meeting to occur at the point in the month when the most accurate data are available is preferable to holding these meetings at an arbitrary date. While it is important to use extrinsic forecasting as part of demand planning, it is best to reduce the number of key drivers of change to just those that provide good correlation. Both key drivers of change and last year's sales data are useful as quick "sanity checks" on forecasts.

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? I. Plan II. Do III. Check IV. Action IV I and II II and III III and IV

III and IV The organization performed the plan phase by doing research and organizing a schedule and budget for influencing demand for the new product. It performed the do phase by executing these plans. However, since it waited until too late to do anything to verify how well the plans were working, it omitted the check phase. It also omitted the action phase because it performed no replanning based on results from the check phase.

Which standard allows an organization to gain a certification to it by an external authority? ISO 14001 ISO 14004 ISO 26000 The ISO does not allow external authorities to provide certifications.

ISO 14001 Certification to the ISO 14001:2015 standard helps an organization meet legal and stakeholder requirements related to environmental performance, helps improve public image, and often gives the organization a competitive advantage or financial benefit. ISO 14004 and ISO 26000 are guidelines for environmental and social responsibility; they are not certifications and therefore no organization can become certified as ISO 14004 or ISO 26000.

Two bulk chemicals are each stable and safe by themselves, but interaction between the two could create a toxic gas cloud. What regulation would prohibit these chemicals from being stored next to each other on a container ship? Restriction of Hazardous Substances (RoHs) directive ICAO's Recommendations on Dangerous Goods International Maritime Dangerous Goods (IMDG) Code ISO 14000

International Maritime Dangerous Goods (IMDG) Code The IMDG is a uniform international code for the transport of dangerous goods by sea, and it covers such matters as packing, container traffic, and stowage, with particular reference to the segregation of incompatible substances.

Which of the following statements about product design for service is true? Customer satisfaction is not well correlated to ongoing maintenance-related issues. It increases the total cost of ownership. It may compete with the design goal of minimizing development costs. Replacement parts can be a significant source of expense.

It may compete with the design goal of minimizing development costs. Design for service may compete with other design goals such as minimizing development costs or aesthetics.

A French organization that is working with an Italian organization should be mindful of the differences between which of the following when performing supplier relationship management (SRM)? Virtual organization models Legal systems Currency fluctuations Incompatible versions of the same SaaS (software as a service) SRM system

Legal systems Even in the European Union, whose member-states have harmonized their legal systems to some degree, an organization must be mindful of differences. Different countries may have different expectations and legal remedies for contracts. Legal counsel is needed to navigate these laws.

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? Holding costs Lost sale costs Item costs Ordering costs

Lost sale costs The cost of backorders, lost sales, and lost customers are costs related to customer service. These costs can be difficult to quantify financially.

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 Weekly production schedules Debt versus equity levels Product features

Marketing plans The monthly S&OP meeting deals with aggregate-level information about product families and output. The S&OP executive committee compares the demand plan to the business plan to see if actions need to be taken to bring them in line with each other (e.g., additional marketing activities).

Which of the following is an input to rough-cut capacity planning (RCCP)? Aggregate output per product family Master production schedule Material requirements planning Weekly output per component

Master production schedule RCCP determines if resources are available (or can be made available) in the network to achieve the goals in master scheduling.

What supplier performance rating systems source indicates if a supplier-caused discrepancy is found after a part is shipped to stores or has been installed in an assembly? Number of floor failure events Time line performance Levels of conditionally accepted materials Conformation rates

Number of floor failure events The number of floor failure events indicates if a supplier-caused discrepancy is found after a part is shipped to stores or has been installed in an assembly. If this occurs, the organization needs to adjust the performance index accordingly.

What should a project manager do if a project near completion is indefinitely postponed? Officially close the project and release the team. Have the team finish their current tasks and turn in interim deliverables. Have team members finish the project and hold deliverables until requested. Assign other duties to the project team until more information is known.

Officially close the project and release the team. Projects should be formally closed even if they are terminated early or are indefinitely postponed. Releasing the team will stop project expenditures and allow team members to do other operational or project work.

Which of the following statements about a customer data warehouse (CDW) is correct? CDWs are primarily used as measurement tools. Customers are encouraged to access and update their profiles for accuracy. CDWs are maintained as separate entities from a company's customer databases. One-to-one marketing cannot be achieved without using a CDW.

One-to-one marketing cannot be achieved without using a CDW. Because it allows a high degree of customization, one-to-one marketing programs cannot be implemented without using a CDW. CDWs are used for a variety of purposes, including segmentation, implementing different offers to customers, analyzing buying behaviors to detect preferences, and supporting strategic decisions, such as the allocation of human resources. They are usually used in conjunction with information from a company's other databases.

Repeated transactions are funneled through an account manager and regulated through medium-term contracts. This best exemplifies which of the following types of business relationships? Collaborations/strategic alliance Ongoing relationship Buy on the market Mergers and acquisitions

Ongoing relationship An ongoing relationship involves repeated transactions, perhaps regulated through medium-term contracts. Communication is funneled through an account manager, who adjusts in all interactions to the customer's culture and way of doing business.

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 SWOT analysis Operations research Balanced scorecard

Operations research 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 of the following companies is most likely to be interested in supplier relationship management (SRM)? Company that produces video games Paint manufacturer that purchases chemicals and dyes from various suppliers Company that performs market research for political candidates Credit card company

Paint manufacturer that purchases chemicals and dyes from various suppliers Companies whose ability to meet customer demands rests on their control over the supply side of the supply chain model will be most interested in SRM. The other companies are primarily concerned with understanding and responding to customer needs and expectations.

Which is a best practice for a person fulfilling a project manager role? Project managers take on as many detailed project tasks as they have the expertise for. Project managers show a can-do attitude and assume that the team can handle project changes. Project managers use project meetings primarily to ask each team member for the percentage of the project that is complete. Project managers admit to mistakes and see them as learning opportunities.

Project managers admit to mistakes and see them as learning opportunities. Project managers improve in this role by admitting to their mistakes and learning from them. They treat controlling and directing work as a full-time job. Project managers who take on project tasks are at risk of failing to manage the project as a whole and track its many components. Project managers collect information like percentage complete or better project data outside of meetings and reserve meetings for substantive issues and risks. They take a realistic perspective on the consequences of change, so they do not commit to an impossible schedule or budget.

Software calculates the lowest total cost of ownership (TCO) for an organization. The supply plan cannot fully address all service, capacity, and quality goals defined in the corporate strategy. What is the first step the supply chain manager should take to win supply plan approval? Redo the analysis using landed cost instead of TCO. Provide several differentiated yet cost-efficient options. Adjust the plan to meet the corporate strategy despite the higher costs. Implement the supply plan as it stands, minimizing differences.

Provide several differentiated yet cost-efficient options. Differences between a supply plan and the corporate strategy must be resolved during plan validation and refinement. If the supply plan cannot simultaneously meet all customer service, production capacity, and product quality goals, the best first step is to present decision makers with several supply plan options that are sufficiently differentiated by various priorities while minimizing costs to the greatest extent possible. If none of these plans is approved, the supply chain manager could make a case to change the corporate strategy if it is not feasible or profitable.

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? Hour-by-hour forecasts Qualitative forecasts Time series forecasts Random variation

Qualitative forecasts Bias is defined in the APICS Dictionary as follows: "A consistent deviation from the mean in one direction (high or low). A normal property of a good forecast is that it is not biased." Combination methods combine quantitative methods with qualitative methods. Forecasters usually start by generating a quantitative forecast (perhaps combining intrinsic and extrinsic forecasting techniques) and then allow for adjustments to the forecast using qualitative methods. This process often reduces bias, but overly optimistic forecast modifications from an effect such as groupthink could increase bias.

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 Rebate coupons Vision systems Bar codes

RFID The ski resort can use mounted or handheld RFID readers at ski lifts to detect whether each skier has a valid RFID lift ticket card. The pass can be reused, and returning skiers can be detected and offered a discount without having to provide their personal information again or get a new card.

Considering the types of cargo typically carried over long distances by inland water carriers and the rates per ton-mile, which of the following modes of transportation is the barge's closest competitor? Motor carrier Rail Pipeline Piggyback

Rail Railroad and barges both specialize in carrying very heavy, dense, low-value cargo over long distances. A rail line laid along a waterway would make a potent rival for the water carrier.

Which of the following can be used to immediately improve an organization's inventory accuracy even if it doesn't reduce lead times? Increasing cost of goods sold Reducing days of payables outstanding Real-time point-of-sale data updates in the enterprise resources planning (ERP) system Sharing data among trading partners on a virtual network

Real-time point-of-sale data updates in the enterprise resources planning (ERP) system The APICS Dictionary, 15th edition, defines the point-of-sale (POS) as "the relief of inventory and computation of sales data at the time and place of sale, generally through the use of bar coding or magnetic media and equipment." Transferring information from the POS to the organization's information systems in real time allows the organization to deduct inventory from the books immediately at the time of sale.

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. Perform the final assembly at the plant rather than the DCs. Train the DC employees to install the valve correctly. Postpone the final assembly until after the product is at the DCs.

Redesign the product so the valve can be installed only one way. While training the employees may reduce the number of errors, in a fast-paced assembly environment, errors will be inevitable, so the only lasting solution is to make assembly foolproof.

Which of the following is a process in which marketing must stay most involved to prevent an issue from transforming a product from an order qualifier or winner into an order loser? Reducing manufacturing cycle times Increasing distribution centers Reducing capacity to match load Increasing raw material quality

Reducing manufacturing cycle times Reducing cycle times, squeezing out unnecessary inventory, paring down the number of partners, practicing lean manufacturing, and focusing relentlessly on quality may result in a swifter, more agile supply chain, but that can come at the expense of the end customer if marketing isn't there to keep a close eye on the final product and associated services.

Which is a primary goal for reverse logistics for most organizations? Increasing the number of facilities that process reverse logistics transactions Consistently operating as a profit center Reducing the volume of reverse logistics transactions Eliminating the need for a reverse supply chain

Reducing the volume of reverse logistics transactions A primary purpose of reverse logistics for many organizations is to mitigate loss from returned items. A return is a reduction in sales revenue. One way to mitigate loss from returns is to reduce their number.

Which of the following statements about supplier relationship management (SRM) technology is true? SRM technology is often too costly for many businesses to implement. SRM technology should be used to automate the sourcing process itself. SRM technology can increase the visibility of the entire supply chain. The internet has greatly increased the complexity of SRM technology.

SRM technology can increase the visibility of the entire supply chain. SRM technology has made it easier to see what is happening at each point of the supply chain in real time. It can streamline many strategic sourcing tasks, but it should not substitute for the judgment required to select sources. The internet has helped connect the supply chain and simplify communication in SRM systems and the performance of SRM tasks. New SRM technology is increasingly modular and compatible with existing applications and is therefore financially feasible in some form for most companies.

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 spend all time on selling and marketing does all planning/forecasting. Sales staff are required to make brief demand planning inputs each day noting changes. Sales staff spend the first week of each month on detailed planning/forecasting. Sales staff are required to spend part of each day expediting critical sales orders.

Sales staff are required to make brief demand planning inputs each day noting changes. While little or no planning creates an atmosphere of continual emergency (e.g., salespersons who spend too much time trying to expedite orders), a planning process that produces too much information, takes too long to prepare, or asks persons to provide information that they have little chance of knowing accurately can lead to low morale, reduced productivity, and failure to participate in planning. Salespersons should be required to provide some input to demand plans to make them more accurate, but this shouldn't require too much of their time.

Which of the following is true of a situation in which an organization has long lead times when matching customer orders to supply? If customers demand unrealistic delivery dates, salespersons should find ways to meet these demands. The organization can fail at meeting promised delivery requests but still increase customer loyalty using other means. Salespersons should work to educate customers on lead time issues to set expectations. Expediting orders can be a significant source of net profit for the organization.

Salespersons should work to educate customers on lead time issues to set expectations. Matching customer orders is a basic requirement for customer satisfaction, loyalty, and development of lifetime customers. All other means of relationship building can be ruined if a supply failure occurs. Salespersons have been known to go to great lengths to retain customers when supply failures occur, including making unrealistic promises that place undue stress and risk on production. These methods are often highly unprofitable. Supply chain managers can seek cooperation from sales to avoid such situations, for example, by having salespersons communicate with customers to ensure that they understand the product's lead time (and any efforts under way to improve lead times).

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 Sensitivity to demands of the final customer Enhanced communication up the chain Enhanced visibility of future demand all along the chain

Sensitivity to demands of the final customer 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.

According to the Supply Chain Council (SCC) guidelines, which of the following has the most complete risk definition? Skilled labor shortages of up to 10% at a Mexico plant for the first two quarters of the year Unreliable electricity supply at a plant in India to be mitigated by backup generators Supply shortages of up to 10% of requested rubber from Rubber Company with a root cause of drought in Brazil Taxation increases of up to 3% in funds transfers between Japan and the U.S.

Skilled labor shortages of up to 10% at a Mexico plant for the first two quarters of the year The scope of each risk must be well understood before determining what would be an appropriate response. The SCC notes that each identified risk must also have a time dimension or a specific time horizon (e.g., day, month, year) and a specific perspective or view that defines the scope of the risk (e.g., boundaries, what's not included).

Which of the following statements about implementing customer relationship management (CRM) technology is correct? If technology is optimal, job responsibilities may remain static in the new system. Implementation teams should represent technological areas only. Detailed architecture design at an early stage may lead to an inflexible system that is difficult to change. Systems should be measured against whether they increase efficiency and meet customer expectations.

Systems should be measured against whether they increase efficiency and meet customer expectations. Good CRM technology is easy to use and meets customer expectations. Successful implementation of CRM rests on a clear, well-thought-out architecture. Rather than inhibiting change, good design enhances integration and lessens the chances of conflicts as the system evolves. Since it may involve redefining jobs, implementation teams should be cross-functional.

Which of these companies is practicing good risk management in terms of its suppliers? The company requires in its contracts that all suppliers use a defined third-party transportation provider for all shipments. The company develops detailed plans to shift work orders among several certified global suppliers in the event of labor disruptions in their countries. The company sources a key raw material from one supplier who reliably provides the lowest price. The company relies on the selection process as its means of risk management.

The company develops detailed plans to shift work orders among several certified global suppliers in the event of labor disruptions in their countries. Single sourcing of a key material or component is not a good example of risk management, even if the supplier is the lowest-cost provider. Good risk management may involve additional costs incurred through maintaining redundancy in the supply chain and requiring additional supplier performance or assumption of risk.

What benefits could be achieved by moving all procurement activities to one country with a tax advantage while locating the headquarters in a different country with its own unique tax advantages? Employee taxes can be based on headquarters tax law and direct materials taxes on the procurement center's regional tax law. The tax savings for each function magnify the economies of scale. The value-added tax for all items and their subcomponents uses the reduced rate. The tax advantages of the more favorable region can be leveraged each tax season.

The tax savings for each function magnify the economies of scale. When rethinking procurement strategy, multinational corporations may decide to set up a central, global procurement and sourcing center. In this way, the supply chain benefits from various efficiencies created by consolidation of staff and equipment. If, in addition, the company locates the global facility in a low-tax region, the tax savings will magnify the savings from efficiencies of scale. This works because tax authorities generally levy taxes on separate streams of corporate income depending upon where they are earned.

What level of communication would be expected in a successful small business still run with paper versions of the general ledger and with purchase orders once a month by telephone and is asked by its most important customer to accept EDI orders? Backward integration Linked competitive vision and strategic alliance Shared processes and partnership Transactional with information sharing

Transactional with information sharing The small business is just starting to build teh relationship with the customer. Currently it is nothing more than purely transactional.

A response to the risk of poor quality from a supplier that involves specifying measurable quality levels in the contract and requiring the supplier to pay for the transportation of returns and replacements is an example of which of the following? Mitigating risk Transferring risk Avoiding risk Accepting risk

Transferring risk Organizations can move the resource or financial effects of a risk to a third-party organization, in this case, to the supplier. Contractually transferring risk to an outsourcing partner is one method of risk transfer.

Process benchmarking does which of the following? Requires a reworking of the process steps in order to reduce the number Uses measurable aspects of process performance like cycle time duration Uses a checklist of qualitative features from world-class organizations Compares the process chart shapes and unique decision points across industries

Uses a checklist of qualitative features from world-class organizations Process benchmarking improves a process by comparing it against a checklist of world-class process descriptions. Rather than focusing on measurable aspects of process performance such as duration of cycle time, a process checklist draws attention to the features of the process, to its qualitative aspects. The Oliver Wight group of business excellence consultants provides such a checklist for use in all industries.

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's good for the nucleus firm What's good for one's own firm What's good for extended supply chain partners

What's good for the final customer When it comes to supply chains, it's what's good for the final customer that counts, not what's good for the nucleus company or even what seems to be good for the supply chain itself. Supply chain management ought to be all about giving the final customer the right product at the right time and place for the right price.

To win back customers after they have discontinued service, when should the initial communication be made? Within 1 week Within 2 weeks Within 1 month Within 3 months

Within 1 week Rapid communication, within the first week of a customer discontinuing service, is essential in securing win-back customers.

Stockpiling is a warehouse function used for: paper towels and bathroom tissue products. flour, vegetable oil, and boxed table salt. clothing, lawn furniture, and agricultural products. fresh eggs, yogurt, and fermented cheeses.

clothing, lawn furniture, and agricultural products. Stockpiling is used with seasonal inventory such as clothing, lawn furniture, or agricultural products. This inventory arrives at the warehouse in larger amounts in anticipation of the heavy demand to come.

If an organization outsources all of its production activities but continues to perform warehousing and distribution, then the inventory management role should: consist of managing inventory at distribution centers and retail locations. not be necessary at this organization. be decentralized so the organization can retain control over inventory levels. collaborate with external inventory management at each level of production planning.

collaborate with external inventory management at each level of production planning. The inventory management role should plan and control inventory at each stage of development, from raw materials to customer handoff. Therefore, this role can benefit strongly from supply chain collaboration. Inventory management is also integrally connected to production management. Inventory feeds into production and/or is a result of production, so the two areas require coordination at each level of production planning refinement.

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: supplier measurement. internet-enabled sourcing. compliance management. strategic sourcing.

compliance management. Compliance management is emerging as a discipline equal in importance to strategic sourcing. It includes monitoring and measuring compliance and identifying off-contract purchases to uncover lost savings opportunities.

Supply chain efficiency can be risky if a firm: has excess capacity that is being used by another partner in the chain. has eliminated stock buffers and relies on Just-in-Time (JIT) delivery. operates with high visibility. has good quality products.

has eliminated stock buffers and relies on Just-in-Time (JIT) delivery. Supply chain efficiency can be a strength as well as a serious liability if a firm loses its flexibility from having removed all the buffer from inventories and having pared process times down to the JIT delivery velocity. A supply chain that has become so fast and so lean may just keep right on running in a given direction until it starves to death for lack of a market. This was nearly the fate of Cisco Systems in the early 21st century.

The goal of the relationship diagram used in continuous improvement is to identify the major cause of an issue as well as pinpoint the most interrelated one. illustrate how the dependent variable changes in response to the independent one. show how people, departments, or teams interact. diagram how supply chain entities will interact with suppliers.

identify the major cause of an issue as well as pinpoint the most interrelated one. The goal of the relationship diagram used in continuous improvement is to identify the major cause of an issue as well as pinpoint the most interrelated one.

When communicating requirements and priorities for managing supply from internal resources, a best practice is to: provide as much information as possible to each stakeholder. have key performance indicators be identical to ISO communications standards. learn key engineering terminology for use in discussions with engineers. communicate comprehensive production plan details in person.

learn key engineering terminology for use in discussions with engineers. Targeting communications requires understanding what will motivate the listener best and using terminology that the listener will understand and appreciate (e.g., business terms for executives, technical terms for engineers). Targeting communications also means not overloading persons with too much information, setting organization-specific key performance indicators, and allowing production plan details to be automatically communicated (reserving personal discussions for exceptions or special situations).

A company invites key business customers to participate in the performance evaluations of its account managers. This is an example of: collaborative management practices. extrinsic data information gathering. measuring customer satisfaction. supply chain integration.

measuring customer satisfaction. Measurement of customer satisfaction is a key element of customer relationship management (CRM). Business-to-business (B2B) companies may measure the customer-driven effectiveness of their account managers by inviting the business customers' managers to participate in their performance evaluations.

If an organization and its major supply chain partners each implement ISO 31000 and ISO Guide 73:2009 related to risk management, they should be able to: transfer the risk to production schedules for core competency activities that define part of the total end-to-end lead time for the process. mitigate the risk of miscommunications with external partners due to risk terminology differences. transfer the risk of internal control failures related to external financial reporting. mitigate the risk of government appropriation of a plant in a country in which the organization chooses to do business.

mitigate the risk of miscommunications with external partners due to risk terminology differences. ISO Guide 73:2009, Risk Management Vocabulary, should allow various organizations to discuss risk using a common understanding of risk management terms and definitions.

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: regionalization. reverse innovation. globalization. sustainability.

reverse innovation. 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.