SCM300 Global Supply Operations Final Exam
Questions & Answers | Grade A | 100% Correct
1. What is the term used to describe the phenomenon where demand
fluctuations increase as one moves further up the supply chain from the
consumer?
A. The Bullwhip Effect
B. The Butterfly Effect
C. The Snowball Effect
D. Demand Variability Syndrome
Answer: A
Explanation: The Bullwhip Effect refers to the distortion of demand signals as they move
from the retailer to the manufacturer/supplier.
2. In the context of inventory management, what does EOQ stand for?
A. Every Order Quality
B. Economic Order Quantity
C. Estimated Order Quota
D. Electronic Order Queue
Answer: B
Explanation: Economic Order Quantity is the ideal order size a company should purchase
to minimize its total inventory costs.
,3. Which logistics mode is generally considered the most expensive per unit
weight but the fastest?
A. Rail
B. Water
C. Trucking
D. Air
Answer: D
Explanation: Air transportation offers the highest speed and reliability for high-value
items but comes at the highest cost.
4. What is the primary goal of Lean Manufacturing?
A. Eliminating waste
B. Increasing inventory levels
C. Maximizing batch sizes
D. Reducing labor wages
Answer: A
Explanation: Lean focuses on the systematic elimination of waste (muda) within a
manufacturing process.
5. Which of the following is a key characteristic of a 3PL?
A. It is a company that only manufactures goods
B. It is a regulatory body for international trade
C. It provides outsourced logistics services to companies
D. It stands for ‘Third Party Labor’ for internal factory work
Answer: C
Explanation: A Third-Party Logistics (3PL) provider offers services such as transportation,
warehousing, and distribution.
, 6. Total Cost of Ownership (TCO) includes which of the following?
A. Only the purchase price of the item
B. Only the labor costs required to build the product
C. The retail price minus taxes
D. Purchase price, shipping, maintenance, and disposal costs
Answer: D
Explanation: TCO considers all costs associated with the acquisition, use, and disposal of a
product over its entire life cycle.
7. What does the ‘Triple Bottom Line’ in sustainable supply chain management
refer to?
A. Profit, People, Planet
B. Price, Product, Promotion
C. Planning, Procurement, Production
D. Assets, Liabilities, Equity
Answer: A
Explanation: The Triple Bottom Line measures success based on economic (Profit), social
(People), and environmental (Planet) performance.
8. Which inventory strategy involves having suppliers manage the inventory
levels at the customer’s location?
A. Just-In-Time (JIT)
B. Cross-docking
C. Safety Stocking
D. Vendor Managed Inventory (VMI)
Answer: D
Explanation: VMI is a collaborative strategy where the supplier is responsible for
maintaining the buyer’s inventory levels.
Questions & Answers | Grade A | 100% Correct
1. What is the term used to describe the phenomenon where demand
fluctuations increase as one moves further up the supply chain from the
consumer?
A. The Bullwhip Effect
B. The Butterfly Effect
C. The Snowball Effect
D. Demand Variability Syndrome
Answer: A
Explanation: The Bullwhip Effect refers to the distortion of demand signals as they move
from the retailer to the manufacturer/supplier.
2. In the context of inventory management, what does EOQ stand for?
A. Every Order Quality
B. Economic Order Quantity
C. Estimated Order Quota
D. Electronic Order Queue
Answer: B
Explanation: Economic Order Quantity is the ideal order size a company should purchase
to minimize its total inventory costs.
,3. Which logistics mode is generally considered the most expensive per unit
weight but the fastest?
A. Rail
B. Water
C. Trucking
D. Air
Answer: D
Explanation: Air transportation offers the highest speed and reliability for high-value
items but comes at the highest cost.
4. What is the primary goal of Lean Manufacturing?
A. Eliminating waste
B. Increasing inventory levels
C. Maximizing batch sizes
D. Reducing labor wages
Answer: A
Explanation: Lean focuses on the systematic elimination of waste (muda) within a
manufacturing process.
5. Which of the following is a key characteristic of a 3PL?
A. It is a company that only manufactures goods
B. It is a regulatory body for international trade
C. It provides outsourced logistics services to companies
D. It stands for ‘Third Party Labor’ for internal factory work
Answer: C
Explanation: A Third-Party Logistics (3PL) provider offers services such as transportation,
warehousing, and distribution.
, 6. Total Cost of Ownership (TCO) includes which of the following?
A. Only the purchase price of the item
B. Only the labor costs required to build the product
C. The retail price minus taxes
D. Purchase price, shipping, maintenance, and disposal costs
Answer: D
Explanation: TCO considers all costs associated with the acquisition, use, and disposal of a
product over its entire life cycle.
7. What does the ‘Triple Bottom Line’ in sustainable supply chain management
refer to?
A. Profit, People, Planet
B. Price, Product, Promotion
C. Planning, Procurement, Production
D. Assets, Liabilities, Equity
Answer: A
Explanation: The Triple Bottom Line measures success based on economic (Profit), social
(People), and environmental (Planet) performance.
8. Which inventory strategy involves having suppliers manage the inventory
levels at the customer’s location?
A. Just-In-Time (JIT)
B. Cross-docking
C. Safety Stocking
D. Vendor Managed Inventory (VMI)
Answer: D
Explanation: VMI is a collaborative strategy where the supplier is responsible for
maintaining the buyer’s inventory levels.
