BUAD 331 Final Exam UTK Questions With
Complete Solutions
Course
BUAD 331
1. Question:
What is the primary goal of supply chain management?
A. Reduce headcount across departments
B. Maximize marketing visibility
C. Deliver value to customers efficiently and cost-effectively
D. Minimize supplier relationships
✅ Answer: C. Deliver value to customers efficiently and cost-effectively
Explanation: SCM focuses on delivering the right product, in the right quantity, at the right
time, at minimal cost.
2. Question:
Which inventory model is best used for high-value, low-demand items?
A. Continuous review
B. Periodic review
C. ABC classification
D. Just-in-Time (JIT)
✅ Answer: C. ABC classification
Explanation: ABC analysis prioritizes inventory control. High-value, low-volume items fall into
category "A" and require close monitoring.
3. Question:
A company that manufactures and sells its own brand of shoes through its own retail stores is an
example of what kind of distribution strategy?
A. Indirect distribution
B. Multichannel distribution
C. Vertical integration
D. Outsourced logistics
✅ Answer: C. Vertical integration
Explanation: The company controls both production and retail (downstream), characteristic of
vertical integration.
,4. Question:
Which incoterm places the greatest responsibility on the buyer?
A. Delivered Duty Paid (DDP)
B. Free Carrier (FCA)
C. Ex Works (EXW)
D. Cost, Insurance, Freight (CIF)
✅ Answer: C. Ex Works (EXW)
Explanation: EXW requires the buyer to handle all transportation, export, and import processes.
5. Question:
The “bullwhip effect” in supply chains is primarily caused by:
A. Bulk discounts at the retail level
B. Uncoordinated information flow between supply chain partners
C. Excessive use of lean manufacturing
D. Consignment inventory practices
✅ Answer: B. Uncoordinated information flow between supply chain partners
Explanation: Bullwhip effect refers to increasing order variability upstream due to poor demand
signal transmission.
6. Question:
If a retailer’s reorder point (ROP) is 150 units, and their average daily demand is 30 units, what
is the lead time?
A. 3 days
B. 4 days
C. 5 days
D. Cannot be determined
✅ Answer: C. 5 days
Explanation: ROP = Demand × Lead time → 150 = 30 × LT → LT = 5 days.
7. Question:
Which of the following is a key advantage of cross-docking in distribution centers?
, A. Reduces need for barcoding
B. Eliminates last-mile delivery
C. Minimizes inventory holding costs
D. Improves lead time for production
✅ Answer: C. Minimizes inventory holding costs
Explanation: Cross-docking bypasses storage, immediately transferring inbound to outbound
shipments.
8. Question:
Which performance metric best evaluates supply chain responsiveness?
A. Inventory turnover
B. Fill rate
C. Cash-to-cash cycle
D. Order-to-delivery lead time
✅ Answer: D. Order-to-delivery lead time
Explanation: Responsiveness is measured by how quickly a company can fulfill customer
demand.
9. Question:
What role does procurement play in achieving sustainability in the supply chain?
A. Focuses on supplier diversity only
B. Chooses the lowest-cost supplier regardless of impact
C. Ensures ethical sourcing and environmental standards
D. Avoids third-party audits
✅ Answer: C. Ensures ethical sourcing and environmental standards
Explanation: Sustainable procurement aligns purchasing with environmental, social, and
governance (ESG) criteria.
10. Question:
Which digital tool is most commonly used for real-time tracking in logistics?
A. ERP system
B. Blockchain
C. RFID
D. CRM system
Complete Solutions
Course
BUAD 331
1. Question:
What is the primary goal of supply chain management?
A. Reduce headcount across departments
B. Maximize marketing visibility
C. Deliver value to customers efficiently and cost-effectively
D. Minimize supplier relationships
✅ Answer: C. Deliver value to customers efficiently and cost-effectively
Explanation: SCM focuses on delivering the right product, in the right quantity, at the right
time, at minimal cost.
2. Question:
Which inventory model is best used for high-value, low-demand items?
A. Continuous review
B. Periodic review
C. ABC classification
D. Just-in-Time (JIT)
✅ Answer: C. ABC classification
Explanation: ABC analysis prioritizes inventory control. High-value, low-volume items fall into
category "A" and require close monitoring.
3. Question:
A company that manufactures and sells its own brand of shoes through its own retail stores is an
example of what kind of distribution strategy?
A. Indirect distribution
B. Multichannel distribution
C. Vertical integration
D. Outsourced logistics
✅ Answer: C. Vertical integration
Explanation: The company controls both production and retail (downstream), characteristic of
vertical integration.
,4. Question:
Which incoterm places the greatest responsibility on the buyer?
A. Delivered Duty Paid (DDP)
B. Free Carrier (FCA)
C. Ex Works (EXW)
D. Cost, Insurance, Freight (CIF)
✅ Answer: C. Ex Works (EXW)
Explanation: EXW requires the buyer to handle all transportation, export, and import processes.
5. Question:
The “bullwhip effect” in supply chains is primarily caused by:
A. Bulk discounts at the retail level
B. Uncoordinated information flow between supply chain partners
C. Excessive use of lean manufacturing
D. Consignment inventory practices
✅ Answer: B. Uncoordinated information flow between supply chain partners
Explanation: Bullwhip effect refers to increasing order variability upstream due to poor demand
signal transmission.
6. Question:
If a retailer’s reorder point (ROP) is 150 units, and their average daily demand is 30 units, what
is the lead time?
A. 3 days
B. 4 days
C. 5 days
D. Cannot be determined
✅ Answer: C. 5 days
Explanation: ROP = Demand × Lead time → 150 = 30 × LT → LT = 5 days.
7. Question:
Which of the following is a key advantage of cross-docking in distribution centers?
, A. Reduces need for barcoding
B. Eliminates last-mile delivery
C. Minimizes inventory holding costs
D. Improves lead time for production
✅ Answer: C. Minimizes inventory holding costs
Explanation: Cross-docking bypasses storage, immediately transferring inbound to outbound
shipments.
8. Question:
Which performance metric best evaluates supply chain responsiveness?
A. Inventory turnover
B. Fill rate
C. Cash-to-cash cycle
D. Order-to-delivery lead time
✅ Answer: D. Order-to-delivery lead time
Explanation: Responsiveness is measured by how quickly a company can fulfill customer
demand.
9. Question:
What role does procurement play in achieving sustainability in the supply chain?
A. Focuses on supplier diversity only
B. Chooses the lowest-cost supplier regardless of impact
C. Ensures ethical sourcing and environmental standards
D. Avoids third-party audits
✅ Answer: C. Ensures ethical sourcing and environmental standards
Explanation: Sustainable procurement aligns purchasing with environmental, social, and
governance (ESG) criteria.
10. Question:
Which digital tool is most commonly used for real-time tracking in logistics?
A. ERP system
B. Blockchain
C. RFID
D. CRM system
