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1. A company seeks to improve visibility across its supply chain to reduce
uncertainty and enhance decision-making. Which concept best supports
this objective?
A. Lean manufacturing
B. End-to-end supply chain integration
C. Economic order quantity
D. Safety stock optimization
Answer: End-to-end supply chain integration ✔
Rationale: End-to-end integration improves visibility across all supply chain
stages, enabling better coordination and decisions.
2. A firm experiences frequent stockouts despite maintaining high inventory
levels. What is the most likely root cause?
A. Excessive demand variability
B. Poor demand forecasting
C. Long transportation lead times
D. High service levels
Answer: Poor demand forecasting ✔
Rationale: Inaccurate forecasting leads to mismatched inventory placement
despite high total levels.
,3. Which supply chain strategy is most appropriate for products with highly
unpredictable demand and short life cycles?
A. Make-to-stock
B. Lean strategy
C. Agile strategy
D. Continuous replenishment
Answer: Agile strategy ✔
Rationale: Agile supply chains are designed for flexibility and
responsiveness to demand variability.
4. A company wants to minimize total logistics cost while maintaining service
levels. Which trade-off is most relevant?
A. Quality versus cost
B. Inventory versus transportation
C. Demand versus supply
D. Procurement versus production
Answer: Inventory versus transportation ✔
Rationale: Increasing inventory can reduce transportation frequency,
highlighting a key trade-off.
5. What is the primary purpose of Sales and Operations Planning (S&OP)?
A. Optimize production schedules
B. Align supply and demand plans
C. Minimize procurement costs
D. Increase warehouse capacity
Answer: Align supply and demand plans ✔
Rationale: S&OP integrates demand and supply planning to balance
resources.
6. A company implements vendor-managed inventory (VMI). What is the main
benefit?
A. Reduced supplier responsibility
B. Increased buyer control
C. Improved replenishment efficiency
, D. Higher inventory costs
Answer: Improved replenishment efficiency ✔
Rationale: VMI allows suppliers to manage inventory, improving efficiency
and service levels.
7. Which metric best measures supply chain responsiveness?
A. Inventory turnover
B. Order fulfillment cycle time
C. Return on assets
D. Gross margin
Answer: Order fulfillment cycle time ✔
Rationale: Cycle time directly reflects how quickly customer orders are
fulfilled.
8. A company wants to reduce the bullwhip effect. What action is most
effective?
A. Increase order batching
B. Share real-time demand information
C. Increase safety stock
D. Reduce supplier collaboration
Answer: Share real-time demand information ✔
Rationale: Information sharing reduces demand distortion across the supply
chain.
9. Which transportation mode is typically the fastest but most expensive?
A. Rail
B. Ocean
C. Air
D. Pipeline
Answer: Air ✔
Rationale: Air transport offers speed but at the highest cost.
10.A firm uses a centralized distribution network. What is a key advantage?
A. Lower transportation cost
, B. Higher inventory levels
C. Reduced safety stock
D. Increased delivery time
Answer: Reduced safety stock ✔
Rationale: Centralization reduces variability, lowering safety stock
requirements.
11.What is the primary objective of lean supply chain management?
A. Maximize responsiveness
B. Eliminate waste
C. Increase inventory
D. Improve flexibility
Answer: Eliminate waste ✔
Rationale: Lean principles focus on removing non-value-added activities.
12.A company faces long lead times from overseas suppliers. What strategy
can mitigate risk?
A. Increase batch size
B. Nearshoring
C. Reduce inventory
D. Single sourcing
Answer: Nearshoring ✔
Rationale: Nearshoring reduces lead times and risk exposure.
13.Which document authorizes payment to a supplier?
A. Purchase requisition
B. Purchase order
C. Invoice
D. Bill of lading
Answer: Invoice ✔
Rationale: An invoice is used to request and authorize payment.
14.What is a key benefit of cross-docking?
A. Increased storage costs