MGT 8803 SUPPLY CHAIN EXAMS SCRIPT 2026/2027
QUESTIONS AND SOLUTIONS RATED A+
✔✔Which conditions are more conducive to a Centralized supply chain? - ✔✔- Demand
is stable
- You need higher product availability
- Low distribution complexity
Explanation:
- If demand is predictable than there is no need to "respond"/ "decentralize" you can
simply forecast demand and build inventory models to create an efficient supply chain
and service your customers at an acceptable level
- If distribution is centralized there is a higher likelihood of any one product being
available because demand is not aggregated at a regional level.
- If complexity is low you don't need a tailored (decentralized) approach. Centralized
supply-chains are more suitable.
✔✔A centralized network configuration lends itself to which type of supply chain model?
- ✔✔Efficient
✔✔An decentralized network configuration lends itself to which type of supply chain
model? - ✔✔Responsive
✔✔Which of the following is an advantage of a Decentralized strategy compared to a
Centralized strategy? - ✔✔Shorter shipping distances
✔✔Outsourcing - ✔✔obtain (goods or a service) from an outside or foreign supplier,
especially in place of an internal source.; obtaining of any resource or process external
to the company.
✔✔Offshoring - ✔✔the relocation of business processes and services to a lower-cost
foreign location particularly white-collar, technical, professional, and clerical services;
obtaining of any resource or process external to the company and across the ocean.
✔✔Why would a company consider Outsourcing? - ✔✔- lack of capacity in house
- supplier has better technical capabilities
- to focus more on core capabilities
✔✔Why would a company want to Offshore? - ✔✔to be closer to offshore customers
offshore has better cost/price
offshore has better technical capability
faster response to offshore customers
✔✔Pitfalls of Offshoring - ✔✔- exchange rate volatility
, - effect on core competencies
- delivery lead times and reliability
- suppliers become future competitors
- often inaccurate "true" cost of offshore sourcing
- lack of control over suppliers' cost and quality
- supplier integrity
- inaccurate determination of overall product cost
- introduction of various risk elements in the supply chain
NOT pitfalls:
- You may lose the ability to do the task offshore (If the offshoring company becomes
really good at the task you may never be able to make the product in the same way they
do and they can become future competitors and overtake your market.)
- You may not get a good understanding on your overall product cost
✔✔Cost factor when considering offshoring that is not captive - ✔✔Export Taxes
Exchange rate exposure
damage in transit
ocean export costs
NOT Cost factor: Real estate costs (Real estate is not considered because when you
offshore to someone else, you have no real estate costs.)
✔✔A functional product is likely to have what? - ✔✔low inventory costs
Also:
- low demand uncertainty
- more predictable demand
- longer product life
- low inventory cost
- low profit margins
- low product variety and higher volume
- low stockout and obsolencence cost
✔✔Reasons for outsourcing - ✔✔cost advantage, insufficient capacity, lack of expertise,
quality
- decrease lead times
- reduce and control costs
- focus on core competencies
NOT to decrease flexibility and speed
✔✔Drivers of offshoring - ✔✔- political drivers
-technology drivers
- market drivers
QUESTIONS AND SOLUTIONS RATED A+
✔✔Which conditions are more conducive to a Centralized supply chain? - ✔✔- Demand
is stable
- You need higher product availability
- Low distribution complexity
Explanation:
- If demand is predictable than there is no need to "respond"/ "decentralize" you can
simply forecast demand and build inventory models to create an efficient supply chain
and service your customers at an acceptable level
- If distribution is centralized there is a higher likelihood of any one product being
available because demand is not aggregated at a regional level.
- If complexity is low you don't need a tailored (decentralized) approach. Centralized
supply-chains are more suitable.
✔✔A centralized network configuration lends itself to which type of supply chain model?
- ✔✔Efficient
✔✔An decentralized network configuration lends itself to which type of supply chain
model? - ✔✔Responsive
✔✔Which of the following is an advantage of a Decentralized strategy compared to a
Centralized strategy? - ✔✔Shorter shipping distances
✔✔Outsourcing - ✔✔obtain (goods or a service) from an outside or foreign supplier,
especially in place of an internal source.; obtaining of any resource or process external
to the company.
✔✔Offshoring - ✔✔the relocation of business processes and services to a lower-cost
foreign location particularly white-collar, technical, professional, and clerical services;
obtaining of any resource or process external to the company and across the ocean.
✔✔Why would a company consider Outsourcing? - ✔✔- lack of capacity in house
- supplier has better technical capabilities
- to focus more on core capabilities
✔✔Why would a company want to Offshore? - ✔✔to be closer to offshore customers
offshore has better cost/price
offshore has better technical capability
faster response to offshore customers
✔✔Pitfalls of Offshoring - ✔✔- exchange rate volatility
, - effect on core competencies
- delivery lead times and reliability
- suppliers become future competitors
- often inaccurate "true" cost of offshore sourcing
- lack of control over suppliers' cost and quality
- supplier integrity
- inaccurate determination of overall product cost
- introduction of various risk elements in the supply chain
NOT pitfalls:
- You may lose the ability to do the task offshore (If the offshoring company becomes
really good at the task you may never be able to make the product in the same way they
do and they can become future competitors and overtake your market.)
- You may not get a good understanding on your overall product cost
✔✔Cost factor when considering offshoring that is not captive - ✔✔Export Taxes
Exchange rate exposure
damage in transit
ocean export costs
NOT Cost factor: Real estate costs (Real estate is not considered because when you
offshore to someone else, you have no real estate costs.)
✔✔A functional product is likely to have what? - ✔✔low inventory costs
Also:
- low demand uncertainty
- more predictable demand
- longer product life
- low inventory cost
- low profit margins
- low product variety and higher volume
- low stockout and obsolencence cost
✔✔Reasons for outsourcing - ✔✔cost advantage, insufficient capacity, lack of expertise,
quality
- decrease lead times
- reduce and control costs
- focus on core competencies
NOT to decrease flexibility and speed
✔✔Drivers of offshoring - ✔✔- political drivers
-technology drivers
- market drivers
