SCM 300 Exam 3 Davilla Exam Questions with Correct Answers
(Grade A+)
Question 1: Competitive priorities
Answer: 1. cost 2. quality 3. speed/time 4. flexibility
Question 2: Value
Answer: what i get/price
Question 3: Productivity
Answer: what i make/cost
Question 4: SCM key components
Answer: 1. Procurement 2. Operations 3. Logistics
Question 5: Procurement
Answer: Buy it: process of obtaining services, supplies, and equipment in conformance with corporate
regulations
Question 6: Operations
Answer: Make it: makes business processes effective and efficient. They help the organization create high
quality products/ services using the fewest resources
Question 7: Logistics
Answer: Move it: developing the transportation itinerary and finding reliable transportation and storage
partners, to be able to navigate the flow of materials to the final destination
Question 8: Reverse logistics
Answer: reuse of production and materials
Question 9: 1st tier suppliers
Answer: a company's direct supplier. A firm that directly provides goods and/ or services to a company
Page 1
,Question 10: 2nd tier suppliers
Answer: a firm provides goods and/ or services to a company's first-tier supplier
Question 11: Downstream
Answer: direction in which products flow towards an end consumer. Direction is the right. Storage and
consolidation/sorting picking and packing, labeling
Question 12: Upstream
Answer: direction from customers to suppliers. Direction is the left central return center AKA reverse
logistics activities
Question 13: Safety stock
Answer: protects against uncertainty in demand, lead time, supply not intended to be used. cushion,
insurance, etc
Question 14: Pipeline inventory
Answer: Orders that have been placed but not yet received nor paid for by customer Inventory "on its way"
to the customer
Question 15: Vertical integration
Answer: company taking on additional supply classes (Forward and backward)
Question 16: Order less
Answer: if holding cost too high
Question 17: Order more
Answer: If holding cost too low
Question 18: Low inventory pros
Answer: less storage space required (lowering holding cost), lower chance of inv shrinkage, less materials
handling, less money invested in inventory *Cons for High Inventory
Page 2
, Question 19: High inventory pros
Answer: higher levels of customer service (having inventory addresses immediate demand), quantity
discounts possible, fewer orders will be placed, greater security against unexpected demand variability
*Cons for Low Inventory
Question 20: order cost < Carrying cost
Answer: when to use eoq
Question 21: Supplier considerations
Answer: consumer needs, cost quality speed & flex, technological capability, location, information
technology system, ability to innovate, capacity potential, 2nd & 3rd tier suppliers, reliability, and service
Question 22: holding cost = ordering cost
Answer: EOQ formula
Question 23: Bottleneck
Answer: slowest or weakest workstation in assembly line
Question 24: Line flow strategy
Answer: -make items fast and make it over and over. everything goes down a line Demand: Standard Items,
High Volumes, Static Industry Layout: Product Focused/Line Flow Layouts Manufacturing system:
Assembly Lines, Continuous Flow Systems Make-to-stock systems
Question 25: Flexible flow strategy
Answer: every item made is different, work can go in any direction Demand: Customized Items, Low
Volumes, Dynamic Industry Layout: Process Focused/Flexible Flow Layouts Manufacturing system: Job
Shops Make-to-order systems
Question 26: Hybrid strategy
Answer: every item is the same but one aspect is different (ie car color) Demand: Moderation
(Customization, Changes, Industry) Layout: Hybrid Layouts Manufacturing system: Group Technology
(Cellular) Layout Possibly an Assemble-to-order system
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(Grade A+)
Question 1: Competitive priorities
Answer: 1. cost 2. quality 3. speed/time 4. flexibility
Question 2: Value
Answer: what i get/price
Question 3: Productivity
Answer: what i make/cost
Question 4: SCM key components
Answer: 1. Procurement 2. Operations 3. Logistics
Question 5: Procurement
Answer: Buy it: process of obtaining services, supplies, and equipment in conformance with corporate
regulations
Question 6: Operations
Answer: Make it: makes business processes effective and efficient. They help the organization create high
quality products/ services using the fewest resources
Question 7: Logistics
Answer: Move it: developing the transportation itinerary and finding reliable transportation and storage
partners, to be able to navigate the flow of materials to the final destination
Question 8: Reverse logistics
Answer: reuse of production and materials
Question 9: 1st tier suppliers
Answer: a company's direct supplier. A firm that directly provides goods and/ or services to a company
Page 1
,Question 10: 2nd tier suppliers
Answer: a firm provides goods and/ or services to a company's first-tier supplier
Question 11: Downstream
Answer: direction in which products flow towards an end consumer. Direction is the right. Storage and
consolidation/sorting picking and packing, labeling
Question 12: Upstream
Answer: direction from customers to suppliers. Direction is the left central return center AKA reverse
logistics activities
Question 13: Safety stock
Answer: protects against uncertainty in demand, lead time, supply not intended to be used. cushion,
insurance, etc
Question 14: Pipeline inventory
Answer: Orders that have been placed but not yet received nor paid for by customer Inventory "on its way"
to the customer
Question 15: Vertical integration
Answer: company taking on additional supply classes (Forward and backward)
Question 16: Order less
Answer: if holding cost too high
Question 17: Order more
Answer: If holding cost too low
Question 18: Low inventory pros
Answer: less storage space required (lowering holding cost), lower chance of inv shrinkage, less materials
handling, less money invested in inventory *Cons for High Inventory
Page 2
, Question 19: High inventory pros
Answer: higher levels of customer service (having inventory addresses immediate demand), quantity
discounts possible, fewer orders will be placed, greater security against unexpected demand variability
*Cons for Low Inventory
Question 20: order cost < Carrying cost
Answer: when to use eoq
Question 21: Supplier considerations
Answer: consumer needs, cost quality speed & flex, technological capability, location, information
technology system, ability to innovate, capacity potential, 2nd & 3rd tier suppliers, reliability, and service
Question 22: holding cost = ordering cost
Answer: EOQ formula
Question 23: Bottleneck
Answer: slowest or weakest workstation in assembly line
Question 24: Line flow strategy
Answer: -make items fast and make it over and over. everything goes down a line Demand: Standard Items,
High Volumes, Static Industry Layout: Product Focused/Line Flow Layouts Manufacturing system:
Assembly Lines, Continuous Flow Systems Make-to-stock systems
Question 25: Flexible flow strategy
Answer: every item made is different, work can go in any direction Demand: Customized Items, Low
Volumes, Dynamic Industry Layout: Process Focused/Flexible Flow Layouts Manufacturing system: Job
Shops Make-to-order systems
Question 26: Hybrid strategy
Answer: every item is the same but one aspect is different (ie car color) Demand: Moderation
(Customization, Changes, Industry) Layout: Hybrid Layouts Manufacturing system: Group Technology
(Cellular) Layout Possibly an Assemble-to-order system
Page 3
