SCM Final Exam study notes already
solved 2026/2027
Competitive Priorities correct answerCost - Material costs, production costs (machine and labor),
Packaging, transportation, storage costs, Quality costs- (returns, warranties, repairs, rework, errors,
time), Customer service costs, other organization costs (marketing, finance, technology, waste disposal,
rent, insurance, legal, human resources).
Quality- Design quality (Toyota), Material & Production quality, Quality level delivered, Consistent
quality (McDonalds), Service quality (IPad).
Speed/Time- Delivery time, On-time delivery
Flexibility- Product or Customization Flexibility, Volume flexibility, Mass Customization (Both
Customization and Volume) For example Oreganos vs. Little Caesars.
Others: Design Flexibility, Materials/parts flexibility, facility flexibility, Tools/Machinery Flexibility,
employee flexibility, Service flexibility.
Red Robins vs. Mcdonalds
Productivity and Value correct answerProductivity- Organizational Perspective, What did I make
(Outputs)/What was the cost (Inputs)
Value- Customer perspective, What do I get? (Quantity, quality, size..)/what is the price? (Money,
waiting time, warranty...)
Ex: Two cans of corns, price might not be the deciding factor.
,Supply Chain correct answerSupply Chain Management is the Efficient Integration of suppliers,
transporters, manufacturers, warehouses, retailers, and all other parties associated with the delivery of
the final product.
Operations Management correct answerDesign, operation, and improvement of the productions
systems the efficiently transform INPUTS into Finished Goods & Services, maximizing productivity.
Examples of duties:
Process management, plant management, capacity planning, scheduling jobs/people, waiting line
management, process improvement projects.
Logistics correct answerIs the COORDINATED Planning and Execution of the following:
Preparation of Packaged Product
Movement Itinerary (Transport)
Storage Itinerary (Warehousing)
Product distribution throughout the Supply Chain
Examples of duties:
Distribution/Warehousing Infrastructure Mgmt.
Packaging, containerization, transportation, Management and communication
Procurement correct answerThe process of obtaining services, supplies, and equipment in conformance
with corporate regulations.
Examples of duties:
Supplier selection
Purchasing regulations
,Managing supplier relationships - Motivation, Development
Materials/Inventory Management
Upstream correct answerIn supply chain, the direction that points toward the suppliers. Is to the left.
Explained: In a company an executive that works in upstream supply chain management might be
responsible for: ensuring that empty boxes at the retail level are returned to the distributor for reuse,
developing relationships with a company's first tear suppliers in order to better communicate the needs
of the present and the future.
Downstream correct answerIn a supply chain, the direction that points toward the end customer. The
downstream direction is to the right.
In a company an executive that works in downstream supply chain management finds ways to get goods
and services closer to the customer in an effective and efficient manner.
Reverse Logistics correct answerThe management of products that flow backward in the supply chain,
away from the consumer and back in the direction of manufacturers. (The management of materials
moving upstream in the supply chain)
1st and 2nd tier suppliers correct answer1st tier- A company's direct suppliers. A firm that directly
provides goods and/or services to a company.
2nd tier- A firm that provides goods and/or services to a company's first tear supplier.
Safety Stock correct answer(buffer stock)
Inventory kept to account for variation/uncertainty of demand. (Example: 100 shovels are sold per week
Sunday to Saturday. Shipments arrive Sunday morning. Stores always wants to start Sunday with 125
units of inventory. The additional 25 units are safety stock.
, Pipeline Inventory correct answerInventory in transit between two points. Those two points establish
the pipeline. So the inventory does not necessarily need to be on a truck or train.
The pipeline should have enough inventory to account for the demand for the period of time it takes a
product to move from point A to point B-lead time. The required pipeline inventory is typically
calculated as:
=periodic demand * Lead time
Vertical Integration correct answerThe act of a company taking additional supply chain responsibilities
that were formerly done by outside parties. There are two classes of vertical integration:
Forward Integration: Taking over supply chain responsibilities formerly performed by downstream
supply chain partners.
Backward Integration: Taking over supply chain responsibilities formerly performed by upstream supply
chain partners.
Benefits of high and low inventory levels/purchases correct answerPros of high inventory levels- Higher
levels of customer service, quantity discounts may be possible, fewer orders will need to be placed,
greater security against unexpected demand variability.
Pros of Low inventory levels- Less storage space required, lower chance of inventory obsolescence and
shrinkage, less inventory typically means less materials handling requirements. Less money invested in
inventory means more money available for investment opportunities.
What is EOQ? correct answerEconomic Order Quantity- It's the lot size that will minimize total annual
inventory cost (TC); it is therefore seen as the optimal lot size. EOQ= Sqrt[(2DS)/H]
EOQ's relationship to holding costs and ordering costs? correct answerBasically, if a manager wanted to
minimize total inventory cost they could calculate EOQ and find the optimal order size. EOQ can also be
described as the lot size where annual holding costs is equal to annual ordering costs.
solved 2026/2027
Competitive Priorities correct answerCost - Material costs, production costs (machine and labor),
Packaging, transportation, storage costs, Quality costs- (returns, warranties, repairs, rework, errors,
time), Customer service costs, other organization costs (marketing, finance, technology, waste disposal,
rent, insurance, legal, human resources).
Quality- Design quality (Toyota), Material & Production quality, Quality level delivered, Consistent
quality (McDonalds), Service quality (IPad).
Speed/Time- Delivery time, On-time delivery
Flexibility- Product or Customization Flexibility, Volume flexibility, Mass Customization (Both
Customization and Volume) For example Oreganos vs. Little Caesars.
Others: Design Flexibility, Materials/parts flexibility, facility flexibility, Tools/Machinery Flexibility,
employee flexibility, Service flexibility.
Red Robins vs. Mcdonalds
Productivity and Value correct answerProductivity- Organizational Perspective, What did I make
(Outputs)/What was the cost (Inputs)
Value- Customer perspective, What do I get? (Quantity, quality, size..)/what is the price? (Money,
waiting time, warranty...)
Ex: Two cans of corns, price might not be the deciding factor.
,Supply Chain correct answerSupply Chain Management is the Efficient Integration of suppliers,
transporters, manufacturers, warehouses, retailers, and all other parties associated with the delivery of
the final product.
Operations Management correct answerDesign, operation, and improvement of the productions
systems the efficiently transform INPUTS into Finished Goods & Services, maximizing productivity.
Examples of duties:
Process management, plant management, capacity planning, scheduling jobs/people, waiting line
management, process improvement projects.
Logistics correct answerIs the COORDINATED Planning and Execution of the following:
Preparation of Packaged Product
Movement Itinerary (Transport)
Storage Itinerary (Warehousing)
Product distribution throughout the Supply Chain
Examples of duties:
Distribution/Warehousing Infrastructure Mgmt.
Packaging, containerization, transportation, Management and communication
Procurement correct answerThe process of obtaining services, supplies, and equipment in conformance
with corporate regulations.
Examples of duties:
Supplier selection
Purchasing regulations
,Managing supplier relationships - Motivation, Development
Materials/Inventory Management
Upstream correct answerIn supply chain, the direction that points toward the suppliers. Is to the left.
Explained: In a company an executive that works in upstream supply chain management might be
responsible for: ensuring that empty boxes at the retail level are returned to the distributor for reuse,
developing relationships with a company's first tear suppliers in order to better communicate the needs
of the present and the future.
Downstream correct answerIn a supply chain, the direction that points toward the end customer. The
downstream direction is to the right.
In a company an executive that works in downstream supply chain management finds ways to get goods
and services closer to the customer in an effective and efficient manner.
Reverse Logistics correct answerThe management of products that flow backward in the supply chain,
away from the consumer and back in the direction of manufacturers. (The management of materials
moving upstream in the supply chain)
1st and 2nd tier suppliers correct answer1st tier- A company's direct suppliers. A firm that directly
provides goods and/or services to a company.
2nd tier- A firm that provides goods and/or services to a company's first tear supplier.
Safety Stock correct answer(buffer stock)
Inventory kept to account for variation/uncertainty of demand. (Example: 100 shovels are sold per week
Sunday to Saturday. Shipments arrive Sunday morning. Stores always wants to start Sunday with 125
units of inventory. The additional 25 units are safety stock.
, Pipeline Inventory correct answerInventory in transit between two points. Those two points establish
the pipeline. So the inventory does not necessarily need to be on a truck or train.
The pipeline should have enough inventory to account for the demand for the period of time it takes a
product to move from point A to point B-lead time. The required pipeline inventory is typically
calculated as:
=periodic demand * Lead time
Vertical Integration correct answerThe act of a company taking additional supply chain responsibilities
that were formerly done by outside parties. There are two classes of vertical integration:
Forward Integration: Taking over supply chain responsibilities formerly performed by downstream
supply chain partners.
Backward Integration: Taking over supply chain responsibilities formerly performed by upstream supply
chain partners.
Benefits of high and low inventory levels/purchases correct answerPros of high inventory levels- Higher
levels of customer service, quantity discounts may be possible, fewer orders will need to be placed,
greater security against unexpected demand variability.
Pros of Low inventory levels- Less storage space required, lower chance of inventory obsolescence and
shrinkage, less inventory typically means less materials handling requirements. Less money invested in
inventory means more money available for investment opportunities.
What is EOQ? correct answerEconomic Order Quantity- It's the lot size that will minimize total annual
inventory cost (TC); it is therefore seen as the optimal lot size. EOQ= Sqrt[(2DS)/H]
EOQ's relationship to holding costs and ordering costs? correct answerBasically, if a manager wanted to
minimize total inventory cost they could calculate EOQ and find the optimal order size. EOQ can also be
described as the lot size where annual holding costs is equal to annual ordering costs.
