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ISCEA CSCA EXAMINATION SECTIONS
1-8 BRAND NEW OFFICIAL
QUESTIONS WITH ANSWERS.
Buyers and suppliers trying to optimize their own profits has
downsides because it - correct answer -Increases overall cost
throughout the extended supply chain and in the end the final
customer pays
Total supply chain profits might therefore be lower than if - correct
answer -the supply chain coordinates actions to have a common
objective of maximizing total supply chain profits
Contracts for product availability and supply chain profits - correct
answer -Buyback contracts
Revenue-sharing contracts
Quantity flexibility contracts
Kinds of contracts to help with supply chain performance - correct
answer -Contracts for product availability and supply chain profits
contracts to coordinate supply chain costs
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contracts to increase agent effort
contracts to induce performance improvement
Contracts for product availability and supply chain profits are
designed to - correct answer -encourage a buyer to purchase
more and increase the level of product availability
The supplier must share in some of the buyer's demand
uncertainty, however
Contracts balance conflict between - correct answer -
Manufacturers wanting to sell a lot of their product and retailers
not wanting to run risk of buying too much
Buyback contracts - correct answer -Allows retailer to return
unsold inventory up to a specified point at an agreed to price
Increases optimal order quantity for retailer, resulting in higher
product availability and higher profits for both the retailer and
supplier
Buyback contracts are most effective for products with - correct
answer -low variable cost such as music, software, books,
magazines, and newspapers
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Downside to buyback contracts - correct answer -surplus
inventory that must be disposed of which increases supply chain
costs
also increase information distortion across the supply chain
because it is reacting to the retailer's order, not the actual
customer demand
Revenue sharing contracts - correct answer -Buyer pays minimal
amount for each unit purchased from the supplier and then shares
a fraction of the revenue for each unit sold
Revenue sharing contracts decrease - correct answer -cost per
unit sold to the retailer, which effectively decreases the cost of
overstocking but can result in sc information distoriation
Quantity Flexibility Contracts - correct answer --Allows the buyer
to modify the order (within limits) as demand visibility increases
closer to the point of sale
-Better matching of supply and demand
-Increased overall supply chain profits if the supplier has flexible
capacity
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-Lower levels of information distortion than either buyback
contracts or revenue sharing contracts
Differences in costs at the buyer and supplier can lead to - correct
answer -decisions that increase total supply chain costs
A quantity discount contract may encourage the buyer to
purchase a ___ (which would be lower costs for the supplier),
which would ___ - correct answer -larger quantity; result in lower
total supply chain costs
Quantity discounts lead to - correct answer -information
distoration because of order batching doesn't reflect true demand
Increased sales to a retailer via quantity discounts may result in -
correct answer -forward buying, particularly for consumable items
There are many instances in a supply chain where - correct
answer -an agent acts on the behalf of a principle and the agent's
actions affect the reward for a principle
ISCEA CSCA EXAMINATION SECTIONS
1-8 BRAND NEW OFFICIAL
QUESTIONS WITH ANSWERS.
Buyers and suppliers trying to optimize their own profits has
downsides because it - correct answer -Increases overall cost
throughout the extended supply chain and in the end the final
customer pays
Total supply chain profits might therefore be lower than if - correct
answer -the supply chain coordinates actions to have a common
objective of maximizing total supply chain profits
Contracts for product availability and supply chain profits - correct
answer -Buyback contracts
Revenue-sharing contracts
Quantity flexibility contracts
Kinds of contracts to help with supply chain performance - correct
answer -Contracts for product availability and supply chain profits
contracts to coordinate supply chain costs
, Page | 2
contracts to increase agent effort
contracts to induce performance improvement
Contracts for product availability and supply chain profits are
designed to - correct answer -encourage a buyer to purchase
more and increase the level of product availability
The supplier must share in some of the buyer's demand
uncertainty, however
Contracts balance conflict between - correct answer -
Manufacturers wanting to sell a lot of their product and retailers
not wanting to run risk of buying too much
Buyback contracts - correct answer -Allows retailer to return
unsold inventory up to a specified point at an agreed to price
Increases optimal order quantity for retailer, resulting in higher
product availability and higher profits for both the retailer and
supplier
Buyback contracts are most effective for products with - correct
answer -low variable cost such as music, software, books,
magazines, and newspapers
, Page | 3
Downside to buyback contracts - correct answer -surplus
inventory that must be disposed of which increases supply chain
costs
also increase information distortion across the supply chain
because it is reacting to the retailer's order, not the actual
customer demand
Revenue sharing contracts - correct answer -Buyer pays minimal
amount for each unit purchased from the supplier and then shares
a fraction of the revenue for each unit sold
Revenue sharing contracts decrease - correct answer -cost per
unit sold to the retailer, which effectively decreases the cost of
overstocking but can result in sc information distoriation
Quantity Flexibility Contracts - correct answer --Allows the buyer
to modify the order (within limits) as demand visibility increases
closer to the point of sale
-Better matching of supply and demand
-Increased overall supply chain profits if the supplier has flexible
capacity
, Page | 4
-Lower levels of information distortion than either buyback
contracts or revenue sharing contracts
Differences in costs at the buyer and supplier can lead to - correct
answer -decisions that increase total supply chain costs
A quantity discount contract may encourage the buyer to
purchase a ___ (which would be lower costs for the supplier),
which would ___ - correct answer -larger quantity; result in lower
total supply chain costs
Quantity discounts lead to - correct answer -information
distoration because of order batching doesn't reflect true demand
Increased sales to a retailer via quantity discounts may result in -
correct answer -forward buying, particularly for consumable items
There are many instances in a supply chain where - correct
answer -an agent acts on the behalf of a principle and the agent's
actions affect the reward for a principle
