Certified Supply Chain Manager (CSCM) Exam Verified
Questions, Correct Answers, and Detailed
Explanations for Students||Already Graded A+
1. What is the primary objective of supply chain management?
A) Increase marketing reach
B) Reduce workforce size
C) Maximize customer value while minimizing total supply chain
cost
D) Standardize manufacturing processes
Rationale: The main goal of supply chain management is to create
value for the customer at the lowest possible cost across the supply
chain.
2. Which of the following is a key component of a supply chain?
A) Advertising
B) Suppliers, manufacturers, distributors, retailers, and customers
C) Financial institutions
D) Government regulators
Rationale: A supply chain consists of all parties involved in producing,
handling, and delivering a product or service from suppliers to
customers.
3. What does the term “bullwhip effect” describe?
A) Excessive inventory due to poor forecasting
B) Amplification of demand variability upstream in the supply chain
C) Sudden disruption in production
D) Reduction in customer demand
,Rationale: The bullwhip effect occurs when small changes in
consumer demand cause larger fluctuations in orders at the supplier
level.
4. Which strategy aims to produce goods only after receiving
customer orders?
A) Make-to-stock
B) Assemble-to-stock
C) Make-to-order
D) Engineer-to-stock
Rationale: Make-to-order production starts only after an actual order
is received, reducing inventory costs and customization issues.
5. In supply chain management, what is the primary purpose of a
safety stock?
A) Reduce labor costs
B) Prevent stockouts due to demand or supply variability
C) Increase lead time
D) Standardize procurement
Rationale: Safety stock acts as a buffer against uncertainties in
demand and supply.
6. Which inventory management technique calculates the optimal
order quantity?
A) FIFO
B) LIFO
C) EOQ (Economic Order Quantity)
D) JIT
,Rationale: EOQ determines the most cost-effective quantity to order,
balancing ordering and holding costs.
7. What is the main focus of Just-in-Time (JIT) production?
A) Maximize inventory
B) Reduce waste and produce only what is needed when it is
needed
C) Increase lead times
D) Use advanced automation
Rationale: JIT focuses on reducing inventory and producing goods in
response to actual demand, minimizing waste.
8. Which performance metric measures how well a company fulfills
customer orders on time?
A) Inventory turnover
B) Lead time
C) Order fulfillment rate
D) Cost per unit
Rationale: Order fulfillment rate tracks the percentage of customer
orders delivered on time and in full.
9. Which of the following is a push-based supply chain strategy?
A) Producing goods based on forecasted demand
B) Producing only after customer orders
C) Drop shipping
D) Vendor-managed inventory
Rationale: Push strategies rely on forecasts to produce and move
products through the supply chain.
, 10. The primary purpose of demand forecasting is to:
A) Predict future customer demand to plan supply chain activities
B) Reduce labor costs
C) Improve employee productivity
D) Increase supplier lead times
Rationale: Accurate demand forecasting helps in inventory
management, production planning, and meeting customer demand
efficiently.
11. Which logistics activity involves moving goods from one
location to another?
A) Warehousing
B) Inventory management
C) Transportation
D) Demand planning
Rationale: Transportation is the physical movement of products
between locations in a supply chain.
12. What is the main goal of a supply chain risk management
strategy?
A) Increase supply chain costs
B) Maximize profit only
C) Identify, assess, and mitigate potential risks in the supply chain
D) Replace suppliers frequently
Rationale: Supply chain risk management aims to reduce
vulnerabilities and ensure continuity of operations.
Questions, Correct Answers, and Detailed
Explanations for Students||Already Graded A+
1. What is the primary objective of supply chain management?
A) Increase marketing reach
B) Reduce workforce size
C) Maximize customer value while minimizing total supply chain
cost
D) Standardize manufacturing processes
Rationale: The main goal of supply chain management is to create
value for the customer at the lowest possible cost across the supply
chain.
2. Which of the following is a key component of a supply chain?
A) Advertising
B) Suppliers, manufacturers, distributors, retailers, and customers
C) Financial institutions
D) Government regulators
Rationale: A supply chain consists of all parties involved in producing,
handling, and delivering a product or service from suppliers to
customers.
3. What does the term “bullwhip effect” describe?
A) Excessive inventory due to poor forecasting
B) Amplification of demand variability upstream in the supply chain
C) Sudden disruption in production
D) Reduction in customer demand
,Rationale: The bullwhip effect occurs when small changes in
consumer demand cause larger fluctuations in orders at the supplier
level.
4. Which strategy aims to produce goods only after receiving
customer orders?
A) Make-to-stock
B) Assemble-to-stock
C) Make-to-order
D) Engineer-to-stock
Rationale: Make-to-order production starts only after an actual order
is received, reducing inventory costs and customization issues.
5. In supply chain management, what is the primary purpose of a
safety stock?
A) Reduce labor costs
B) Prevent stockouts due to demand or supply variability
C) Increase lead time
D) Standardize procurement
Rationale: Safety stock acts as a buffer against uncertainties in
demand and supply.
6. Which inventory management technique calculates the optimal
order quantity?
A) FIFO
B) LIFO
C) EOQ (Economic Order Quantity)
D) JIT
,Rationale: EOQ determines the most cost-effective quantity to order,
balancing ordering and holding costs.
7. What is the main focus of Just-in-Time (JIT) production?
A) Maximize inventory
B) Reduce waste and produce only what is needed when it is
needed
C) Increase lead times
D) Use advanced automation
Rationale: JIT focuses on reducing inventory and producing goods in
response to actual demand, minimizing waste.
8. Which performance metric measures how well a company fulfills
customer orders on time?
A) Inventory turnover
B) Lead time
C) Order fulfillment rate
D) Cost per unit
Rationale: Order fulfillment rate tracks the percentage of customer
orders delivered on time and in full.
9. Which of the following is a push-based supply chain strategy?
A) Producing goods based on forecasted demand
B) Producing only after customer orders
C) Drop shipping
D) Vendor-managed inventory
Rationale: Push strategies rely on forecasts to produce and move
products through the supply chain.
, 10. The primary purpose of demand forecasting is to:
A) Predict future customer demand to plan supply chain activities
B) Reduce labor costs
C) Improve employee productivity
D) Increase supplier lead times
Rationale: Accurate demand forecasting helps in inventory
management, production planning, and meeting customer demand
efficiently.
11. Which logistics activity involves moving goods from one
location to another?
A) Warehousing
B) Inventory management
C) Transportation
D) Demand planning
Rationale: Transportation is the physical movement of products
between locations in a supply chain.
12. What is the main goal of a supply chain risk management
strategy?
A) Increase supply chain costs
B) Maximize profit only
C) Identify, assess, and mitigate potential risks in the supply chain
D) Replace suppliers frequently
Rationale: Supply chain risk management aims to reduce
vulnerabilities and ensure continuity of operations.
