Questions And Correct Answers (Verified Answers) Plus
Rationales 2026 Q&A | Instant Download Pdf
1. Which of the following best describes the primary objective of supply chain
management?
A. Minimize transportation costs
B. Maximize customer value and competitive advantage
C. Increase production output
D. Reduce supplier lead time
Answer: B
SCM seeks to create customer value and competitive advantage through
effective coordination of supply chain activities.
2. Which process area includes forecasting, demand planning, and sales &
operations planning (S&OP)?
A. Source
B. Plan
C. Make
D. Deliver
Answer: B
The “Plan” process focuses on demand planning and aligning supply with
demand.
3. A key benefit of S&OP is:
A. Improved product design
B. Alignment of financial and operational plans
C. Reduction in insurance costs
D. Eliminating all stockouts
Answer: B
S&OP aligns business strategy, financial plans, and operational execution.
4. A core element of CPFR is:
,A. Vendor-managed inventory
B. Joint forecasting and replenishment
C. Outsourcing transportation
D. Reverse logistics
Answer: B
CPFR emphasizes collaborative forecasting and replenishment to reduce
variability.
5. The bullwhip effect is primarily caused by:
A. Consolidated shipments
B. Long-term contracts
C. Demand signal distortion
D. Standardized parts
Answer: C
Information distortion as it moves upstream amplifies demand variability.
6. Which inventory type is held to mitigate uncertainty in supply or demand?
A. Cycle stock
B. WIP inventory
C. Safety stock
D. Pipeline inventory
Answer: C
Safety stock protects against uncertainty.
7. Which strategy delays final product configuration until the final customer
order?
A. Outsourcing
B. Offshoring
C. Postponement
D. Benchmarking
Answer: C
Postponement delays product differentiation to reduce inventory and increase
flexibility.
, 8. A KPI that measures forecast accuracy is:
A. Perfect order fulfillment
B. On-time delivery
C. Mean absolute deviation (MAD)
D. Fill rate
Answer: C
MAD evaluates forecast error.
9. Which of the following is a primary feature of lean supply chains?
A. High inventory buffers
B. Waste elimination
C. High batch production
D. Long lead times
Answer: B
Lean focuses on eliminating non–value-added activities.
10. The Theory of Constraints (TOC) focuses on:
A. Reducing cycle time
B. Improving the performance of bottlenecks
C. Expanding warehouse capacity
D. Increasing supplier count
Answer: B
TOC improves system throughput by addressing bottlenecks.
11. A make-to-order strategy is most appropriate when:
A. Demand is stable
B. Products are standardized
C. Inventory costs are low
D. Products are customized
Answer: D
MTO effectively supports high customization.