Covers: Supply Management, Outsourcing, Quality, Forecasting, and Process Mapping
1. A company chooses to single source a key component to a supplier known for
innovation. Which strategic benefit is the company most likely seeking?
A) Lower switching costs
B) Improved quality and collaboration
C) Reduced dependency risk
D) Faster multiple supplier competition
2. If a firm outsources a non-core activity to a foreign supplier and later decides to
bring it back domestically, this is called:
A) Near-shoring
B) Offshoring
C) Re-shoring
D) Dual sourcing
3. A purchasing manager notices suppliers have long delivery times due to capacity
limits. Which process improvement approach would best address this issue?
A) Increasing demand variability
B) Mapping the process to identify bottlenecks
C) Reducing quality inspections
D) Using more suppliers without analysis
4. Which of the following would NOT be a valid reason to make instead of buy a
component?
A) To protect intellectual property
B) To reduce risk exposure
C) To access specialized supplier technology
D) To utilize idle capacity
5. According to Deming’s philosophy, the primary way to ensure quality is through:
A) Final inspection of products
B) Increasing quotas and slogans
C) Prevention and continuous improvement in processes
D) Rework and repair
6. If the bottleneck of a production line can handle 10 units per hour, the maximum
process capacity per hour is:
, A) Determined by the average of all tasks
B) 10 units per hour
C) The sum of all task capacities
D) Determined by the fastest station
7. A firm decides to outsource its IT support to focus more on research and product
innovation. This demonstrates:
A) Risk aversion
B) Core competence focus
C) Tactical cost cutting
D) Reactive strategy
8. A process map primarily helps managers:
A) Eliminate supplier contracts
B) Visualize and improve workflow relationships
C) Increase cycle time
D) Automate without evaluation
9. If the correlation coefficient (r) between sales and advertising spend is 0.92, this
suggests:
A) A strong positive relationship
B) No relationship
C) A weak negative relationship
D) The data are random
10.In supply chain management, risk assessment focuses on:
A) Maximizing supplier quantity
B) Balancing expected returns with potential disruptions
C) Reducing product design variety
D) Minimizing information sharing
11.When a process has high variability but low average demand, which forecasting
method may be least effective?
A) Weighted moving average
B) Exponential smoothing with small alpha
C) Naïve forecast
D) Time series with trend adjustment
12.A process improvement team notices employees pass documents across multiple