MBA 703 LATEST 2026 EXAM QUESTIONS AND ANSWERS
GRADED A+
✔✔Safety Stock - ✔✔To cope w/ uncertainties (changing demands or defective parts/
raw materials)
Buffer for lack of flexibility in supply chain
✔✔Bullwhip effect: - ✔✔Information about product demand gets distorted as it passes
from one entity to next across supply chain
-slight rise in demand for an item (small change) leads to excessive inventory,
production, warehousing "just in case"
✔✔Supply chain planning systems: manager flow of information up & down the chain: -
✔✔-Generate demand forecasts
-Share information about changes easier & faster so work can be better coordinated
-develop better DEMAND PLANNING that matches production closer w/ customer
demands
-Manager the flow of products through distribution centers & warehouses by using
SUPPLY CHAIN EXECUTION SYSTEMS
-Coordinate activities w/ supply chain partners
✔✔Global Supply Chain - ✔✔Use of web-based apps to transfer information across SC
-Manager uses a web interface to tap into suppliers systems to determine whether
inventory and production capabilities match demand for the firm's products
✔✔Some of the issues of global SC: - ✔✔Greater geographical distances
Greater time differences
Participants from different countries: different performance standards, different legal
requirements
✔✔Internet helps companies manage global complexities: - ✔✔Outsourcing operations:
Apparel industry: Li & Fang; Chang
Third party logistics: e.g., UPS
✔✔In addition to reducing costs, SCM systems facilitate efficient customer response: -
✔✔Enabling the business to be driven more by customer demand
✔✔What are the 2 SC models? - ✔✔Push- based model (build to stock) - schedules
based on best guesses on demand
Pull based model (demand driven) - customer orders trigger events in supply chain (ex:
dell does not build a computer until it receives an order
✔✔What are the Pros of push-based model? - ✔✔Higher service levels: customer-
centered
, Decrease inventory levels (but may take longer to fulfill an order & can be costly)
✔✔What is the hybrid approach to SC model? - ✔✔Push-based system to get products
to regional warehouse
From there they wait for orders that pull products in near retailers
✔✔What is a brand? - ✔✔The symbolic embodiment of all the information connected
with a product or service.
✔✔Viral marketing: - ✔✔Leveraging the enthusiasm of consumers to promote a product
or service
✔✔Brand: - ✔✔A strong brand can be exceptionally powerful resource for competitive
advantage
-consumers use brands to decide which company's products are better, thus forming
brand loyalty
✔✔Scale Advantages: - ✔✔-businesses benefit from economies of scale: Costs can be
spread across increasing units of production or in serving multiple customers
- organizations are scalable if they benefit from scale economies as they develop
-developing firms may gain bargaining power with their suppliers or buyers
✔✔Switching costs - ✔✔costs incurred by consumers when switching from one product
to another-
-Firms that seem dominant but that do not have high switching costs can be rapidly
outshines by strong rivals
-Sources: learning costs, information & data, financial commitment, contractual
commitments, search costs, loyalty programs
✔✔Value of service & switching costs - ✔✔In order to win customers from an
established incumbent, a late-entering rival must offer a product or service that not only
exceeds the value offered by the incumbent, but also exceeds the incumbent's value
and any customer switching costs.
✔✔Differentiation - ✔✔Technology is used by firms to differentiate their wares
-Data plays a critical role in differentiation
-COMMODITIES: products or services that are nearly identically offered from multiple
vendors (gold wheat)
✔✔Network Effects - ✔✔When the value of a product or service increases as its
number of users expands
-referred to as network externalities or Metcalfe's Law
-Switching costs play a role in determining the strength of network effects
GRADED A+
✔✔Safety Stock - ✔✔To cope w/ uncertainties (changing demands or defective parts/
raw materials)
Buffer for lack of flexibility in supply chain
✔✔Bullwhip effect: - ✔✔Information about product demand gets distorted as it passes
from one entity to next across supply chain
-slight rise in demand for an item (small change) leads to excessive inventory,
production, warehousing "just in case"
✔✔Supply chain planning systems: manager flow of information up & down the chain: -
✔✔-Generate demand forecasts
-Share information about changes easier & faster so work can be better coordinated
-develop better DEMAND PLANNING that matches production closer w/ customer
demands
-Manager the flow of products through distribution centers & warehouses by using
SUPPLY CHAIN EXECUTION SYSTEMS
-Coordinate activities w/ supply chain partners
✔✔Global Supply Chain - ✔✔Use of web-based apps to transfer information across SC
-Manager uses a web interface to tap into suppliers systems to determine whether
inventory and production capabilities match demand for the firm's products
✔✔Some of the issues of global SC: - ✔✔Greater geographical distances
Greater time differences
Participants from different countries: different performance standards, different legal
requirements
✔✔Internet helps companies manage global complexities: - ✔✔Outsourcing operations:
Apparel industry: Li & Fang; Chang
Third party logistics: e.g., UPS
✔✔In addition to reducing costs, SCM systems facilitate efficient customer response: -
✔✔Enabling the business to be driven more by customer demand
✔✔What are the 2 SC models? - ✔✔Push- based model (build to stock) - schedules
based on best guesses on demand
Pull based model (demand driven) - customer orders trigger events in supply chain (ex:
dell does not build a computer until it receives an order
✔✔What are the Pros of push-based model? - ✔✔Higher service levels: customer-
centered
, Decrease inventory levels (but may take longer to fulfill an order & can be costly)
✔✔What is the hybrid approach to SC model? - ✔✔Push-based system to get products
to regional warehouse
From there they wait for orders that pull products in near retailers
✔✔What is a brand? - ✔✔The symbolic embodiment of all the information connected
with a product or service.
✔✔Viral marketing: - ✔✔Leveraging the enthusiasm of consumers to promote a product
or service
✔✔Brand: - ✔✔A strong brand can be exceptionally powerful resource for competitive
advantage
-consumers use brands to decide which company's products are better, thus forming
brand loyalty
✔✔Scale Advantages: - ✔✔-businesses benefit from economies of scale: Costs can be
spread across increasing units of production or in serving multiple customers
- organizations are scalable if they benefit from scale economies as they develop
-developing firms may gain bargaining power with their suppliers or buyers
✔✔Switching costs - ✔✔costs incurred by consumers when switching from one product
to another-
-Firms that seem dominant but that do not have high switching costs can be rapidly
outshines by strong rivals
-Sources: learning costs, information & data, financial commitment, contractual
commitments, search costs, loyalty programs
✔✔Value of service & switching costs - ✔✔In order to win customers from an
established incumbent, a late-entering rival must offer a product or service that not only
exceeds the value offered by the incumbent, but also exceeds the incumbent's value
and any customer switching costs.
✔✔Differentiation - ✔✔Technology is used by firms to differentiate their wares
-Data plays a critical role in differentiation
-COMMODITIES: products or services that are nearly identically offered from multiple
vendors (gold wheat)
✔✔Network Effects - ✔✔When the value of a product or service increases as its
number of users expands
-referred to as network externalities or Metcalfe's Law
-Switching costs play a role in determining the strength of network effects
