SCM 502 CORRECT TEST PAPER QUESTIONS AND
ANSWERS SET A+
✔✔Reneging - ✔✔When a customer joins the line, gets frustrated and leaves the line.
✔✔Product development and commercialization - ✔✔¬∑¬†¬†¬†¬†¬†¬† What does the
customer want? When? Can we organize the right suppliers, manufacturers,
distributors, and retail organizations to get the job done right?
✔✔Supplier Relationship Management - ✔✔Finding suppliers. Developing relationships.
Managing present and future purchases from the suppliers. Working together to
improve quality.
✔✔Manufacturing Flow Management - ✔✔Making the right items to meet customer
expectations. Doing this using the least amount of resources possible.
✔✔Demand Management - ✔✔Utilize forecasting to understand likely demand. Once a
forecast is available manage the firm’s facilities and resources to meet expected
demand.
✔✔Order Fulfillment - ✔✔If proper demand management has taken place, then it will be
time to fulfill orders. This might include picking, packing, and shipping items to the
customer.
✔✔Customer Relationship Management: - ✔✔¬∑¬†¬†¬†¬†¬†¬† Utilizing information to
better understand the needs and desires of your customers today and into the future.
✔✔Customer Service Management: - ✔✔Communication between customers and the
supply chain. Providing customers with product availability details and tracking
information. Providing customers with product assistance and maintenance
opportunities. • Returns Management: Dealing with reverse logistics issues such as
, damaged and unwanted products, product recalls, the return of pallets to the distribution
center, etc. Understanding problems […]”
✔✔Shrinkage calculation - ✔✔¬∑¬†¬†¬†¬†¬†¬† Order Size Required = (Actual
Demand) / (Proportion of Acceptable Product per Order). Always round up
✔✔Importance of supply chain integration - ✔✔¬∑¬†¬†¬†¬†¬†¬† Supply chain
integration is the only way for supply chain partners to achieve effectiveness, efficiency,
and adaptability.
✔✔Obstacles to Integration - ✔✔¬∑¬†¬†¬†¬†¬†¬† Obstacles to integration are all
related to poor communication, an unwillingness to share, and/or lack of trust between
supply chain partners.”
✔✔Bullwhip effect - ✔✔¬∑¬†¬†¬†¬†¬†¬† The bullwhip effect is a supply chain
phenomenon where fairly stable demand results in a proliferation in the amount of
inventory that is carried as one travels upstream in the supply chain.
✔✔4 Causes of the bullwhip effect - ✔✔Order batching, forward buying, rationing,
shortage gaming
✔✔Order Batching - ✔✔¬∑¬†¬†¬†¬†¬†¬† When companies place large and infrequent
orders from their suppliers. Typically this is done to take advantage of quantity
discounts and economies of scale in purchasing and delivery. The problem is that the
infrequent orders leave large communication gaps (uncertainty) for suppliers and it may
also require suppliers to carry large amounts of inventory so they can be prepared when
those large orders are actually placed.
✔✔Forward Buying - ✔✔This is the result of suppliers offering sales. Buyers are
motivated to buy in large quantities to take advantage of low prices. Buyers are not
buying based on demand, but rather on price. Therefore, true demand is unknown by
sellers (uncertainty). Sellers experience the uncertainty of demand due to their own
short-term drops in price for their customers.
✔✔Rationing - ✔✔Sometimes, despite their best efforts, suppliers do not have enough
inventory to satisfy the demand of all of their customers. If this is the case, suppliers
may ration their inventory and send each of their customers only a fraction of the
inventory that was ordered.
✔✔Shortage Gaming - ✔✔¬∑¬†¬†¬†¬†¬†¬† Rationing can often lead to shortage
gaming. In rationing, customers only receive a fraction of their placed order. This leaves
the customer short of their desired inventory level. If customers feel that this rationing
may occur again, customers may try to “game” the system by placing an order
larger than their expected demand.
ANSWERS SET A+
✔✔Reneging - ✔✔When a customer joins the line, gets frustrated and leaves the line.
✔✔Product development and commercialization - ✔✔¬∑¬†¬†¬†¬†¬†¬† What does the
customer want? When? Can we organize the right suppliers, manufacturers,
distributors, and retail organizations to get the job done right?
✔✔Supplier Relationship Management - ✔✔Finding suppliers. Developing relationships.
Managing present and future purchases from the suppliers. Working together to
improve quality.
✔✔Manufacturing Flow Management - ✔✔Making the right items to meet customer
expectations. Doing this using the least amount of resources possible.
✔✔Demand Management - ✔✔Utilize forecasting to understand likely demand. Once a
forecast is available manage the firm’s facilities and resources to meet expected
demand.
✔✔Order Fulfillment - ✔✔If proper demand management has taken place, then it will be
time to fulfill orders. This might include picking, packing, and shipping items to the
customer.
✔✔Customer Relationship Management: - ✔✔¬∑¬†¬†¬†¬†¬†¬† Utilizing information to
better understand the needs and desires of your customers today and into the future.
✔✔Customer Service Management: - ✔✔Communication between customers and the
supply chain. Providing customers with product availability details and tracking
information. Providing customers with product assistance and maintenance
opportunities. • Returns Management: Dealing with reverse logistics issues such as
, damaged and unwanted products, product recalls, the return of pallets to the distribution
center, etc. Understanding problems […]”
✔✔Shrinkage calculation - ✔✔¬∑¬†¬†¬†¬†¬†¬† Order Size Required = (Actual
Demand) / (Proportion of Acceptable Product per Order). Always round up
✔✔Importance of supply chain integration - ✔✔¬∑¬†¬†¬†¬†¬†¬† Supply chain
integration is the only way for supply chain partners to achieve effectiveness, efficiency,
and adaptability.
✔✔Obstacles to Integration - ✔✔¬∑¬†¬†¬†¬†¬†¬† Obstacles to integration are all
related to poor communication, an unwillingness to share, and/or lack of trust between
supply chain partners.”
✔✔Bullwhip effect - ✔✔¬∑¬†¬†¬†¬†¬†¬† The bullwhip effect is a supply chain
phenomenon where fairly stable demand results in a proliferation in the amount of
inventory that is carried as one travels upstream in the supply chain.
✔✔4 Causes of the bullwhip effect - ✔✔Order batching, forward buying, rationing,
shortage gaming
✔✔Order Batching - ✔✔¬∑¬†¬†¬†¬†¬†¬† When companies place large and infrequent
orders from their suppliers. Typically this is done to take advantage of quantity
discounts and economies of scale in purchasing and delivery. The problem is that the
infrequent orders leave large communication gaps (uncertainty) for suppliers and it may
also require suppliers to carry large amounts of inventory so they can be prepared when
those large orders are actually placed.
✔✔Forward Buying - ✔✔This is the result of suppliers offering sales. Buyers are
motivated to buy in large quantities to take advantage of low prices. Buyers are not
buying based on demand, but rather on price. Therefore, true demand is unknown by
sellers (uncertainty). Sellers experience the uncertainty of demand due to their own
short-term drops in price for their customers.
✔✔Rationing - ✔✔Sometimes, despite their best efforts, suppliers do not have enough
inventory to satisfy the demand of all of their customers. If this is the case, suppliers
may ration their inventory and send each of their customers only a fraction of the
inventory that was ordered.
✔✔Shortage Gaming - ✔✔¬∑¬†¬†¬†¬†¬†¬† Rationing can often lead to shortage
gaming. In rationing, customers only receive a fraction of their placed order. This leaves
the customer short of their desired inventory level. If customers feel that this rationing
may occur again, customers may try to “game” the system by placing an order
larger than their expected demand.
