APICS CSCP Module 2 – Demand Management, Forecasting, and Sales & Operations Planning Exam Questions with Verified Answers

Description: This document provides updated and verified APICS CSCP Module 2 exam questions and answers. It covers demand management, forecasting models, collaborative planning, and the role of Sales & Operations Planning (S&OP) in supply chain integration. The material also reviews performance metrics, customer relationship management, and demand-driven supply chain practices. It is a complete resource for mastering Module 2 concepts and preparing for CSCP certification. As you plan a manufactured product supply chain, what is considered the most crucial element? - answerComponent suppliers. without the base components required for the product, the rest of the suppl chain cannot operate as designed. The owner of a coal mine need power for the machinery that he uses to extract the coal. what is this and example of? - answerDoubling back. When a raw material supplier ends up using a component that they produce in their own operations, it is an example of the supply chain doubling back to serve itself. in this instance, the coal Page1 might be used to run power generators that can then be used to power the basic mining equipment used to gather coal. which is not essential element of product supply chain model? material extraction, material transformation into product, selling to the user, reverse chains. - answerReverse chain. Reverse transaction is not an essential element of supply chain product model. stakeholders - answerall who can be affected by the decision made in a supply chain. this may encompass the public, goverment, trade associations, and univerisities. how can the goverment impact supply chain function? - answerLevying taxes, creation of infrastructure, and regulation. what is the best way to view the nature of a supply chain? ... a series of ..... - answera series of processes that are linked together. each process can be carried out by a different entity, the success or failure of the supply chain model depends on the process that allows information, material, and cash to flow most seamlessly. what WAS the primary focus of some of the earlies supply chain models? - answerCutting costs. However, as business became more connected, the focus became value creation, rather than trimming expenses. this makes the chain more stable. in a value creation supply chain, what are the most valuable activities - answerActivities that trascend a single entity. provide positive impact to no only a single organization, but the chain as a whole. when a supply chain operates externally, connecting business and organizations rather than departments, one leading entity often emerges. what is the name of this entity? - answerNucleus firm. the firm that directs and organized the supply chain is Page2 usually known as a nucleus firm or channer master. The SCOR supply chain process model includes three basic entities. Which of these can be found to the right of your company in this model? - answerCustomers..... Suppliers can be found to the left. How many management process are included in the SCOR supply chain model? - answer5 different processes. These are planning, sourcing, making, delivery, and returns. The SCOR model is limited and does not account for every single business process. How many tiers in each direction does the model extend from the central company? - answerAccounts for 2 tiers in each direction from the central company. this includes 2 customer tiers and 2 supply tiers. is sales and marketing part of the SCOR model? - answerNo which of the following does the scor model assume is needed to build the model? fixed costs, training, growth, regulation - answerTraining. the model assumptions are: Training, product service quality, information technology, and administration. managing supply chain encompases more than simply increasing speeds and cutting costs. Whats the primary difference between overseeing process and managing silos? - answerInnovation and bringin entities together. Overseeing a process requires the ability to bring various people and concepts together in new ways. it requires interaction between different groups to bring benefit to each in the best way possible. which figure is associated with vertical integration? (company/owner) - answerHenry Ford is the model for vertical integration. His action in bringin as many elements as possible under the control of his company meets the primary aims Page3 of vertical integration. a company operates in both Europe and NA. Which is the most likely way the company would operate in these regions? - answerFocus on primary tasks, outsourcing of non-primary tasks For most supply chain models, what approach is assumed? - answerlateral or horizontal integration. this is the most effective model due to globalization. Keiretsu Networks - answer-A middle ground between few suppliers and vertical integration -Supplier becomes part of the company coalition a company has decided to split one of its divisio into tis own company. what is the benefit? - answerIncreased focus and expertise for both companies. this can lead to development of better and more attractive products for customers that fit with the core values of each individual company. what has contributed the most to the development of lateral supply chains? access to chas, new materials, outsorced hires, communication technologies - answerCommunication technologies. Allows strategic partnerships to be formed. big draw back from lateral supply chain? - answerinability to see the larger supply chain process as a whole. A company does not have clearly defined goals or lings to outside busines, appart from occasional transactions. What stage of supply chain management evolution does this best correspond to? - answerMultiple dysfunction. a central firm does not have goals or definitions hat are created in a clear and concrete manner. do not have meaningful external ties to other department or organizations. In a semifunctional enterprise, a company may begin to develop initiatives to increase efficiency and quality control. what is still Page4 lacking at this stage of supplu chain management evolution? - answerDecision making partnerships between departments. Company X has begun to integrate its own internal processes and resources with its partners in the supply chain. what is the name of this stage of supply chain evolution? - answerExtended Enterprise. This usually begins with a single partnership between entities in the chain and can extend until all partners are meaningful networked. Company has begun to bring departments together in planning for major product releases. which stage of supply chain management evolution dies this approach best describe? - answerIntegrated enterprise. when the company starts to dismantle traditional silos that exist in departments and organizations. they are on their way to lateral integration of the supply chain as a whole. a semifunctional enterprise may implement plans to increase the function of various departments. which of the following would best describe the actions of a semi-functional enterprise? partnerships with distribution channels, building additional warehouses to house inventory, finding ways to reduce inventory, - answerFind ways to reduce inventory. In most cases these initiatives are independent from each other and still exist only internally within the organization. when a company is doing well and makes more money by moving along the supply chain management evolution scare, what is the bes posible economic decision? - answerReserve some money to improve products and processes. This can be beneficial over the long term , as opposed to decision that will make short term impact such as pass savings to the Page5 customers, or gains to stakeholders. A semifunctional enterprise may implement plans to increase the function of various departments. Which of the following would best describe the actions of a semifunctional enterprise? - answerFind ways to reduce inventory. A semifunctional enterprise has begun to increase training, decrease inventory held in its own warehouses, plan new strategies to increase effectiveness, and/or begun to train in more effective ways. In most cases, however, these initiatives are independent from each other and still exist only internally within the organization. 42. Any given product may require multiple components. What is the name for the complete list of items necessary to create a single finished product? - answerEXP: The bill of materials shows the entirety of the components that are necessary to create one finished product. Material requirements planning software may be implemented to create the bill of materials. an integrated enterprise is nearly through the supply chain management evolution. what is the core focus of this stage? - answerBusiness Processes. In the third stage of supply chain management evolution, a company begins to think in terms of business processes, rather than individual pieces and departments. This stage marks integration of various departments, but does not yet include integration of partnerships outside of the organization in meaningful ways. Integrated enterprises arose primarily in the 1980s and 1990s. What other development occurred around the same time that may have affected this part of the evolution of supply chain management? - answerAvailability of Personal computers. The availability, improvement, and affordability of personal computers paved the way for integrated Page6 enterprises to arise. Because they made communication much faster, personal computers made it more possible than ever before to create good streams of communication between departments in a company. Automation has been a key component in integrated planning for businesses. In what decade did material requirements planning make it possible to automatically create a bill of materials? - answer1950's. MRP was able to automate the bill of materials as early as the 1950s. This was a key step in a flow that would eventually allow the various departments in a company to access the same data instantly. Integration requires the departments of an organization to be able to communicate quickly and effectively. Which of the following is the correct term for the collaborative process described here? - answerCPFR. is the process that replaced traditional production planning. it stands for collaborative planning, forecasting, and replenishment. Jeff wants to cut down on the number of warehouses held by his company. For the best possible supply chain results, which other entity should he consider in planning for this decision? A. Transportation B. Retail C. Sales and marketing D. Tech support - answerTransportation and warehousing decisions are best performed together. When a warehouse is closed down, it may affect transportation logistics negatively, so the best gains are found when the two departments work together to create and change plans. Extended enterprise is the final stage of supply chain management evolution. What is the best description of the core feature of this stage? A. Creating relationships with logistic suppliers B. Beginning initiatives to increase functionality of departments C. Extending at least Page7 one business process beyond the corporation D. Breaking down barriers between departments - answerIn an extended enterprise, at least one business process reaches outside of the organization to affect the supply chain. This often begins with a single partnership, but may eventually extend to the creation of processes that include the entire supply chain. The most successful lateral integrations have often started with a single strategic partnership. Which well-known partnership began with a collaboration on diapers? A. Huggies and Costco B. Wal-Mart and Procter & Gamble C. Target and the Honest Company D. Pampers and Babies R Us - answerThe extensive partnership between Wal-Mart and Procter & Gamble began with a collaboration on diapers. This is a core example of the principle that defines an extended enterprise. Not every initial collaboration between members of a supply chain turns out to be a successful one. Which of the following best describes an example of a negative interaction between supply chain partners? A. Retailers allowing consumers to purchase products at a discount B. Online suppliers cutting out traditional retail stores C. A supplier discovering a new source of raw materials D. Powerful manufacturers requiring suppliers to hold inventory - answerTraditionally, if one stakeholder in the supply chain uses its leverage over other supply partners to transfer risk in a way that doesn t benefit the entire chain, it can create tension in the chain. One example of this can be seen when a powerful manufacturer requires their suppliers to store the majority of the inventory.' 51. Innovations in e-commerce have sometimes led to the loss of traditional jobs. Which of the following roles have increased the most due to the Page8 creation of commerce online? A. Security B. Tech support C. Customer service D. Manufacturing - answerSecurity. With the development of e-commerce, various kinds of security have been necessary. Common examples of growth can be seen in cybersecurity firms that develop solutions to guard against hackers or airline security officials to check in passengers that have purchased their tickets online. Globalization has greatly affected supply chain management. Which of the following is not one of primary ways that supply chains compete with other supply chains? A. Capital B. Labor C. Training D. Customers - answerTraining. On a global scale, supply chains compete the most in the areas of capital, labor, and customers. While a chain may hold a competitive advantage over another chain in their technological resources, training, or individual processes, the three areas mentioned above are the core resources at stake. 53. Kathy wants to create a supply chain for her non-profit organization. Which of the following does she need to consider? A. Social value B. Financial value C. Customer value D. All of the above - answerAll of the above. Whether a supply chain is created for a company, military organization, nonprofit, or government, each of the value factors needs to be considered. This includes financial values, customer values, and social values. Cost reduction was a core focus of supply chain management in its early stages. Which of the following is a danger of focusing on cutting costs? A. Loss of personnel B. Less available partners C. Increased expenses in other areas D. None of the above - answerIncreased expenses in other areas. When costs are limited in one area, it can often lead to greater expenses being acquired in other areas. For example, if a warehouse is closed, it may lead to Page9 increased transportation costs, as drivers need to make deliveries from further away. Cost cutting is not always a negative approach. What principle should be used to determine whether cutting a cost is going to be effective for the supply chain? A. If value to the customer is created B. If value to the supplier is created C. If value to the manufacturer is created D. None of the above - answerif value to the customer is created. If the customer benefits from value added, then a cost-cutting measure is said to be effective. For example, if a supply chain can offer the same level of customer support with more profit, but fewer expenses, then cost cutting is beneficial. Upfront investments can often play a role in the success of a supply chain. Which of the following would be an example of this? A. Training managers in new processes B. Updating an older warehouse C. Improving automation through new machinery D. All of the above - answerall of the avobe. When a net gain can be achieved through an upfront investment, it is considered to be worthwhile. This can be through training employees, upgrading outdated equipment, and investing in new technologies that will save on expenses overall. 57. Company A has found ways to save $5 on the costs associated with each product that they create. What would be the best way to distribute this savings? A. Discount the product cost by $5 B. Re invest the entire amount into company processes C. Distribute the money to shareholders D. Consider all stakeholders before investing - answerconsider all stakeholders before investing. By taking all stakeholders in mind, the investors, customers, and employees can all benefit from cost savings. This is the best long term approach to create health in the organization. Customer value is one of the Page10 three aspects that need to be considered in the creation of a supply chain. Which of the following does not fit under the heading of customer value? A. Quality B. Investment C. Availability D. Affordability - answerInvestment foes NOT fit. Customers find value in a product through its quality, affordability, availability, and service experience. When a customer experiences value in each of these areas, they are more likely to purchase a product. Jamie is a customer looking for a pair of high end shoes. What customer value factors might she consider that fall under the heading of quality? A. What kind of customer service she receives B. Whether discounted shoes are available C. What materials were used in the shoes D. How many are available in the store - answerwhat materials were used in the process. Quality factors for customer value include the quality of design, the quality of production, and the quality of materials. While the other factors may go into her decision as well, they fall into categories categories outside of quality. The reverse flow, or process of returns and repairs, is an important part of the customer experience. What category of customer value does the reverse flow best relate to? A. Affordability B. Quality C. Availability D. Service - answerService. While quality may also relate to the reverse flow, service is the best overarching category as it relates to returns and repairs. The customer experience with the returns process can affect the customer s overall opinion of value over the long-term. 61. Customer value may be weighted differently depending on the goals of the company in question. Which of the following best represents an emphasis on the customer value of affordability? A. Pier One B. Wal-Mart C. Sears D. Home Depot - answerWal Page11 Mart is one of the best examples of a focus on affordability. Wal-Mart has created its supply chain with a particular and driven focus on affordability first and foremost. Toms has developed its brand based on the idea that the company will donate a pair of shoes to someone in need for every pair of shoes that is purchased. What customer value does this best represent? A. Social value B. Customer value C. Financial value D. All of the above - answersocial value. With this program, Toms has a focus on social value. This is done by creating some form of social good for the community, while still delivering goods and products to consumers. 63. Social value can be achieved both by introducing positive social goods and by removing negative impacts. Which of the following does not represent a positive social good? A. Generation of tax dollars B. Increased job opportunities C. Extraction of resources D. Support for infrastructure - answerExtraction of resources better fits under the category of negative impacts. When extraction is performed in a socially and environmentally conscious way, it can add social value to a company by minimizing negative impacts. Every flow of the supply chain interactions with customer values in some way or another. Which of the flows of supply chain management is most closely associated with minimization of negative social impacts? A. Reverse flow B. Cash flow C. Information flow D. Distribution flow - answerReverse Flow. Because the reverse flow is closely associated with recycling and repair, it has the most association with the minimization of negative social impacts. When a company has a good reverse flow, they can contribute to the conservation of resources, creating a positive social impact. 65. Strategy has multiple definitions that may be Page12 applicable. What is at the core of corporate strategy in particular? A. Stewardship of resources B. Saving capital C. Training D. manpower - answerstewardship of resources. Corporate strategy is best described as the bringing together and intentional use of resources. 66. Miles has been brought on to a team to design the corporate strategy for the company. Which of the following best characterizes the nature of a good corporate strategy overall? A. Static plan B. Adaptability C. Cost reduction D. None of the above - answerAdaptability. EXP: Strategy is the most effective when a company stays flexible, able to take advantage of any appropriate opportunities that arise. For this reason, adaptability is a core component of a good corporate strategy. When dealing with a supply chain, there are multiple entities that need to be satisfied. For the best possible supply chain management, which entity s needs should be given the highest emphasis? A. Manufacturer ' B. Distributer C. Component extractor D. Customer - answercustomer. EXP: If the customer s needs are not well considered, the entirety of the supply chain is more likely to fail. Even above the central firms needs, the customer needs. 68. There are multiple parts to any given corporate strategy. In logistics strategy, focus is given to customer demands in what area? A. Quality B. Availability C. Delivery D. Cost - answerAvailability. Logistics strategy takes a look at data surrounding the current customer demands based on availability. This can include the base components and materials, availability of service, or finished products. To address the end customer s needs for availability, a company must accurately predict the quantity and type of products that will be needed in any given Page13 time frame. What is the term for predictive processes?' A. Preplanning B. Sourcing C. Forecasting D. Research and development - answerForecasting is the term used to describe the process of interpreting data on customer needs and desires to make predictions about inventory. When forecasting is done well, it can help companies to create the right amount of inventory to meet customer demands without having to maintain a large volume of product on hand over long periods of time. A grocery store wants to keep a small stash of diapers on hand beyond what they predict that they will sell for the upcoming season. What is this small stash known as? A. Material stockpile B. Emergency stash C. Product differential D. Safety stock - answerSafety stock is the term used to describe product purchased that is beyond the predicted demand for the product. It is used to serve the customers need for availability. 71. Variable demand for a product has impact on each of the entities in a given supply chain. Which entity has the most variability in demand? A. Distributor B. Manufacturer C. Retailer D. component creators - answerComponent creators. Running back from the customer, each tier of the supply chain experiences a wider spectrum of variability in demand. This means that the furthest tier to the left, or the component supplier, will have the greatest change in variability over time. Throughout a supply chain, entities are affected by uncertainties in the predictions of how much demand there will be for a given product. What is the name given to the distortion of demand uncertainty that exists in a supply chain? A. Bullwhip effect B. Whiplash effect C. Demand relations D. Uncertainty effect - answerBullwhip effect. The increasing variability in Page14 demand experienced throughout the supply chain is known as the bullwhip effect. Waves in the graph grow greater as they trend backwards through the chain, much like the image of a whip. Cotton suppliers in a supply chain are experiencing the bullwhip effect. Which of the following strategies is most likely being used by the supply chain? A. Demand-driven enterprise B. Supply chain numbers C. Forecasting - answerForecasting. The bullwhip effect is most likely to be encountered in supply chains that rely on forecasting. Because they are based on predictions at each level, variability increasing affects each member of the chain. . 74. Company A creates their product based on forecasts of demand. What is the correct term for this kind of supply chain? A. Pull chain B. Push chain C. Predictive chain D. Whip chain - answerA push chain is one that pushes products down the line of supply to meet forecasted needs by a particular schedule. A supply chain like this needs to meet the assigned schedules to match the forecast. 75. A demand-driven supply chain differs greatly from a forecast-based chain. What does not exist in a demand driven supply chain? A. Delivery of raw materials B. Fixed production schedule C. Customer demand D. Customer service - answerFixed production schedule. Unlike a forecast-based chain, which needs to meet production schedules to offer products in accordance with its predictions, a demand-driven supply chain does not use a fixed production schedule. Instead, products are not created until they are requested from the consumer. Demand-driven chains do not rely on the existence of premade product inventory. What is the biggest potential risk in this type of strategy? A. Increased costs B. Less market flexibility C. Lower customer satisfaction Page15 D. All of the above - answerWhen stock is not available on-hand, it can result in lower customer satisfaction. When there are delays in production along the supply chain that result in a longer-than-expected wait time for the consumer, it can lower their sense of value for the product received. When customer demand suddenly increases, it can cause a number of issues for supply chains that operate on a demand-driven basis. Which of the following is not one of the potential expenses associated with expanded customer demand in a demand-driven model? A. Additional transportation B. Overstock disposal C. Overtime expenses D. Faster transportation - answerOverstock disposal. EXP: Because stock is not accumulated based on forecasts in a demand-driven model, overstock is not an issue in this case. However, demand-driven businesses that experience higher-than average demand may have to pay more to keep their employees working for longer hours, delivery trucks available to fill and transport orders, and expedited shipping rates. In a forecast-based supply chain, additional stock is sometimes accumulated. At which point in the supply chain can safety stock build up? A. Retailer B. Distributor C. Manufacturer D. All of the above - answerall of the above. In a forecast based model, safety stock can accumulate at each point along the supply chain. This is one of the major reasons why supply chains can experience the bullwhip effect. 79. In a demand-driven context, an effort is made to replace forecasts. What is used to create demand visibility? A. Real data B. Consumer logs C. Surveys D. None of the above - answerReal data is available to retailers when a customer requests a product. This real data replaces predictive estimations that are used for forecasts. Page16 One of the core principles for a supply chain is the ability of each entity to have insight into the end user s needs. In a demand-driven model, what is the term for access to data on real demand? A. Continuity ' B. Customer desire C. Real-time values D. Visibility - answerVisibility refers to an entity s ability to gain access to data as it relates to real consumer demand. Unlike models that attempt to predict consumer demand, 'visibility gives insight into actual product requests from the customer. 81. Every entity in a supply chain is affected by the demand of the end consumer. I a demand driven model, which entity receives the real data about the consumer demand? A. Retailer B. Distributor C. Manufacturer D. All of the above - answerretailer. EXP: In a demand-based model, only the retailer has insight into the real data on demand. This is known as visibility for customer demand data. 82. Access to real demand data along a supply chain relies heavily on technology. Which of the following technologies can be used by a retailer to alert manufacturers about the need for production in a demand-driven environment? A. Bill of materials B. RFID C. Processing schedule D. All of the above ` - answerEXP: RFID gives instant feedback to manufacturers when a product has been purchased. This can in turn allow the manufacturer to begin to create replacement runs. ` Although demand-driven models operate on real data, they still have to rely on forecasts at some points along the supply chain. At which end of the supply chain will forecasts be the most necessary? A. Retailer B. Distributor C. Manufacturer D. Raw components - answerraw components. The need for raw components must always rely to some degree on forecasting. For example, fruit takes time to grow, so Page17 forecasts must be made in advance on how much land should be devoted to a particular crop to supply a given chain, even if the rest of the chain operates on a demand-driven basis. When a product does not change a lot over time, has stable margins, and offers a longer life cycle, it might be known as a functional product. What is the average margin of error for forecasts relating to this type of product? A. 1% B. 5% C. 10% D. 15% ` - answer10%. EXP: The average margin of error in forecasting for a functional product is 10%. Although this may vary slightly over time, functional products generally remain within a few percentage points of this mark. 85. Sandra is developing a supply chain for a functional product. What kind of performance indicators would not be used for this type of product? A. Buffer Capacity B. Minimal inventory C. Low cost product design D. Short lead times - answerBuffer capacity. EXP: Buffer capacity is a performance indicator that is better used with innovative products. Unlike functional products, which focus on efficiency of physical materials, innovative products have to accommodate less predictable demands. 86. Innovative products often have fairly short life cycles in the market. What is the average lead time required for these kinds of products? - answer1 day to 2 weeks. EXP: In general, innovative products have a very short lead time. This can be as low as one day, but very rarely exceeds two weeks. Katie manages a supply chain for innovative products. Which of the following would she most value in a supplier? A. Consistency B. Long lead times C. Maximum inventory D. Speed and flexibility - answerspeed and flexibility. EXP: Short lead times and short product life cycles mean that supplier speed and flexibility should be Page18 a top concern for supply chains that deal with innovative products. products. Demand may fluctuate rapidly, which means that the most adaptable suppliers will be the best partners for this kind of supply chain. 88. Casey manages a supply chain for functional products. Which of the following would not be a helpful approach for this type of chain? A. Minimal inventory B. Extreme reduction in lead times C. Cost efficient suppliers D. Maximum performance standards for design - answerExtreme reduction in lead time is more appropriate for supply chains based around innovative products. Longer lead times are much more appropriate for a functional product supply chain. In some cases, a supply chain can accommodate both functional and innovative products. Which of the following best represents a type of supply chain that offers both kinds of product? A. Salt B. Alarm clocks C. Automobiles D. None of the above - answerAutomobiles have a wide range of product styles. While a base model, inexpensive car can represent a functional product, there are also high-end cars built primarily for a limited number of consumers that fit more neatly into the category of innovative products. Unlike Fisher s division of products into functional and innovative products, Byrnes argues