Model Answer:

a) Strategic Fit refers to consistency between the customer priorities that the
competitive strategy is designed to satisfy and the supply chain capabilities that the
supply chain strategy
aims to build.

True

b) Companies who aim to have efficient supply chains select their suppliers based
on their speed, flexibility and quality

False

c) The following are factors that reflect the ability of companies to understand their
supply chains and achieve responsiveness, except

Meeting long lead time

d) Logistics can be used as a synonym to production in supply chains

False

e) Which of the following are internal Supply chain componentsft

All of the above

f) Locations and capacities of facilities is a supply chain planning decision

False

g) Processes in a supply chain are divided into two categories depending on

whether they are executed in response to a customer order or in anticipation of a
customer order, is which type of supply chain view

Push n pull view

h) The Focal Company (internal supply chain) is fed information from whom:

Suppliers & Customers

i) Which of the following is a benefit of flows in a supply chainft

All of the above

h)Logistic network which moves materials from suppliers to manufacturing unit is

classified as
inbound distribution

k) Supply chain management is the design of seamless value-added processes

across organization boundaries to meet the real needs of the end customer.
l) Work In Progress warehouses hold whatft

partially completed assemblies

m) The amount of inventory kept at each stock point in a warehouse network is

usually based on:

Tradeoffs between warehousing, inventory, and transportation costs

n) Which of the following is NOT a reason that companies are depending more on
their
suppliersft

More control over their suppliers

o) Allocating orders to shipment, setting delivery schedules, placing replenishment

orders is a supply chain planning decision
False

Which of the following is true for supply chain managementft

1. The physical material moves in the direction of the end of chain

 2. Flow of cash backwards through the chain
3. Exchange of information moves in both the direction
4. All of the above

(Ans:4)

The sequence of a typical manufacturing supply chain is

1. Storage–Supplier–manufacturing–storage–distributor–retailer–customer
2. Supplier–Storage-manufacturing–storage–distributor–retailer–customer
3. Supplier–Storage-manufacturing– distributor–storage–retailer–customer
4. Supplier–Storage-manufacturing–storage– retailer–distributor–customer

(Ans:b)

The purpose of supply chain management is

1. provide customer satisfaction

2. improve quality of a product
3. integrating supply and demand management
4. increase production

(Ans:c)

Logistics is the part of a supply chain involved with the forward and reverse flow
of

1. goods
2. services
 3. cash
4. all of the above

(Ans:d)

Due to small change in customer demands, inventory oscillations become

progressively larger looking through the supply chain. This is known as

1. Bullwhip effect
2. Netchain analysis
3. Reverse logistics
4. Reverse supply chain

(Ans:a)

VMI stands for

1. Vendor material inventory

2. Vendor managed inventory
3. Variable material inventory
4. Valuable material inventory

(Ans:b)

The major decision areas in supply chain management are

1. location, production, distribution, inventory

2. planning, production, distribution, inventory
 3. location, production, scheduling, inventory
4. location, production, distribution, marketing

(Ans:a)

Distribution requirement planning is a system for

1. Inventory management
2. Distribution planning
3. Both ‘a’ and ‘b’
4. None of the above

(Ans:c)

Reverse logistics is required because

1. Goods are defective

2. Goods are unsold
3. The customers simply change their minds
4. All of the above

(Ans:d)

3-PL stands for

1. Three points logistics

2. Third party logistics
3. Three points location
4. None of the above
(Ans:b)

JIT is used for forecasting control

Which modeling approach for supply chain design and analysis the variables
known and designedft

Deterministic analytical

Which of the following is not a distribution strategy ft

None of the above

Which modeling approach for supply chain design at least one of the variables is
unknown

Stochastic analytical

The objective of supply chain is

Ans : to improve the efficiency and responsiveness of whole supply chain.

KPI --key performance indicator

What optimization does modelling approach on

All of the above

JIT is reduced to WIP goods

Which ISO standard focuses on security in supply chain

28000.0

Supply chain is concerned with the

The flow of materials in the forward direction ,cash in the reverse direction

Which characteristic of product does ,transportation cost is most cases is a

function of

Weight

Meandering isnt part of logistics

The advantage of using container is

Intermodal transit ease

Inventory carried for the purpose of providing flexibility to each

decision-making unit to manage its operations independently is known
as
Decoupling inventory

Cycle inventory helps in

taking advantage of economies of scale and reducing cost within the supply chain

The inventory that is dependent on alternative modes of transportation

is known as
Pipeline inventory

In an automobile manufacturing facility, the management has brought

down the cost of ordering of automotive components from Rs 500 to Rs
50 through the introduction of electronic ordering. The annual demand
of cars is 15,000 units. Inventory carrying cost of automotive
components is Rs 20 per unit per year. The inventory turnover ratio in
both the cases would be

34.64 and 109.48

In an automobile manufacturing facility, the management has brought

down the cost of ordering of automotive components from Rs 500 to Rs
50 through the introduction of electronic ordering. The annual demand
of cars is 15,000 units. Inventory carrying cost of automotive
components is Rs 20 per unit per year. Now assume the company runs
its manufacturing operation for 300 days a year. Number of days
inventory to be carried in both the cases would be

8.66 and 2.74

The best strategy of minimizing the amount of safety inventory to be
kept in a store without hurting the level of customer service is
minimizing the uncertainty inherent in supply

Higher demand uncertainty provides higher savings by pooling which of

the following inventoryft

Safety inventory

Higher number of stock points required for risk pooling results in higher
savings in terms of

cycle inventory

Centralized system will provide benefits for the items which

includes both c & d

Decentralized system will provide benefits for the items which

includes both a & b

Toyota supply chain is highly flexible in terms of maintaining relationship with the
suppliers.
False

A supply chain could be more accurately described as a supply network

or a supply web.

True

Dell computers have encouraged the suppliers to locate their plants

close to the Dell Assembly plants.

False

The decision pertaining to the capacity of a plant or a warehouse is a

tactical decision.

False
The decision pertaining to which markets will be supplied from which
facilities/locations is a tactical decision.

True

The decision pertaining to timing and size of market promotions is an

operational d
False

There is virtually no difference between 3PL and 4PL service providers.

False

ff-shore production of electronic products in the south-east Asian

countries has made its supply chains extremely complicated.
True

IT can not only act as an enabler, it can turn around the supply chain
performance of an organization.

False

Complex taxation structure has adversely affected the supply chain

performance of Indian organizations.

True

Which of the following statements is true

Logistics is a subset of supply chain.

If a customer visiting a departmental store cannot find his desired soap manufactured
by Hindustan Unilever Ltd (HUL) in the store, which of the following chain partner will
he hold responsible for the non-availability of the soapft

The departmental store

Which of the following sequence is trueft

Sourcing → Inbound logistics → Conversion into finished goods → Outbound logistics → Retailing

Supply chain is concerned with the

e. a, b & c above

The objective of a supply chain is:

a, b & c above

Which of the following statements is trueft

Dell supply chain believed in medium-term relationship with the suppliers with loosely held
supplier network.

In today’s supply chain, there has been a shift in the power structure
in a chain towards

Retailers

Which of the following statements is true regarding outsourcingft

e. b & d above

If the focus of a retailer is to achieve leadership in cost, then which of

the following phenomenon will hold good

Customers will prefer a large variety of products but the retailer will not keep a large variety in
the store in order to achieve economies of scale.

The companies will realize the benefits of implementing IT when which

of the following is undertakenft

e. c & d above
Ford supply chain is characterized by

Vertical integration

Toyota supply chain is characterized by

Long-term relationship with the suppliers

Dell supply chain is characterized by

Individual customization
Which of the following statements is trueft

b & d above

Which one of the following is not the supply challenge being faced by
the Indian organizationsft

IT implementation

The push–pull boundary located at the beginning of a supply chain is

known as:

make-to-order (MTO) supply chain.

he push–pull boundary located at the end of a supply chain is known as:

make-to-stock (MTS) supply chain.

The push–pull boundary located at the interface between component manufacturing

and assembly of a supply chain is known as

configure-to-order (CTO) supply chain.

Which one of the following does not constitute the dimensions of

customer service from the perspective of a supply chainft

Product life span

Customer service dimension(s) used to characterize a supply chain
is/are:
a and c above

Functional products are characterized by:

e. b and c above

Innovative products are characterized by:

a and d above

Which of the following is/are trueft

e. b and c above

Which of the following is not trueft

FMCGs should have a responsive supply chain.

Which of the following is/are trueft

e. b and d above

A firm that does not lie on the efficiency frontier can improve:

both responsiveness and cost performance.

firm that lies on the efficiency frontier can improve:

a, b, and c above

Which of the following supply chain performance measure does not fall
under the SCOR modelft

Product variety

The parameter(s) for supply chain benchmarking is/are captured by the following
measure:

a, b, and c above

When a firm lies on the efficiency frontier, it is possible to improve the

performance of the firm on both responsiveness and efficiency through:

a, b, and c above

Some key points from chapter 1

A supply chain consists of all parties involved, directly or

indirectly, in fulfilling a customer request. The supply chain
includes not only the manufacturer and suppliers, but also
transporters, warehouses, retailers, and even customers
themselves.

The functioning of a supply chain involves three key flows –

information, product, and funds

Logistics emerged as a cross-functional approach that integrates

all materials, functions of purchasing, inventory management,
production control, inbound traffic, warehousing, and store-
keeping as well as incoming quality control with the objective of
ensuring efficient operations. In this shape, business logistics
may be regarded as the early avatar of supply chain management

For any supply chain, there is only one source of revenue:

the customer.

All flows of information, product, or funds generate costs

within the supply chain.

The only way for a manufacturer to keep transportation

costs low is to bring full truckloads of product close to the
market and then distribute locally using “milk runs” with
smaller vehicles
Hyundai Motor’s decision to build a second manufacturing
plant in India in 2008 is a supply chain design or strategic
decision. A firm must ensure that the supply chain
configuration supports its strategic objectives and
increases the supply chain surplus during this phase. The
two Hyundai plants have allowed the firm to cost
effectively serve the growing Indian market and also use
its Indian plants to serve global demand for small cars. In
2015, Hyundai was the second largest automobile
manufacturer and the largest automobile exporter in India.
Supply chain design decisions are typically made for the
long term (a matter of years) and are expensive to alter on
short notice. Consequently, when companies make these
decisions, they must take into account uncertainty in
anticipated market conditions over the following few
years.

The goal of planning is to maximize the supply chain

surplus that can be generated over the planning horizon
given the constraints established during the strategic or
design phase

Planning includes making decisions regarding which

markets will be supplied from which locations, the
subcontracting of manufacturing, the inventory policies to
be followed, and the timing and size of marketing and
price promotions.
Pull processes are initiated by a customer order, whereas
push processes are initiated and performed in anticipation
of customer orders.

The Profit-Leverage Effect states that a decrease in purchasing

expenditures will directly decrease profit (T/F)
False

The purchasing function is one of the most value-enhancing functions in

any organization, and therefore, it is not necessary to periodically monitor
the purchasing function's performance against a set of standards or
industry benchmarks (T/F)

False

Outsourcing allows a firm to concentrate on core capabilities and reduce

staffing levels (T/F)

True

A purchase order is legally binding once issued by the buyer (T/F)

False

Duties, taxes, or customs imposed by the host country for imported or

exported goods, are known as Tariffs (T/F)

True

1. Lean producon and six sigma cant work together as its pertains to SCM.
false
2. 3PL’s o!en do the following
All of the above
3. When dealing internaonally freight terms are much more complicated.
For that
reason there are internaonal terms known as
incoterms
4. If a buyer and seller agree that the terms will be FOB origin then the
following is
true
the buyer owns the product when the seller delivers the product to the
trucker
5. Logiscs a-ect which of the following
all of the above
6. If I have to ship some heavy products (50,000 LBS) from NJ to
California, which
would most likely to be the lowest costs
inter modal
7. If you are believer in the kaizen process of improvement which of the
following
describes your approach to solving problems
slow and steady wins the race
8. Which of the following is not an element of JJIT
addional workforce
9. The di-erence between a Physical inventory and a cycle count is
cycle counts use a small subsets of inventory that are counted on any
given day.
10. When a supplier is willing to provide you di-erent prices based on how
much you
buy it is called
Quanty discounts and price breaks
B&C
11. In ABC analysis which of the following are true
B & C items are generally about for about 80% of the items
A items are given the highest priority and a=enon
Ans: A & C
12. As a CFO you would like lower inventory turns at your company
FALSE
13. A products direct cost consists of
costs directly traceable to the unit produced
the labor and material that is used to make the part of the @nal product
Ans: A & B

14. Indirect costs can be traced directly to the unit produced.

FALSE
15. Order costs in manufacturing include the costs of set up
TRUE
16. Independent demand includes which of the following
holiday season retail sales increase
17. Companies always like to have lots of excess inventory so they can
meet
customers unexpected orders
false
18. There are four broad categories of inventory. Which is not one of the
them.
Bu-er inventory

19. Dependant demand includes all of the following except:

Movements in GDP
20. If my company had unique delivery and handling requirement for my
product
which would be the best type of carrier to me
contract carrier
21. The di-erences between TL and LTL is
LTL is good for companies shipping less weight or volume that cannot @ll
a truck
22. A carrier who o-ers transportaon service to all shippers at published
rates is
referred to as a common carrier.
23. Logiscs consists of the following
ALL of the above
24. Six sigma is a very process driven approach. In DMAIC which of the
following is
not part of the process
-inspect all parts.
25. Six sigma is a process that employs what type of technique
quantave
26. Six sigma is described by which of the following statements
-a stascs based process to make signi@cantly quality improvements
-near quality perfecon
A&B
27. The following contains data which might be necessary to calculate
ROQ
A ) 2250
28. When managing inventory EOQ is used to
determine how many parts to order when you price your order.

29)RFID is another term for bar codes

FALSE
30. Why would a company want to use ABC analysis when managing their
inventory
so they can focus their attention on the few parts that have the highest
inventory
Value.

1. Customer relaonship CRM is only for markeng types and has nothing to
do with SCM
False
2. Customer segmentaon is used so that
companies can focus on specic customer characteriscs that will help them
be!er service those customers
3. It is a more important to find customer
False
4. As a customers of a company that use CRM tools to collect data, you
can assured
that your privacy will always be protected and will never be provide to ther
markeng companies
false
5. When companies are making decisions as to where to locate a new
manufacturing facility
all of the above
6. Which of the following is not one of the 6 locaon types of factory
legendary
7. Companies o,en stet up factories in proximity to their competors factory
TRUE
8. NAFTA involves
Canada, Mexico and USA only
9. In the context SR: which of the following are the types of services
pure services , end products and state ulity
10. Which of the following companies might be the least likely have a costs
leadership strategy
bobs lawn mowing service
11. Companies o,en use call centers to help
all of the above
12. SFA includes:
All of the above
13. Why would a company set up a factory where labor rates are high.
all of the above
14. With regard to “right-to-work” laws which of the following is true.
if there is a union that represents the factory workers. Then as a factory
worker
you can decide if you want to join the union.
15. If a company decides to pursue a Niche strategy, which of the following
best
describes what they are doing
they have a unique service or product to sell that very few other companies
offer

16. The term “Bundling” refers to

how companies put various services together when they o;er
them for sale in
their customers
17. Distribuon channels in service means how you distribute or
provide your service
True
18. Company wants their customers or potenal customers to have
easy access or
availability to their locaon, it called:
locaon Strategy
19. Disney, epcot or a large amusement park would use the
following techniques to
help address its customers service needs
- queue management
- chase demand strategy
- A &B
20. Distribuon channels can include
all of the above
21. A queuing system uses mathemacal formulas that can predict
wait mes and del
with this.
TRUE
22. A company needs to understand their service capacity so they
run
ALL of the above
23. Chase strategy is used when you can vary the capacity as the
demand changes
implemenng a sophiscated queuing system
24. When managing service quality you need to make sure you
deliver the product
and service the customer wants and:
sasfy customers percepons.
25. Keeping customers occupied, starng with the service quickly,
keeping customers
informed grouping customer together, the techniques used to
manage:
wait mes
26. What aspects or dimensions of service quality are important:
All of the above
27. An e;ecve and simple way to reduce and or eliminate service
problems is the
use of
clear communicaon

1. SCM is not involving customers for product sold to them

2. SCM is important because it helps lower coverall costs;
contribute to improve
3. A irst ier supplier: supplies product or services directly to the
buyer
4. The bullwhip efect is caused because customer demand is
rarely perfectly stable
Business must forecast demand to properly posiion
all of the above
5. The most efecive way a supplier can contribute to its company
“green iniiaives
is by
designing and manufacturing products that are environmentally
responsible
6. Benchmarking is comparing a process or product to ytheat of
others..
7. Transportaion management involves the following
tradeof decisions
customer service
negoiaion of freight rates, term and condiions
ABC above
8. MRO stands for maintenance, repairs and operaing supplies
9. SCM helps contribute to companies goals by
acivity seeking beter materials and reliable supplies
working closely with strategic suppliers
involving suppliers and purchasing personnel in new product
design and
development eforts
ANS: All of the above
10. $10 $9 widget 1,000,000
11. Why do companies like to reduce inventory and increase
inventory turns
less space is needed to store it
avoid or reduce inventory obsolesce
it allows them to spend money
All of the above
12. RFQ
13. Companies oten use a P-card in these situaion
small dollar purchases
14. Outsourcing is when a company decised to buy something
instead of makie it
themselves
T
15. Companies someimes have a dsingle or sole source for a part
or product
A, B, C, D
16. A centralized purchasing organizaion is beter than a
decentralizeated Organizaion
it depends on the situation
17. If you wanted to ind out if you were geing the best pruce for
the raw material
you were buying, a technique you might use is called
benchmarking
18. Public and private purchasing are diferent in the following
ways:
all of the above
19. A supplier partnership is:
a term used in SCM
a relaionship between supplier and buyer in which the both work
tohether for
their mutual beneits
B&C
20. Why do companies have supplier ceriicaion program
to help improve their assurance that the quality of the product
meets the
requirements
to reduce the amount of ime they have to spend inspecing
products
Answer: A & B
21. Supplier development does not normally include which of the
following:
working with the tax department
22. Companies have SRP because they :
want to encourage coninuous improvement
want to use those suppliers as examples for other suppliers

suppliers as examples for other suppliers

A & B only
23. Companies measure suppliers for the purpose of
comparing suppliers that provide similar products to one another
what gets measured gets improved
evaluaing performance
BC&D
24. Which is not one of key points of SRM
Hiding of informaion & process lows
25. Supply chain management if done correctly can have a
signiicant inancial impact
on the company’s botom’s line
TRUE

1. MRP is a short range planning tool

tool used to plan components and parts to support the MPS
2. Why might Pull system
because they don’t want to make the product into they have a
real demand
3. Closed loop MRP
APP
MPS
MRP
CRP
All the above
4. ERP is an extension for MRP- II and includes )nance or SCM or
AP
5. Mixed production strategy
includes aspects of both chase and level strategies
maintains stable core workforce
A&B
6. A time fence
to prevent change being made to the short term product schedule
7. ATP is calculated by subtracting con)rmed customer orders
form the quanity the
)rm planned to produce
is the remaining open slots that customer can still order to sales
people and sell
A&B
8. in the context of planning independent demand
the demand to )nal products are a3ected by trends seasonal
pa4erns and
general marker conditional
9. when manufacturing eye glasses. There are two lenses per pair
of eye glasses
2
Here are the part that are needed to make a simple table lamp
if the )nished table lamp is level 0, then which of the following
items would be
the )rst level in a planning BOM
wood from which a base is needed
10. A planner might run a “implosion from a BOM in order to
determine all the products or assemblies a particular part is used
on before
deciding if they can make changes to the part
11. RRP is used
to determine if the aggregate resources such as gross labor and
machine hours
are capable of meeting the aggregate production

12. ERP system can be useful to a business because all of the

following except
)rms must adapt processes to meet ERP system even if they don’t
work in their
company .
13. You understand the Pareto principles if you realize that
the Pareto principle helps you realize that the majority of results
come from a
monitory of inputs
14. A buyer and seller might want to implement a Vendor
managed inventory VMI
program because
A,B,C
the supplier tracks the inventory
buyer can take ownership at stocking location
opportunity for supplier to educate customers about other
products
15. Reverse auctions
take a lot of preparation by the buyer
streamline the negotiation process after auction results are in
16. 3PL companies can be useful for which of the following
-freight management
-product distribution
warehousing
all of the above
17. Qualitative forecasting use intuition and opinion True
18. Quantities forecasting uses mathematical models and
historical data to make
forecasts
TRUE
19. Which description below describes a quantative forecasting
techniques
Weighted moving average
20. A simple moving average forecasting model is only allowed to
use two points in
time
FALSE
21. Which of the following is not quantitative forecasting
technique
Delphi method
22. A tracking signal is often used to determine if the forecast is
within acceptable
control limits
23. ERP system have replaced all MRP and MRP II system use by
companies
FALSE
24. APP are not used for determining the
Hiring temporary employees in the next 2-6 months
25. MPS or Master production schedules are often used
 799:301 Introduction to Supply Chain
Management Quiz Questions

Chapter
01

1.1 Supply chain management starts with understanding the flow.

A. True
B. False

1.2 The following diagram depicts the anticipatory business model (or push business
model).

A. True
 B. False

1.3 It was intense global competition that led manufactures to adopt Supply Chain
Management (SCM) and other practices such as Just-in-Time (JIT).

A. True
B. False

1.4 The goal of Supply Chain Management is to increase customer service by

increasing inventory and reducing costs.

A. True
B. False

1.5 Service firms offer intangible products (meaning products that cannot be
physically touched), therefore, they do not have a supply chain.

A. True
B. False

1.6 Which of the following statements is TRUE?

A. Supply chain management was invented by the auto manufacturing

industry
B. Strategic partnerships are seen as one of the foundations of supply
chain
management C. Purchasing is seen as the final and most difficult step in the
supply chain
D. Logistics and Supply Chain Management are synonymous terms (i.e., they
mean the same thing).

1.7 Which one of the following is NOT a common mode of transportation in the
supply chain?

A. Air
B. Bus C.
Pipeline D.
Rail
 E. Truck
F. Water

1.8 Successful modern supply chain management typically includes the practice of?

A. Keeping high inventories throughout the supply chain B.

Always purchasing materials with the lowest per unit cost
C. Collaborating and sharing information between supply chain
partners
D. Issuing ultimatums to your supply chain partner

1.9 Which one of the following is NOT one of the four Foundations of Supply Chain
Management?

A. Logistics Management B.
Operations Management

C. Demand
Management D. Supply
Management E.
Integration

1.10 Based on the diagram, which of the following correctly identifies the
Manufacturer's Tier 1 supply chain partner(s)?

A. Supplier A and Customer A

B. Supplier A only
C. Supplier C and Customer
C
D. Customer A only E. All the Suppliers and Customers shown are Tier 1
supply chain partners

Chapter
02
2.1 The Qualitative forecasting method is based on opinion & intuition.

A. True
B. False

2.2 Forecasts are more accurate the farther out into the future that you forecast.

A. True
B. False

2.3 Cause-and-Effect Models can have multiple independent variables.

A. True
B. False

2.4 Independent Demand is demand for an item that is directly related to other items
or finished products, such as a component or material used in making a finished
product.

A. True
B. False

2.5 Collaborative Planning, Forecasting, and Replenishment is the process of

combining statistical forecasting techniques and judgment to construct demand
estimates for products or services.

A. True
B. False

2.6 Which one of the following is NOT a type of qualitative forecasting?

A. Sales force composite B.

Consumer survey

C. Jury of executive
opinion

D. Naïve
method

2.7 What does the acronym CPFR represent?

 A. Coordinated Planning & Forecasting Relationships
B. Collaborative Planning, Forecasting, &
Replenishment
C. Centralized Purchasing & Forecasting Relationships
D. Collaborative Purchasing, Forecasting, & Receivables

2.8 In the absence of any other information or visibility, individual supply chain
participants can begin second-guessing what is happening with
ordering patterns, and potentially start over-reacting. This is known as?

A. Forecast Bias B.
The Bullwhip Effect
C. A Tracking Signal D. The Running
Sum of Forecast Errors

2.9 When creating a quantitative forecast, data should be evaluated to detect for a
repeating pattern of demand from year to year, or over some other time interval,
with some periods of considerably higher demand than others. This is known as
a?

A. Trend Variation
B. Random Variation
C. Seasonal
Variation D. Cyclical
Variation

Chapter
03

3.1 The goal of supply chain planning is to balance supply and demand in a way that
realizes the financial and service objectives of the company.

A. True
B. False

3.2 Material Requirement Planning is the system intended to develop long-range

plans (more than a year away) concerning product families manufactured by the
organization.
 A. True
B. False

3.3 The three basic production strategies for addressing the aggregate planning
problem are the chase production strategy, the level production strategy, and the
mixed production strategy.

A. True
B. False
3.4 The Chase Production Strategy relies on a constant output rate and capacity
while varying inventory and backlog levels to handle the fluctuating demand
pattern.

A. True
B. False

3.5 Master Production Scheduling is a process that brings all the demand and supply
plans for the business (sales, marketing, development, production, sourcing, and
finance) together to provide management with the ability to strategically direct the
business to achieve a competitive advantage

A. True
B. False

3.6 Which of the following is an engineering document that shows an inclusive listing
of all the component parts and assemblies making up the final product?

A. Master Production Schedule

B. Bill of
Materials
C. Distribution Requirement Plan
D. Resource Requirement Plan

3.7 The medium-range capacity planning technique used to check the feasibility of
the Master Production Schedule (MPS) is
called?

A. Resource Requirement Planning (RRP)

B. Rough-cut Capacity Planning (RCCP)
 C. Capacity Requirement Planning (CRP)
D. None of the above

3.8 Which of the following MRP terms represents a committed order awaiting
delivery for a specific period?

A. Projected on-hand inventory

B. Time bucket
C. Net requirement
D. Scheduled
receipt

3.9 Organizations that choose to implement one single system with all of the desired
applications from a single vendor is said to have chosen a?

A. Best-of-breed solution
B. Elite integrator solution
C. Single integrator
solution
D. Premier application solution

3.10 The process of converting a parent item’s planned order releases into component
gross requirements is called?

A. Lot Sizing
B. MRP
Explosion C. Bill
of Materials
D. Pegging

Chapter
04

4.1 The four broad categories of inventory are raw materials, work-in-process, MRO,
and finished goods.

A. True
 B. False

4.2 The Economic Order Quantity (EOQ) is the optimal order size because it
minimizes the annual total inventory cost.

A. True
B. False

4.3 There are no inventories in the service industry.

A. True
B. False

4.4 The top 2 primary functions of inventory are (1) To meet customer demand, and
(2) To buffer against uncertainty in demand and/or
supply.

A. True
B. False

4.5 The lowest inventory level at which a new order must be placed to avoid a
stockout is known as the Replenishment Threshold

A. True
B. False

4.6 Inventory costs which are independent of the output quantity are called?

A. Indirect Costs
B. Variable Costs
C. Fixed Costs
D. Carrying Costs

4.7 Which inventory stock level is generally used for a very specific purpose or future
event, and for a defined period of time?

A. Cycle Stock
B. Safety Stock
C. Strategic
Stock
 D. Pipeline Stock

4.8 Which of the following is NOT an example of an ordering cost for products
purchased from a supplier?

A. The cost of transmitting the order

B. The cost of receiving the product
C. The cost associated with processing the invoice
D. The opportunity cost of not ordering from a least cost
supplier E. The cost of handling the product

4.9 The primary purpose of the basic economic order quantity model is

A. To calculate the reorder point, so that replenishments take place at the

proper time
B. To minimize the sum of carrying cost and holding
cost C. To maximize the customer service level D. To
minimize the sum of ordering cost and holding cost

4.10 A type of inventory system that issues an order whenever a withdrawal is made
from inventory, is known as?

A. ABC System B. Bin

System C. Base Stock
Level System
D. Single Period Inventory Model

Chapter
05

5.1 The Profit-Leverage Effect states that a decrease in purchasing expenditures will
directly decrease profit

A. True
B. False

5.2 The purchasing function is one of the most value-enhancing functions in any
organization, and therefore, it is not necessary to periodically monitor the
 purchasing function’s performance against a set of standards or industry
benchmarks.

A. True
B. False

5.3 Outsourcing allows a firm to concentrate on core capabilities and reduce staffing

levels A.

True

B. False

5.4 A purchase order is legally binding once issued by the buyer.

A. True
B. False

5.5 Duties, taxes, or customs imposed by the host country for imported or exported
goods, are known as Tariffs

A. True
B. False

5.6 What is the term that is often used for the acquisition of services?

A. Purchasing B.
Contracting C.
Requisitioning
D. Ordering

5.7 Which of the following is NOT one of the primary goals of Purchasing?

A. Ensure the uninterrupted flow of materials and services at the lowest total
cost
B. Improve the quality of the finished goods produced
C. Increase the supplier base
D. Optimize customer satisfaction.
5.8 Benefits derived from implementing an e-procurement system include all of the
following EXCEPT:
A. Time Savings
B. Real Time Access
C. Trackability
D. Decentralizing
Purchasing

5.9 Which of the following would be a good reason to outsource (buy) versus make
an item?

A. A firm lacks the technology or expertise to produce an

item
B. To utilize existing capacity within a company's own firm
C. To have more direct control over the design and production of an end item
D. No competent supplier presently produces the needed item

5.10 The sum of all costs associated with every activity in the supply stream of a
product, is referred to as?

A. Total Cost of Acquisition

B. Total Cost of
Ownership
C. Purchase Requisition Cost
D. Total Procurement Cost

Chapter
06

6.1 "Rationalizing the supplier base" would mean that the purchasing firm is
attempting to reduce the number of suppliers in its supplier network.

A. True
B. False

6.2 While paperless transactions are now possible through e-procurement and Web-
based services, these would NOT be considered sustainable business practices.
 A. True
B. False

6.3 A Supplier Code of Conduct is intended to inform suppliers of ethical sourcing

expectations and is typically a condition for becoming an approved supplier.

A. True
B. False

6.4 The concept of Distributive Negotiations refers to both sides work together to
maximize the outcome or create a win-win result.
A. True
B. False

6.5 Pain and Gain Share contract provisions are associated with supplier rewards
and recognition programs.

A. True
B. False

6.6 Managing a firm's external resources in ways that support the long-term goals of
the firm can be referred to as?

A. Ethical souring
B. Functional sourcing
C. Strategic
sourcing D. Hybrid
Sourcing

6.7 The following term refers to an act that creates the greatest good for the greatest
number of people?

A. Rights and duties

B. Corporate responsibility
C. Utilitarianism D. Social
sustainability

6.8 An outsourcing program can result in all of the following positive outcomes,
 except?

A. Reducing staffing levels B. Decreased

need for supplier management
C. Cost reduction
D. Gains in manufacturing flexibility

6.9 Which of the following is TRUE?

A. VMI stands for Vertically Managed Inventory

B. 3PL stands for Third Party Leverage C.
VMI stands for Vendor-Managed Inventory
D. 3PL stands for Three Point Logistics

6.10 The sourcing strategies including; maintaining safety and/or strategic stocks,
developing contingency plans, strengthening relationships, and searching for
alternatives, are appropriate for which item category?
A. Non-Critical Items
B. Bottleneck
Items C. Leverage
Items
D. Strategic Items

Chapter
07

7.1 An effective supplier certification program may increase the time spent on
incoming inspections

A. True
B. False

7.2 Award-winning suppliers serve as role models for other suppliers and may
therefore be exempt from audits and certification programs

A. True
B. False
7.3 Successful supplier relationships involve equal decision-making control between
both the buyer and the supplier.

A. True
B. False

7.4 A strong supplier partnership requires that both buyer and supplier adopt a
strong tactical perspective

A. True
B. False

7.5 ISO 14000 is a widely accepted management and quality certification standard

A. True
B. False

7.6 The keys to developing successful supply partnerships include all of the following
EXCEPT?

A. Personal Relationships B.
Individualized Objectives C.
Mutual Benefits and Needs D.
Performance Metrics
7.7 Benefits of implementing an effective supplier certification program include all of
the following EXCEPT?

A. Building long-term relationships B. Reducing

time spent on incoming inspections C.
Increasing the supplier base
D. Recognizing excellence

7.8 The process commonly utilized in continuous improvement is known as?

A. Specific, Measurable, Achievable, Relevant, Time-Oriented (S.M.A.R.T.)

B. Plan, Source, Make, Deliver
C. Ready, Aim, Fire D. Plan,
Do, Check, Act

7.9 An organization's process for evaluating the quality systems of key suppliers in
 an effort to eliminate incoming inspections can be referred to as?

A. Quality Systems Certification

B. Supply Management C.
Supplier Inspection
D. Supplier
Certification

7.10 The best supplier candidates for Supplier Relationship Management (SRM)
include all of the following EXCEPT?

A. Preferred Suppliers B. Suppliers that provide lesser quantities of a

crucial products/services
C. Developmental suppliers that need to make
improvements D. Suppliers that provide high volumes of
products or services

Chapter
08

8.1 LEAN production is an operating philosophy or mindset that attempts to minimize

the impact of supply variability and flaws in forecasting through the use of
safety stock inventories.

A. True
B. False

8.2 The primary design objective of a LEAN layout is to reduce wasted movements
of workers and/or materials.
A. True
B. False

8.3 Which of the following is NOT one of the "Seven Tools of Quality Control"

A. Scatter Diagrams
B. Histograms C. Small
Batch Scheduling
D. Control Charts
8.4 Which one of the following is among the most important elements of the LEAN
manufacturing philosophy?

A. Quality inspections and a standardized product line B.

Fully automated assembly lines and a large supplier base

C. Large inventories and large batch sizes D.

Waste reduction and continuous
improvement

8.5 All of the following are included in the eight wastes EXCEPT?

A. Overproducing B.
Extra-Processing
C.
Overspending
D. Waiting

8.6 LEAN manufacturing emphasizes all of the following EXCEPT?

A. Continuous improvement
B. Large batch sizes C.
Reduction of waste

D. Synchronization of material flows

8.7 Which one of the following is NOT a quality tool of Six Sigma?

A. Flow Diagrams
B. Check Sheets C.
Hysterical Charts
D. Cause & Effect Diagrams

8.8 What company originated the concept of Six Sigma?

A. Ford
B.
Motorola
C. Toyota
D. IBM
8.9 Which Statistical Tool of Six Sigma is used to determine the frequency of a
specific problems?

A. Flow Diagram
B. Pareto Chart
C. Cause and Effect Diagrams
D. Check
Sheet

8.10 Which quality guru (i.e., expert) is credited with the concept that 'quality is free;
defects are costly'

A. W. Edwards Demming
B. Joseph Juran
C. Philip
Crosby
D. Shigeo Shingo

Chapter
09

9.1 A small LTL shipment that originates on a truck in Los Angeles and is moved to
Phoenix where it is unloaded and put onto another truck for final shipment to
Denver would be considered an intermodal shipment since it utilizes more than
one vehicle during shipment.

A. True
B. False

9.2 The term "private warehouse" refers to warehouses that are owned by the
company that also owns the goods being stored.

A. True
B. False

9.3 Transportation regulation and deregulation both have their supporters.

Proponents of regulation consider it to be good since it encourages
competition and allows price negotiations.
 A. True
B. False
9.4 FOB destination requires that the supplier legally retain ownership of the product
being shipped until it reaches the destination; whereas with FOB origination
the buyer takes ownership of the product immediately upon shipment.

A. True
B. False

9.5 Because air transport is so expensive the best cargo candidates for air shipment
are products with a high cost to weight ratio.

A. True
B. False

9.6 A 4PL, commonly referred to as a lead logistics provider, is a trucking company

that also provides tracking services

A. True
B. False

9.7 Which one of the following carrier types generally transports goods for the
company that owns the carrier?

A. Common carrier
B. Exempt carrier
C. Contract carrier
D. Private carrier

9.8 Which of the following modes of cargo transport can be characterized as being
inexpensive, very slow and inflexible, and good for transporting very heavy, very
bulky, and containerized cargo?

A. Air carriers
B. Rail carriers

C. Water
carriers D. Motor
carriers
9.9 The transfer of goods from an inbound carrier to an outbound carrier, without the
goods being put away into storage is known as?

A. Piggy backing
B. Cross
docking C.
Transshipping
D. Customs Brokering
9.10 Which of the following is NOT consistent with a decentralized warehousing
system?

A. Higher safety stocks required

B. Shorter lead times C. Lower
transportation fees
D. Lower total operating
costs

Chapter
10

10.1 The WTO is the only global international organization dealing with the rules of
trade between nations.

A. True
B. False

10.2 A country that imposes high tariffs encourages foreign-based companies to

import goods.

A. True

B. False

10.3 An import can only occur inside the borders of your home country and an export
can only occur outside the borders of your home country.

A. True
B. False
10.4 Two models that utilize quantitative data, to help determine the attractiveness of
one location versus another, are the Break-Even Model and the Extrapolated
Average Cost Model.

A. True
B. False

10.5 A right-to-work law allows employees to decide for themselves whether or not
they want to join or financially support a union.

A. True
B. False

10.6 Which global facility type describes a factory set-up primarily to produce products
at a low cost with minimal technical and managerial
resources?

A. Offshore
Factory
B. Source Factory
C. Server Factory
D. Contributor
Factory
E. Outpost Factory
F. Lead Factory

10.7 When a number of interconnected companies and institutions from a particular

field are located in a single geographic location; that location is referred to as?

A. Regional Business Center

B. Metroplex
C.Business
Cluster D.
Industrial Point

10.8 Which of the following would be considered a “quality-of-life” issue in making a

global location decision?
 A. Currency Stability
B. Community Safety
C. Proximity to Markets
D. Access to Suppliers

10.9 If a company wanted to import materials duty-free, for use in the production of
their end items, and then export them to other countries, they would most likely
utilize?

A. Duty-free Territory
B. International Cross Docking Zone
C. Foreign Trade Zone
D. International Processing Center

10.10 Which global facility type describes a factory set up in an area with an
abundance of advance suppliers, competitors, and research facilities

A. Offshore Factory
B. Source Factory
C. Server Factory
D. Contributor Factory
E. Outpost
Factory F. Lead
Factory
Chapter
11

11.1 Segmenting customers on the basis of things like products purchased, sales
history, demographic information, and desired product features can dilute
the results of a CRM program.

A. True
B. False

11.2 Through the use permission marketing programs, customers are allowed to
select the type of communications companies can make with them, and even
choose to be completely eliminated from both e-mail and traditional mailing lists.
 A. True
B. False

11.3 When websites suggest other items for purchase based on already purchased
items, this is an example of Clickstream selling.

A. True
B. False

11.4 Some of the ways customers evaluate the customer service capabilities of an
organization are through their experiences with human response call centers,
automated response call centers, and consumer web sites

A. True
B. False

11.5 Companies should adopt a Customer Relationship Management (CRM) strategy

for every customer.

A. True
B. False

11.6 Which of the following is a required element of an effective CRM initiative?

A. Sending out promotional materials by e-mail to a large random group of a

potential customers
B. Segmenting
customers
C. Preserving a traditional sales force that communicates with the supply-
chain via a traditional paper document/contract system
D. All of the above
11.7 You are a manager at Sunnydale Appliances. A customer who recently
purchased a dishwasher contacts you with a problem and requests warranty
information. This is an example of?

A. Customer churn

B. Post-transaction customer
service
 C. Customer management
D. Pre-transaction customer service

11.8 When an organization attempts to offer the right products and services to
customers at the right time through the offer of individual promotions tied
to specific events, like birthdays and anniversaries, this is referred to as?

A. Event-based
marketing

B. Segmented selling
C. Holiday marketing D. Extreme
segmentation marketing

11.9 Companies work very hard to reduce the number of their present customers
which never return. This customer defection is often referred to
as?

A. Balking

B. Customer churn

C. Customer Retention
D. Revenue exodus

11.10 Customer Service is?

A. A Philosophy
B. An Activity
C. A Performance Measure
D. All of the above
E. None of the above

Chapter
12

12.1 The optimal capacity utilization for a service organization is 100%.

A. True
B. False
12.2 When a customer takes their automobile to a car wash, the car wash provides
state utility to the vehicle.
A. True
B. False

12.3 Balking occurs when customers decide to leave the queue after some length of
waiting time in the queue.

A. True
B. False

12.4 Themed restaurants such as the ESPN zone (sports theme), Rainforest Cafe
(jungle theme), and Chuck E. Cheese (kids theme) are all examples of
Entertailment facilities.

A. True
B. False

12.5 A service bundle includes the explicit service, the supporting facility, the
facilitating goods, as well as the implicit
services.

A. True
B. False

12.6 The three general service strategies are?

A. profit-based, nonprofits, and free services

B. cost leadership, differentiation, and focus

C. manufacturing, service, and retail

D. mass-production, make-to-order, and

services

12.7 Which of the following items would be considered a facilitating product?

A. The automobiles washed by the car wash

B. The suits being cleaned by the dry cleaner
 C. The tools used to fix your car at an auto
shop

12.8 The number of customers per day an organization's service delivery system is
designed to serve within a certain time frame, is referred to as?

A. Service Capacity

B. CapacityUtilization
C. Productivity Potential
D. Service Throughput
12.9 All of the following are included in the five dimensions of service quality
EXCEPT?

A. Reliability

B. Responsiveness

C. Reasonability
D. Assurance

12.10 Which of the following would NOT be considered an acceptable option in

managing capacity when demand exceeds available service
capacity?

A. Utilizing fewer facilitating products

B. Utilizing technological tools like computers and automated
systems
C. Sharing cross-trained employees
D. Using customers to provide services

Due to small change in customer demands, inventory oscillations become

progressively larger looking through the supply chain. This is known as

o Bullwhip effect
o Netchain analysis
 o Reverse logistics
o Reverse supply chain

The bullwhip effect is caused because customer demand is rarely perfectly stable -
Business must forecast demand to properly position

In the absence of any other information or visibility, individual supply

chain, participants can begin second-guessing what is happening with
ordering patterns, and potentially start over-reacting. This is known as?
o A. Forecast Bias
o B. The Bullwhip Effect
o C. A Tracking Signal
o D. The Running Sum of Forecast Errors

Which of the following is not a cause of the bullwhip effect?

Aligning incentives across the supply chain

How can a company counteract the bullwhip effect?

o Draft better supply contracts

o Improve communication
o Pay higher sales commissions
o Increase inventory

Managing the activities involving the flow of supplies into and out of a company
is known as what?
o SCM
o Procurement and distribution
o Operations management

How do the oscillations of the bullwhip effect change as you move up the supply
chain?
The oscillations, or fluctuations, get larger as one moves up the supply chain
from consumers to suppliers
The oscillations, or fluctuations, self-correct as one moves up the supply chain from
consumers to suppliers.
The oscillations, or fluctuations, get smaller as one moves up the supply chain from
consumers to suppliers
The oscillations, or fluctuations, are constant as one moves up the supply chain from
consumers to suppliers.
Which of the following is not true in the case of a centralized system?

It can capture local knowledge and skills.

Which of the following is not true in the case of a decentralized system?

It has short lead time.

Which of the following sequential stages does supply chain integration involve?