Supply Chain Design and Management: Master the Fundamentals

Question 1

Which of the following is NOT a fundamental component of supply chain design?

Accepted Answer

Customer service

Answer

Supplier selection

Answer

Inventory management

Answer

Transportation

Question 2

Lead time in a supply chain refers to the time:

Accepted Answer

Between order placement and product delivery

Answer

Required to produce and deliver goods from suppliers

Answer

Customers spend using the products

Answer

For inventory to be replenished

Question 3

In a pull-based supply chain, production is primarily driven by:

Accepted Answer

Actual customer demand

Answer

Forecasted demand

Answer

Supplier production schedules

Answer

Warehouse inventory levels

Question 4

Which of the following is NOT a potential risk in managing global supply chains?

Accepted Answer

Improved communication technologies

Answer

Political instability

Answer

Currency exchange rate fluctuations

Answer

Cultural and language barriers

Question 5

Which strategy effectively mitigates risks in global supply chains?

Accepted Answer

Using diverse suppliers and transportation routes

Answer

Centralizing production in one location

Answer

Eliminating inventory to reduce risk

Answer

Creating long-term contracts with a few suppliers

Question 6

The practice of aligning and coordinating the activities of multiple entities involved in producing and distributing a product or service is known as:

Accepted Answer

Supply chain integration

Answer

Vendor management

Answer

Logistics management

Answer

Operations management

Question 7

The primary purpose of demand forecasting in supply chain management is to:

Accepted Answer

Predict future demand

Answer

Optimize inventory levels

Answer

Reduce production costs

Answer

Enhance customer satisfaction

Question 8

What is the primary goal of inventory management in a supply chain?

Accepted Answer

To minimize total inventory costs while meeting customer demand

Answer

To maximize customer service levels regardless of cost

Answer

To increase production efficiency at the expense of inventory levels

Answer

To reduce supplier lead times without considering inventory implications

Question 9

The Economic Order Quantity (EOQ) formula primarily aims to minimize which cost element?

Accepted Answer

Inventory carrying cost

Answer

Ordering cost

Answer

Transportation cost

Answer

Production cost

Question 10

The bullwhip effect describes how demand variability tends to:

Accepted Answer

Increase as we move up the supply chain

Answer

Decrease as we move up the supply chain

Answer

Remain constant throughout the supply chain

Answer

Be unpredictable at different points in the supply chain

Question 11

What is the fundamental objective of supply chain risk management?

Accepted Answer

To identify and mitigate potential risks in the supply chain

Answer

To eliminate all potential risks in the supply chain

Answer

To transfer all risks in the supply chain to suppliers

Answer

To disregard risks and focus solely on opportunities in the supply chain

Question 12

Which inventory management technique optimizes stock levels by considering holding costs and demand patterns?

Accepted Answer

Economic Order Quantity (EOQ)

Answer

Just-in-Time (JIT)

Answer

First-In, First-Out (FIFO)

Answer

Last-In, First-Out (LIFO)

Question 13

What is the primary goal of transportation in supply chain management?

Accepted Answer

Moving goods and materials efficiently and cost-effectively

Answer

Minimizing inventory levels

Answer

Improving customer service

Answer

Optimizing resource allocation

Question 14

What is the primary purpose of safety stock in inventory management?

Accepted Answer

To buffer against uncertainties in demand and supply

Answer

To reduce holding costs

Answer

To increase customer satisfaction

Answer

To improve inventory turnover

Question 15

Which transportation mode is typically the most expensive but offers the fastest transit times?

Accepted Answer

Air

Answer

Road

Answer

Rail

Answer

Sea

Question 16

What is the main benefit of using a just-in-time (JIT) inventory system?

Accepted Answer

Reduced inventory holding costs

Answer

Improved product quality

Answer

Reduced lead times

Answer

Increased flexibility

Question 17

What is the purpose of a supply chain risk assessment?

Accepted Answer

To identify potential risks and develop mitigation strategies

Answer

To evaluate the financial impact of supply chain disruptions

Answer

To monitor supply chain performance and identify areas for improvement

Answer

To develop a contingency plan for supply chain disruptions

Question 18

What is the primary goal of supply chain design?

Accepted Answer

To create a supply chain that is efficient, cost-effective, and meets customer needs

Answer

To minimize environmental impact

Answer

To reduce production costs

Answer

To increase market share

Question 19

What is the primary objective of inventory management?

Accepted Answer

To ensure the availability of goods or materials when needed

Answer

To minimize inventory carrying costs

Answer

To improve customer service

Answer

To increase production efficiency

Question 20

Which of the following is a potential disadvantage of using a third-party logistics (3PL) provider?

Accepted Answer

Reduced visibility and control

Answer

Increased flexibility and scalability

Answer

Reduced inventory costs

Answer

Enhanced customer service

Question 21

What is the key goal of transportation management?

Accepted Answer

To ensure the timely delivery of goods

Answer

To minimize transportation costs

Answer

To improve product quality

Answer

To reduce environmental impact

Question 22

Which of the following is a qualitative factor to consider when designing a supply chain?

Accepted Answer

Customer responsiveness

Answer

Cost reduction

Answer

Lead time

Answer

Inventory turnover rate

Question 23

What is the purpose of a safety stock?

Accepted Answer

To buffer against unexpected demand variations

Answer

To ensure uninterrupted production

Answer

To reduce inventory carrying costs

Answer

To improve supplier relationships

Question 24

Which of the following is NOT a benefit of supply chain collaboration?

Accepted Answer

Reduced customer satisfaction

Answer

Enhanced information sharing

Answer

Increased flexibility and agility

Answer

Reduced costs and improved efficiency

Question 25

What is the concept of a lean supply chain?

Accepted Answer

Eliminating waste and maximizing value for customers

Answer

Focusing on increasing production capacity

Answer

Increasing inventory levels to buffer against uncertainty

Answer

Reducing supplier partnerships

Question 26

For long-distance shipments, which mode of transportation is typically the most cost-effective option?

Accepted Answer

Sea transport using ships

Answer

Road transport using trucks

Answer

Rail transport using trains

Answer

Air transport using planes

Question 27

What is the primary function of a supply chain network?

Accepted Answer

Establishing connections between suppliers, manufacturers, and customers

Answer

Controlling inventory levels throughout the supply chain

Answer

Optimizing transportation routes and minimizing costs

Answer

Reducing production costs and maximizing efficiency

Question 28

The process of determining optimal inventory levels for each item in a supply chain is known as:

Accepted Answer

Inventory optimization

Answer

Inventory forecasting

Answer

Safety stock management

Answer

Demand planning