Question 1

A new supplier in a different country will offer substantial savings on existing components. Which part of the organization should be consulted to ensure this is a good strategy for the firm?

Accepted Answer

The logistics department should be consulted to ensure that the new supplier can provide the components at a lower cost without compromising quality and delivery timelines. The logistics team can also help evaluate shipping costs and duties associated with importing from a different country.

Question 2

A company's market is characterized be frequently changing product demand and pressure for short lead times. The company also faces intense competition. To enhance its competitiveness, the company should stress which of the following strategies?

Accepted Answer

The company should reduce cycle times to meet the pressure of short lead times and to respond quickly to the changing product demand. This will enhance its competitiveness by increasing its ability to deliver products faster than its competitors. Increasing the labor force or increasing WIP inventory may not be effective solutions and matching competitor's prices may not be sustainable in the long term.

Question 3

When relocating production offshore, volatility in which of the following areas most likely would impact profitability without modifying product landed costs?

Accepted Answer

When relocating production offshore, currency exchange rates can have a significant impact on profitability without modifying product landed costs. Fluctuations in exchange rates can affect the financial performance of the company, particularly if there is a significant difference between the currency of the production location and the currency of the market where the product is sold. Labor costs, commodity prices, and product quality are all factors that would affect the production cost and thus impact landed costs.

Question 4

A manufacturer experiences frequent changes in product technology and market preferences, resulting in new product introductions each year. Which of the following sourcing strategies would be most appropriate?

Accepted Answer

Strategic partnering involves a close and collaborative relationship between the manufacturer and a few selected suppliers, allowing for customization and flexibility in product development. This would be the most suitable option for a manufacturer with frequent changes in product technology and market preferences, as it allows for a long-term relationship based on trust and mutual benefits.

Question 5

Using financial tools to minimize the impact of currency fluctuations is an example of what type of risk management strategy?

Accepted Answer

Mitigation strategies aim to reduce the impact or likelihood of a risk occurring. Using financial tools, such as hedging, to minimize the impact of currency fluctuations is an example of a mitigation strategy. By hedging, a company is essentially reducing the financial risk of currency fluctuations on their bottom line. Recovery strategies focus on minimizing the damage after a risk event has occurred, prevention strategies aim to stop a risk event from occurring, and diversification strategies involve spreading risk across a range of assets or markets.

Question 6

Which of the following statements describes a continuous replenishment strategy in a retail environment?

Accepted Answer

In a continuous replenishment strategy, the vendor uses sales data to prepare and ship products to maintain the desired level of inventory. This allows for a more efficient supply chain and reduces the need for retailers to make replenishment decisions or prepare individual orders. Vendors still work closely with retailers to ensure customer service is improved. However, they take on a larger role in managing inventory policy.

Question 7

Production of a company's highest profit items is dependent upon the purchase of high-quality circuit boards. Which level of collaboration should the company develop with their supplier?

Accepted Answer

The answer of Production of a company's highest profit items...

Question 8

Which of the following types of risk typically would be most difficult to plan for and mitigate?

Accepted Answer

Geopolitical risks are often unpredictable and cannot be controlled or planned for in advance. They can include events such as political instability, terrorism, war, and natural disasters that can significantly impact the supply chain and disrupt business operations. While other risks such as currency fluctuation, forecast error, and supplier performance can also be challenging to manage, they are typically more predictable and controllable through proactive planning and risk mitigation strategies.

Question 9

An effective company strategy results when combining innovative products with:

Accepted Answer

An effective company strategy results from combining innovative products with an efficient supply chain because an efficient supply chain can help to get the products to market quickly and cost-effectively.

Question 10

Which of the following factors is most likely to slow the adoption of collaborative planning, forecasting, and replenishment (CPFR)?

Accepted Answer

The reluctance to share detailed information is the most likely factor to slow the adoption of CPFR, as this requires a high degree of trust and transparency among supply chain partners. The other factors listed may pose some challenges, but are not as fundamental as the lack of a willingness to share information.

Question 11

Which of the following responses to risk best describes the evolving concept of flexibility in supply chain risk management?

Accepted Answer

The answer of Which of the following responses to risk...

Question 12

Which of the following objectives is a major principle of theory of constraints (TOC) accounting when applied to a supply chain?

Accepted Answer

The answer of Which of the following objectives is a...

Question 13

The design process by which a firm structures and manages the supply chain to achieve optimization is called:

Accepted Answer

The answer of The design process by which a firm...

Question 14

In a reverse supply chain, which of the following tools enables forecasting the usability of each part in the returned product?

Accepted Answer

A disassembly bill of material (BOM) allows for the identification and tracking of individual parts within a returned product. By assessing the condition of each part, it becomes possible to forecast the usability of each part. Reverse network design concerns the physical network of facilities and channels involved in the reverse supply chain, while warranty return rate analysis measures the rate at which products are returned due to defects. Design for service focuses on improving the ease and efficiency of servicing a product.

Question 15

Which of the following distribution strategies is characterized by items flowing through a warehouse in an almost continuous manner?

Accepted Answer

Cross-docking is characterized by items flowing through a warehouse in an almost continuous manner without storage in the warehouse. This means that items are unloaded from inbound trucks and then immediately loaded onto outbound trucks, often without even being stored in the warehouse. This reduces the amount of time and handling required for the items to move through the distribution network, making it a faster and more efficient option.

Question 16

In order to bring a new product to market quickly while maximizing customer value and minimizing costs, a company should leverage:

Accepted Answer

Top performing suppliers ensure high quality, cost-effectiveness, and availability, which are crucial for quickly bringing a product to market while maximizing customer value and minimizing costs.

Question 17

Which of the following factors typically is most important to a company that uses the chase production strategy when evaluating potential suppliers for a component?

Accepted Answer

The chase production strategy focuses on matching production rates to demand, so a supplier's agility, or ability to quickly respond to changes in demand, is crucial.

Question 18

A supplier disputes a low rating generated by a company's enterprise resources planning (ERP) system. Which of the following actions by the purchasing agent is most appropriate?

Accepted Answer

The most appropriate action would be to investigate the discrepancy by comparing the vendor and company detail records and interviewing employees who handled the data. This will help determine if there was a mistake or if there is an issue with the ERP system. Scrapping the entire system or telling the supplier to improve their performance without further investigation would not be appropriate actions. Advising the IT manager of a flaw in the rating system may be a viable option, but this should only be done after a thorough investigation has been conducted.

Question 19

A company that has selected the hybrid production method has multiple alternatives for the timing of activating and deactivating capacity. The inventory carrying costs and which of the following categories of costs would typically be relevant in the analysis of the alternatives?

Accepted Answer

The answer of A company that has selected the hybrid...

Question 20

Which of the following considerations are essential to a company's advanced supply chain strategy that utilizes cloud computing?

Accepted Answer

The answer of Which of the following considerations are essential...

Exam 3: APICS Certified Supply Chain Professional