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CSCP Certified Supply Chain Professional Exam Question and Answers

Question # 4

Which of the following is the most important result when a company implements customer relationship management?

A.

Profits are maximized.

B.

Retention of key customers is increased.

C.

Product options are increased.

D.

Transaction costs are decreased.

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Question # 5

Which of the following consequences is a result of shipping directly from the point of manufacture to the customer rather than through a distribution network?

A.

Delivery lead times are consistent.

B.

Risk pooling benefits are negated.

C.

Distribution overhead is increased.

D.

Order-fill rate is decreased.

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Question # 6

Supply chain disruption avoidance measures typically are based on distinguishing:

A.

common and special causes of variation.

B.

supplier issues from distribution issues.

C.

planned events from unplanned events.

D.

certified trading partners from other trading partners.

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Question # 7

Enterprise resources planning (ERP) is defined as a:

A.

framework for organizing, defining, and standardizing business processes to use its internal knowledge to seek external advantage.

B.

production control system that determines priorities of in-process work.

C.

software module used to determine whether sufficient capacity is available to ship customer orders on time.

D.

process whereby sales, marketing, and operations determine what products will be sold and what resources will be required for production.

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Question # 8

The most appropriate frequency for the sales and operations planning process typically is:

A.

weekly.

B.

monthly.

C.

quarterly.

D.

annually.

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Question # 9

A tool which allows content to be accessed, customized, and personalized to sell is called a(n):

A.

customer relationship management (CRM).

B.

value-added network (VAN).

C.

customer portal.

D.

online catalog.

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Question # 10

Supplier certification procedures verify that a supplier:

A.

is ISO certified.

B.

implements, documents, and improves procedures related to customer requirements.

C.

tracks manufacturing processes, including bills of material and routings to support the processes.

D.

manufactures products to the specifications shown on engineering documents and bills of material.

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Question # 11

To handle a dispute over damage to goods shipped between two countries, which international standard should be applied?

A.

United Nations (UN) Global Compact

B.

Incoterms®

C.

Export Trading Company (ETC) Act

D.

Omnibus Foreign Trade and Competitiveness Act

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Question # 12

Which of the following approaches would be used to enhance compliance, minimize risks, and connect supply chain activities when exporting products to emerging markets?

A.

Logistics network planning

B.

Distribution requirements planning (DRP)

C.

Supply chain event management (SCEM)

D.

Global trade management

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Question # 13

Which of the following factors is the most important driver of supply chain change?

A.

Health and safety concerns

B.

Competitor actions

C.

Government regulations

D.

Customer perceptions of value

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Question # 14

In an assemble-to-order manufacturing environment, the master production schedule is typically the schedule of:

A.

resources.

B.

customer orders.

C.

components and subassemblies.

D.

the final assembly.

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Question # 15

A company that is effectively managing its cash will have which of the following conditions?

A.

Low accounts receivable, tow inventory, high accounts payable

B.

High accounts receivable, low inventory, high accounts payable

C.

Low accounts receivable, high inventory, low accounts payable

D.

High accounts receivable. high inventory. low accounts payable

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Question # 16

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

A.

top performing suppliers in the areas of quality, cost, and availability.

B.

crowdsourcing for design capital requirements.

C.

e-commerce trading methods.

D.

concurrent engineering or participative design.

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Question # 17

A key challenge in managing the supply chain for an innovative product is that:

A.

contribution margins will be slim.

B.

the product life cycle will be long.

C.

product demand will be volatile.

D.

inventory levels must be minimal.

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Question # 18

A new distribution warehouse is added to an existing supply chain network. Which of the following factors primarily is responsible for the resulting overall reduction of customer delivery lead times?

A.

New material handling equipment improves the speed and efficiency of the pick/pack process.

B.

Increased safety stock levels in the overall network results in fewer stockouts and more on-time deliveries.

C.

The average travel time from the distribution warehouse to the customer is reduced.

D.

The territory for each distribution warehouse shrinks, resulting in fewer inbound transportation carriers.

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Question # 19

Which of the following metrics is the most appropriate measure of the availability of products to ship in a make-to-stock environment?

A.

Backlog level

B.

Fill rate

C.

Perfect order percentage

D.

Average customer order lead time

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Question # 20

When choosing a supplier in a market-responsive supply chain, a company most appropriately would make the selection on the basis of quality and:

A.

product cost.

B.

product development capabilities

C.

cost of delivery.

D.

speed.

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Question # 21

Which of the following processes enables joint planning of key supply chain activities?

A.

Vendor-managed inventory (VMI)

B.

Supply chain event management (SCEM)

C.

Distribution requirements planning (DRP)

D.

Collaborative planning forecasting, and replenishment (CPFR)

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Question # 22

Which of the following technologies best enables pulling products through the supply chain?

A.

Automatic identification system (AIS)

B.

 Point-of-sale (POS) system 

C.

Customer relationship management (CRM)

D.

Supply chain event management (SCEM)

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Question # 23

The primary business advantage of developing an international supply chain is to:

A.

reduce transportation costs.

B.

decrease inventory costs.

C.

limit the number of component suppliers.

D.

realize economies of scale in production and distribution.

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Question # 24

A firm has determined its cash-to-cash cycle time to be 60 days. The number of days' payables outstanding is 25, and number of days' sales outstanding is 35. If the firm reduces its inventory by 20%, the new cash-to-cash cycle time, in days, will be approximately:

A.

48.

B.

50.

C.

60.

D.

88.

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Question # 25

A company that is having difficulties prioritizing resources against a long list of improvement projects should use which of the following processes?

A.

Control chart

B.

Competitive benchmarking

C.

Pareto analysis

D.

Six Sigma

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Question # 26

When maintaining a material requirements plan, scheduled receipts are best represented by which of the following terms?

A.

Planned orders

B.

On-hand inventory

C.

Replenishment shipments

D.

Maintenance, repair, and operating (MRO) supplies

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Question # 27

Effective collaboration for item replenishment by external suppliers requires:

A.

accurate long-term forecasts.

B.

returnable plastic containers.

C.

close communication about component usage.

D.

a process for the reverse supply chain.

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Question # 28

Total line-haul costs vary directly with:

A.

weight shipped.

B.

distance shipped.

C.

shipping time.

D.

the number of times a shipment is handled.

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Question # 29

Which of the following descriptions represents cash-to-cash conversion?

A.

The conversion time from material acquisition to sales revenue

B.

The conversion time from sales order lo receipt of payment

C.

The currency conversion rate when buying and selling goods

D.

The measure of an organization's effective use of inventory

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Question # 30

Which of the following activities is the most appropriate use of an advanced planning and scheduling system?

A.

Selecting the target market for a product

B.

Optimizing transportation routes

C.

Creating a daily demand forecast

D.

Identifying constraints within a facility

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Question # 31

A role-based entry into a company’s system that aggregates all required sources of information into a single environment is known as:

A.

a portal.

B.

a hub.

C.

a local area network (LAN).

D.

an extranet.

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Question # 32

A company has significant cash invested in its finished goods inventories. What action can this company take to significantly reduce its inventory investment while maintaining its customer service levels?

A.

Begin production after receipt of customer orders

B.

Move the customer decoupling point from finished goods to components

C.

Increase component assembly lead times

D.

Plan key component material with preferred suppliers

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Question # 33

Which of the following actions by trading partners will likely reduce the goods that will be processed by the reverse supply chain?

A.

Contracting with a third party to process returned goods

B.

Designing products that are easy to disassemble

C.

Working to delay regulations that require accepting returns

D.

Providing support and service for proper product use

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Question # 34

Which of the following outcomes is an expected benefit of effectively implementing supply chain event management software?

A.

Inventory data are captured in real time.

B.

Files are transferred from one corporation to another.

C.

Notifications of variances from plans are triggered.

D.

Communication protocols between companies are standardized.

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Question # 35

A company would like to benchmark its inventory levels against other companies. Which of the following metrics is best to use for this purpose?

A.

Fill rate

B.

Days of supply

C.

Net asset turns

D.

Cash-to-cash cycle time

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Question # 36

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

A.

Understanding the history and evolution of supply chain technologies

B.

Understanding the complexity of information services configuration

C.

Understanding the content and scope of a company’s cloud implementation

D.

Understanding the product offering of local and global internet service providers (ISPs)

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Question # 37

An effective company strategy results when combining innovative products with:

A.

an efficient supply chain.

B.

a responsive supply chain.

C.

accurate forecasts.

D.

high inventory levels.

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Question # 38

Which of the following operations is the best example of reuse?

A.

Manufacturing new products from worn tires

B.

Utilizing wastepaper as packaging material

C.

Making animal feed from fresh food scraps

D.

Extracting precious metals from used electronics

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Question # 39

A key assumption of the economic order quantity (EOQ) is that:

A.

future demand cannot be projected.

B.

the rate of demand is continuous and constant.

C.

reorder frequency is fixed.

D.

as the lot size decreases, the setup cost per unit decreases.

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Question # 40

A supervisor knows that employees have good ideas for improving department operations but are hesitant to share them. Which of the following tools would be most appropriate for encouraging the employees to participate in identifying opportunities?

A.

Tree diagram

B.

Pareto chart

C.

Process map

D.

Affinity diagram

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Question # 41

Which of the following metrics is the most appropriate measure of supply chain asset efficiency?

A.

Return on equity

B.

Net present value (NPV)

C.

Cash-to-cash cycle time

D.

Upside flexibility

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Question # 42

The practice of purchasing items in large quantities and requesting that shipments be delivered directly to customers is referred to as:

A.

drop shipping.

B.

cross-docking.

C.

breaking bulk.

D.

freight equalization.

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Question # 43

A clothing company focuses its attention on high-fashion products and rapid product development. Which of the following types of value is the company trying to create?

A.

Financial

B.

Customer

C.

Social

D.

Environmental

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Question # 44

A pattern of increased shipments from manufacturing plants to a central warehouse at month-end and quarter-end typically would cause which of the following situations in a central warehouse?

A.

Fluctuation in required labor resources

B.

Decreased use of storage capacity

C.

Decreased transportation costs

D.

Increased outbound shipments

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Question # 45

Bill of lading (B/L) documentation includes which of the following?

A.

Country where goods were produced

B.

Contract for shipping and ownership of goods

C.

Description and terms of sale of goods

D.

Means of payment for import/export of goods

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Question # 46

Which of the following actions is most likely to reduce the risk of product shortages for a company planning to use a subcontractor to produce some of its products?

A.

Sharing product demand forecasts with the subcontractor

B.

Conducting periodic compliance audits of the subcontractor

C.

Increasing safety stock for products to be produced by the subcontractor

D.

Including penalties for late deliveries in the contract with the subcontractor

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Question # 47

A company wants to improve its transportation strategy to focus on its core manufacturing competence and reduce costs. Which of the following options is most likely to enable the company to achieve its objectives?

A.

Implement a transportation management system (TMS)

B.

Transition to leased transportation equipment

C.

Engage a third-party logistics (3PL) company

D.

Redesign the distribution network

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Question # 48

Which of the following supply chain fulfillment strategies is more commonly associated with e-commerce enabled supply chains?

A.

Push system

B.

Parcel shipments

C.

Small number of niche customers

D.

Fewer reverse logistics activities

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Question # 49

Which of the following factors is the key determinant of safety stock for finished goods?

A.

Forecast variance

B.

Mean absolute deviation (MAD)

C.

Standard deviation

D.

Desired service level

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Question # 50

For an item with high profit impact and low supply risk, what would be a likely procurement strategy to support the overall supply strategy?

A.

Ensure supply, even at a premium cost.

B.

Vertically integrate the supply chain.

C.

Exploit purchasing power and minimize cost.

D.

Form a strategic sourcing group.

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Question # 51

The four risks of supply chain risk management are supply, demand,:

A.

quality, and process.

B.

value, and sustainability.

C.

process, and environmental.

D.

value, and environmental.

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Question # 52

Which of the following principles is included in the United Nations (UN) Global Compact?

A.

Trading blocs

B.

Anti-corruption

C.

Risk management

D.

Accounting standards

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Question # 53

Which of the following methods is used to minimize the bullwhip effect?

A.

Outsourcing noncore business activities

B.

Reducing the number of stock keeping units (SKUs)

C.

Reducing lead time

D.

Increasing factory inventory

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Question # 54

A company develops annual forecasts for key products and enters into annual contracts with key suppliers based on the forecasts. Which of the following benefits would the company most likely receive from this approach?

A.

Shorter delivery lead times

B.

Lower prices

C.

Improved service

D.

Higher-quality products

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Question # 55

Due diligence for conflict- or high-risk-materials should include which of the following processes:

A.

a method to track the country of origin of materials when they leave the country.

B.

a system of controls and transparency regarding the traceability of materials through the supply chain.

C.

certification primarily by companies that are selling directly to consumers about the firm’s tier one suppliers.

D.

ability to provide documentation of the source materials when they are imported into United Nations countries.

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Question # 56

Which of the following transportation modes has the highest fixed cost and the lowest variable cost structure?

A.

Rail

B.

Truck

C.

Air

D.

Pipeline

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Question # 57

A retailer that imports furniture from several manufactures in low-wage countries wants to reduce variability in quality. The retailer has proposed merging with one of the manufacturers and giving it sole responsibility for one product family. The proposed merger is an example of:

A.

parallel integration.

B.

internal integration.

C.

horizontal integration.

D.

vertical integration.

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Question # 58

Which of the following types of raw materials would be most appropriate to source via an Internet-based trading exchange?

A.

Expensive material that is critical to the finished good

B.

Expensive material for which there are several substitutes

C.

Inexpensive material that is critical to the finished good

D.

Inexpensive material for which there are many sources

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Question # 59

Throughout most of the supply chain, safety stock will be de-emphasized as a result of improved:

A.

cycle stock

B.

planning.

C.

supply.

D.

information.

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Question # 60

Which of the following situations is an example of inventory being held as a way to balance supply and demand?

A.

A manufacturer holds inventory of key components to maintain a level production schedule.

B.

A manufacturer of seasonal products builds finished-goods inventory before the peak selling period.

C.

A distributor maintains safety stock of slow-moving items at a central distribution center.

D.

A retailer stocks a variety of sizes and colors of a fast-selling item to avoid losing sales.

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Question # 61

The primary reason for the evolution of the supply chain is:

A.

fewer rejects due to poor quality.

B.

increased on-time delivery.

C.

increased cost savings.

D.

increased communication.

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Question # 62

Which of the following benefits of supplier relationship management typically results from collaboration with a few critical suppliers?

A.

Automation of supplier sales activities

B.

Elimination of formal contracts

C.

Reduction in customer and supplier inventories

D.

Standardization of communications

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Question # 63

The question below is based on the following flowchart:

Which of the following phrases most accurately describes the complete flow of demand information?

A.

From supplier to customer

B.

From customer to manufacturer

C.

From customer to supplier

D.

From supplier to manufacturer

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Question # 64

Keeping all other factors equal, a company typically will try to maintain higher service levels for products with:

A.

wider variety.

B.

shorter lead time.

C.

higher profit margins.

D.

lower sales volumes.

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Question # 65

Incorporating supplier input into product and process design helps to:

A.

maintain quality.

B.

stabilize product costs.

C.

reduce time to market.

D.

save costs to the buyer.

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Question # 66

The main benefit of a mass customization product design strategy is to:

A.

sell high quantities of product to specific customer segments.

B.

achieve economies of scale in purchasing components.

C.

offer more product variety while keeping inventories low.

D.

avoid assembly of finished products.

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Question # 67

Which of the following customer relationship management activities most appropriately is used for revenue generation?

A.

Generating customer leads

B.

Generating graphic sales models

C.

Measuring customer preferences

D.

Identifying customer margins

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Question # 68

The factors to consider in the make-or-buy decision include costs, proprietary knowledge, and:

A.

design history.

B.

available capacity.

C.

inventory balance.

D.

warehouse location.

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Question # 69

Which of the following types of information would be an appropriate basis for a qualitative forecast?

A.

Leading indicators

B.

Market research data

C.

Order history

D.

Shipment history

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Question # 70

The primary objective of supply chain management is:

A.

minimizing transportation costs.

B.

reducing inventory levels.

C.

taking a systems approach.

D.

implementing advanced technologies.

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Question # 71

A firm supplies a single line of products to consumers using retail stores and on-line sales, distributors, and wholesalers. Currently the firm has common pricing and response times for sales in each sales channel. Which of the following tools is most appropriate to employ to improve profitability?

A.

Customer segmentation

B.

Customer-facing ordering systems

C.

Customer relationship management (CRM)

D.

Supply Chain Operations Reference (SCOR®)

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Question # 72

Which of the following strategies is used primarily for demand planning?

A.

Build-to-order scheduling

B.

Push-pull replenishment

C.

Collaborative planning, forecasting, and replenishment

D.

Vendor-managed inventory

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Question # 73

A large wholesaler formerly owned a number of delivery trucks. The wholesaler sold all of its trucks and now purchases transportation services from fleet operators. This is an example of which of the following strategies?

A.

Selling and leasing back equipment.

B.

Renting equipment on consignment.

C.

Using a third-party logistics provider.

D.

Using an owner-operator fleet.

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Question # 74

Which of the following situations is an example of postponement?

A.

Shipments are broken down into small groups for reshipment.

B.

Shipments are consolidated immediately for reshipment.

C.

Production begins after a customer order is received.

D.

Partially assembled goods are assembled at a later stage.

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Question # 75

A company’s decision to charge different prices for the same service sold in different market segments is most likely based on which of the following metrics?

A.

Internal rate of return (IRR)

B.

Lifetime customer value (LCV)

C.

Net present value (NPV)

D.

Return on investment (ROI)

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Question # 76

Reverse supply chain activity typically peaks nearest the beginning of which of the following stages of the product life cycle?

A.

Introduction

B.

Growth

C.

Maturity

D.

Decline

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Question # 77

Which of the following actions typically would be the first step in implementing the philosophy of customer relationship management?

A.

Creating a customer-centric organization

B.

Developing a map of the customer segments

C.

Documenting the objectives for implementation

D.

Selecting an information technology solution

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Question # 78

Which of the following levels in a supply chain network represents the most upstream external activity?

A.

Supplier to contractor

B.

Manufacturing to supplier

C.

Customer to distribution

D.

Customer to contractor

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Question # 79

A firm supplies products and services to a wide variety of industries with varying requirements for responsiveness and reliability. Many customers across these industries are not satisfied with the firm’s ability to meet the lead time and on time delivery requirements. Which of the following tools is most appropriate for the firm to use to improve customer service?

A.

Customer service ratio metrics

B.

Market segmentation

C.

Customer relationship management (CRM)

D.

Supply Chain Operations Reference (SCOR®)

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Question # 80

Demand management involves which of the following undertakings?

A.

Adjusting capacity to support expected demand

B.

Engaging in activities associated with customer relationship management

C.

Creating higher customer demand by improving performance in areas such as lead time and service levels

D.

Understanding events and managing activities that could influence future demand

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Question # 81

The most likely benefit of implementing a collaborative transportation management system is:

A.

lower distribution center operating costs.

B.

fewer transportation planners.

C.

less variability in picking and packing time.

D.

less variability in transportation costs.

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Question # 82

A company manufactures special products for select customers. When demand for these products drops, the manufacturer can switch the production line to a commodity-type product that can be sold on the open market at reduced terms to generate cash. The company is executing a corporate strategy that is based on:

A.

customer focus and alignment.

B.

forecast accuracy.

C.

multiple downstream channels.

D.

multiple upstream supply chains.

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Question # 83

In addition to sales history, current customer orders, and forecasted demand, which of the following data sources should be used as part of a demand management process?

A.

Inventory levels

B.

Contractual obligations

C.

Customer profitability

D.

Scheduled marketing activities

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Question # 84

The use of a seasonal index as a forecasting technique measures the ratio of the:

A.

average seasonal demand to the average demand for all periods.

B.

average demand for all periods to the average seasonal demand.

C.

average seasonal demand to the standard deviation of the demand for all periods.

D.

standard deviation of the seasonal demand to the standard deviation of demand for all periods.

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Question # 85

The purpose of continuous improvement in the supply chain is to:

A.

eliminate the root causes of problems.

B.

improve interorganizational communication.

C.

develop better written procedures.

D.

reduce product costs.

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Question # 86

Compared to mass-media marketing, customer relationship management has the advantage of allowing the organization to:

A.

compete for customers based on service.

B.

reach a larger number of potential customers.

C.

reduce inventory to improve cash flow.

D.

focus on attracting new customers.

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Question # 87

Which of the following practices has improved management of the customer pipeline?

A.

Reverse auctions

B.

Sales force automation

C.

Finite capacity planning

D.

Point-of-purchase metrics

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Question # 88

A company plans to maximize profitability by charging more for its products at retail locations than on its website. Which of the following segmentation strategies would best support this plan?

A.

Group

B.

Channel

C.

Regional

D.

Location

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Question # 89

Maintaining a long-term collaborative relationship with a trading partner requires:

A.

formal and informal communication.

B.

interconnected information systems.

C.

one partner regularly exercising power.

D.

standardized terms of agreement.

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Question # 90

Which of the following outcomes is a benefit typically expected of customer relationship management (CRM)?

A.

Reducing the size of the sales force by automating activities

B.

Gaining a better understanding of customer requirements

C.

Implementing automated inter-organizational processes

D.

Focusing sales efforts on the most profitable customers

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Question # 91

Which of the following scenarios represents a correct application of the Supply-Chain Operations Reference-model (SCOR)?

A.

Sales and marketing refers to SCOR to improve demand generation.

B.

Production and engineering uses SCOR best practices to design a new "make" process flow.

C.

Distribution and logistics selects suppliers from the SCOR reference list.

D.

Marketing and development incorporates SCOR Level I metrics for new product design.

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Question # 92

Compared to a global strategy, a multicountry strategy would be characterized by:

A.

strategy coordination across countries.

B.

preferred suppliers located in host countries.

C.

major strategic decisions coordinated centrally.

D.

products adapted to local needs.

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Question # 93

A manufacturer uses standard costing, and a potential supplier uses activity-based costing. This difference most likely will have implications for which of the following types of future decisions?

A.

Price concessions

B.

Make-or-buy

C.

Distribution warehouse locations

D.

Freight terms

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Question # 94

Companies are more likely to consider the consequences of their product design decisions when they view the reverse supply chain as an extension of the:

A.

forward supply chain.

B.

marketing process.

C.

manufacturing process.

D.

sales and operations planning process.

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Question # 95

Which of the following factors typically is the most significant impediment to implementing collaborative commerce?

A.

Technology barriers

B.

Security

C.

Corporate culture

D.

Return on investment (ROI)

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Question # 96

A company's annual cost of goods sold is $350 million, and inventory carrying cost is 18%. The company averages four inventory turns. The cost savings resulting from increasing inventory turns from four to six would be:

A.

$29,000,000.

B.

$15,750,000.

C.

$10,500,000.

D.

$ 5,250,000.

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Question # 97

A large manufacturer wanting to be more competitive in the global market place decided to outsource its transportation and return processing to other companies on a contractual basis. The companies providing the services would be referred to as:

A.

fourth party logistics providers.

B.

third party logistics providers.

C.

retail services providers.

D.

distribution services providers.

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Question # 98

What is the primary role of marketing in supporting supply chain management?

A.

Selecting favored supplier partners

B.

Developing efficient customer channels

C.

Focusing on short-term forecasting accuracy

D.

Working with research and development on slow-moving products

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Question # 99

The process of gathering data about what customers need and ensuring that desired features are included in the design and initial planning phase of a new product or service is known as:

A.

a quick response program.

B.

quality function deployment.

C.

total quality management.

D.

early supplier involvement.

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Question # 100

Which of the following organizational design choices is an example of vertical integration?

A.

Contracting with a third-party logistics provider

B.

Producing components used internally

C.

Externally staffing a customer service center

D.

Awarding a one-time trade show contract

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Question # 101

Medium-term demand management projections are used primarily to:

A.

complete strategic business planning of facilities.

B.

complete forecasts at the item level.

C.

aggregate demand for production planning.

D.

develop the master production schedule.

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Question # 102

The focus of collaborative supply chain management differs from a transactional approach by its emphasis on the:

A.

transportation of goods to the next link in the chain.

B.

flow of product information up to the next level of the chain.

C.

flow of demand information and cash up the chain.

D.

flow of supply into an organization.

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Question # 103

A manufacturer of plastic components that are sold either directly or through distributors wants to identify the requirements of the end customers for each market segment. Which of the following approaches would be most appropriate?

A.

Analyzing the buying history for each of the market segments

B.

Asking the manufacturer's direct customers

C.

Conducting a market research project

D.

Sending samples of potential future products to the final customers

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Question # 104

A remanufacturer of equipment is most likely to have what type of supply chain?

A.

Modular logistics

B.

Reverse logistics

C.

Mixed model

D.

Lateral

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Question # 105

The primary reason for a firm to pursue strategic supply chain activities is to:

A.

gain competitive advantage.

B.

reduce total cost of ownership (TCO).

C.

decrease inventory.

D.

increase product life cycles.

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Question # 106

Which of the following indicators is most appropriate to use as a measure of supply chain utilization?

A.

Production equipment productivity

B.

Net asset turnover

C.

Value-added productivity per employee

D.

Upside flexibility

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Question # 107

Which of the following actions typically would be considered part of a reverse logistics strategy?

A.

Offering a discount on new purchases when used products are returned

B.

Reducing the amount of packaging material used in shipping

C.

Manufacturing products in batches consistent with full-truckload shipments

D.

Batching returns of defective components to the suppliers

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Question # 108

A firm has identified groups of customers based on specific characteristics the customers desire from products and services the firm can provide. Characteristics include lead times, pricing tiers, and service levels. The firm is engaged in which of the following activities?

A.

Customer differentiation

B.

Order winner segregation

C.

Market segmentation

D.

Channel definition

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Question # 109

A return material authorization (RMA) policy is used in reverse logistics to:

A.

physically transport returned items by using an efficient transportation mode.

B.

minimize the number of returned items by involving product design and demand forecasting.

C.

reduce the cost of returned items by refusing to accept items that should not be returned.

D.

reclaim substantial value from returned items by recycling.

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Question # 110

A company considers outsourcing its information technology support to a low-cost region on another continent. The company currently has no business presence there. Which of the following actions is most effective in helping to select a service provider?

A.

Contacting the country's consulate for leads

B.

Contacting the country's local government for recommendations

C.

Visiting several potential providers before making a selection

D.

Finding a trusted local business agent to help in the search

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Question # 111

A company that is focused on customer relationship management is most likely to take which of the following actions for customers who have been profitable over time?

A.

Reduce the cost of serving them.

B.

Target them for higher margin services.

C.

Target them for greater attention.

D.

Charge them for administrative services used.

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Question # 112

Component commonality in manufacturing primarily allows a company to:

A.

optimize production runs for the components.

B.

use less-specialized machinery.

C.

decrease single-minute exchange of die processes.

D.

increase planning and control.

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Question # 113

The strategy to implement supplier relationship management has been developed. The most appropriate next step is to:

A.

develop criteria for prospective partners.

B.

develop policies for alliances.

C.

select initial partners.

D.

conduct a pilot implementation.

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Question # 114

When implementing e-commerce in the supply chain, a company's toughest challenge most likely will be:

A.

getting all vendors to computerize.

B.

translating data into universal standards.

C.

convincing the information technology department of the value.

D.

explaining the reason for change to customers.

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Question # 115

Distribution from which of the following types of sites enables goods to enter a country, undergo further modification, and then be exported without paying customs duties?

A.

Public warehouse

B.

Value-added territory

C.

Free trade zone

D.

Customs clearing house

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Question # 116

Which of the following processes would a company use to evaluate the risk profile for end-of-life planning for a product family?

A.

Distribution requirements planning

B.

Sales and operations planning

C.

Rough-cut capacity planning

D.

Production activity control

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Question # 117

Customizing can be an effective warehousing strategy because it allows a company to:

A.

allocate available storage space to optimize handling costs.

B.

address trade-offs between space and material handling needs.

C.

effectively design its inbound and outbound dock areas.

D.

add value to the product through modification, labeling, and packaging.

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Question # 118

A company ships from its manufacturing facilities directly to its warehouses. If the number of warehouses increases, transportation costs between manufacturing facilities and warehouses most likely will:

A.

increase.

B.

decrease.

C.

not change.

D.

become less predictable.

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Question # 119

When a company undertakes a win-back strategy without considering the profitability of customer accounts, it is neglecting which of the following key elements?

A.

Loyalty

B.

Scoring

C.

Segmentation

D.

Prospecting

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Question # 120

The demand side of a traditional warehouse management system primarily is concerned with:

A.

receiving incoming goods.

B.

assigning storage locations.

C.

assembling outbound orders.

D.

forecasting product demand.

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Question # 121

Managing supply chain risks includes which of the following activities?

A.

Developing alternatives to key suppliers

B.

Setting aside funds for disruption-recovery efforts

C.

Charging each supply chain partner a portion of risk cost

D.

Creating extra inventory to cover disruptions in the supply chain

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Question # 122

The process used to determine the impact of promotions, price discounts, and rebates on demand forecasts commonly is referred to as demand:

A.

planning.

B.

forecasting.

C.

aggregating.

D.

shaping.

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Question # 123

A company that has consistently achieved a high level of on-time delivery performance has decided to reduce its inventory level significantly. Which of the following outcomes is the most likely effect of that decision on the company's on time delivery performance?

A.

There will be no effect.

B.

It will decline and then stabilize at a lower level.

C.

It will improve and then stabilize at a higher level.

D.

It will decline until sales erode.

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Question # 124

Bar codes and radio frequency identification systems are key technologies in supply chain systems because they perform which of the following functions?

A.

Tracking truck locations on cross-country deliveries

B.

Facilitating timely and accurate data acquisition

C.

Providing paperless invoicing of goods

D.

Producing schedule broadcasts for suppliers

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Question # 125

What is the primary benefit of using modular rather than integral designs?

A.

Lower cost of manufacturing

B.

Increased product performance

C.

Greater responsiveness in marketing and production

D.

Reduced complexity of bills of material

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Question # 126

A manufacturer offers a trade-in allowance on a new machine when the customer returns the old machine. The manufacturer reconditions the returned machine locally and then sells it on the used market for a profit. This program is an example of a focus on:

A.

environmentally sensitive engineering.

B.

gray box design.

C.

green manufacturing.

D.

sustainability in operations.

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Question # 127

When an importer and manufacturer are operating in a free trade zone, payment of a customs duty is triggered when products are:

A.

returned.

B.

assembled.

C.

stored.

D.

distributed.

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Question # 128

A product design that can be produced to requirements even when conditions in the production process are unfavorable typically is known as what type of design?

A.

Universal

B.

Computer-aided

C.

Modular

D.

Robust

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Question # 129

A company currently produces custom goods for a limited market. To increase market share, the company will implement a strategy to reduce the number of products it produces and reduce delivery lead time. The company can increase its chances of achieving the strategy by:

A.

using benchmark data for products in the same product groups.

B.

incorporating results from market surveys.

C.

involving customers in the product design process.

D.

using electronic communications to receive customer complaints.

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Question # 130

A firm is undertaking a revision of its financial metrics to make them more comprehensive and has decided to use metrics such as return on investment (ROI), return on assets (ROA), and economic value added (EVA). This is an example of utilizing which of the following types of metrics?

A.

Activity based

B.

Stakeholder focused

C.

Financial sustainability

D.

Value chain

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Question # 131

A company that sells engineered-to-order products is planning implementation of a supplier relationship management system (SRM) for direct materials. Which of the following factors is most likely to make the implementation difficult?

A.

Complexity of the purchasing process

B.

Cost of the application software upgrades

C.

Management of variable lead times

D.

Resistance of material suppliers

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Question # 132

Direct shipment distribution typically offers which of the following advantages?

A.

Risk pooling is facilitated.

B.

Demand variability is reduced.

C.

Service levels are increased.

D.

Lead times are reduced.

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Question # 133

It is most appropriate to measure spending per customer as a proportion of profitability during which of the following phases of a supplier/customer relationship?

A.

Customer acquisition

B.

Customer retention

C.

Customer dependency

D.

Strategic customer care

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Question # 134

A company produces and distributes a family of soft drinks in a single country. It has developed and will introduce a new family of soft drinks for weight- and health-conscious individuals. There currently are no competitors with nationwide distribution for this category of soft drinks. Which of the following supply chain strategies would be most appropriate for the two product families?

A.

Produce both product families to forecast and push through the distribution system.

B.

Produce both product families only after receipt of a distributor order.

C.

Produce the current product family to forecast and the new product family to order.

D.

Produce the current product family to order and the new product family to forecast.

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Question # 135

Which of the following statements about the use of bar code labels for product identification in the supply chain is true?

A.

They have been replaced by radio frequency identification tags.

B.

They can be read by devices 1 to 3 meters from the item.

C.

They facilitate the capture of information about the location of items.

D.

Each of the trading partners must apply a unique label.

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Question # 136

The most important challenge to consider when sourcing globally is:

A.

the identification of sources capable of producing the materials.

B.

the availability of low-cost labor and energy.

C.

complying with specific import/export issues.

D.

balancing the difference between piece price and total cost.

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Question # 137

A company's supply chain depends heavily on sourcing from international suppliers. Conditions increasingly threaten supply continuity. Which of the following actions is most appropriate?

A.

Source from domestic suppliers.

B.

Conduct a risk assessment.

C.

Carry additional safety stock.

D.

Spread logistics across multiple carriers.

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Question # 138

Which of the following warehousing tools enables wireless scanning of products?

A.

Magnetic stripes

B.

Universal product codes

C.

Radio frequency devices

D.

Local area network

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Question # 139

Which of the following measures effectively evaluates overall resources in a distribution warehouse?

A.

Throughput

B.

Cube utilization

C.

Filled pallet positions

D.

Labor efficiency

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Question # 140

Which of the following distribution approaches for a low-volume, high-variety product line typically will result in the highest level of customer service and the lowest total distribution costs?

A.

Direct shipment from plant to customers

B.

Shipment from a central distribution warehouse

C.

Shipment through a multi-echelon distribution network

D.

Outsourcing the distribution function

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Question # 141

Which of the following ISO standards is used to assist organizations with sustainable development?

A.

ISO 31000

B.

ISO 14001

C.

ISO 26000

D.

ISO 9001

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Question # 142

The social dimension of sustainability typically would be addressed when developing and implementing policies regarding:

A.

accounting practices.

B.

biodiversity protection.

C.

conflicts of interest.

D.

waste reduction.

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Question # 143

Which of the following strategies would increase overall supply chain risk?

A.

Single sourcing a product that makes the highest annual profit

B.

Outsourcing a product that is not well suited to your operations

C.

Identify multiple sources for a product that has a potential for supply chain disruption

D.

Internally manufacturing a product that has a high level of technical intellectual property

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Question # 144

Which of the following outcomes occurs when direct shipping is used instead of a distribution network?

A.

Outbound transportation cost is reduced.

B.

Inventory velocity is reduced.

C.

Order-fill rates are reduced.

D.

Inventory obsolescence is reduced.

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Question # 145

Allowing for organizational restructuring is an example of which of the following steps in creating successful strategic alliances among suppliers?

A.

Managing multifaceted relationships

B.

Negotiating a win-win deal

C.

Planning for change

D.

Conducting pulse checks

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Question # 146

Implementation of supply chain applications based on which of the following technologies is most likely to have the lowest fixed costs?

A.

Best of breed packages

B.

One integrated package

C.

Service-oriented architecture

D.

Software-as-a-service

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Question # 147

The transportation manager at a consumer goods manufacturer has decided to begin shipping full truckload rather than less-than-truckload quantities. Which of the following outcomes is likely following implementation of this decision?

A.

Inventory levels at the manufacturer will decrease.

B.

Lead times as seen by the customer will increase.

C.

Production efficiencies at the manufacturer will increase.

D.

Transportation costs as seen by the customer will increase.

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Question # 148

The most appropriate reason for a business to comply with the United Nations (UN) Global Compact practices typically would be to:

A.

enhance the competitive advantage.

B.

gain access to proven management tools.

C.

reduce the threat of organized labor.

D.

reduce the cost of operating in multiple countries.

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Question # 149

A manufacturer and the distributors of its products have decided to focus on price and product availability as strategic priorities. Which of the following values would be the most appropriate measure of customer service?

A.

Manufacturer's volume flexibility

B.

Order-fulfillment lead times

C.

Distributors' order-fill rates

D.

Supply chain inventory days of supply

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Question # 150

A company originally based in Germany sets up companies in India, China, Vietnam, Mexico, and Brazil. It sources most of the raw materials locally and employs the local workforce to manage and produce finished goods. Most of the goods produced are consumed in the same country. The company can be classified as what type of enterprise?

A.

Globally integrated

B.

Domestic

C.

Multinational

D.

Virtual

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Question # 151

In an advanced planning system, which of the following modules feeds the master planning module?

A.

Purchasing planning

B.

Demand planning

C.

Distribution planning

D.

Fulfillment planning

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Question # 152

The customer who provides point-of-sale data remains the sole decision-maker regarding order quantities when what type of inventory strategy is used?

A.

Continuous replenishment

B.

Advanced continuous replenishment

C.

Vendor-managed replenishment

D.

Quick response

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Question # 153

A manufacturer of consumer packaged goods with a single plant and nine regional distribution centers is considering reducing the number of distribution centers in its system. Reducing the number of distribution centers most likely will reduce fixed warehousing and the cost of:

A.

storing cycle inventory in the distribution centers.

B.

storing finished-goods inventory at the manufacturing plants.

C.

transportation from the distribution centers to the customer.

D.

transportation from the plant to the distribution centers.

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Question # 154

The mission of the global reporting initiative (GRI) is to provide a:

A.

comparison of key metrics for companies in the same industries across the globe.

B.

feasible business plan that can be shown to global potential investors.

C.

trusted and credible framework for reports regarding sustainability practices.

D.

transparent collaboration between non-profit organizations and governments.

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Question # 155

Which of the following actions is in accordance with the Ten Principles in the United Nations (UN) Global Compact?

A.

Preventing a group of employees from forming a collective bargaining (union) group

B.

Paying different wages in different parts of the world for a given job classification

C.

Requiring an individual to pay a fee for consideration in hiring or promotion decisions

D.

Withholding certain employment opportunities from specific groups of people

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Question # 156

Inventory parameters established using analytic inventory techniques typically are based on balancing:

A.

supply and dependent demand.

B.

customer service and inventory costs.

C.

transportation and warehousing costs.

D.

inventory levels and decision-making costs.

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Question # 157

A company is formally adhering to the principles of the UN Global Compact. After a review of their supply chain, they have found that a key supplier is in violation of the compact. The best action for the company to do first is:

A.

do nothing. The company is not responsible for compliance of suppliers.

B.

replace the supplier as soon as possible with a compliant supplier.

C.

notify the supplier of non-compliance.

D.

require the supplier to become compliant.

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Question # 158

A corporation must consider which of the following factors when selecting its enterprise resources planning system?

A.

Uniqueness of operations

B.

Corporate profitability

C.

MRP and MRP II processing

D.

Industry benchmarks

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Question # 159

Which of the following activities typically would be an appropriate application of the ISO 31000 Risk Management Principles and Guidelines?

A.

Calculating a risk index for each facility

B.

Establishing external risk communications processes

C.

Projecting the ability of a facility to recover from an event

D.

Preparing for risk management accreditation

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Question # 160

A firm has discovered a product quality issue. What should be the first step in responding to this issue?

A.

Determine the root cause of the quality issue.

B.

Separate the non-conforming products.

C.

Trace the location of the faulty product in the supply chain.

D.

Replace faulty products when they are returned by the end user.

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Question # 161

When doing international business, a company's total line-haul costs will vary with the:

A.

weight shipped.

B.

distance shipped.

C.

pallets shipped.

D.

volume shipped.

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Question # 162

Which of the following factors typically is most important in successfully implementing sales and operations planning (S&OP)?

A.

Involvement of specialists from all functional groups within an organization

B.

Creation of a dedicated S&OP organizational unit

C.

Involvement and accountability at senior management level

D.

Focus on 3 months to 18 months in the future

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Question # 163

A manufacturer is the leader of a group of trading partners that are collaborating to improve customer service levels and profitability. Which of the following methodologies would be most appropriate for synchronizing supply and demand across the supply chain?

A.

Sales and operations planning

B.

Distribution requirements planning

C.

Supply Chain Operations Reference-model

D.

Supply chain event management

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