Supply Chain Management
Practice Questions
Course Introduction
Supply Chain Management is a comprehensive course that explores the strategic and operational aspects of coordinating activities involved in sourcing, procurement, production, and distribution of goods and services. Students learn about key concepts such as demand forecasting, inventory management, logistics, supplier relationships, and information flow within supply networks. The course emphasizes the importance of integrating processes across organizations to enhance efficiency, reduce costs, and deliver value to customers. Through case studies and real-world applications, learners gain insights into current challenges and innovations in global supply chains, as well as the impact of technology and sustainability practices on supply chain performance.
Recommended Textbook
Managing Operations Across the Supply Chain 3rd Edition by Morgan Swink
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Chapter 1: Introduction to Managing Operations Across the Supply Chain
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Q1) During the "mass production" era, operations management focused primarily on:
A)Production and design.
B)Internal production.
C)The global supply chain.
D)Sales, production and design. In the mass production era, the operations focus was on internal production.
Answer: B
Q2) Which of the following is NOT one of the processes included in operations management?
A)Design
B)Finance
C)Produce
D)Deliver Design, supply, produce, and deliver are operations management processes.Finance is not.
Answer: B
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Page 3
Chapter 2: Operations and Supply Chain Strategy
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Q1) Under which component of the business model would organizational culture fall?
A)Key customer
B)Value proposition
C)Environment
D)System capabilities
Answer: D
Q2) Which of the following is a measure common to both the strategic profit model and the SCOR model?
A)Responsiveness
B)Return on assets
C)Delivery performance
D)Lead time
Answer: B
Q3) Which of the following is NOT considered a key characteristic of a core capability:
A)It is based on factors that are rare or unique to the firm.
B)It is hard to imitate.
C)It does not need to be extendable to many market opportunities.
D)There are few substitutes for it.
Answer: C
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Page 4
Chapter 3: Managing Processes and Capacity
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Q1) Joe Jones, plant manager at Waco Industries, told a friend that if it was necessary, his plant could produce 1,000 items a day if all conditions were just right.Joe is describing his plant's:
A)Effective capacity.
B)Yield rate.
C)Utilization.
D)Maximum capacity.
Answer: D
Q2) An example of a short-term capacity decision is:
A)Adding specialized labor.
B)Installing new equipment.
C)Adding new facilities.
D)Adding low-skilled labor.
Answer: D
Q3) Which of the following two effects is directly a result of bottlenecks?
A)Increase in costs and increase in defects.
B)Increase in output and increase in lead-times.
C)Decrease in inspections and increase in costs.
D)Decrease in output and increase in lead-times.
Answer: D
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Chapter 4: Product Process Innovation
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Q1) Which of the following types of businesses would most likely use a batch process structure?
A)Company that builds cruise ships.
B)An automotive assembler such as Ford Motor Co.
C)A glass beverage bottle manufacturer.
D)A company that produces automobile seats.
Q2) John Jones, CEO of Joes Corp., is unhappy because each product his company makes takes a unique route through the facility, so processing times tend to be high.His company most likely has a:
A)Fixed-position layout.
B)Sequential action layout.
C)Functional layout.
D)Product layout.
Q3) If you were developing a service blueprint, how would you classify "delivery of gasoline to a service station"?
A)Support processes
B)Physical evidence
C)Back-office/invisible contact employee actions
D)Front-office/visible contact employee actions
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Page 6
Chapter 5: Manufacturing and Service Process Structures
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Q1) Xanadu Inc.decided to increase the training received by new employees.The expense of this training is an example of which of the following costs of quality:
A)Appraisal costs
B)External failure costs
C)Internal failure costs
D)Prevention costs
E)Quality control costs
Q2) At the heart of the Six Sigma program is a five-step process called D-M-A-I-C.These letters denote a major activity that must be completed to achieve the objectives of Six Sigma.These activities are:
A)Define, Measure, Analyze, Improve, Control.
B)Define, Measure, Analyze, Inquire, and Compare.
C)Define, Measure, Analyze, Involve, and Cost.
D)Define, Measure Analyze, Improve, and Compare.
Q3) Which of the following statements is NOT consistent with core values of TQM?
A)Front line workers usually have the best ideas for solving problems
B)Every employee has a stake in product quality
C)Managers should support workers, not the other way around D)Opinions are as important as data.
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Page 7
Chapter 6: Managing Quality
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Q1) The width of a histogram showing a distribution of data indicates the __________ of the process that generated the distribution.
A)Predictability
B)Average
C)Bias
D)Central tendency
Q2) You have been given the following sample information that has been drawn from the last sample taken: Mean of the sample: 12.50
Lower control limit for the range: 0 Upper control limit for the range: 10.6
Observations: 13, 12, 8, 10, 11, 16, 17, 8, 17, 18, 20, 14 Which of the following conclusions does this data support?
A)The process is under control.
B)The process is not under control.
C)The sample is within specifications.
D)The sample is out of specification.
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Chapter 7: Managing Inventories
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Q1) C-TPAT or Customs-Trade Partnership Against Terrorism is a program designed to manage the flow of orders across borders.It is an example of which of the following risks for lean supply chains?
A)Operational/technological
B)Social
C)Economy/competition
D)Legal/political
Q2) John Jones is a plant manager.He believes his plant is guilty of "waste of overproduction." Which of the following symptoms might he have observed that led to this belief?
A)Idle equipment.
B)Excess inventory.
C)High customer returns of products.
D)All of these.
Q3) What is the possible impact of lean systems, if taken to its extreme, on supply chain risk?
A)No impact - they are not related
B)Positive impact - lean reduces risk
C)Negative impact - lean increases risk
D)Yet to be determined - the data is not yet in
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Chapter 8: Lean Systems
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Q1) Jones Company makes every effort to consistently meet the expectations of all of its customers.It is clear that Jones Company is focused on:
A)Customer service.
B)Customer satisfaction.
C)Customer happiness.
D)Customer success.
Q2) A firm has found that it provides a 90 percent order fill rate (orders shipped complete), 90 percent on-time delivery, 90 percent of its orders arrive at customers' destination in perfect condition, and 90 percent of the time all documentation is correct.These are all of the elements of a perfect order for this company's customers.If the firm improves its performance in on-time delivery to 98 percent, what is its new perfect order performance?
A)88 percent
B)98 percent
C)0 percent
D)80 percent
E)71.4 percent
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Chapter 9: Customer Service Management
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Q1) Gathering data on the supply market's structure, price forecasts, and supply chain risk are assessed during a/an:
A)Spend analysis.
B)Insourcing/outsourcing decision.
C)Market analysis.
D)Supplier certification process.
Q2) An online auction used for sourcing:
A)Typically drives prices up as suppliers compete against each other.
B)Is used in situations similar to negotiation.
C)Can hurt supplier relationships.
D)Can only consider price.
Q3) In its own country, a former supplier to your company recently began selling its own product that is identical to a product that was developed by your company.This is an example of:
A)Supply risk.
B)Sustainability.
C)Insourcing.
D)Strategic sourcing.
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11
Chapter 10: Sourcing and Supply Management
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Q1) A trucking company which provides shipping services to the public is a:
A)Common carrier.
B)Contract carrier.
C)LTL carrier.
D)Private carrier.
Q2) Falcon Enterprises has four orders to be shipped to different customers located in Houston Texas.The weights of each order are: 4,000 pounds, 5,000 pounds, 8,000 pounds, and 6,000 pounds.The cost to ship each order individually is $12 per hundred weight.The shipments can be consolidated into a single order for a cost of $10 per hundred weight with an additional change of $200 per stop.Should the shipments be consolidated?
A)It does not matter the cost is the same.
B)No, the cost is $340 higher with consolidation.
C)Yes, the cost is $700 lower with consolidation.
D)No, the cost is $700 higher with consolidation.
Q3) The center-of gravity method of determining a facility location:
A)Requires that demand be estimated in terms of the dollar sales revenue in each market.
B)Requires that cost be measured in dollars of transportation cost.
C)Does not require that qualitative factors be considered in location decisions.
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Page 12
Chapter 11: Logistics Management
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Q1) Which of the following factors should be considered when one designs a forecasting process?
A)Time horizon for planning.
B)Level of detail for planning.
C)Availability of data.
D)All the answers are correct.
Q2) Long-term/strategic demand planning is typically done using what units?
A)Total business unit sales
B)Total product family sales
C)Total product item sales
D)Sales at a given location
Q3) Designing postponable products has the potential to allow operations managers to:
A)Ignore forecasts.
B)Move from build-to-stock to assemble or make-to-order operations.
C)Influence the timing of demand.
D)All the items are correct.
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13
Chapter 12: Demand Planning: Forecasting and Demand Management
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Q1) The focus of an aggregate production plan, in general, is on all of the following EXCEPT:
A)The intermediate-term future rather than the very short-term future.
B)Product lines rather than specific items.
C)Facilities and capital equipment rather than labor and inventory.
D)Inventory levels rather than new plants.
Q2) If a make-to-stock manufacturing firm with highly seasonal demand follows a chase demand strategy, which of the following is likely to be true?
A)Inventory will fluctuate significantly during the year.
B)The production rate must be set equal to the demand in the heaviest demand period, and it must stay at that level all year.
C)It will be easy to keep the workforce size stable.
D)The firm likely will have higher capital investment than if it followed a level plan.
Q3) Which of the following is NOT an input into the S&OP?
A)Safety Stocks
B)Spare Parts Demand
C)Promotion
D)Lot Sizing Logic.
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Chapter 13: Sales and Operations Planning
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Q1) Which of the following information is NOT contained in a MRP secondary report?
A)Cost.
B)Inventory levels.
C)Schedule attainment.
D)Planned order releases.
Q2) Demand-driven MRP:
A)Compares materials and capacity requirements within a single firm.
B)Extends planning across the supply chain.
C)Focuses on distribution planning.
D)Is also called advanced planning and scheduling
Q3) Benefits of ERP systems include all of the following EXCEPT:
A)Easy implementation.
B)Fewer data entry errors.
C)More informed business decisions.
D)Improved customer service.
Q4) Which of the following is NOT an input into the MRP?
A)Bill of materials
B)Inventory records file
C)Master production schedule
D)Planned order release
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Chapter 14: Materials and Resource Requirements Planning
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Q1) Which of the following factors is NOT typically considered a best practice for creating a high performing project team?
A)Team members are volunteers.
B)Team members serve on the project from beginning to end.
C)Team members are from the same functional area.
D)Team members are collocated.
Q2) Which of the following is NOT a good reason to kill a project?
A)Consistent budget and schedule overruns.
B)Inadequate resources to complete the project successfully.
C)Personnel problems on the project.
D)The project objectives are no longer of value to the firm.
Q3) Task X is expected to take 3 days to complete.The maximum (latest) earliest finish date for any predecessors to task X is 10.Therefore, the earliest finish for task X is:
A)7
B)10
C)13
D)Cannot determine from the information given
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16
Chapter 15: Project Management
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Q1) Task X has a best-case duration of 4 days, a worst-case duration of 10 days, and a most likely duration of 6 days.Using this information, we can estimate a 50 percent probability that the task will be completed in no more than how many days?
A)6.0 days
B)3.3 days
C)10.0 days
D)6.3 days
Q2) Which of the following statements is true regarding crash costs?
A)Crash costs tend to increase with each additional day of crashing.
B)Crash costs tend to decrease with each additional day of crashing.
C)It is usually cheaper to crash tasks that are not on the critical path.
D)Additional crash costs are rarely justified in practice.
Q3) If a project path has an expected duration of 10 days and a standard deviation of 3 days, what is the probability that the path will be completed in 10 days or less?
A)0 percent
B)33 percent
C)50 percent
D)75 percent
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Chapter 16: Sustainable Operations Management
preparing for the Future
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Q1) Joe's Quick Oil Change shop is interested in improving its ability to satisfy customers.The most appropriate mapping tool for a company such as this is called:
A)Service architecture.
B)Service blueprinting.
C)Service diagramming.
D)Service mapping.
Q2) The principles of process improvement suggest that an effective, efficient process:
A)Maximizes the number of sequential activities and minimizes the number of parallel ones.
B)Eliminates all ? steps.
C)Minimizes the number of entry points of a workpiece into the process.
D)Minimizes reliance on departments outside of manufacturing.
Q3) Which of the following conditions does a "critical" process satisfy?
A)Most steps (thus consuming the most time).
B)The one that people complain about the most.
C)A process that is visible to the key customers.
D)The first process that we encounter in the system.
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Page 18
Chapter 17: Process Mapping and Analysis
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Q1) A FMEA analysis shows that, for a given failure mode, the severity is 5, the occurrence is 3, and the undetectability is 2.The risk priority number (RPN) for this mode is:
A)10
B)5
C)30
D)16
Q2) A project aimed at finding new core products or processes is called a(n):
A)Research and advanced development project.
B)New platform development project.
C)Next generation development project.
D)Enhancement development project.
Q3) What is the first step in conducting value engineering/value analysis?
A)Estimate the value of each function in a product.
B)Identify the functional purposes of a product.
C)Compare the importance and cost of each function.
D)Ask suppliers to provide cost information.
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19
Chapter 18: Quality Improvement Tools
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Q1) When small changes generated by a customer produce progressively larger changes at each stage upstream in the supply chain, this is known as:
A)Buffering.
B)Bullwhip effect.
C)Pareto effect.
D)Vendor managed inventory.
Q2) Which of the following statements is true regarding a periodic review inventory system?
A)Safety stock is not needed when periodic review systems are used.
B)The same quantity of inventory is ordered each time an order is placed.
C)Inventory replenishment orders are placed in equal increments of time.
D)None of the selections are true.
Q3) Which of the following are NOT often associated with a vendor-managed inventory (VMI) arrangements?
A)Long-term commitments from both parties.
B)Supplier representative located at the customer site.
C)Customers recommend to suppliers how they should schedule production.
D)Supplier places replenishment orders.
E)All of these are typically associated with VMI.
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Page 20
Chapter 19: Advanced Methods for Project Scheduling
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Q1) When a company such as Patagonia makes sustainability a critical development and embeds it visibility in advertising or in its activities, we see an example of sustainability operating at which of the following levels?
A)Sustainability as Public Relations.
B)Sustainability as cost minimization.
C)Sustainability as business model.
D)Sustainability as company mantra.
Q2) Zanda Corp.has always operated within one country.It is contemplating opening production facilities in another country.Zanda should realize:
A)Production processes used domestically should work well in a different country.
B)The means of motivating the workforce domestically may not work well in a different country.
C)The technology used domestically is often the best to use in a different country.
D)The same business model that is used domestically should apply to the foreign country.
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