Multiple Choice Questions (MCQ) on

Supply chain management

March 9, 2015 admin
Multiple Choice Questions (MCQ) on Supply chain management

Which of the following is true for supply chain management?

a. The physical material moves in the direction of the end of chain
b. Flow of cash backwards through the chain
c. Exchange of information moves in both the direction
d. All of the above
(Ans:d)

The sequence of a typical manufacturing supply chain is

a. Storage–Supplier–manufacturing–storage–distributor–retailer–customer
b. Supplier–Storage-manufacturing–storage–distributor–retailer–customer
c. Supplier–Storage-manufacturing– distributor–storage–retailer–customer
d. Supplier–Storage-manufacturing–storage– retailer–distributor–customer
(Ans:b)

The purpose of supply chain management is

a. provide customer satisfaction
b. improve quality of a product
c. integrating supply and demand management
d. increase production
(Ans:c)

Logistics is the part of a supply chain involved with the forward and reverse flow of
a. goods
b. services
c. cash
d. all of the above
(Ans:d)

Due to small change in customer demands, inventory oscillations become progressively larger
looking through the supply chain. This is known as
a. Bullwhip effect
b. Netchain analysis
c. Reverse logistics
d. Reverse supply chain
(Ans:a)

VMI stands for

a. Vendor material inventory
b. Vendor managed inventory
c. Variable material inventory
d. Valuable material inventory
(Ans:b)
 The major decision areas in supply chain management are
a. location, production, distribution, inventory
b. planning, production, distribution, inventory
c. location, production, scheduling, inventory
d. location, production, distribution, marketing
(Ans:a)

Distribution requirement planning is a system for

a. Inventory management
b. Distribution planning
c. Both ‘a’ and ‘b’
d. None of the above
(Ans:c)

Reverse logistics is required because

a. Goods are defective
b. Goods are unsold
c. The customers simply change their minds
d. All of the above
(Ans:d)

3-PL stands for

a. Three points logistics
b. Third party logistics
c. Three points location
d. None of the above
(Ans:b)

Supply Chain Management Solved Multiple choice Questions.

1. _______ analysis relates to what processes, activities, and decisions actually create costs in your
supply chain.
A. Cost driver
B. Value proposition
C. Cost reduction
D. Target costing
cost driver analysis considers how processes, activities, and decisions actually create costs in the value
chain/supply chain.

2. In the 1980s, Toyota and Honda outcompeted American carmakers because they relied on suppliers
for approximately _______ percent of a car’s value.
A. 30
B. 45
C. 60
D. 80
4.The _______ has made it possible for other companies to eliminate intermediaries and sell directly to
the end consumer.

A. SCM
B. Internet
C. competition
D. global sourcing

The World Wide Web has made it possible for each consumer, sans intermediaries, to access the sellers
in the market place directly. If a business has been constrained by its ability to present itself directly in
the market place, there will be growing opportunities to by pass intermediaries and sell directly to the
end consumer.

5. Value stream mapping is an application of process mapping, developed to apply _______ principles to
process improvement.
A. management
B. lean
C. supply chain
D. cycle time

Value stream mapping has supporting methods that are often used in Lean environments to analyze and
design flows at the system level (across multiple processes).

6. A supply chain is made up of a series of processes that involve an input, a _______, and an output.
A. shipment
B. supplier
C. customer
D. transformation

7. _______ is a tool to chart how individual processes are currently being conducted and to help lay out
new improved processes.

A. Process mapping
B. Pareto charting
C. Supply chain design
D. Design chain mapping

8.Identify from the following list a major strategic risk associated with outsourcing.
A. Outsourcing landed cost is usually higher than insourcing cost.
B. The supplier is purchased by a competitor.
C. The business loses sight of market trends.
D. The cost of supplied material is passed on to the customer.

9. _______ is the design of seamless value-added processes across organization boundaries to meet the
real needs of the end customer.
A. Operations
B. Supply chain management
C. Process engineering
D. Value charting

10. The impact of cost reduction on profits is much larger than the impact of increased
A. innovation.
B. production.
C. information.
D. sales.

11. _______ considers how your organization competes and is an essential element of corporate
strategy.
A. Value proposition analysis
B. Leadership
C. A consultant
D. A competitor

12. “3PL” involves using a supplier to provide _______ services.

A. marketing
B. design
C. logistics
D. contract manufacturing

Third Party Logistics; using an OUTSOURCED supplier to provide some combination of logistics activities
such as transportation, warehousing, procurement, manufacturing, inventory management, and
customer service.

13. The collective learning in the organization, especially how to coordinate diverse production skills
and integrate multiple streams of technologies, is called
A. innovative constraint.
B. second-tier competency.
C. corporate skill.
D. core competency.
Core competencies are the collective learning in organizations, and involve how to coordinate diverse
production skills and integrate multiple streams o

14. Integration of business economics and strategic planning has given rise to a new area of study
called __________.
A. Micro Economics
C. Corporate Economics
B. Macro Economics
D. Managerial Economics

1. Supply chain management is essentially the optimisation of material flows

and associated information flows involved with an organisation's operations.
To manage these flows, e-business applications are essential to bring such
benefits as noted in 'Internet retailing' in 2010 which reported that the
average rates of return to a high street retailer could be as high as 10%.
 What did the same source report as the average rate of return for UK e-
commerce sites?

Your Answer: 15%

Correct Answer: 22%

More than double the high street return at 22%.

2. Supply chain (SC) management involves the coordination of all supply

activities of an organisation from its suppliers to the delivery of products to
its customers. There are various features associated with this area of e-
commerce and which refers to what is known as efficient consumer response
(ECR):

Your Answer: Creating and satisfying customer demand by optimizing

strategies, promotions and product introductions

3. An organisation's supply chain can be viewed from a system's perspective

that starts with the acquisition of resources which are then transformed into
products or services. Simply, put the sequence is represented:

Your Answer: (blank)

4. Logistics is an integral part of supply chain management. Which explanation

best represents outbound logistics?

Your Answer: The management of resources supplied from an organisation

to its customers and intermediaries

5. The 'value chain' idea is a concept that has been well established for the
past three decades and it refers to considering key activities that an
organization can conduct to add value for the customer. It traditionally
distinguished between primary activities and support activities. Why is this
concept regarded as outdated with the development of e-business?

Your Answer: The support activities offer far more than just support

6. A value chain analysis provides an analytical framework for an organisation

to examine individual activities and determine value added at each stage.
The principles can also be applied to an organisation's external value stream
 analysis which considers how the whole production and delivery process can
be made more efficient. The activities can be categorized into those:

Your Answer: (blank)

7. Improvements in the value chain can be implemented by following

Kjellsdotter and Jonsson's iterative planning cycle. Which of the following
does not form part of the cycle?

Your Answer: Creating a consensus forecast

Correct Answer: Creating a quality control plan

Answers 1 - 3 are the first three stages with creating a quality control plan
not being part of this model. The final two stages include 'adjusting delivery
and production plan' as well as 'settle delivery and production plan'.

8. What does the following definition refer to: an organisation which uses
communications technology to allow it to operate without clearly define
physical boundaries between different functions?

Your Answer: Base-free organisation

Correct Answer: Virtual organisation

An implication of increasing outsourcing of core activities is that companies

will move towards being a virtual organization.

9. Using digital communication to improve supply chain efficiency is dependent

on effective exchange and sharing of information. The challenges of
achieving standardized data formats and data exchange have given rise to
the study of the optimisation of the:

Your Answer: Information supply chain

10. The typical benefits of e-supply chain management gained by a B2B

company are quite comprehensive. Which of the following is false though?

Your Answer: Reduced complexity of the supply chain

Correct Answer: Increased costs through outsourcing

Outsourcing should actually reduce costs not increase them.

11. What does a company's information system need to deliver to different
parties who need to access the supply chain information of an organisation,
whether they be employees, suppliers, logistics service providers or
customers?

Your Answer: Password and user name reminders

Correct Answer: Supply chain visibility

Supply chain visibility relates to being able to access up-to-date accurate

and relevant information about supply chain processes by different
stakeholders.

12. What was the rationale behind introducing the Global Data Synchronisation
Network in 2005?

Your Answer: To provide a common pricing structure taking currency

fluctuations into account
Correct Answer: To create standards for sharing information about
products

A common approach was needed as there was an incompatibility between

supply change management systems.

13. To manage e-supply chains effectively, benefits need to be developed into a

performance management framework. Sambasivan and colleagues (2009)
produced such a framework, identifying categories of measures and provided
examples of metrics for each. Which of the following fits this framework?

Your Answer: (blank)

14. Key to re-structuring the supply chain is the need to examine the types of
relationships between partners such as suppliers and distributors.
Researchers have found that low cost is the main driver in managing supply
partnerships and a restructuring will often require companies to:

Your Answer: Reduce their number of suppliers

Correct Answer: All of the above

While not a one size fits all approach, the three basic assessments of core
competencies, suppliers and relationships has been shown to be productive.

15. As guidance to managing a global distribution, seven action points have

been suggested. Do these include:
 Your Answer: Treat local distributors as short-term partners
Correct Answer: They are all incorrect

It should not take long to realize that the converse is more applicable for
each of these points.