Supply Chain Management

Question Bank
PART - A
1) What is a supply chain?
A supply chain is a network of all parties involved, either directly (or) indirectly, in
fulfilling a customer request. The supply chain includes
 Manufacturers
 Suppliers
 Transporters
 Warehouses
 Retailers
 Customers
2) Define LSCM
Logistics management is that part of the supply chain that plans, implements, and
controls the efficient, effective forward and reverses flow and storage of goods, services,
and related information between the point of origin and the point of consumption in order
to meet customer requirements.
3) What is the objective of supply chain?
 To maximize the overall value generated.
 To maximize the overall profit.
4) What is supply chain surplus?
Supply chain surplus is the value addition by supply chain function of an
organisation. It is calculated by the following formula:
Supply chain surplus = Revenue generated from a customer - Total cost incurred to produce
and deliver the product.
5) Write any three importance of SCM
 Improves customer satisfaction as well as service
 Reduces inventory costs
 Increases cash flow
 Provides better medium for information sharing between partners
 Improves bottom line ( decreasing the use of fixed assets in the supply chain)
6) Factors to be used to measure supply chain management
 Responsiveness
 Efficiency
7) List down the supply chain drivers
1. Logistic drivers
 Facilities
 Inventory
 Transportation
2. Cross functional drivers
 Information
 Sourcing
 Pricing

8) What is value?
The value a supply chain generates is the difference between what the final product is worth
to the customer and the costs the supply chain incurs in filling the customer’s request
9) Two process views of SC
 Push/ pull strategy
 Cycle strategy
10) What are the benefits of supply chain?
 Lower costs
 Improved quality
 Higher profit margins
 Better customer service
 Efficient manufacturing
 Creation of better facilities for manufacturing, product design research
11) What is a strategic fit?
 Consistency between customer priorities of competitive strategy & supply chain
capabilities specified by the supply chain strategy
 Competitive and supply chain strategies have same goals.
EG of strategic fit- Dell
12) Draw the supply chain structure

13) What is supply chain management (SCM)?

SCM is the term used to describe the management of the flow of materials, information, &
funds across the entire supply chain, from suppliers to component producers to final assemblers
to distribution (Warehouses & Retailers), and ultimately to the consumer.
14) What is the objective of supply chain management?
Objective of SCM is to be able to have the right products in the right quantities (at the right
place) at the right moment at minimal cost.
15) Importance of supply chain
 Reduced inventories along the chain.
 Better information sharing among the partners.
 Planning being done in consultation rather than in isolation.
 Supply chain design, planning & operation decisions play a significant role in the
success (or) failure of a firm.
16) What are the three decision phases in supply chain?
 Supply chain strategy (or) design.
 Supply chain planning.
 Supply chain operation.
17) List the four process cycles
 Customer order cycle
 Replenishment cycle.
 Manufacturing cycle.
 Procurement cycle.
18) List the supply chain macro processes in a firm
 Customer Relationship Management.
 Internal Supply Chain Management.
 Supplier Relationship Management.
19) List the customer order process
 Customer Arrival.
 Customer order entry.
 Customer order fulfilment.
 Customer order receiving.
20) List the procurement process
 Component order arrival.
 Production scheduling.
 Manufacturing (or) shipping.
 Receiving.
21) What is push/pull view of SC process?
The processes are divided into two categories depending on whether they are
executed in response to a customer order (or) in anticipation of customer orders.
22) What are the process views of a supply chain?
A supply chain is a sequence of processes and flows that take place within and
between different stages and combine to fill a customer need for a product.
23) What is cycle view of SC processes?
A cycle view of the supply chain clearly defines the processes involved and the
owners of each process.
24) What is customer relationship management?
 All processes that focus on the interface between the firm and its customers.
 Customer relationship management (CRM) is an approach to managing a company's
interactions with current and future customers. It often involves using technology to
organize, automate, and synchronize sales, marketing, customer service, and
technical support.
 The CRM aims to facilitate the placement and tracking of orders.
25) What is the supplier relationship management?
 All processes that focus on the interface between the firm and its suppliers.
 The SRM aims to arrange and manage supply sources for various goods and services.
 Supplier relationship management (SRM) is the discipline of strategically planning
for, and managing, all interactions with third party organizations that supply goods
and/or services to an organization in order to maximize the value of those
interactions.
26) What is logistics management?
Logistics management includes the design and administration of systems to control
the flow of material, work-in-process, and finished inventory to support business unit
strategy.
27) What is SCM Strategy?
A supply chain strategy is an enabler of business strategy. A well executed SC
strategy results in value creation for the organization. It establishes how the organization
has to work with supply chain partners including suppliers, distributors and customers.
28) Define Business Strategy
A business strategy is the means by which it sets out to achieve its desired ends
(objectives). It can simply be described as a long-term business planning. The business
strategy involves leveraging the core competencies of the organisation to achieve a defined
goal or objective. It also includes the analytic and decision making process surrounding what
to offer (products, services), when to offer (timing, business cycle) and where to offer
(markets and segments).
29) Define Sourcing
Sourcing is the "location, acquisition and management of all the vital inputs required
for an organization to operate. This includes raw materials, component parts, products,
labour in all its forms, location and services"
30) What are the components of sourcing decisions?
 In house or outsource
 Supplier selection
 Procurement
 Sourcing related metrics
31) What is make vs. buy decision?
The primary activity of supply chain consists of inbound and outbound logistics,
operations, sales and services. The secondary activities of supply chain include
procurement, technology development, and human resource management. Make vs. buy
decision looks at each of these activities and examines whether they can be done internally
or can be outsourced to an external party.
32) What are the functions of SCM
 Defining business boundaries and relationships
 Managing demand and supply
 Logistics
 Purchasing
 Selling system interface
 Manufacturing system interface
 Product design interface
33) Comparison of efficient and responsive supply chain
EFFICIENT RESPONSIVE
Primary goal Lower cost Quick response
Product design strategy Minimum product cost Modularity to allow postponement
Pricing strategy Lower margins Higher margins
Manufacturing strategy High utilization Capacity flexibility
Inventory strategy Minimize inventory Buffer inventory
34) Define Cycle time in SCM?
The total time it would take to satisfy a customer order if all inventory levels were
zero. It is calculated by adding up the longest lead times in each stage of the cycle.
35) Define Risk Management in SCM
Supply chain risk management (SCRM) is "the implementation of strategies to manage both
everyday and exceptional risks along the supply chain based on continuous risk assessment with
the objective of reducing vulnerability and ensuring continuity."
36) Write short note on SCM Sustainability?
Supply chain sustainability is a holistic perspective of supply chain processes and
technologies that go beyond the focus of delivery, inventory and traditional views of cost. This
emerging philosophy is based on the principle that socially responsible products and practices
are not only good for the environment, but are important for long-term profitability.
37) Write short note on supply Chain Strategy
A supply chain strategy determines the nature of procurement of raw materials,
transportation of materials to and from the company, manufacture of the product or operation
to provide the service, and distribution of the product to the customer, along with any follow-up
service and a specification of whether these processes will be performed in-house or
outsourced.
38) What is meant by facility Decisions
 Location: centralize to gain economies of scale or decentralize to be more
responsive. Other issues are quality of life, cost of workers, cost of facility,
infrastructure, taxes etc.
 Capacity: excess capacity allows a company to be more responsive to changes in the
level of demand, but at the expense of efficiency.
 Manufacturing methodology
Decisions between a product or functional focus and between flexible or dedicated
capacity.
39) List the Six elements of SCM Strategy
 Leverage
 Communication
 Efficiency
 Innovation
 Risk management
 Continuous improvement
40) What are the various enabling Techniques in SCM
It refers to the techniques which can be used and integrated throughout the supply chain.
 Electronic data interchange (EDI)
 The internet
 Enterprise resource planning (ERP)
 The supply chain management software (SCM)
41) Define distribution network
A distribution network is the system a company uses to get products from the manufacturer
to the retailer. A fast and reliable distribution network is essential to a successful business
because customers must be able to get products and services when they want them.
42) What is returnability
Returnability can be defined as the ease with which a customer can return
unsatisfactory merchandise and the ability of the network to handle such returns.
43) Define value addition
The purpose of supply chains is to add value to production and distribution. Depending upon
the markets and the value chains they are servicing, supply chains can be differentiated
according to criteria such as costs, time reliability and risk. Efficient logistics contributes to
added-value in four major interrelated ways:
 Production costs. Derived from the improved efficiency of manufacturing with appropriate
shipment size, packaging and inventory levels. Thus, logistics contributes to the reduction of
production costs by streamlining the supply chain.
 Location. Logistics adds value by taking better advantage of various locations, implying
access to expanded markets (more customers) and lower distribution costs.
 Time. Added value derived from having goods and services available when required along
the supply chain (e.g. lower lead times) with better inventory and transportation
management.
 Control. Added value derived from controlling most, if not all, the stages along the supply
chain, from production to distribution. By better synchronizing cycles and lead times,
logistics enables better marketing and demand response, thus anticipating flows and
allocating distribution resources accordingly.
44) What is Presale
This is one aspect of value addition. This is important especially when a new product is
launched in the channel. The channel members can be empowered by educating them about
 New products
 Marketing campaigns
  Product availability
 Training to internal staff about the latest product offering and technicalities.
45) What is Value addition
The enhancement to a product or service by a company before the product is offered to
customers. It refers to the additional value of a commodity over the cost of the commodities
used to produce it from the previous stage of production. It can be said as to economically
add value to a product and form characteristics more preferred in the marketplace.
Two main types of value addition
 Innovation (improving the existing processes)
 Distribution (service)
46) What is post sale
Value addition does not end with sales. It extends to the post delivery phase also. The
distributor therefore
 has to put in place systems to track products under warranty and take steps to be
closer to the channel partners as well as the customers
 provide support at the lowest cost
 Launch upgrades or replace existing products when they are phased out.
47) What is facility Location
Facility Location is the right location for the manufacturing facility, it will have sufficient
access to the customers, workers, transportation, etc. For commercial success, and competitive
advantage following are the critical factors:
Overall objective of an organization is to satisfy and delight customers with its product and
services. Therefore, for an organization it becomes important to have strategy formulated
around its manufacturing unit. A manufacturing unit is the place where all inputs such as raw
material, equipment, skilled labors, etc. come together and manufacture products for
customers. One of the most critical factors determining the success of the manufacturing unit is
the location
48) What is AIS
The Automatic Identification System (AIS) is an automatic tracking system used on ships and
by vessel traffic services (VTS) for identifying and locating vessels by electronically exchanging
data with other nearby ships, AIS base stations, and satellites.
49) What is Decision Tree
A decision tree is a graphic device used to evaluate decision making under uncertainty. It is
used to evaluate supply chain design decisions given uncertainty in prices, demand, exchange
rates and inflation. A decision model represents our understanding of an evaluation situation.
There are three types of nodes in a decision tree:
 Decision nodes, represented by squares, are variables or actions that the decision maker
controls.
 Chance event nodes, represented by circles, are variables or events that cannot be
controlled by the decision maker.
 Terminal or end nodes, represented in a decision tree diagram by unconnected branches,
are endpoints where outcome values are attached.
By convention, the tree is drawn chronologically from left to right and branches out,
like a tree lying on its side. Decision tree analysis language includes colourful biological
analogies. The starting (usually) decision node is called the root, and the radial lines are
called branches (sometimes twigs). The terminal nodes are sometimes called leaves, and an
overly complex tree bears the label, a bushy mess.
The decision trees are commonly used in operations management specifically in decision
analysis to help identify a strategy most likely to reach a goal.
50) Define Uncertainty
Uncertainty can be defined as the deviation from the expected outcome. It is a
comprehensive term which considers situations which are both positive (chance) and
negative(threats). The uncertainty is primarily affecting the supply chain in four ways:
1. Adding cost;
2. Increasing inventory levels;
3. Increasing lead-times; and
4. Reducing speed to market.
51) What are the factors influencing network decision
 Strategic factors
 Technological factors
 Macro-economic factors
 Political factors
 Infrastructure factors
 Competitive factors
 Customer response time and local presence
 Cost of logistics and facilities
52) Write short note on Optimized network
Optimization models come in a wide variety of complexity and sophistication, with prices to
match. They are typically linear or mixed-integer programs that are capable of determining an
“optimal” distribution network based upon the data, assumptions, and parameters provided.
Changes to any of the assumptions, parameters, or data will cause the model to yield a different
result. Therefore, they are very dependent on the quality of the data and parameters and the
experience of the individual performing the modeling analysis. An optimization-modeling
program is more sophisticated than a Centroid analysis, but it is limited to evaluating a static
range of variables. If a network can be described by summarized data, or by looking individually
at one or more slices in time, then an optimization model is very effective.
53) What is drop shipping:
In this type of distribution network product is shipped directly from the manufacturer to
the end customer, bypassing the retailer. Information flows from the customer via the retailer,
to the manufacturer, and product is shipped directly from the manufacturer to the customer .
54) What is in-transit merge:
It combines pieces of order coming from different locations so that the customer
gets a single delivery. Eg dell
55) Four phases in network design decisions:
 Define a supply chain strategy
 Define the regional facility configuration
 Select a set of desirable potential sites
 Location choices
56) Models for facility location:
Network optimization model: Network optimization solves for the optimal supply chain
network design with the lowest total cost structure given a set of constraints. Network
optimization is typically defined into three segments: Sourcing, Manufacturing and
Distribution optimization.
Gravity model:
57) What are the obstacles to co – ordination in a supply chain?
 incentive obstacles
 Information processing obstacles
 Operational obstacles
 Pricing obstacles
  Behavioral obstacles
58) What is the role of IT in sourcing?
 Design collaboration
 Source (sourcing software assists in the qualification of suppliers)
 Negotiate (negotiation with suppliers)
 Buy (the actual procurement of materials from suppliers)
 Supply collaboration
59) What is logistics information system
Logistics information systems are a subset of the firm’s total information system, and it is
directed to the particular problems of logistics decision making.
There are three distinct elements that make up this system:
1. the input
2. the database
3. and the output
The Inputs
The inputs are data items needed for planning and operating logistics system obtained from
sources like customers, company records, and published data and company personnel.
The Database
Management of the database involves selection of the data to be stored and retrieved,
choice of the methods of analysis and choice of the basic data-processing procedures.
The Outputs
The outputs of a logistics information system include:
1. summary reports of cost or performance statistics,
2. status reports of inventories or order progress,
3. exception reports that compare desired performance with actual performance,
4. Reports that initiate action.
60) Write short note on sources of uncertainty
There are three distinct sources of uncertainty
 Supply uncertainty caused by variability of supplier performance
 Process uncertainty caused by problems in the manufacturing facility
 Demand uncertainty caused by irregularity in customer orders.
61) List the components of inventory
 Cycle Inventory
 Safety Inventory
 Seasonal Inventory
62) What is inventory?
Inventory refers to all the raw materials, work in progress and finished goods within
a supply chain.
In other words, inventories are stocks of the product a firm is manufacturing for sale
and components that make up the product. Thus, inventories form a link between the
production and sale of the product.
63) What are the different categories of inventory
(i) Raw Materials:
These are those goods which have been purchased and stored for future productions. These
are the goods which have not yet been committed to production at all.
(ii) Work-in-Progress:
These are the goods which have been committed to production but the finished goods have
not yet been produced. In other words, work-in-progress inventories refer to ‘semi-
manufactured products.’
 (iii) Finished Goods:
These are the goods after production process is complete. Say, these are final products of
the production process ready for sale. In case of a wholesaler or retailer, inventories are
generally referred to as ‘merchandise inventory’.
64) What is the objectives of inventory management
There are two main objectives of inventory management:
1. Making Adequate Availability of Inventories:
The main objective of inventory management is to ensure the availability of inventories as
per requirements all the times. This is because both shortage and surplus of inventories
prove costly to the organization.
Minimising Costs and Investments in Inventories:
Closely related to the above objective is to minimize both costs as well as volume of
investment in inventories in the organization. This is achieved mainly by ensuring required
volume of inventories in the organization all the times.
65) What is the motive of holding inventory?
There are three major motives behind holding inventories in an enterprise:
a) Transaction Motive: an enterprise maintains inventories to avoid bottlenecks in its
production and sales.
b) Precautionary Motive: Inventories are also held with a motive to have a cushion against
unpredicted business.
c) Speculative Motive: An enterprise may also hold inventories to take the advantages of price
fluctuations. Suppose, if the prices of raw materials are to increase rather steeply, the
enterprise would like to hold more inventories than required at lower prices.
66) What are the costs of holding inventory?
Material cost: These include costs which are associated with placing of orders to purchase
raw materials and components.
Carrying cost: These include costs involved in holding or carrying inventories like insurance
charges for covering risks, rent for the floor space occupied, wages to labourers, wastages,
obsolescence or deterioration, thefts, pilferages, etc.
67) What is bull whip effect?
The bullwhip effect is an observed phenomenon in forecast-driven distribution channels. It
refers to a trend of larger and larger swings in inventory in response to changes in customer
demand, as one looks at firms further back in the supply chain for a product.
68) What is safety stock?
Safety stocks are maintained as a safeguard against uncertainities of demand and supply.
In countries where transportation and supply uncertainities are large, safety stock
constitutes a significant portion of a firm’s inventory.
69) What is risk pooling?
Risk pooling suggests that demand variability is reduced if one aggregates demand
across locations because as demand is aggregated across different locations, it becomes
more likely that high demand from one customer will be offset by low demand from
another. This reduction in variability allows a decrease in safety stock and therefore reduces
average inventory.
70) What is cycle inventory?
Cycle inventory is the average inventory in a supply chain due to either production
or purchases in lot sizes that are larger than those demanded by the customer.
An inventory control and management practice that refers to a process of regularly
scheduled
Inventory counts (usually daily) that "cycles" through your inventory. Using a
“volume based” cycle count strategy, users determine how often certain items or locations
are counted using frequency or dollar values segregated into “ABC” categories. Another
 method is ‘geographic based” where complete counts are sequenced to allow for a
complete cycle through the facility within a given time frame. Cycle counting can eliminate
the need for wall to wall physical counts and can maintain a higher level of on-going
accuracy.
71) What is inventory holding cost?
Holding cost is the percentage of the cost of a product and is the sum of the cost of capital,
spoilage cost, handling cost, occupancy cost and miscellaneous cost.
72) What is vendor managed inventory?
Vendor-managed inventory (VMI) is a business model in which the buyer of a
product (business) provides certain information to a vendor (supply chain) supplier of that
product and the supplier takes full responsibility for maintaining an agreed inventory of the
material, usually at the buyer's consumption location (usually a store). A third-party logistics
provider can also be involved to make sure that the buyer has the required level of inventory
by adjusting the demand and supply gaps.
73) What is Multi-echelon inventory?
Multi-echelon inventory optimization looks at inventory levels holistically across the
supply chain while taking into account the impact of inventories at any given level or
echelon on other echelons. For example, if the product sold in a retailer’s outlet is received
from one of its distribution centers, the distribution center represents one echelon of the
supply chain and the outlet another one. It should be clear that the amount of stock needed
at the outlets is a function of the service received from the distribution center. The better
the service that is provided upstream, the smaller the protection that is needed
downstream. The goal of multi-echelon inventory optimization is to continually update and
optimize safety stock levels across all of these echelons.
Multi-echelon inventory optimization represents the state of the art approach to
optimize inventory across the end to end supply chain. Modeling multiple stages allows
other types of inventory, including cycle stock and prebuild along with safety stock due to
time phased demands, to be accurately predicted. As part of inventory optimization,
supplier performance, customer service and internal asset metrics should be continuously
monitored to enable continuous improvement.
74) What is single echelon approach?
A sequential single-echelon approach forecasts demand and determines required inventory
for each echelon separately. Multi-echelon inventory optimization determines the correct
levels of inventory across the network based on demand variability at the various nodes and
the performance (lead time, delays, service level) at the higher echelons.
75) What is lot or batch size?
A lot or batch size is the quantity that a stage of a supply chain either produces or
purchases at a time.
76) What are facilities?
The actual physical locations in the supply chain network when product is stored,
assembled, (or) fabricated.
77) What is sourcing in SC?
It is the choice of who will perform a particular supply chain activity such as
production, storage, transportation, or the management of information.
78) Differentiate between Centralized and decentralized warehousing.
In centralized warehousing, a single warehouse serves the whole market, while in
decentralized warehousing the market is divided into different zones, each of which is served
by a different (smaller) warehouse.
Decentralized warehousing leads to reduced lead times since warehouses are much
closer to customers. On the other hand, centralized warehousing is characterized by lower
facility costs because of larger economies of scale.
79) What is warehouse management system?
Warehouse Management System (WMS): “is a key part of the supply chain and primarily
aims to control the movement and storage of materials within a warehouse and process the
associated transactions, including shipping, receiving, put away and picking. The systems
also direct and optimize stock put away based on real-time information about the status of
bin utilization. A WMS monitors the progress of products through the warehouse. It involves
the physical warehouse infrastructure, tracking systems, and communication between
product stations.”
80) What are the types of facilities?
There are two major types of facilities. They are
 Production sites
 Storage sites
81) Define TL
Truckload shipping is the movement of large amounts of homogeneous cargo,
generally the amount necessary to fill an entire semi-trailer or intermodal container. A
truckload carrier is a trucking company that generally contracts an entire trailer-load to a
single customer. This is as opposed to a less-than truckload (LTL) company that generally
mixes freight from several customers in each trailer. One advantage Full Truckload (FTL)
carriers have over Less than Truckload carriers is that the freight is never handled en route,
whereas an LTL shipment will typically be transported on several different trailers.
82) Define LTL
A term common to the shipping industry is LTL or “less than truck load.” That means that the
item being shipped will not take up the entire available space on the truck. FTL or “full truck
load” means that the load will fill up the entire truck. Shippers that accommodate full truck loads
cater to those customers who typically ship in bulk. The large amount of goods being shipped
offsets the cost of a larger truck.
83) What are the different modes of transportation?
Supply chains use a combination of the following modes of transportation
 Air
 Package carriers
 Truck
 Rail
 Water
 Pipeline
 intermodal
84) What is intermodal transportation?
Intermodal transportation is the use of more than one mode of transport to move a
shipment to its destination. A variety of intermodal combinations are possible with the most
common being truck/rail.
85) What are various considerations when designing a transportation network?
 Should transportation be direct or through an intermediate site
 Should the intermediate site stock product or only serve as a cross docking location
 Should delivery route supply a single destination or multiple destinations
86) What is milk run?
Milk run is a route on which a truck either delivers product from a single supplier to multiple
retailers or goes from multiple suppliers to a single buyer location.
87) What is information in SC?
Information consists of data and analysis concerning facilities, inventory,
transportation, costs, prices and customers throughout the supply chain.
88) What is the role of transportation in SC?
It is facilities moving inventory from point to point in the supply chain.
Transportation is an important supply chain driver because products are rarely produced
and consumed in the same location. Transportation is a significant component of the costs
incurred by most supply chains.
89) What is freight forwarder?
A freight forwarder, forwarder, or forwarding agent, also known as a non-vessel operating
common carrier (NVOCC), is a person or company that organizes shipments for individuals or
corporations to get goods from the manufacturer or producer to a market, customer or final
point of distribution. Forwarders contract with a carrier to move the goods. A forwarder does
not move the goods but acts as an expert in the logistics network. A forwarder contracts with
carriers to move cargo ranging from raw agricultural products to manufactured goods. Freight
can be booked on a variety of shipping providers, including ships, airplanes, trucks, and railroads.
It is not unusual for a single shipment to move on multiple carrier types. International freight
forwarders typically handle international shipments. International freight forwarders have
additional expertise in preparing and processing customs and other documentation and
performing activities pertaining to international shipments.
90) Define reverse logistics.
Reverse logistics is the process of moving goods from their typical final destination for
the purpose of capturing value, or achieving proper disposal to the satisfaction of the customer
or consumer
91) Define Break bulk
In shipping, break bulk cargo or general cargo are goods that must be loaded individually,
and not in intermodal containers nor in bulk as with oil or grain. Ships that carry this sort of
cargo are often called general cargo ships. The term break bulk derives from the phrase breaking
bulk—the extraction of a portion of the cargo of a ship or the beginning of the unloading process
from the ship's holds. These goods may not be in shipping containers. Break bulk cargo is
transported in bags, boxes, crates, drums, or barrels. Unit loads of items secured to a pallet or
skid are also used.
92) Define Cross-dock.
Cross-docking is a practice in the logistics of unloading materials from an incoming semi-
trailer truck or railroad car and loading these materials directly into outbound trucks, trailers, or
rail cars, with little or no storage in between. This may be done to change the type of
conveyance, to sort material intended for different destinations, or to combine material from
different origins into transport vehicles (or containers) with the same destination or similar
destinations.
93) List the factors influencing the design of packaging.
 The type of product to be packed
 The cost of the product
 The amount of handling that the product has to go through
 Package should facilitate handling
 Ability to be reused
 Ability to be disposed
 Its effect on environment
94) What are the types of packaging?
Packaging is classified into two types:
1. Consumer oriented packaging in which packaging is designed for consumer
convenience and appeal, marketing considerations and display.
2. Logistic oriented industrial packaging focuses on the handling convenience and
protection during transportation, material handling and storage.
95) What are the stages in industrial packaging?
 First stage is packaging the product itself. For example, soft drinks are packaged in cans.
 Second stage is called Master cartons. In this case the packaged products are packed in
larger cartons so that it can help in quantity handling.
 The third stage is that of formation of unit load. Here the master cartons are consolidated
into a single, large unit to facilitate handling, transportation, protection and storage. This
process may involve palletization, where the master cartons are mounted onto a standard
size rigid platform.
96) Differentiate between inbound and outbound logistics.
Inbound logistics: The management of materials from suppliers and vendors into production
processes or storage facilities.
Outbound logistics: The process related to the movement and storage of products from the end
of the production line to the end user
97) Design options or types of distribution network:
Manufacturer storage with direct shipping
Manufacturer storage with direct shipping and in-transit merge
Distributor storage with package carrier delivery
Distributor storage with last mile delivery
Manufacturer/Distributor storage with customer pickup
Retail storage with customer pickup
98) What are the elements of customer service/needs?
Response time
Product variety
Product availability
Customer experience
Order visibility
Returnability
99) Elements of cost of meeting customer needs:
Inventories
Transportation
Facilities and handling
Information
100) Role of network design in the supply chain:
Facility role Facility
allocation Capacity
allocation
Market and supply allocation
101) factors influencing network design decisions:
 Strategic factors
 Technological
 Macroeconomic
 Political
 Infrastructure
 Competitive
 Socioeconomic
102) What is 3PL?
A third party logistics provider that performs one or more of the logistics activities relating
to the flow of product, information and funds that could be performed by the firm itself.
Eg: UPS & FedEx
103) Define 4PL?
 4PL is an integrator that assembles the resources, capabilities and technology of its own
organization and other organizations to design, build and run comprehensive supply chain
solutions.
104) What are the risks of using a third party?
 The process is broken
 Underestimation of the cost of co-ordination
 Reduced customer/supplier contact
 Loss of internal capacity and growth in third party power
 Leakage of sensitive data and information
 Ineffective contracts
105) What is the need for organization structure?
Logistics /supply chain is a vital activity that must be carried out in every firm.
Providing organizational structure to logistics/SC defines the necessary lines of authority and
responsibility to ensure that goods are moved according to plan. The balance between
customer service and the costs to produce can be effectively monitored if there is an
exclusive structure. Areas such as order processing, traffic and warehousing can be
individually supervised for better control. A manager is often required to coordinate the
combined operations and achieve the highest level of efficiency.
106) What are the various stages of organizational development?
Organizational development has been evolving over the years. Stage1: observed in
the early 1970’s represented clustering of activities that were important to logistics
management.
Stage 2: organization was directed at formal structures where a top level executive was
placed in charge of the relevant logistics activities.
Stage 3: organization structure referred to full integration of logistics activities.
Stage 4: processes such as product scheduling, work in progress inventory management and
coordination of just in time scheduling both inbound and outbound are now included in the
scope of integrated logistics.
107) What are the different organization choices?
The organization choices can be categorized as informal, semiformal and formal
types.
Informal: There is no change in organizational structure but rely on compulsion to
accomplish coordination among activities and people responsible for them.
Semiformal: A logistician or supply chain coordinator is assigned to manage the projects that
involve the supply chain and the other functional areas.
Formal: clear lines of authority and responsibility are established for logistics/SC.
108) What are the three corporate strategies followed by organizational design?
The three corporate strategies are
 Process strategy – the objective is to achieve maximum efficiency in moving goods
from raw materials to finished goods state.
 Market strategy – has a strong customer service orientation
 Information strategy – primary objective is the coordination of logistics activity
throughout the dispersed network (network of dealers and distribution
organizations).
109) What is organizational positioning?
Organizational positioning refers to the placement of logistics activities in the
organizational structure. Positioning is carried out to effectively manage the logistics
activities. Positioning is based on whether the organization is centralized or
decentralized, staff or line and large or small organization.
110) Differentiate between centralized and decentralized organization?
 A centralized organization groups logistics activities at the corporate level for serving
all product groups. It keeps close control over logistics activities.
A decentralized organization puts the responsibility for logistics at the product group
or division level. It allows quicker and more customised logistics response to
customer needs.
111) Differentiate between staff and line organization?
Staff organization: the logistician is placed in a consulting role to the other functions
such as marketing and operations.
Line organization: A line position is directly involved in the day-to-day operations of
the organization, Line positions are occupied by line personnel and line managers.
Line personnel carry out the primary activities of logistics department and are
considered essential to the basic functioning of the organization.
112) What is interfunctional management?
When all the activities of a firm are economically interrelated to departmentalize
along functional lines promotes conflicts, in order to deal with such conflicts
interfunctional management is setup. A shared interface exists so that collective
management is made possible among the functional areas to prevent suboptimal
decisions from being made.
113) What is interorganizational management?
Supply and distribution policies of any one firm in the distribution channel can affect
the performance of other firms in the channel it is advantageous to view the channel
as a single entity and manage it to the benefit of all members involved.
114) What is superorganization?
The superorganization is a group of firms related through their business processes
and mutual objectives (satisfying customers and maximizing profits) but these firms
are legally separate. They share a common interest in individual decisions made by
each since the decisions of other firms can affect their performance and vice versa.
115) What is an alliance?
The high cost of logistics may force firms to collaborate with firms having excess capacity,
strategic facility locations to markets, desirable technology and outstanding administrative
capabilities. Forming a logistics alliance or partnerships may benefit both parties by
strengthening its own competitive position.
116) What is process framework?
The control process is in part one of monitoring changing conditions with the anticipation
that corrective action may be needed to realign actual performance with planned
performance. The control process framework ensures accomplishment of the desired goals.
117) What are the types of control systems?
They are generally categorized into
 Open loop systems – human intervention is present in the action of
comparing the actual and desired performance and in the action to reduce process
error.
 Closed loop systems – the decision rule is used as manager surrogate in
closed loop systems. The decision rule acts as the manager would if they had
observed the performance error.
118) What is control information?
An effective logistics control system requires accurate, relevant and timely information
about activity or function performance. The main sources of this information are audits and
various reports of logistics activities.
PART - A
1. Explain the drivers of SCM?
2. Describe the concept of SCM And Logistics Management
3. Explain the SCM enabling technologies
4. Explain the Evaluation Study of LSCM
5. Explain the role of SCM Manager
6. Discuss the impact of Effective performance of Logistics and SCM
7. Explain clearly about the SCM Strategy
8. Describe the Advantages and disadvantages of SCM
9. Describe the Concept of SCM And Logistic Management?
10. Explain the global application in SCM Value Chain Trends?
11. Explain the importance and note of distribution network design
12. Explain the fundamental of Logistics Management
13. Explain the Current trends in Logistics automation?
14. Explain the Logistics Outsourcing?
15. Discuss the impact of uncertainty on network design
16. Explain how network design decisions are made using decision trees
17. Explain the network design planning
18. Explain the performance measure of logistics network model
19. Explain the location analysis techniques
20. Describe the term LIS
21. Describe the design options for a distribution network
22. Describe the various types of warehousing
23. Explain the Implementation of Sourcing
24. Explain Bull whip effect
25. Explain the concept of Coordination in supply chain
26. Explain the supply chain redesign on the inventory
27. Explain the role of Inventory Management
28. How do you manage cycle inventory and safety inventory
29. Describe about vendor managed inventory
30. Explain the term multi echelon inventory
31. Explain the role of warehousing
32. Explain the models of facility Locations
33. Explain 3PL and 4PL
34. Explain the term shipping container Labeling
35. What are the different drivers of transportation discuss in detail
36. What is cross dock? Discuss its significance in logistics management
37. Discuss about the various types of transportation utilized in Logistics Management?
38. What is industrial packaging? Discuss its significance in logistics management
39. What is 3PL. discuss the advantage and disadvantage of using third party logistics.
40. Elucidate the need and development of organization structure in logistics management
41. Distinguish between interfunctional and interorganizational management in logistics
management
42. Explain the control process framework in detail
43. What is organizational positioning? Explain the basis of organizational positioning
44. Discuss in detail the different organizational choices
45. What are the different sources of control information? Discuss the different types of audit.

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