CSCP Supply Chain Design 2 — Questions and Answers
Question 1: In supply chain design, 'total cost of ownership' (TCO) includes:
- Purchase price plus all costs of acquiring, using, and disposing of a product (Correct answer)
- Only the unit purchase price from a supplier
- Freight and customs duties only
- Annual maintenance and repair costs only
Correct answer: Purchase price plus all costs of acquiring, using, and disposing of a product
TCO captures the full life-cycle cost including acquisition, operation, maintenance, and disposal beyond just the purchase price.
Question 2: Which factor most directly influences the decision to use a centralized versus decentralized distribution network?
- The tradeoff between transportation cost and customer service lead times (Correct answer)
- The number of SKUs in the product catalog
- The company's annual revenue
- The number of employees in the logistics department
Correct answer: The tradeoff between transportation cost and customer service lead times
Centralized networks reduce inventory holding costs but increase transportation costs and lead times, while decentralized networks do the opposite.
Question 3: What is 'supply chain segmentation' in the context of CSCP?
- Tailoring supply chain strategies to different customer or product groups based on their unique needs (Correct answer)
- Dividing a single supplier's orders into multiple shipments
- Breaking down a bill of materials into components
- Separating domestic and international supply chains
Correct answer: Tailoring supply chain strategies to different customer or product groups based on their unique needs
Supply chain segmentation assigns different service levels, replenishment strategies, or channels to distinct groups of products or customers.
Question 4: Which of the following best describes 'demand shaping' in supply chain management?
- Using pricing, promotions, and product availability to influence customer demand (Correct answer)
- Forecasting future demand using historical data
- Shifting production capacity to meet peak demand
- Increasing safety stock to buffer against demand spikes
Correct answer: Using pricing, promotions, and product availability to influence customer demand
Demand shaping proactively influences customer demand through incentives like discounts, promotions, or product substitutions.
Question 5: A 'hub-and-spoke' distribution network is characterized by:
- Consolidating shipments through central hubs before delivery to end destinations (Correct answer)
- Direct shipping from every supplier to every customer
- Shipping exclusively via rail networks
- Using only third-party logistics providers
Correct answer: Consolidating shipments through central hubs before delivery to end destinations
Hub-and-spoke networks consolidate freight at central hubs to achieve economies of scale before distributing to final destinations.
Question 6: The concept of 'decoupling point' in supply chain design refers to:
- The point where a product transitions from push-based to pull-based supply chain management (Correct answer)
- The location where goods cross international borders
- The moment when a customer order is placed
- The point at which inventory is transferred to a 3PL
Correct answer: The point where a product transitions from push-based to pull-based supply chain management
The decoupling point separates the portion of the supply chain driven by forecasts (push) from the portion driven by actual customer orders (pull).
CSCP Supply Chain Design 2
In supply chain design, 'total cost of ownership' (TCO) includes: