CSCP Supply Chain Design 1 — Questions and Answers
Question 1: Which of the following best describes the concept of a supply chain network design?
- A strategic plan to optimize the number, location, and size of facilities (Correct answer)
- A tactical plan for daily shipping schedules
- An operational plan for warehouse picking procedures
- A financial plan for reducing procurement costs
Correct answer: A strategic plan to optimize the number, location, and size of facilities
Supply chain network design is a strategic activity focused on optimizing facility locations, quantities, and capacities to meet service and cost objectives.
Question 2: What is the primary goal of vertical integration in supply chain design?
- To control more stages of the supply chain internally (Correct answer)
- To outsource all non-core functions
- To increase the number of suppliers
- To reduce the number of distribution centers
Correct answer: To control more stages of the supply chain internally
Vertical integration means a company owns and controls multiple stages of its supply chain, reducing dependency on external partners.
Question 3: Which supply chain model focuses on responding quickly to unpredictable demand with high product variety?
- Agile supply chain (Correct answer)
- Lean supply chain
- Efficient supply chain
- Continuous replenishment supply chain
Correct answer: Agile supply chain
An agile supply chain is designed for flexibility and rapid response to volatile, uncertain demand with high product variety.
Question 4: The 'bullwhip effect' in supply chains refers to:
- Increasing variability of orders upstream from end consumers (Correct answer)
- A technique for smoothing demand signals
- A method of reducing lead times
- A quality control process at receiving docks
Correct answer: Increasing variability of orders upstream from end consumers
The bullwhip effect describes how small fluctuations in consumer demand amplify into larger order swings as you move upstream through the supply chain.
Question 5: A make-to-order (MTO) strategy is best suited for:
- High-variety, low-volume products with customized specifications (Correct answer)
- High-volume, standardized commodity products
- Perishable goods with short shelf lives
- Products with very stable and predictable demand
Correct answer: High-variety, low-volume products with customized specifications
Make-to-order is ideal for customized, low-volume products where production only begins after a customer order is received.
Question 6: Which of the following is a key benefit of postponement strategy in supply chain design?
- Delaying product differentiation reduces inventory risk and increases flexibility (Correct answer)
- It speeds up production lead times for standard products
- It eliminates the need for safety stock entirely
- It reduces the number of suppliers in the network
Correct answer: Delaying product differentiation reduces inventory risk and increases flexibility
Postponement delays the point at which a product is differentiated, allowing companies to hold generic inventory and customize only when demand is known.
CSCP Supply Chain Design 1
Which of the following best describes the concept of a supply chain network design?