CSCP Supply Chain Design Strategy 5 — Questions and Answers
Question 1: Supply chain resilience is best achieved through which combination of strategies?
- Single sourcing and just-in-time inventory only
- Redundancy, flexibility, visibility, and collaborative risk management (Correct answer)
- Maximum inventory buffers at every node
- Eliminating all suppliers from low-cost countries
Correct answer: Redundancy, flexibility, visibility, and collaborative risk management
Resilience requires layered strategies — redundancy, flexibility, end-to-end visibility, and shared risk management with partners.
Question 2: In supply chain design, 'demand shaping' refers to:
- Adjusting manufacturing capacity to match demand variability
- Using pricing, promotions, or incentives to influence customer demand patterns (Correct answer)
- Designing packaging to fit more units per pallet
- Forecasting demand using historical sales data
Correct answer: Using pricing, promotions, or incentives to influence customer demand patterns
Demand shaping uses commercial levers like pricing and promotions to shift demand to times or products that better match supply.
Question 3: A fourth-party logistics provider (4PL) differs from a 3PL primarily because a 4PL:
- Owns all transportation assets used in the supply chain
- Manages and integrates multiple 3PLs and supply chain resources on behalf of the client (Correct answer)
- Only provides warehousing services
- Specializes in customs brokerage
Correct answer: Manages and integrates multiple 3PLs and supply chain resources on behalf of the client
A 4PL acts as a supply chain integrator, orchestrating multiple 3PLs and resources to optimize the overall network.
Question 4: Which supply chain design concept reduces the 'bullwhip effect'?
- Increasing order batch sizes at each tier
- Sharing real-time demand information across all supply chain tiers (Correct answer)
- Adding more intermediaries to the supply chain
- Extending supplier lead times
Correct answer: Sharing real-time demand information across all supply chain tiers
Sharing real-time demand data reduces information distortion that causes order amplification upstream.
Question 5: When should a company consider nearshoring as part of its supply chain redesign?
- When labor costs in nearby countries are higher than distant low-cost countries
- When the benefits of shorter lead times, lower logistics costs, and reduced risk outweigh higher production costs (Correct answer)
- When the company has excess inventory in distant warehouses
- When customer demand is perfectly stable and predictable
Correct answer: When the benefits of shorter lead times, lower logistics costs, and reduced risk outweigh higher production costs
Nearshoring makes strategic sense when responsiveness, risk reduction, and logistics savings justify higher production costs.
Question 6: A company uses a postponement strategy for product customization. Which supply chain benefit does this most directly create?
- Higher raw material costs
- Reduced finished goods inventory and improved forecast accuracy at the generic level (Correct answer)
- Longer customer lead times
- Increased number of SKUs in the warehouse
Correct answer: Reduced finished goods inventory and improved forecast accuracy at the generic level
Postponement reduces finished-goods SKU proliferation and allows forecasting at a less variable aggregate level.
Question 7: In supply chain design, the concept of 'strategic fit' means:
- The supply chain strategy aligns with the competitive strategy of the business (Correct answer)
- All suppliers are located within 100 miles of the factory
- The company uses only the latest automation technology
- The supply chain is designed to minimize the number of employees
Correct answer: The supply chain strategy aligns with the competitive strategy of the business
Strategic fit ensures the supply chain's capabilities (efficiency, responsiveness) match the company's competitive priorities.
CSCP Supply Chain Design Strategy 5
Supply chain resilience is best achieved through which combination of strategies?