CWLP Supply Chain Operations & Optimization 5 — Questions and Answers
Question 1: Which supply chain disruption response strategy involves holding additional inventory specifically to buffer against supply uncertainty?
- Demand shaping
- Safety stock buffering (Correct answer)
- Lead time compression
- Network rationalization
Correct answer: Safety stock buffering
Safety stock is held above cycle stock to protect against variability in supply lead times or demand fluctuations.
Question 2: A retailer shares real-time sales and inventory data with its supplier so the supplier can plan production proactively. This practice is called:
- Electronic data interchange (EDI)
- Continuous replenishment planning (CRP) (Correct answer)
- Demand-driven MRP
- Supply chain visibility
Correct answer: Continuous replenishment planning (CRP)
CRP uses shared POS and inventory data to allow suppliers to maintain agreed stock levels continuously without formal purchase orders.
Question 3: Which transportation mode typically offers the lowest cost per ton-mile for large, heavy shipments over long distances?
- Air freight
- Truckload (TL)
- Rail freight (Correct answer)
- Parcel carriers
Correct answer: Rail freight
Rail offers the lowest cost per ton-mile for bulk and heavy commodities over long distances due to high capacity and fuel efficiency.
Question 4: In supply chain optimization, 'service level' is most precisely defined as:
- The average delivery speed across all orders
- The probability that demand will be met from available stock during a replenishment cycle (Correct answer)
- The percentage of orders delivered on time
- Customer satisfaction survey scores
Correct answer: The probability that demand will be met from available stock during a replenishment cycle
Service level in inventory management is the statistical probability of not stocking out during a given replenishment cycle.
Question 5: A manufacturer implements a 'milk run' strategy for inbound logistics. This means:
- Suppliers deliver full truckloads directly to the plant
- A carrier visits multiple suppliers on a fixed route to consolidate smaller pickups into one vehicle (Correct answer)
- Products are stored in refrigerated trailers between plants
- Delivery windows are expanded to allow flexible arrival times
Correct answer: A carrier visits multiple suppliers on a fixed route to consolidate smaller pickups into one vehicle
Milk runs use a single vehicle to collect small quantities from multiple suppliers on a regular circuit, improving transportation efficiency.
Question 6: Which supply chain metric measures the end-to-end time from raw material sourcing through delivery to the end customer?
- Order-to-cash cycle
- Supply chain throughput time (pipeline lead time) (Correct answer)
- Manufacturing cycle efficiency
- Dock-to-stock time
Correct answer: Supply chain throughput time (pipeline lead time)
Supply chain pipeline lead time (or throughput time) captures total elapsed time across all supply chain stages from raw material to end customer.
Question 7: Which practice involves a supplier owning inventory stored at the customer's site, with ownership transferring only when the customer uses or sells the item?
- Vendor-managed inventory (VMI)
- Consignment inventory (Correct answer)
- Cross-docking
- Drop shipping
Correct answer: Consignment inventory
Under consignment, the supplier retains title to goods stored at the customer location until consumption, reducing the customer's working capital requirement.
CWLP Supply Chain Operations & Optimization 5
Which supply chain disruption response strategy involves holding additional inventory specifically to buffer against supply uncertainty?