MEM Supply Chain Management 2 — Questions and Answers
Question 1: Which of the following best describes a 'make-to-order' (MTO) production strategy?
- Products are built before receiving customer orders
- Production begins only after a confirmed customer order is received (Correct answer)
- Products are partially built and customized later
- Inventory is replenished based on forecasts
Correct answer: Production begins only after a confirmed customer order is received
In MTO, manufacturing starts only after a firm customer order is placed, avoiding finished goods inventory but resulting in longer lead times.
Question 2: The SCOR (Supply Chain Operations Reference) model organizes supply chain processes into which primary categories?
- Plan, Source, Make, Deliver, Return (Correct answer)
- Buy, Build, Ship, Sell, Service
- Design, Procure, Produce, Distribute, Recycle
- Forecast, Order, Fulfill, Invoice, Pay
Correct answer: Plan, Source, Make, Deliver, Return
SCOR's five primary management processes are Plan, Source, Make, Deliver, and Return, providing a standard framework for supply chain analysis.
Question 3: Which supplier selection criterion is most associated with a strategic partnership rather than a transactional relationship?
- Lowest unit price
- Geographic proximity
- Capability for joint product development (Correct answer)
- Largest production capacity
Correct answer: Capability for joint product development
Strategic partnerships emphasize long-term collaboration such as joint product development, innovation sharing, and mutual investment beyond simple cost competition.
Question 4: Cross-docking in distribution centers primarily aims to:
- Increase on-hand safety stock
- Reduce storage time by transferring goods directly from inbound to outbound transport (Correct answer)
- Batch-process large orders over multiple days
- Inspect and repackage all incoming goods
Correct answer: Reduce storage time by transferring goods directly from inbound to outbound transport
Cross-docking minimizes storage and handling by moving goods almost immediately from receiving docks to outbound shipments, reducing inventory holding costs.
Question 5: Which concept describes the practice of sharing real-time sales and inventory data between a retailer and its suppliers to improve replenishment?
- Electronic Data Interchange (EDI)
- Collaborative Planning, Forecasting, and Replenishment (CPFR) (Correct answer)
- Material Requirements Planning (MRP)
- Distribution Requirements Planning (DRP)
Correct answer: Collaborative Planning, Forecasting, and Replenishment (CPFR)
CPFR is a business practice that combines real-time data sharing with joint planning between trading partners to align supply and demand more effectively.
Question 6: A supply chain risk mitigation strategy that uses multiple suppliers for the same component is called:
- Single sourcing
- Sole sourcing
- Dual or multiple sourcing (Correct answer)
- Preferred supplier program
Correct answer: Dual or multiple sourcing
Dual or multiple sourcing spreads procurement across several suppliers, reducing dependency on any single source and protecting against supply disruptions.
Question 7: The cash-to-cash (C2C) cycle time metric is calculated as:
- Days Sales Outstanding + Days Payable Outstanding
- Days Inventory Outstanding + Days Sales Outstanding − Days Payable Outstanding (Correct answer)
- Days Payable Outstanding − Days Inventory Outstanding
- Revenue divided by average inventory
Correct answer: Days Inventory Outstanding + Days Sales Outstanding − Days Payable Outstanding
C2C = DIO + DSO − DPO; it measures how long cash is tied up between paying suppliers and collecting from customers.
MEM Supply Chain Management 2
Which of the following best describes a 'make-to-order' (MTO) production strategy?