Supply Chain and Logistics Supply Chain Planning and Strategy 2 — Questions and Answers
Question 1: What is collaborative planning, forecasting, and replenishment (CPFR)?
- An internal financial forecasting tool
- A supply chain best practice where trading partners jointly develop forecasts and replenishment plans (Correct answer)
- A government reporting standard for food supply
- A software certification program
Correct answer: A supply chain best practice where trading partners jointly develop forecasts and replenishment plans
CPFR improves supply chain efficiency by sharing forecasting, promotional, and inventory data between retailers and suppliers.
Question 2: What is postponement strategy in supply chain management?
- Delaying supplier payments to improve cash flow
- Deferring product differentiation to the latest possible point in the supply chain (Correct answer)
- Pushing inventory upstream to reduce distribution costs
- Postponing new product launches until peak season
Correct answer: Deferring product differentiation to the latest possible point in the supply chain
Postponement delays customization or final assembly until actual demand is known, reducing forecast risk and inventory obsolescence.
Question 3: What is a make-to-order (MTO) production strategy?
- Building large amounts of inventory in advance of demand
- Manufacturing products only after a confirmed customer order is received (Correct answer)
- Ordering raw materials on a monthly basis
- Making products to standard quality only when reorder points are hit
Correct answer: Manufacturing products only after a confirmed customer order is received
Make-to-order production starts only after a customer order is placed, reducing finished goods inventory while increasing lead times.
Question 4: What is the difference between a push and pull supply chain strategy?
- Push uses rail; pull uses road transport
- Push produces based on forecasts; pull produces based on actual demand signals (Correct answer)
- Push uses domestic suppliers; pull uses global suppliers
- Push applies to B2B; pull applies to B2C
Correct answer: Push produces based on forecasts; pull produces based on actual demand signals
Push strategies build and distribute inventory based on demand forecasts, while pull strategies respond to real customer orders or consumption signals.
Question 5: What is a supply chain risk assessment?
- Annual financial review of supply chain costs
- A systematic process to identify, evaluate, and prioritize risks across supply chain operations (Correct answer)
- Auditing supplier ISO certifications
- Assessing warehouse fire safety compliance
Correct answer: A systematic process to identify, evaluate, and prioritize risks across supply chain operations
Supply chain risk assessment identifies vulnerabilities like single-source dependencies, geographic concentration, and supplier financial fragility.
Question 6: What is an integrated supply chain?
- A supply chain using only domestic suppliers
- A supply chain where all processes, information, and partners are coordinated seamlessly from raw material to end customer (Correct answer)
- A supply chain managed by a single company end-to-end
- A supply chain that uses integrated logistics software
Correct answer: A supply chain where all processes, information, and partners are coordinated seamlessly from raw material to end customer
An integrated supply chain aligns all participants—suppliers, manufacturers, distributors, and retailers—through shared information and coordinated processes.
Supply Chain and Logistics Supply Chain Planning and Strategy 2
What is collaborative planning, forecasting, and replenishment (CPFR)?