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Question 1Supply Chain Strategy and Integrated Planning

Which SCOR process category is responsible for balancing aggregate demand and supply across the supply chain?

  1. Source
  2. Deliver
  3. Make
  4. Plan Correct answer.

Explanation

SCOR's Plan category covers processes that balance aggregated demand and supply and develop plans for sourcing, production, and delivery. Source, Make, and Deliver execute the physical flow after plans are set.

Question 2Supply Chain Strategy and Integrated Planning

Strategic fit is achieved when a firm's supply chain design is aligned with which of the following?

  1. the firm's annual tax filing and reporting calendar
  2. the customer priorities the firm intends to satisfy Correct answer.
  3. the total number of SKUs carried in the catalog
  4. the current version of the enterprise resource planning system

Explanation

Strategic fit means the supply chain's responsiveness and efficiency characteristics match the customer priorities the competitive strategy targets. It is not defined by administrative calendars or IT system versions.

Question 3Supply Chain Strategy and Integrated Planning

In a push-based supply chain, production and replenishment decisions are primarily triggered by which input?

  1. forecasted demand Correct answer.
  2. retail point-of-sale data
  3. actual customer orders
  4. supplier delivery schedules

Explanation

Push systems anticipate demand and commit production based on forecasts before customer orders are known. Pull systems, by contrast, react to actual demand signals such as orders or point-of-sale data.

Question 4Supply Chain Strategy and Integrated Planning

The bullwhip effect refers to which phenomenon?

  1. shorter lead times downstream
  2. stable demand across the chain
  3. lower inventory levels at upstream tiers
  4. amplified demand variability upstream Correct answer.

Explanation

The bullwhip effect is the amplification of demand variability as orders move upstream from customers to suppliers. It often results from forecast updating, order batching, and price promotions.

Question 5Supply Chain Strategy and Integrated Planning

What is the primary purpose of collaborative planning, forecasting, and replenishment (CPFR)?

  1. to share forecasts and replenishment plans Correct answer.
  2. to audit supplier financial statements annually
  3. to calculate standard product costs for accounting
  4. to schedule preventive maintenance in factories

Explanation

CPFR is a joint trading-partner process for sharing demand forecasts and replenishment plans to improve forecast accuracy and reduce inventory. It does not perform cost accounting, maintenance scheduling, or financial auditing.

Question 6Supply Chain Strategy and Integrated Planning

Sales and operations planning primarily balances which two plans at an aggregate level?

  1. the marketing budget and the capital plan
  2. the quality plan and the audit plan
  3. the payroll plan and the tax plan
  4. the demand plan and the supply plan Correct answer.

Explanation

S&OP reconciles the aggregate demand plan with the aggregate supply plan so that one balanced business plan can be approved. Budget, payroll, and audit plans are separate functional plans.

Question 7Supply Chain Strategy and Integrated Planning

Forecast bias measures which characteristic of a forecasting method?

  1. the average absolute error over time
  2. the correlation between two unrelated product families
  3. the number of periods in the forecast horizon
  4. a systematic tendency to over- or under-forecast Correct answer.

Explanation

Bias captures the consistent directional error in forecasts, such as repeatedly forecasting too high or too low. Average absolute error measures magnitude, while horizon and correlation describe other forecast attributes.

Question 8Supply Chain Strategy and Integrated Planning

ABC analysis classifies inventory items primarily by which criterion?

  1. shelf life remaining at receipt
  2. annual usage value Correct answer.
  3. supplier lead time in calendar days
  4. physical weight per unit of measure

Explanation

ABC classification ranks items by annual usage value, typically price times annual quantity, so that high-value items receive tighter control. Weight, lead time, and shelf life may influence policy but are not the ABC ranking basis.

Question 9Supply Chain Strategy and Integrated Planning

A manufacturer delays final product configuration until a customer order is received. What is the main supply chain benefit?

  1. higher fixed production costs
  2. greater reliance on long-range demand forecasts
  3. reduced inventory risk from variety Correct answer.
  4. longer customer lead times

Explanation

Postponement keeps products in a generic state until demand is known, reducing the risk of holding the wrong finished-product mix. It may require flexible capacity and can increase lead time, but the primary benefit is inventory risk reduction.

Question 10Supply Chain Strategy and Integrated Planning

A company hires and lays off workers each month to match output to demand. Which aggregate planning approach is this?

  1. subcontracting strategy
  2. chase strategy Correct answer.
  3. level strategy
  4. mixed strategy

Explanation

A chase strategy adjusts capacity, often through workforce size, to follow demand period by period. A level strategy keeps output steady, while mixed and subcontracting strategies combine or outsource capacity.

Question 11Supply Chain Strategy and Integrated Planning

Rough-cut capacity planning is used primarily to do which of the following?

  1. sequence individual jobs on a single machine
  2. calculate standard labor rates
  3. test feasibility of the master schedule Correct answer.
  4. set the annual financial budget

Explanation

Rough-cut capacity planning checks whether the master production schedule can be supported by key resources such as bottleneck work centers. Detailed sequencing and cost-rate setting occur in other planning processes.

Question 12Supply Chain Strategy and Integrated Planning

The center-of-gravity method is used in network design to determine which of the following?

  1. the number of employees per shift
  2. the inventory turnover target
  3. a low-cost facility location Correct answer.
  4. the optimal product mix for a plant

Explanation

The center-of-gravity method identifies a geographic location that minimizes weighted transportation distance or cost. It does not set product mix, staffing, or inventory turnover targets.

Question 13Supply Chain Strategy and Integrated Planning

Consolidating safety stock into fewer distribution centers typically reduces total safety inventory because of which effect?

  1. lead-time compression
  2. postponement
  3. economies of scale in production
  4. risk pooling Correct answer.

Explanation

Risk pooling occurs because aggregate demand across a larger market is less variable relative to its mean than demand at individual locations. This allows less total safety stock to achieve the same service level.

Question 14Supply Chain Strategy and Integrated Planning

A product has stable demand, low variety, and predictable lead times. Which supply chain approach is most appropriate?

  1. lean and efficiency-focused Correct answer.
  2. project-based and temporary
  3. agile and highly responsive
  4. decentralized and speculative

Explanation

Stable, low-variety demand with predictable lead times favors a lean, efficiency-focused supply chain that minimizes waste and cost. Agile designs are better suited to volatile demand and high variety.

Question 15Supply Chain Strategy and Integrated Planning

Which statement describes a key limitation of mean absolute percentage error (MAPE)?

  1. it requires at least 24 months of data
  2. it cannot be used for seasonal products
  3. it ignores the direction of forecast error
  4. it is undefined when actual demand is zero Correct answer.

Explanation

MAPE divides absolute error by actual demand, so a zero actual value makes the percentage undefined or infinite. It can be used with seasonal products and does not require a fixed 24-month history.

Question 16Supply Chain Strategy and Integrated Planning

The master production schedule specifies which of the following for end items?

  1. transport routes and carrier rates
  2. supplier payment terms and discounts
  3. what, how much, and when Correct answer.
  4. warehouse layout and pick paths

Explanation

The master production schedule states which end items to produce, in what quantities, and on what dates. Commercial terms, warehouse layout, and transport routing are outside the MPS.

Question 17Supply Chain Strategy and Integrated Planning

Distribution requirements planning (DRP) is primarily used to plan which of the following?

  1. capacity of raw material suppliers
  2. design of new product packaging
  3. replenishment at distribution centers Correct answer.
  4. maintenance schedules for production equipment

Explanation

DRP calculates replenishment needs for finished goods at distribution centers by using forecast demand, inventory positions, and lead times. It is not a supplier capacity, maintenance, or packaging design tool.

Question 18Supply Chain Strategy and Integrated Planning

Backward vertical integration means a firm expands into which part of the supply chain?

  1. sideways into competitor markets
  2. upstream toward its suppliers Correct answer.
  3. outward into third-party logistics
  4. downstream toward end customers

Explanation

Backward integration moves upstream, such as a manufacturer acquiring a component supplier. Forward integration moves downstream toward customers.

Question 19Supply Chain Strategy and Integrated Planning

Sales and operations execution (S&OE) is best described as which activity?

  1. a method for calculating standard product costs
  2. a long-range capital planning process
  3. short-term gap resolution in execution Correct answer.
  4. an annual supplier scorecard review

Explanation

S&OE focuses on the near-term horizon, detecting and resolving gaps between demand and supply within the current execution window. It complements S&OP, which works at a more aggregate planning level.

Question 20Supply Chain Strategy and Integrated Planning

The triple bottom line approach to supply chain sustainability evaluates performance across which three dimensions?

  1. profit, tax, and compliance
  2. cost, speed, and quality
  3. social, environmental, economic Correct answer.
  4. quality, workplace safety, and delivery speed

Explanation

The triple bottom line considers social, environmental, and economic performance, often summarized as people, planet, and profit. Cost, speed, and quality are operational metrics rather than the triple bottom line dimensions.

Question 21Supply Chain Strategy and Integrated Planning

A firm shifts from make-to-stock to make-to-order for a product. How does this typically affect the inventory decoupling point?

  1. it moves downstream toward the customer Correct answer.
  2. it disappears entirely
  3. it remains fixed at the factory
  4. it moves upstream toward raw materials

Explanation

Make-to-order postpones commitment until an order arrives, so the decoupling point moves downstream closer to the customer. Make-to-stock generally holds the decoupling point at finished goods before customer demand.

Question 22Supply Chain Strategy and Integrated Planning

A retailer wants to reduce demand variability that contributes to the bullwhip effect. Which pricing action is most consistent with that goal?

  1. volume discounts with long lead times
  2. frequent short-term promotional discounts
  3. everyday low pricing Correct answer.
  4. quarterly price skimming

Explanation

Everyday low pricing reduces forward buying and stockpiling caused by promotions, smoothing the demand signal passed upstream. Frequent promotions and long-lead-time discounts tend to amplify order variability.

Question 23Supply Chain Strategy and Integrated Planning

A manufacturer depends on a single supplier for a critical component. Which action best reduces concentration risk without raising inventory?

  1. qualify a second source for the component Correct answer.
  2. increase safety stock at the plant
  3. centralize finished goods in one warehouse
  4. extend payment terms with the supplier

Explanation

Qualifying a second source reduces dependence on one supplier and creates a recovery option without adding inventory. Safety stock may buffer disruption but directly raises inventory.

Question 24Supply Chain Strategy and Integrated Planning

In a mature S&OP process, what is the typical output of the executive review?

  1. a supplier audit report
  2. a detailed shop-floor schedule
  3. one integrated business plan Correct answer.
  4. a monthly payroll forecast

Explanation

Mature S&OP produces a single integrated business plan that aligns demand, supply, and financial plans. Detailed scheduling and functional reports occur at lower levels.

Question 25Supply Chain Strategy and Integrated Planning

In CPFR, exception management focuses partner attention on which items?

  1. only items with zero sales history
  2. items selected by the retailer alone
  3. every item in the joint forecast
  4. items outside agreed tolerances Correct answer.

Explanation

Exception management compares forecasts and plans against agreed tolerances and highlights only the exceptions for joint review. This avoids spending effort on items that are already within acceptable agreement.

Question 26Supply Chain Strategy and Integrated Planning

Which SCOR process category includes activities such as order fulfillment, distribution, and customer invoicing?

  1. Deliver Correct answer.
  2. Source
  3. Plan
  4. Make

Explanation

The Deliver process covers order management, warehousing, transportation, and invoicing to fulfill customer demand. Plan sets direction, Source procures inputs, and Make transforms inputs into outputs.

Question 27Supply Chain Strategy and Integrated Planning

At what point in a supply chain does a push-pull boundary sit?

  1. Where a supplier is selected and contracted
  2. Where ownership of goods transfers from supplier to buyer
  3. Where forecast-driven production becomes demand-driven Correct answer.
  4. Where inventory is physically counted for accounting

Explanation

The push-pull boundary separates stages managed from forecasts from stages triggered by actual customer demand. It is a decoupling point for inventory and information flow.

Question 28Supply Chain Strategy and Integrated Planning

A supply chain achieves strategic fit when which condition is met?

  1. Inventory is minimized at every echelon
  2. All suppliers are integrated vertically
  3. Capabilities match competitive priorities Correct answer.
  4. Every product uses the same distribution channel

Explanation

Strategic fit exists when supply chain responsiveness and efficiency are consistent with the priorities of the competitive strategy. Different products may require different supply chain designs.

Question 29Supply Chain Strategy and Integrated Planning

In a vendor-managed inventory arrangement, which party typically monitors stock levels and determines replenishment quantities?

  1. The retailer's category manager
  2. The third-party logistics provider
  3. The supplier Correct answer.
  4. The customer's finance department

Explanation

VMI transfers the replenishment decision to the supplier, which uses shared demand and inventory data to manage stock. The retailer provides visibility but does not set order quantities.

Question 30Supply Chain Strategy and Integrated Planning

What is the main operational purpose of cross-docking?

  1. To hold seasonal inventory in a warehouse until it is needed
  2. To perform final product assembly in a location near customers
  3. To flow goods from inbound to outbound with little storage Correct answer.
  4. To collect and consolidate returned goods for repair

Explanation

Cross-docking moves products across a dock from inbound to outbound vehicles with minimal putaway and storage. This reduces handling and inventory dwelling time.

Question 31Supply Chain Strategy and Integrated Planning

Which planning level typically covers a multi-year horizon and sets network design, facility location, and capacity expansion?

  1. Operational planning
  2. Tactical planning
  3. Strategic planning Correct answer.
  4. Execution scheduling

Explanation

Strategic planning has the longest horizon and commits structural resources such as plants, distribution centers, and major capacity. Tactical and operational plans work within those structural choices.

Question 32Supply Chain Strategy and Integrated Planning

Inventory held to satisfy expected demand between replenishment orders is best described as which type of stock?

  1. Pipeline stock
  2. Safety stock
  3. Cycle stock Correct answer.
  4. Obsolete stock

Explanation

Cycle stock is the inventory that varies with order quantity and expected demand between replenishments. It exists because ordering and production occur in batches.

Question 33Supply Chain Strategy and Integrated Planning

Which metric is defined as the percentage of orders delivered complete, on time, damage-free, and with correct documentation?

  1. Perfect order fulfillment Correct answer.
  2. Line fill rate
  3. Inventory record accuracy
  4. Order-to-delivery cycle time

Explanation

Perfect order fulfillment combines multiple service dimensions into one customer-facing measure. An order must satisfy all criteria to count as perfect.

Question 34Supply Chain Strategy and Integrated Planning

Which ordering practice most directly amplifies the bullwhip effect by creating demand spikes upstream?

  1. Using electronic data interchange for orders
  2. Ordering in large periodic batches Correct answer.
  3. Shortening replenishment lead times
  4. Sharing point-of-sale data with suppliers

Explanation

Batch ordering aggregates demand into large discrete orders, which increases variability as signals move upstream. The bullwhip effect is amplified when each tier orders in large lots at intervals.

Question 35Supply Chain Strategy and Integrated Planning

A product has high demand variability, high margin, and unpredictable customer requirements. Which supply chain approach is most appropriate?

  1. Agile, responsiveness-focused Correct answer.
  2. Single-source with lowest-cost supplier
  3. Make-to-stock with long production runs
  4. Lean, efficiency-focused

Explanation

Agile supply chains emphasize flexibility and fast response for uncertain, high-margin products. Lean efficiency is better suited to stable, predictable demand.

Question 36Supply Chain Strategy and Integrated Planning

A firm outsources payroll and IT helpdesk because they are not central to its competitive advantage. This decision is best explained by which concept?

  1. Postponement strategy
  2. Focus on core competencies Correct answer.
  3. Economies of scale in production
  4. Vertical integration

Explanation

Firms outsource non-core activities so they can concentrate resources on capabilities that differentiate them in the market. The activity is necessary but not strategically distinctive.

Question 37Supply Chain Strategy and Integrated Planning

When evaluating total cost of ownership for a purchased component, which costs should be included?

  1. Only inbound freight charges
  2. Full life-cycle costs Correct answer.
  3. Only import duties and tariffs
  4. Only the quoted unit price

Explanation

Total cost of ownership includes acquisition, quality, logistics, inventory, usage, maintenance, and disposal costs over the component's life cycle. Unit price alone gives an incomplete comparison.

Question 38Supply Chain Strategy and Integrated Planning

In the CPFR process, what is the primary purpose of the joint business plan?

  1. To set individual employee performance goals
  2. To select a transportation carrier
  3. To audit supplier financial statements
  4. To align promotions and inventory targets Correct answer.

Explanation

The joint business plan establishes shared events, promotions, inventory targets, and product mix assumptions that drive partner forecasts. It creates a common basis for collaboration.

Question 39Supply Chain Strategy and Integrated Planning

How does capacity requirements planning differ from rough-cut capacity planning?

  1. It converts planned orders into work-center load Correct answer.
  2. It is used only for long-range facility planning
  3. It ignores routings and work centers
  4. It plans only finished-goods storage space

Explanation

Capacity requirements planning uses MRP planned order releases, routings, and work-center data to calculate required hours. Rough-cut capacity planning checks key resources at a more aggregate level.

Question 40Supply Chain Strategy and Integrated Planning

A forecasting model decomposes demand into level, trend, and seasonal index. Which component captures recurring calendar-based patterns?

  1. Random error
  2. Seasonal component Correct answer.
  3. Level
  4. Trend component

Explanation

The seasonal component represents repeating patterns tied to calendar periods, such as months or quarters. Level is the average, trend is long-term direction, and random error is unexplained variation.

Question 41Supply Chain Strategy and Integrated Planning

A firm can still meet customer delivery promises with a centralized distribution network. Which factor most directly favors centralization in this situation?

  1. Shorter average distance to customers
  2. Greater proximity to local customers
  3. Lower facility overhead Correct answer.
  4. Faster local delivery response

Explanation

Centralization reduces duplicate facilities, overhead, and coordination costs when service times remain acceptable. Proximity and local response are advantages of decentralized networks.

Question 42Supply Chain Strategy and Integrated Planning

What is the main role of the consensus demand plan in a mature S&OP process?

  1. To align functions on one demand view Correct answer.
  2. To set the production schedule for each machine
  3. To replace the financial budget
  4. To determine individual sales quotas

Explanation

The consensus demand plan aligns sales, marketing, finance, and operations around a single unconstrained demand baseline. Supply planning then works from that agreed view.

Question 43Supply Chain Strategy and Integrated Planning

A company's inventory turnover ratio falls from 8 to 5 while sales remain flat. What does this most likely indicate?

  1. Demand has become more seasonal
  2. The company has eliminated safety stock
  3. Inventory sits longer relative to sales Correct answer.
  4. Inventory is being sold faster

Explanation

A lower inventory turnover ratio means higher average inventory is being held for the same sales volume. This suggests slower movement or excess stock rather than faster turnover.

Question 44Supply Chain Strategy and Integrated Planning

In inbound logistics, a milk-run route is designed primarily to do which of the following?

  1. Consolidate pickups from several suppliers Correct answer.
  2. Return defective goods to the supplier
  3. Deliver finished goods directly to retail stores
  4. Ship expedited emergency orders by air

Explanation

Milk runs use a fixed route to collect smaller loads from multiple suppliers, improving vehicle utilization and reducing inbound freight cost. They are a consolidation technique, not an expediting mode.

Question 45Supply Chain Strategy and Integrated Planning

Which strategy best improves supply chain resilience without simply adding inventory at every stage?

  1. Flexible capacity and cross-trained workers Correct answer.
  2. Single-sourcing all critical components
  3. Reducing visibility into tier-two suppliers
  4. Extending lead times to reduce cost

Explanation

Flexibility allows capacity and labor to shift as disruptions occur, reducing reliance on buffer stock. Cross-training and flexible capacity are structural resilience measures.

Question 46Supply Chain Strategy and Integrated Planning

In the Kraljic portfolio matrix, purchased items with high supply risk and high profit impact are classified as which category?

  1. Strategic items Correct answer.
  2. Bottleneck items
  3. Noncritical items
  4. Leverage items

Explanation

Strategic items require close supplier partnerships, joint risk management, and long-term planning because they are both value-critical and supply-risky. Leverage and noncritical items have lower supply risk.

Question 47Supply Chain Strategy and Integrated Planning

Forecast value added analysis is used primarily to determine which of the following?

  1. Whether demand is statistically significant
  2. Which forecasting software license is cheapest
  3. How many periods of history to archive
  4. Whether each step beats a naive benchmark Correct answer.

Explanation

Forecast value added compares forecast accuracy before and after each model or adjustment against a naive benchmark. A step that does not improve accuracy destroys value.

Question 48Supply Chain Strategy and Integrated Planning

Integrated business planning extends traditional S&OP most directly by doing which of the following?

  1. Eliminating the demand review step
  2. Shortening the planning cycle to daily
  3. Replacing the master production schedule
  4. Tying plans to financials and strategy Correct answer.

Explanation

Integrated business planning connects demand and supply plans to financial statements and strategic objectives, often over a longer horizon than classic S&OP. It does not replace execution scheduling.

Question 49Supply Chain Strategy and Integrated Planning

Which design principle is most characteristic of a circular supply chain?

  1. Disposing of returns at the lowest cost
  2. Maximizing single-use packaging
  3. Designing products for disassembly and reuse Correct answer.
  4. Minimizing product lifespan to accelerate replacement

Explanation

Circular supply chains keep materials in use through repair, remanufacturing, and recycling, which requires products designed for disassembly and reuse. This contrasts with linear take-make-dispose models.

Question 50Supply Chain Strategy and Integrated Planning

Under transaction cost economics, a firm is more likely to produce a component in-house when which condition holds?

  1. The component is standardized and widely available
  2. High asset specificity and costly contracts Correct answer.
  3. Contracts can be enforced at near-zero cost
  4. Asset specificity is low and many qualified suppliers exist

Explanation

High asset specificity creates hold-up risk, making market contracting expensive to safeguard. Vertical integration becomes more efficient when contractual safeguards are costly.