SCM Final Exam Questions with Verified
Solutions
1st and 2nd tier suppliers - ANS-1st tier- A company's direct suppliers. A firm that
directly provides goods and/or services to a company.
2nd tier- A firm that provides goods and/or services to a company's first tear supplier.
3 Key measurement system attributes - ANS-Effective- Where the desired goals met?
Efficient- A measure of the resources used in the process.
Adaptable- A measure of the conditions under which the tasks were completed.
3 parts of Social responsibility - ANS-In the world of business social responsibility often
means that an organization values three things:
Legal and Ethical Behavior- Acting within the law in all of the nations in which they
conduct business. It might also include treating stakeholders well-employees, business
partners, and customers.
Sustainability- Earth-friendly business practices. Having business practices, products,
and services that do not harm the environment in the present nor in the future.
Commitment to the Community- Investing in the well-being of the communities in which
the business operates as well as the greater world.
3PL - ANS-A contractor that performs one or more logistics functions for their client in
an effort to facilitate effective and efficient movement in the supply chain. This third-
party contractor can neither be the buyer nor the seller of the items being moved.
According to lecture: Is 99% reliability good? Can anything be 100% reliable? - ANS-
99% reliability is outstanding, especially if the product has only the one component.
Nothing is 100% reliable.
Attributes of a good consultant - ANS-Data collection, Data analysis
Be creative
Have a long-term vision- Consider Human Nature
Understand Group/Team Dynamics- for clients and your teams
Understand Business Imperatives
Balanced scoreboard - ANS-A performance management tool that focuses on strategic
activity and strategic outcomes. Four different areas:
,Financial results: Utilizes some basic financial metrics related to cost, revenues, and
profits.
Customer-related results- Measures to see if the company is meeting the customers'
product and/or service requirements as well as customer satisfaction expectations.
Internal business process results- Measures to see that the business process in the
supply chain are running efficiently and effectively.
Learning and growth results- Measures the working environment, the dedication to
continuous improvement, and other issues that are related to the company's human
resources.
Balking - ANS-When a potential customer sees the line, but never joins the line because
they think it looks too long and/or too slow.
Benefits and shortcomings of ISO 9000 certification - ANS-A set of standards for
assuring that the products and processes of an organization meet quality standards.
Internal Certification- Very important to any organization competing in international
markets.
Certification only, compliance does not insure HIGH Quality.
May take up to 18 months to get certified(quality audit).
Documentation supports claims of quality- Process leads to increased productivity in all
functional areas.
Attractive to Customers- Perception of High Quality.
Potential for increased profitability, improved marketing.
Benefits of high and low inventory levels/purchases - ANS-Pros of high inventory levels-
Higher levels of customer service, quantity discounts may be possible, fewer orders will
need to be placed, greater security against unexpected demand variability.
Pros of Low inventory levels- Less storage space required, lower chance of inventory
obsolescence and shrinkage, less inventory typically means less materials handling
requirements. Less money invested in inventory means more money available for
investment opportunities.
Block Diagrams (what's the difference between block diagram and business process
flow chart) - ANS-In the chain of process, where is the particular process?
Describe system in which process will lie.
Briefly describe the basics of some of the ERP support systems - ANS-CRM- Customer
Relationship Management
SRM- Supplier Relationship Management
Decision Support Systems- Supply Chain modules- Inventory, Logistics,
Operations...Finance, accounting, marketing, HR...
Supply Chain Suites
, Bullwhip effect - ANS-The bullwhip effect is a supply chain phenomenon where fairly
stable demand results in a proliferation in the amount of inventory that is carried as one
travels upstream in the supply chain.
Causes: Poor observations, poor supply chain practices, and poor communication.
Oder Batching- When companies place large and infrequent orders from their suppliers.
Forward buying- This is the result of suppliers offering sales.
Rationing- Sometimes, despite their best efforts, suppliers do not have enough
inventory to satisfy the demand of all their customers.
Shortage Gaming- Rationing can often lead to shortage gaming. In rationing, customers
only receive a fraction of their placed order.
Business Process outsourcing - ANS-The outsourcing of office activities like accounting,
human resources, customer service activities (like call centers and customer chat).
Sometimes these types of outsourced activities are referred to as back office activities.
Calculating Reliability - ANS-Reliability is a measure of the percentage of time a system
or product operates successfully.
Capacity Utilization - ANS-A ratio of the amount of product produced by a
manufacturing process versus the maximum capacity of that facility.
The formula for this would be (Actual factory output)/(factory design capacity)
Cargo Classifications with examples - ANS-Bulk: Cargo that is loose and free flowing.
Bulk cargo is not any type of bag, box, or packaging vessel. As such, bulk cargo is
typically loaded and unloaded by being pumped, scooped, shoveled, etc.
Break bulk: Cargo that is packaged (boxed, bottle, can, etc.) and/or secured on a pallet.
This type of cargo can be placed inside of a standardized container or truck trailer.
Neo-Bulk: Typically these are large items that do not quite fit into either the bulk or
break bulk categories. This might include vehicles, logs, and livestock. Neo-bulk items
are typically not moved in standardized containers.
Cash-to-cash cycle - ANS-A measure of the number of days between the time a
company pays their supplier for inventory and the time that same company is paid for
the same inventory by their customer.
The Cash-to-Cash cycle formula is (Days of Inventory on Hand) + (Days of Accounts
Receivable owed to your company by your customers)- (Days of accounts payable your
company owes to suppliers.)
Catalog Order Process - ANS-Simple process.
What they need?
Solutions
1st and 2nd tier suppliers - ANS-1st tier- A company's direct suppliers. A firm that
directly provides goods and/or services to a company.
2nd tier- A firm that provides goods and/or services to a company's first tear supplier.
3 Key measurement system attributes - ANS-Effective- Where the desired goals met?
Efficient- A measure of the resources used in the process.
Adaptable- A measure of the conditions under which the tasks were completed.
3 parts of Social responsibility - ANS-In the world of business social responsibility often
means that an organization values three things:
Legal and Ethical Behavior- Acting within the law in all of the nations in which they
conduct business. It might also include treating stakeholders well-employees, business
partners, and customers.
Sustainability- Earth-friendly business practices. Having business practices, products,
and services that do not harm the environment in the present nor in the future.
Commitment to the Community- Investing in the well-being of the communities in which
the business operates as well as the greater world.
3PL - ANS-A contractor that performs one or more logistics functions for their client in
an effort to facilitate effective and efficient movement in the supply chain. This third-
party contractor can neither be the buyer nor the seller of the items being moved.
According to lecture: Is 99% reliability good? Can anything be 100% reliable? - ANS-
99% reliability is outstanding, especially if the product has only the one component.
Nothing is 100% reliable.
Attributes of a good consultant - ANS-Data collection, Data analysis
Be creative
Have a long-term vision- Consider Human Nature
Understand Group/Team Dynamics- for clients and your teams
Understand Business Imperatives
Balanced scoreboard - ANS-A performance management tool that focuses on strategic
activity and strategic outcomes. Four different areas:
,Financial results: Utilizes some basic financial metrics related to cost, revenues, and
profits.
Customer-related results- Measures to see if the company is meeting the customers'
product and/or service requirements as well as customer satisfaction expectations.
Internal business process results- Measures to see that the business process in the
supply chain are running efficiently and effectively.
Learning and growth results- Measures the working environment, the dedication to
continuous improvement, and other issues that are related to the company's human
resources.
Balking - ANS-When a potential customer sees the line, but never joins the line because
they think it looks too long and/or too slow.
Benefits and shortcomings of ISO 9000 certification - ANS-A set of standards for
assuring that the products and processes of an organization meet quality standards.
Internal Certification- Very important to any organization competing in international
markets.
Certification only, compliance does not insure HIGH Quality.
May take up to 18 months to get certified(quality audit).
Documentation supports claims of quality- Process leads to increased productivity in all
functional areas.
Attractive to Customers- Perception of High Quality.
Potential for increased profitability, improved marketing.
Benefits of high and low inventory levels/purchases - ANS-Pros of high inventory levels-
Higher levels of customer service, quantity discounts may be possible, fewer orders will
need to be placed, greater security against unexpected demand variability.
Pros of Low inventory levels- Less storage space required, lower chance of inventory
obsolescence and shrinkage, less inventory typically means less materials handling
requirements. Less money invested in inventory means more money available for
investment opportunities.
Block Diagrams (what's the difference between block diagram and business process
flow chart) - ANS-In the chain of process, where is the particular process?
Describe system in which process will lie.
Briefly describe the basics of some of the ERP support systems - ANS-CRM- Customer
Relationship Management
SRM- Supplier Relationship Management
Decision Support Systems- Supply Chain modules- Inventory, Logistics,
Operations...Finance, accounting, marketing, HR...
Supply Chain Suites
, Bullwhip effect - ANS-The bullwhip effect is a supply chain phenomenon where fairly
stable demand results in a proliferation in the amount of inventory that is carried as one
travels upstream in the supply chain.
Causes: Poor observations, poor supply chain practices, and poor communication.
Oder Batching- When companies place large and infrequent orders from their suppliers.
Forward buying- This is the result of suppliers offering sales.
Rationing- Sometimes, despite their best efforts, suppliers do not have enough
inventory to satisfy the demand of all their customers.
Shortage Gaming- Rationing can often lead to shortage gaming. In rationing, customers
only receive a fraction of their placed order.
Business Process outsourcing - ANS-The outsourcing of office activities like accounting,
human resources, customer service activities (like call centers and customer chat).
Sometimes these types of outsourced activities are referred to as back office activities.
Calculating Reliability - ANS-Reliability is a measure of the percentage of time a system
or product operates successfully.
Capacity Utilization - ANS-A ratio of the amount of product produced by a
manufacturing process versus the maximum capacity of that facility.
The formula for this would be (Actual factory output)/(factory design capacity)
Cargo Classifications with examples - ANS-Bulk: Cargo that is loose and free flowing.
Bulk cargo is not any type of bag, box, or packaging vessel. As such, bulk cargo is
typically loaded and unloaded by being pumped, scooped, shoveled, etc.
Break bulk: Cargo that is packaged (boxed, bottle, can, etc.) and/or secured on a pallet.
This type of cargo can be placed inside of a standardized container or truck trailer.
Neo-Bulk: Typically these are large items that do not quite fit into either the bulk or
break bulk categories. This might include vehicles, logs, and livestock. Neo-bulk items
are typically not moved in standardized containers.
Cash-to-cash cycle - ANS-A measure of the number of days between the time a
company pays their supplier for inventory and the time that same company is paid for
the same inventory by their customer.
The Cash-to-Cash cycle formula is (Days of Inventory on Hand) + (Days of Accounts
Receivable owed to your company by your customers)- (Days of accounts payable your
company owes to suppliers.)
Catalog Order Process - ANS-Simple process.
What they need?
