Question 1

A firm has increased finished-goods inventories for several products to compensate for increased variability in demand. The firm analyzed shipment data and determined that the variability was due to a few customers placing large orders for single shipments to obtain discounts. Which of the following actions is the firm most likely to take to maintain sales and reduce variability in demand?

Accepted Answer

A)  Reducing discounts for large orders 
B)  Encouraging high-volume customers to place blanket orders 
C)  Implementing extrinsic forecasting methods 
D)  Increasing the level of safety stock on high-volume products

Question 2

Customizing can be an effective warehousing strategy because it allows a company to:

Accepted Answer

A)  allocate available storage space to optimize handling costs. 
B)  address trade-offs between space and material handling needs. 
C)  effectively design its inbound and outbound dock areas. 
D)  add value to the product through modification, labeling, and packaging.

Question 3

Managing supply chain risks includes which of the following activities?

Accepted Answer

A)  Developing alternatives to key suppliers 
B)  Setting aside funds for disruption-recovery efforts 
C)  Charging each supply chain partner a portion of risk cost 
D)  Creating extra inventory to cover disruptions in the supply chain

Question 4

Which of the following responses to risk best describes the evolving concept of flexibility in supply chain risk management?

Accepted Answer

A)  The practice of adjusting capacities in a manufacturing environment 
B)  The ability to react quickly to changes or events while maintaining customer service levels 
C)  The ability to produce high volume stock keeping units (SKUs) in multiple locations 
D)  The ability to produce complex configurations of a product within the standard lad time

Question 5

A firm is undertaking a revision of its financial metrics to make them more comprehensive and has decided to use metrics such as return on investment (ROI), return on assets (ROA), and economic value added (EVA). This is an example of utilizing which of the following types of metrics?

Accepted Answer

A)  Activity based 
B)  Stakeholder focused 
C)  Financial sustainability 
D)  Value chain

Question 6

A product design that can be produced to requirements even when conditions in the production process are unfavorable typically is known as what type of design?

Accepted Answer

A)  Universal 
B)  Computer-aided 
C)  Modular 
D)  Robust

Question 7

A supplier disputes a low rating generated by a company's enterprise resources planning (ERP) system. Which of the following actions by the purchasing agent is most appropriate?

Accepted Answer

A)  Advise the ERP information technology manager that there is a flaw in the rating system. 
B)  Scrap the vendor rating system until the company can figure out what is wrong. 
C)  Compare the vendor and company detail records, and interview company employees who handled the data. 
D)  Tell the supplier that, regardless of the disputed claims, the supplier must improve performance.

Question 8

Which of the following measures would be an appropriate indicator of the marketing and sales organization's support of the sales and operations planning (S&OP) process?

Accepted Answer

A)  Finished goods inventory as a percent of planned inventory 
B)  Percent of product introductions completed on schedule 
C)  Total revenue as a percent of planned revenue 
D)  New customers as a percent of total customers

Question 9

The four risks of supply chain risk management are supply, demand:

Accepted Answer

A)  quality, and process 
B)  value, and sustainability 
C)  process, and environmental 
D)  value, and environmental

Question 10

Replacing a raw material in a manufacturing process with an alternate material that reduces emissions is an example of using:

Accepted Answer

A)  the global reporting initiative (GRI). 
B)  recycling. 
C)  rework. 
D)  life cycle assessment (LC
A) .

Question 11

Which of the following statements best describes the goals of strategic sourcing?

Accepted Answer

A)  A purchase strategy that relies heavily on technology to reduce risk 
B)  A procurement strategy that takes into account the long-term impact on people, profit, and the planet 
C)  A process of purchasing goods and services aimed at exploiting global efficiencies in production 
D)  A mechanism for managing external resources to support non-commodity purchases

Question 12

A company seeking to maximize supply chain efficiency and to streamline order processing should first:

Accepted Answer

A)  implement a vendor-managed inventory (VMI) process. 
B)  implement electronic data interchange (EDI). 
C)  move to a make-to-stock (MTS) environment. 
D)  utilize supplier portals.

Question 13

A company currently produces custom goods for a limited market. To increase market share, the company will implement a strategy to reduce the number of products it produces and reduce delivery lead time. The company can increase its chances of achieving the strategy by:

Accepted Answer

A)  using benchmark data for products in the same product groups. 
B)  incorporating results from market surveys. 
C)  involving customers in the product design process. 
D)  using electronic communications to receive customer complaints.

Question 14

A team has been given a project which requires them to design a new product with the following key performance indicators (KPIs) and prototype results:  What should be the next step of the project?

Accepted Answer

A)  Close prototype phase and move to production phase 
B)  Stay in prototype phase and issue formal corrective action to address prototype yield only 
C)  Stay in prototype phase and issue formal corrective action to address all key performance indicators 
D)  Close prototype phase and move to production phase with verbal understanding that yield needs to increase

Question 15

On-time delivery performance in the supply chain can best be improved by aligning required capacity with what type of capacity?

Accepted Answer

A)  Demonstrated 
B)  Rated 
C)  Budgeted 
D)  Theoretical

Question 16

A company most likely would implement a supplier certification program to:

Accepted Answer

A)  improve the supplier's procurement process. 
B)  abide by ISO standards. 
C)  validate the supplier's compliance with requirements. 
D)  implement point-of-sale (POS) terminals.

Question 17

Which of the following types of information would be an appropriate basis for a qualitative forecast?

Accepted Answer

A)  Leading indicators 
B)  Regression analysis 
C)  Order history 
D)  Shipment history

Question 18

A firm is expanding into a new market with import/export tariffs and needs a warehouse to accept, store, and ship its general merchandise product. What type of public warehouse in the new market would best meet the firm's needs?

Accepted Answer

A)  Bonded 
B)  Subcontracted 
C)  Specialty 
D)  Network aligned

Question 19

The purchasing manager of a company wants to minimize stock-outs as well as obsolete inventory. Which of the following tools needs to be implemented?

Accepted Answer

A)  Blanket purchase order 
B)  Advanced planning and scheduling (APS) 
C)  Buy-back contracts 
D)  Business-to-business integration software

Question 20

Production of a company's highest profit items is dependent upon the purchase of high-quality circuit boards. Which level of collaboration should the company develop with their supplier?

Accepted Answer

A)  Pull replenishment 
B)  Strategic partnership 
C)  Revenue sharing 
D)  Vendor-managed inventory (VMI)

Exam 3: APICS Certified Supply Chain Professional