APICS CSCP Practice Test - Questions Answers

Positioning safety stock at distribution centers (DCs) closest to customers supports responsiveness by reducing lead times and ensuring that products are readily available to meet customer demands. This strategy allows the company to quickly respond to fluctuations in demand and maintain high service levels. It aligns with the goal of competitive advantage through customer responsiveness by minimizing the time it takes to get products from the warehouse to the customer, thus enhancing customer satisfaction.

Christopher, M. (2016). Logistics & Supply Chain Management. Pearson.

Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2008). Designing and Managing the Supply Chain: Concepts, Strategies, and Case Studies. McGraw-Hill Education.

Attaching a fuel tank cap to a fuel tank door on a car is an example of poka-yoke, a Japanese term for 'mistake-proofing.' This lean technique involves designing processes in such a way that errors are prevented or immediately detected and corrected. By ensuring the fuel tank cap is attached to the fuel tank door, the process is designed to prevent the cap from being lost or forgotten, thereby avoiding a potential error. Other lean techniques like Five Ss, Five whys, and Kaizen are important for continuous improvement and organizational efficiency but do not specifically relate to mistake-proofing as directly as poka-yoke.

Liker, J. K. (2004). The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer. McGraw-Hill.

Shingo, S. (1986). Zero Quality Control: Source Inspection and the Poka-Yoke System. Productivity Press.

When evaluating supply chain options with a focus on minimizing total cost, it is crucial to consider the combined costs of acquiring, holding, and transporting inventory, as well as servicing customers. This comprehensive approach ensures that all relevant cost factors are included in the decision-making process, leading to an optimized supply chain strategy. Simply focusing on keeping inventory levels low or placing buffer inventory in low-cost locations does not capture the full scope of total costs. Balancing these factors is essential to minimize the total cost while maintaining desired service levels.

Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2008). Designing and Managing the Supply Chain: Concepts, Strategies, and Case Studies. McGraw-Hill.

Christopher, M. (2016). Logistics & Supply Chain Management. Pearson.

The primary objective of a lean enterprise is to analyze and focus on the value stream across all functions to maximize value for the ultimate customer. This involves identifying and eliminating waste (non-value-added activities) in processes to streamline operations and enhance efficiency. The focus is on creating value from the customer's perspective, ensuring that every step in the process contributes to this goal. Continuous improvement (Kaizen), employee development, and supplier collaboration are also essential elements of lean, but the overarching objective is maximizing customer value through value stream optimization.

Womack, J. P., & Jones, D. T. (2003). Lean Thinking: Banish Waste and Create Wealth in Your Corporation. Free Press.

Liker, J. K. (2004). The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer. McGraw-Hill.

Outsourcing involves delegating non-core activities to third-party service providers, allowing the company to focus on its core competencies. Effective implementation of outsourcing can lead to significant cost reductions as external providers can often perform these activities more efficiently. It also helps improve the company's focus by allowing internal resources to concentrate on strategic areas. Additionally, outsourcing can free up assets previously tied up in non-core activities, enabling better allocation of resources and potentially improving financial performance. Supply chain management, service supplier management, and collaboration also offer benefits but are broader in scope and do not specifically target the outcomes mentioned as directly as outsourcing does.

Quinn, J. B. (2000). Outsourcing Innovation: The New Engine of Growth. Sloan Management Review.

Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation. Pearson.

Moving the customer decoupling point (the point where demand variability is buffered) from finished goods to components can significantly reduce inventory investment. By doing this, the company can manufacture and assemble products based on actual customer orders rather than forecasted demand, thereby reducing the amount of finished goods inventory held. This approach, often referred to as an assemble-to-order (ATO) strategy, allows the company to maintain high customer service levels by quickly assembling products from components when orders are received, rather than holding large quantities of finished goods.

Vollmann, T.E., Berry, W.L., Whybark, D.C., & Jacobs, F.R. (2005). Manufacturing Planning and Control for Supply Chain Management. McGraw-Hill.

Ptak, C.A., & Smith, C. (2011). Orlicky's Material Requirements Planning. McGraw-Hill Education.

The most appropriate way to address the variability of demand is to increase demand visibility with all partners. Demand visibility is the ability to access and share accurate and timely information on customer demand and market conditions across the supply chain1. Increasing demand visibility with all partners can help address the variability of demand by enabling better forecasting, planning, and coordination of supply chain activities23. Increasing demand visibility can also help reduce the bullwhip effect, which is the amplification of demand fluctuations as they move upstream in the supply chain4.

Water transportation, particularly via ships, is generally the most cost-effective mode of long-distance transportation when measured in cost per ton-mile. Here's why:

Economies of Scale: Ships can carry massive quantities of cargo, which reduces the cost per ton-mile compared to other modes of transport.

Fuel Efficiency: Water transport is more fuel-efficient per ton-mile than air, truck, or rail, translating into lower costs.

Infrastructure Costs: The natural waterways and ports, once established, do not require as much ongoing maintenance as roads or railways, further reducing costs.

Long Distance Capability: Ships can travel long distances without the need for frequent stops or transfers, making them more economical for intercontinental shipments.

Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation. Pearson.

Rodrigue, J.-P., Comtois, C., & Slack, B. (2009). The Geography of Transport Systems. Routledge.

Activity-based costing (ABC) is a method that assigns costs to products and services based on the resources they consume. Here's why ABC directly reflects logistics performance:

Cost Allocation: ABC assigns costs to specific logistics activities (e.g., warehousing, transportation, order processing) rather than spreading costs evenly across all products.

Performance Measurement: By linking costs to specific activities, ABC provides insights into the efficiency and performance of each logistics function.

Cost Drivers: Identifying cost drivers helps in understanding the factors that influence logistics costs, enabling better decision-making and process improvements.

Detailed Analysis: ABC allows for a more granular analysis of logistics costs, highlighting areas where performance can be improved to reduce costs.

Cooper, R., & Kaplan, R. S. (1991). The Design of Cost Management Systems. Prentice Hall.

Drury, C. (2013). Management and Cost Accounting. Cengage Learning.