APICS CSCP Practice Test - Questions Answers, Page 12

Distribution from a free trade zone (FTZ) enables goods to enter a country, undergo further modification, and then be exported without paying customs duties. FTZs are designated areas where businesses can conduct manufacturing, assembly, and other processes on imported goods without being subject to customs duties until the goods leave the zone for domestic consumption. This allows companies to add value to products and re-export them cost-effectively.

Public warehouse is a facility for storing goods but does not offer customs duty advantages.

Value-added territory is not a standard term in international trade.

Customs clearing house assists with customs paperwork but does not provide duty-free processing.

An increase in the inventory turnover rate indicates that a company is selling its inventory more quickly. This typically means that the total amount of inventory held at various points in the supply chain has decreased. The higher turnover rate reflects more efficient inventory management, leading to:

Reduced Inventory Levels: Less inventory is being held in warehouses, leading to lower storage costs and reduced risk of obsolescence.

Improved Cash Flow: Faster inventory turnover means that cash is not tied up in inventory, improving liquidity.

Better Demand Forecasting: Enhanced forecasting and supply chain coordination reduce the need for high safety stock levels.

While the options A, B, and C may be indirectly affected, the primary indication of an increased inventory turnover rate is the reduction in total supply chain inventory.

'Principles of Inventory Management: When You Are Down to Four, Order More' by John A. Muckstadt.

APICS Dictionary, 16th edition.

Bar codes and Radio Frequency Identification (RFID) systems are critical technologies in supply chain systems because they:

Data Acquisition: Enable the timely and accurate capture of data related to inventory, shipments, and other supply chain activities.

Tracking: Provide real-time visibility into the location and status of items within the supply chain.

Efficiency: Reduce manual data entry errors and streamline processes such as receiving, inventory management, and order fulfillment.

Tracking truck locations on cross-country deliveries (A) is typically done using GPS technology. Providing paperless invoicing of goods (C) and producing schedule broadcasts for suppliers (D) are not primary functions of bar codes and RFID systems.

'RFID in Logistics: A Practical Introduction' by Erick C. Jones and Christopher A. Chung.

APICS Dictionary, 16th edition.

When implementing e-commerce in the supply chain, one of the toughest challenges is ensuring that data can be universally understood and processed by different systems. This includes:

Data Standardization: Converting data from various vendors and partners into a common format.

Interoperability: Ensuring different systems can communicate and share data seamlessly.

Data Accuracy: Maintaining the accuracy and consistency of data across the supply chain.

While getting all vendors to computerize (A), convincing the IT department of the value (C), and explaining the reason for change to customers (D) are significant challenges, translating data into universal standards is often the most complex due to the diverse systems and formats used by various entities in the supply chain.

'E-Commerce Logistics and Fulfillment: Delivering the Goods' by Deborah L. Bayles.

APICS Dictionary, 16th edition.

Implementation of supply chain applications based on Software-as-a-Service (SaaS) is most likely to have the lowest fixed costs because:

No Infrastructure Investment: SaaS eliminates the need for significant upfront investment in hardware and infrastructure.

Subscription Model: SaaS is typically offered on a subscription basis, spreading costs over time rather than requiring a large initial capital expenditure.

Scalability: SaaS solutions can be easily scaled up or down based on demand, providing flexibility and cost efficiency.

Maintenance and Updates: The service provider manages maintenance and updates, reducing the need for internal IT resources and associated costs.

In contrast, best of breed packages (A), one integrated package (B), and service-oriented architecture (C) often require more substantial initial investments in technology and infrastructure.

'Supply Chain Management: Strategy, Planning, and Operation' by Sunil Chopra and Peter Meindl.

APICS Dictionary, 16th edition.

The cash-to-cash cycle time in the SCOR model represents the duration it takes for a company to convert its investments in inventory and other resources into cash flows from sales. This metric is crucial for understanding the efficiency of a company's supply chain and working capital management. It is calculated as the number of days between paying for raw materials (cash outflow) and receiving payment for the finished product (cash inflow). This measure includes the time materials spend in production, the duration finished goods remain in inventory, and the time taken for the company to collect payment from customers.

Reference:

SCOR Model documentation by APICS

'Supply Chain Management: Strategy, Planning, and Operation' by Sunil Chopra and Peter Meindl

A robust product design is one that can consistently meet quality and performance requirements even under varying and adverse conditions in the production process. Robust design principles aim to make products less sensitive to variations, ensuring high reliability and quality despite fluctuations in manufacturing environments, material properties, or operational conditions. This approach reduces the need for frequent adjustments and can improve overall production efficiency.

Reference:

'Design for Six Sigma' by Kai Yang and Basem El-Haik

'Taguchi Techniques for Quality Engineering' by Phillip J. Ross

Involving customers in the product design process can significantly enhance a company's ability to meet market demands and reduce lead times. By incorporating customer feedback and requirements early in the design phase, companies can develop products that better meet customer needs, reducing the number of iterations and redesigns. This customer-centric approach can also streamline production processes and reduce the complexity and variety of products, leading to shorter delivery lead times and increased market share.

Reference:

'The Lean Product Playbook' by Dan Olsen

'Customer-Driven Product Development' by John Stark

Component commonality refers to the use of the same parts or components across multiple products. This strategy allows companies to optimize production runs for these components, leading to economies of scale, reduced inventory costs, and simplified procurement processes. By standardizing components, companies can also improve production efficiency, reduce lead times, and enhance flexibility in manufacturing. Additionally, it can facilitate better planning and control, as the demand for common components is aggregated across different products.

Reference:

'Operations Management: Processes and Supply Chains' by Lee J. Krajewski, Manoj K. Malhotra, and Larry P. Ritzman

'Managing Supply Chain Operations' by Lei Lei, Leonardo DeCandia, Ravi Subramanian, and Tugrul U. Daim