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APICS CSCP Practice Test - Questions Answers, Page 25

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Which of the following measures best describes fill rate?

A.
Ratio of available inventory to cost of goods sold (COGS)
A.
Ratio of available inventory to cost of goods sold (COGS)
Answers
B.
Ratio of cost of goods sold to available inventory
B.
Ratio of cost of goods sold to available inventory
Answers
C.
Percentage of demand satisfied by available inventory
C.
Percentage of demand satisfied by available inventory
Answers
D.
Percentage of closed orders to total orders
D.
Percentage of closed orders to total orders
Answers
Suggested answer: C

Explanation:

Fill rate, in the context of supply chain management, is best described as the percentage of demand that is satisfied by available inventory. This measure is crucial for evaluating the efficiency and effectiveness of the inventory management system.

Service Level Indicator: Fill rate directly reflects the ability to meet customer demand without delay, indicating the service level performance.

Inventory Effectiveness: A high fill rate suggests that the inventory levels are well-aligned with demand patterns, minimizing stockouts and backorders.

Customer Satisfaction: Meeting demand promptly leads to higher customer satisfaction and loyalty.

Operational Efficiency: A good fill rate balance helps in optimizing inventory carrying costs while ensuring demand fulfillment.

Benchmarking: Fill rate is commonly used as a benchmark to compare performance over time or against industry standards.

Ballou, R. H. (2004). Business Logistics/Supply Chain Management. Pearson.

Bowersox, D. J., Closs, D. J., & Cooper, M. B. (2013). Supply Chain Logistics Management. McGraw-Hill.

Which of the following statements regarding transportation negotiation is correct?

A.
The lowest possible cost for transportation is the lowest total cost of logistics.
A.
The lowest possible cost for transportation is the lowest total cost of logistics.
Answers
B.
The lowest possible rate must be consistent with the level of service required.
B.
The lowest possible rate must be consistent with the level of service required.
Answers
C.
The key to effective negotiation is to maximize distributor profitability.
C.
The key to effective negotiation is to maximize distributor profitability.
Answers
D.
The key to building solid career relationships is the acceptance of a carrier's rate.
D.
The key to building solid career relationships is the acceptance of a carrier's rate.
Answers
Suggested answer: B

Explanation:

Transportation negotiation involves several critical factors beyond just cost. While it is important to aim for the lowest possible transportation rate, this rate must also align with the necessary level of service required by the logistics operation. This means that achieving the lowest rate is only beneficial if it does not compromise service quality, delivery timelines, reliability, and other essential factors that could affect the overall supply chain performance. Hence, option B emphasizes the balance between cost and service level, making it the correct statement in the context of transportation negotiation.

Coyle, J.J., Langley, C.J., Novack, R.A., & Gibson, B.J. (2016). Supply Chain Management: A Logistics Perspective. Cengage Learning.

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

Which of the following practices allows each process to operate at maximum efficiency rather than having the speed of the entire process constrained by the slowest operation?

A.
Theory of constrains (TOC)
A.
Theory of constrains (TOC)
Answers
B.
Supply/demand balancing
B.
Supply/demand balancing
Answers
C.
Decoupling
C.
Decoupling
Answers
D.
Pull production
D.
Pull production
Answers
Suggested answer: C

Explanation:

Decoupling in supply chain management refers to the practice of creating a buffer, or decoupling point, between different stages of production or the supply chain. This allows each process to operate independently at its maximum efficiency without being constrained by the slower operations. For instance, maintaining inventory at certain points in the supply chain can help in decoupling processes, thus ensuring that each segment can function optimally and that variations or delays in one part do not impact the overall speed of the supply chain.

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

Slack, N., Chambers, S., & Johnston, R. (2010). Operations Management. Pearson Education.

Which of the following relationship activities is most impacted by a lack of trading partner trust?

A.
Collaboration
A.
Collaboration
Answers
B.
Coordination
B.
Coordination
Answers
C.
Cooperation
C.
Cooperation
Answers
D.
Communication
D.
Communication
Answers
Suggested answer: A

Explanation:

Collaboration in supply chain management involves working together with trading partners to achieve mutual goals and improve overall performance. This relationship activity requires a high level of trust, as it often involves sharing sensitive information, joint planning, and coordination of efforts. A lack of trust can severely impact collaboration because it can lead to reluctance in sharing information, misalignment of objectives, and ineffective joint decision-making. Trust is foundational for true collaborative efforts to succeed.

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

Mentzer, J.T. (2004). Fundamentals of Supply Chain Management: Twelve Drivers of Competitive

A role-based entry into a company's system that aggregates all required sources of information into a single environment is known as:

A.
a portal.
A.
a portal.
Answers
B.
a hub.
B.
a hub.
Answers
C.
a local area network (LAN).
C.
a local area network (LAN).
Answers
D.
an extranet.
D.
an extranet.
Answers
Suggested answer: A

Explanation:

A portal in the context of supply chain and business systems is a role-based entry that aggregates all necessary sources of information into a single environment. It provides users with personalized and secure access to relevant data, applications, and services needed for their role within the organization. This centralized access point simplifies information retrieval and improves productivity by ensuring that employees can easily find and use the data they need to perform their duties efficiently.

Turban, E., Volonino, L., & Wood, G.R. (2015). Information Technology for Management: Digital Strategies for Insight, Action, and Sustainable Performance. Wiley.

Laudon, K.C., & Laudon, J.P. (2017). Management Information Systems: Managing the Digital Firm. Pearson.

Enterprise resources planning (ERP) is defined as a:

A.
framework for organizing, defining, and standardizing business processes to use its internal knowledge to seek external advantage.
A.
framework for organizing, defining, and standardizing business processes to use its internal knowledge to seek external advantage.
Answers
B.
production control system that determines priorities of in-process work.
B.
production control system that determines priorities of in-process work.
Answers
C.
software module used to determine whether sufficient capacity is available to ship customer orders on time.
C.
software module used to determine whether sufficient capacity is available to ship customer orders on time.
Answers
D.
process whereby sales, marketing, and operations determine what products will be sold and what resources will be required for production.
D.
process whereby sales, marketing, and operations determine what products will be sold and what resources will be required for production.
Answers
Suggested answer: A

Explanation:

Enterprise Resource Planning (ERP) systems are comprehensive software platforms used to integrate and manage all the core business processes of an organization. Here's a breakdown of why option A is the most accurate definition:

Integration: ERP systems integrate various functions like finance, HR, manufacturing, supply chain, services, procurement, and others into one complete system to streamline processes and information across the organization.

Standardization: By standardizing processes and data, ERPs ensure consistency and accuracy across all business functions.

Process Organization: ERP systems provide a framework to organize business processes, ensuring that every department works with the same information and follows the same procedures.

Internal Knowledge Utilization: ERPs leverage internal data and processes to improve decision-making and operational efficiency.

External Advantage: The streamlined operations and improved data visibility provided by ERPs can enhance an organization's agility and competitive advantage in the marketplace.

Monk, E., & Wagner, B. (2009). Concepts in Enterprise Resource Planning. Cengage Learning.

O'Leary, D. E. (2000). Enterprise Resource Planning Systems: Systems, Life Cycle, Electronic Commerce, and Risk. Cambridge University Press.

The use of break-bulk warehouses allows for reduced transportation costs by receiving:

A.
large shipments and arranging for distribution to locations as smaller shipments.
A.
large shipments and arranging for distribution to locations as smaller shipments.
Answers
B.
sorting multiple receipts for outgoing shipments based on final destination.
B.
sorting multiple receipts for outgoing shipments based on final destination.
Answers
C.
converting individual pallets of goods into truckloads (TLs).
C.
converting individual pallets of goods into truckloads (TLs).
Answers
D.
staging products for delayed delivery to customers.
D.
staging products for delayed delivery to customers.
Answers
Suggested answer: A

Explanation:

Break-bulk warehouses play a critical role in reducing transportation costs by:

Receiving Large Shipments: Bulk shipments are received from manufacturers or suppliers. These large volumes typically attract lower transportation costs per unit due to economies of scale.

Breaking Down Shipments: The large shipments are then divided into smaller, more manageable quantities suitable for distribution to various locations or directly to customers.

Distribution: The smaller shipments are then transported to their final destinations. This method ensures that transportation costs are minimized as the bulk of the travel is done in larger, cost-effective shipments.

Efficiency: This process helps in consolidating shipments, optimizing load capacities, and reducing the overall number of trips required.

Bowersox, D. J., Closs, D. J., & Cooper, M. B. (2013). Supply Chain Logistics Management. McGraw-Hill.

Langley, C. J., Coyle, J. J., Gibson, B. J., Novack, R. A., & Bardi, E. J. (2008). Managing Supply Chains: A Logistics Approach. South-Western Cengage Learning.

The purpose of Incoterms is to establish common:

A.
software system terminology between supply chain partners.
A.
software system terminology between supply chain partners.
Answers
B.
contracts for trade within the supply chain.
B.
contracts for trade within the supply chain.
Answers
C.
company communication channels within the supply chain.
C.
company communication channels within the supply chain.
Answers
D.
quality measures for use in the supply chain.
D.
quality measures for use in the supply chain.
Answers
Suggested answer: B

Explanation:

Incoterms (International Commercial Terms) are standardized terms used in international and domestic trade contracts to define the responsibilities of buyers and sellers. Here's why option B is correct:

Standardization: Incoterms provide a set of standardized terms that clarify the responsibilities of buyers and sellers in trade transactions.

Contract Clarity: They specify who is responsible for costs, risks, and tasks involved in the delivery of goods from the seller to the buyer.

Global Use: Incoterms are globally recognized and used in international trade, ensuring that all parties have a clear understanding of their contractual obligations.

Risk Management: By defining when the risk transfers from the seller to the buyer, Incoterms help manage and mitigate risks in the supply chain.

International Chamber of Commerce (ICC). (2020). Incoterms 2020: ICC Rules for the Use of Domestic and International Trade Terms. ICC Publishing.

Ramberg, J. (2011). ICC Guide to Incoterms 2010. ICC Publishing.

Which of the following statements about warehouse layout and storage is correct?

A.
Product weight is the major factor driving warehouse layout.
A.
Product weight is the major factor driving warehouse layout.
Answers
B.
Products with low volume are typically placed at the lower level in storage racks.
B.
Products with low volume are typically placed at the lower level in storage racks.
Answers
C.
Warehouses that utilize fixed locations storage typically minimize space requirements.
C.
Warehouses that utilize fixed locations storage typically minimize space requirements.
Answers
D.
A typical warehouse is engaged in a combination of short term and extended storage alternatives.
D.
A typical warehouse is engaged in a combination of short term and extended storage alternatives.
Answers
Suggested answer: D

Explanation:

Warehouse layout and storage practices are designed to accommodate various operational needs. Here's why option D is correct:

Mixed Storage Needs: Warehouses typically handle both short-term (transit storage for immediate distribution) and long-term (extended storage for stockpiling) requirements.

Space Optimization: Effective warehouse management balances these needs to optimize space utilization and ensure efficient handling of goods.

Product Turnover: High turnover items may require quick access and thus short-term storage, while slower-moving items may be stored for extended periods.

Flexibility: Warehouses must remain flexible to adapt to changing inventory levels, seasonal demands, and other variables that affect storage duration.

Frazelle, E. (2002). World-Class Warehousing and Material Handling. McGraw-Hill.

Richards, G. (2017). Warehouse Management: A Complete Guide to Improving Efficiency and Minimizing Costs in the Modern Warehouse. Kogan Page.

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

A.
the global reporting initiative e (GRI).
A.
the global reporting initiative e (GRI).
Answers
B.
recycling.
B.
recycling.
Answers
C.
rework.
C.
rework.
Answers
D.
life cycle assessment (LCA).
D.
life cycle assessment (LCA).
Answers
Suggested answer: D

Explanation:

Life Cycle Assessment (LCA) is a methodology used to assess the environmental impacts associated with all the stages of a product's life, from raw material extraction through to processing, manufacturing, distribution, use, and disposal or recycling. When a manufacturing process replaces a raw material with an alternative that reduces emissions, it is applying principles of LCA. This approach helps in understanding the overall environmental footprint of a product and finding opportunities to reduce negative impacts, such as emissions, by evaluating alternative materials and processes.

Baumann, H., & Tillman, A.M. (2004). The Hitch Hiker's Guide to LCA. An orientation in life cycle assessment methodology and application. Studentlitteratur AB.

ISO 14040:2006 Environmental management - Life cycle assessment - Principles and framework.

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