APICS CSCP Practice Test - Questions Answers, Page 27
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Question 261
An organization is striving to improve the transfer of multiple levels of data about products and services to trading partners in the supply chain network. Which of the following solutions is most appropriate?
Explanation:
Improving the transfer of multiple levels of data about products and services to trading partners can be effectively achieved through electronic commerce (e-commerce) for the following reasons:
Real-time Data Sharing: E-commerce platforms enable real-time sharing of product information, inventory levels, and transactional data with trading partners.
Integration: E-commerce systems can integrate with other enterprise systems, facilitating seamless data flow across the supply chain.
Standardization: E-commerce often uses standardized data formats, making it easier to communicate and understand information between different parties.
Accessibility: Data can be accessed from anywhere, improving coordination and decision-making across the supply chain network.
Turban, E., King, D., Lee, J. K., Liang, T.-P., & Turban, D. C. (2015). Electronic Commerce: A Managerial and Social Networks Perspective. Springer.
Laudon, K. C., & Traver, C. G. (2020). E-commerce 2020: Business, Technology, Society. Pearson.
Question 262
The process of continuous improvement can be defined best as a continuous effort to:
Explanation:
Continuous improvement, often associated with methodologies like Kaizen, focuses on making small, incremental changes to improve performance across various metrics. Here's why option A is the best definition:
Incremental Improvements: Continuous improvement involves making small, gradual changes rather than radical shifts.
Multiple Measures: It aims to enhance performance across multiple dimensions such as quality, efficiency, and customer satisfaction simultaneously.
Sustained Effort: Continuous improvement is an ongoing effort, promoting a culture of constant enhancement and adaptation.
Holistic Approach: By addressing various performance measures together, it ensures balanced and sustainable growth.
Imai, M. (1986). Kaizen: The Key to Japan's Competitive Success. McGraw-Hill.
Liker, J. K. (2004). The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer. McGraw-Hill.
Question 263
A retailer that imports furniture from several manufactures in low-wage countries wants to reduce variability in quality. The retailer has proposed merging with one of the manufacturers and giving it sole responsibility for one product family. The proposed merger is an example of:
Explanation:
The proposed merger between the retailer and one of its manufacturers, giving the manufacturer sole responsibility for a product family, is an example of vertical integration. Here's why:
Control Over Supply Chain: Vertical integration involves merging with or acquiring firms at different stages of the production process (e.g., a retailer merging with a manufacturer).
Quality Control: By integrating vertically, the retailer gains better control over the production process, helping to ensure consistent product quality.
Supply Chain Efficiency: Vertical integration can streamline operations, reduce costs, and improve coordination between production and retail.
Reduction of Variability: The direct oversight and alignment of production processes can reduce variability in quality and improve overall supply chain performance.
Porter, M. E. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. Free Press.
Harrigan, K. R. (1985). Vertical Integration and Corporate Strategy. Academy of Management Journal.
Question 264
Which of the following activities is forbidden in a free trade zone (FTZ)?
Explanation:
Free trade zones (FTZs) are special economic areas where goods can be imported, stored, and processed with reduced customs regulations and duties. Here's why conducting retail trade is forbidden in FTZs:
Purpose of FTZs: FTZs are designed to facilitate international trade and improve logistics efficiency by allowing goods to be stored, processed, and re-exported with minimal customs intervention.
Regulatory Restrictions: Retail trade within FTZs is typically prohibited to prevent market distortions and ensure that FTZs are used primarily for manufacturing, assembly, and distribution activities.
Focus on Export and Re-export: The primary activities allowed in FTZs include cross-docking, reconfiguring products, and preparing goods for re-export, which align with their goal of promoting global trade.
Tax and Duty Benefits: Retail sales in FTZs could complicate tax and duty arrangements, undermining the benefits provided to businesses operating in these zones.
United States Customs and Border Protection (CBP). (2020). What is a Foreign-Trade Zone (FTZ)?
World Bank Group. (2008). Special Economic Zones: Performance, Lessons Learned, and Implications for Zone Development.
Question 265
Which of the following metrics is typically the most appropriate measure of product and service quality?
Explanation:
Customer perception is a crucial measure of product and service quality because it directly reflects the customer's experience and satisfaction with the product or service. Unlike internal inspections or product performance metrics, which are internally focused, customer perception captures the end-user's viewpoint. This includes aspects such as the product's ability to meet customer needs, reliability, ease of use, and overall satisfaction. Customer feedback, surveys, and reviews are common methods used to gauge customer perception and assess quality.
Garvin, D.A. (1987). Competing on the Eight Dimensions of Quality. Harvard Business Review.
Parasuraman, A., Zeithaml, V.A., & Berry, L.L. (1988). SERVQUAL: A Multiple-Item Scale for Measuring Consumer Perceptions of Service Quality. Journal of Retailing.
Question 266
A company that sells 60 units of product in a given year and has an average quantity on hand of 10 units. There are 360 selling days and 261 production days in the year. The company has on hand how many days of product inventory?
Explanation:
To determine the days of product inventory on hand, use the formula: DaysofInventory=AverageInventoryDailyUsageDaysofInventory=DailyUsageAverageInventory
Given:
Average quantity on hand = 10 units
Annual sales = 60 units
Selling days in a year = 360 days
First, calculate the daily usage: DailyUsage=60units360days=0.1667units/dayDailyUsage=360days60units=0.1667units/day
Then, calculate the days of inventory: DaysofInventory=10units0.1667units/day60daysDaysofInventory=0.1667units/day10units60days
However, considering production days (261 days) is not relevant as the selling days (360 days) have already been used in the calculation.
Hence, the correct days of inventory based on daily usage calculation is approximately 60 days. To be more precise, using the given options: DaysofInventory=10units(60units/360days)=60daysDaysofInventory=(60units/360days)10units=60days
Vollmann, T.E., Berry, W.L., Whybark, D.C., & Jacobs, F.R. (2005). Manufacturing Planning and Control for Supply Chain Management. McGraw-Hill.
Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation. Pearson.
Question 267
A company that sells 60 units of product in a given year and has an average quantity on hand of 10 units. There are 360 selling days and 261 production days in the year. The company has on hand how many days of product inventory?
Explanation:
To determine the days of product inventory on hand, use the formula: DaysofInventory=AverageInventoryDailyUsageDaysofInventory=DailyUsageAverageInventory
Given:
Average quantity on hand = 10 units
Annual sales = 60 units
Selling days in a year = 360 days
First, calculate the daily usage: DailyUsage=60units360days=0.1667units/dayDailyUsage=360days60units=0.1667units/day
Then, calculate the days of inventory: DaysofInventory=10units0.1667units/day60daysDaysofInventory=0.1667units/day10units60days
However, considering production days (261 days) is not relevant as the selling days (360 days) have already been used in the calculation.
Hence, the correct days of inventory based on daily usage calculation is approximately 60 days. To be more precise, using the given options: DaysofInventory=10units(60units/360days)=60daysDaysofInventory=(60units/360days)10units=60days
Vollmann, T.E., Berry, W.L., Whybark, D.C., & Jacobs, F.R. (2005). Manufacturing Planning and Control for Supply Chain Management. McGraw-Hill.
Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation. Pearson.
Question 268
A manufacturing company has several inexpensive items that are critical to the production process. The supply of these items has been depleted several times. Which of the following actions is most likely to reduce stockouts?
Explanation:
Increasing the minimum inventory levels for critical items ensures that there is a buffer stock available to prevent stockouts. This approach is straightforward and effective for items that are inexpensive but critical to the production process. It helps maintain continuous production by ensuring that these essential items are always available when needed, thereby reducing the risk of production delays due to stock depletion.
Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2008). Designing and Managing the Supply Chain: Concepts, Strategies, and Case Studies. McGraw-Hill Education.
Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation. Pearson.
Question 269
Effective data acquisition for supply chain management requires:
Explanation:
Effective data acquisition for supply chain management involves identifying the proper supply chain profile for the product type. This means understanding the characteristics and requirements of the product, such as demand variability, lead times, and service level expectations, and aligning the supply chain processes accordingly. Different products may require different supply chain strategies, such as lean for stable products and agile for variable demand products. Accurate profiling helps in tailoring data acquisition and management practices to support efficient and responsive supply chain operations.
Fisher, M.L. (1997). What Is the Right Supply Chain for Your Product? Harvard Business Review.
Christopher, M. (2016). Logistics & Supply Chain Management. Pearson.
Question 270
The primary business advantage of developing an international supply chain is to:
Explanation:
The primary business advantage of developing an international supply chain is to realize economies of scale in production and distribution. Here's why:
Economies of Scale: By sourcing and manufacturing on a global scale, companies can produce larger quantities at lower costs per unit. This includes benefits from bulk purchasing of raw materials and components.
Cost Advantages: Access to lower-cost labor and materials in different regions can significantly reduce production costs.
Market Expansion: An international supply chain allows companies to distribute products to a broader market, increasing sales volumes and spreading fixed costs over a larger base.
Specialization: Companies can take advantage of specialized skills and technologies available in different countries, enhancing production efficiency and product quality.
Christopher, M. (2016). Logistics & Supply Chain Management. Pearson.
Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation. Pearson.
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