APICS CSCP Practice Test - Questions Answers, Page 30

Hedging is a strategy used to mitigate risk by taking offsetting positions in related markets to balance potential losses in one part of the supply chain with gains in another. This approach is particularly useful in global supply chains where fluctuations in currency exchange rates, commodity prices, or market conditions can impact different parts of the supply chain differently. By employing hedging strategies, companies can protect themselves from adverse financial impacts and stabilize their overall financial performance. Options A, B, and C are different strategies but do not specifically address the financial balancing described.

Chopra, S., & Meindl, P. (2015). Supply Chain Management: Strategy, Planning, and Operation.

https://www.investopedia.com

Providing support and service for proper product use can reduce the number of goods processed by the reverse supply chain by minimizing the likelihood of returns due to misuse or lack of understanding. Educating customers on how to use products correctly, offering troubleshooting assistance, and ensuring they have the necessary support can lead to higher satisfaction and fewer returns. Options A, B, and C are related to reverse logistics but do not directly address the prevention of returns through better customer support and service.

Guide, V. D. R., & Van Wassenhove, L. N. (2009). The Evolution of Closed-Loop Supply Chain Research.

https://www.supplychainbrain.com

Concurrent engineering, also known as participative design, is a method used to bring new products to market quickly while maximizing customer value and minimizing costs. It involves the simultaneous design and development of a product and its related processes by cross-functional teams. This approach ensures that design, manufacturing, and other considerations are integrated early in the development process, leading to faster time-to-market, improved product quality, and reduced costs. While leveraging top-performing suppliers, crowdsourcing, and e-commerce can contribute to the process, concurrent engineering provides a comprehensive framework for rapid and efficient product development.

Prasad, B. (1996). Concurrent Engineering Fundamentals: Integrated Product and Process Organization.

https://www.npd-solutions.com/concurrent.html

Quality Function Deployment (QFD) is a structured approach used to ensure that the voice of the customer is captured and translated into technical requirements throughout the product development process. QFD involves creating matrices, known as 'House of Quality,' that map customer desires to specific product characteristics and production processes. This methodology ensures that every stage of product development is aligned with customer needs, leading to higher customer satisfaction and better product quality. Options A, B, and C focus on different aspects of quality management but do not specifically address the primary objective of QFD.

Akao, Y. (1990). Quality Function Deployment: Integrating Customer Requirements into Product Design.

https://asq.org/quality-resources/qfd-quality-function-deployment

The Theory of Constraints (TOC) focuses on identifying and managing constraints (bottlenecks) within a process to optimize overall performance. In TOC accounting, the primary objective is to maximize throughput (revenue generation) by ensuring that the system's constraint is optimally utilized. This approach emphasizes the importance of increasing the rate at which the system generates money through sales while managing inventory and operating expenses effectively. Options A, B, and D are relevant to different operational strategies but do not capture the core principle of TOC accounting.

Goldratt, E. M., & Cox, J. (1984). The Goal: A Process of Ongoing Improvement.

https://www.tocinstitute.org/theory-of-constraints.html

Network planning is the process by which a firm structures and manages its supply chain to achieve optimization. This involves designing the network of suppliers, manufacturers, warehouses, and distribution centers to minimize costs and maximize service levels. Network planning includes decisions on facility locations, transportation modes, inventory levels, and the flow of goods through the supply chain. Options A, C, and D address different aspects of supply chain management but do not specifically refer to the comprehensive design and management process implied by network planning.

Chopra, S., & Meindl, P. (2015). Supply Chain Management: Strategy, Planning, and Operation.

https://www.investopedia.com/terms/n/networkplanning.asp

Pooling inventory and demand forecasts across different distribution channels can help reduce obsolescence by providing a more accurate and holistic view of demand. This strategy allows the company to balance inventory levels more effectively, reducing excess stock and minimizing the risk of products becoming obsolete. Managing inventory and forecasts separately for each channel often leads to discrepancies and inefficiencies, whereas pooling helps optimize overall inventory levels. Options A, C, and D may offer some benefits but are less effective in addressing the core issue of high obsolete inventory.

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

https://www.supplychaindive.com

For items with high profit impact and low supply risk, the recommended procurement strategy is to exploit purchasing power and minimize cost. This approach involves negotiating favorable terms with suppliers, leveraging volume discounts, and seeking cost reductions to maximize profitability. Since the supply risk is low, the focus can be on optimizing costs without significant concern for supply disruptions. Options A, B, and D are appropriate for different supply risk and profit impact scenarios but do not align with the characteristics described.

Kraljic, P. (1983). Purchasing Must Become Supply Management. Harvard Business Review.

https://www.cips.org/knowledge/procurement-topics-and-skills/strategy-policy/models/kraljic-matrix/

The chase production strategy aims to match production rates to demand by adjusting output to meet fluctuating demand levels. For a company using this strategy, a supplier's agility is paramount. Agility refers to the supplier's ability to rapidly respond to changes in demand, which is critical for maintaining production schedules and minimizing inventory costs. The supplier's certification status, quoted delivery time, and quoted total price are also important but secondary to the ability to quickly adjust to changing needs, ensuring a smooth and responsive supply chain.

Stevenson, W. J. (2015). Operations Management.

https://www.supplychain247.com