APICS CSCP Practice Test - Questions Answers, Page 31

For the production of high-profit items that depend on high-quality circuit boards, developing a strategic partnership with the supplier is the most appropriate level of collaboration. A strategic partnership involves a long-term, cooperative relationship where both parties work closely to ensure quality, reliability, and innovation. This type of relationship goes beyond simple transactional interactions and involves shared goals, mutual benefits, and often joint development activities. Options A (Pull replenishment), C (Revenue sharing), and D (Vendor-managed inventory) are useful but do not provide the comprehensive, collaborative approach that a strategic partnership offers.

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

https://www.supplychainquarterly.com

Shipping directly from the manufacturing facility to retail locations is known as direct shipping or direct-to-store delivery. This strategy minimizes warehousing costs by eliminating the need for intermediate storage facilities. By shipping products directly to retail locations, the company reduces the handling and storage costs associated with warehousing. While utilizing 3PL providers, pooling inventory, and cross-docking can also be effective, they involve additional warehousing and handling steps, which can increase overall costs.

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

https://www.logisticsmgmt.com

When forming a strategic alliance with a supplier who is also a competitor, it is crucial to establish processes to control shared information. This ensures that sensitive data is protected and only relevant information necessary for the partnership is exchanged. By setting clear guidelines and boundaries for information sharing, both parties can collaborate effectively while safeguarding their competitive interests. Options B (Negotiating contracts), C (Instructing employees to ignore competition), and D (Analyzing market) are important but do not directly address the critical need for controlled information sharing in such alliances.

Das, T. K., & Teng, B. S. (2000). A Resource-Based Theory of Strategic Alliances. Journal of Management.

https://www.supplychaindive.com

The correct answer is C. Understanding the content and scope of a company's cloud implementation is essential to a company's advanced supply chain strategy that utilizes cloud computing. Cloud computing is the delivery of computing services, such as servers, storage, databases, networking, software, analytics, and intelligence, over the internet1. Cloud computing can provide various benefits for supply chain management, such as cost reduction, speed, agility, scale, visibility, and innovation23. However, to leverage these benefits, a company needs to understand the content and scope of its cloud implementation, which includes the following aspects4:

The type of cloud service model that suits the company's needs and goals, such as software-as-a-service (SaaS), platform-as-a-service (PaaS), or infrastructure-as-a-service (IaaS).

The type of cloud deployment model that matches the company's security and performance requirements, such as public cloud, private cloud, or hybrid cloud.

The type of cloud provider that offers the best features, functionality, and compatibility for the company's supply chain applications and processes, such as Amazon Web Services, Microsoft Azure, Google Cloud Platform, or IBM Cloud.

The type of cloud migration strategy that minimizes the risks and challenges of moving the company's supply chain data and systems to the cloud, such as lift-and-shift, re-platform, re-factor, or re-architect.

The other options are not as essential or relevant as the correct answer. Understanding the history and evolution of supply chain technologies is not necessary for a company's advanced supply chain strategy that utilizes cloud computing. While it may provide some background and context for the current and future trends and developments in supply chain management, it does not directly affect the company's cloud implementation or performance. Understanding the complexity of information services configuration is not specific to a company's advanced supply chain strategy that utilizes cloud computing. While it may help the company optimize its information systems and processes, it is not unique to cloud computing and applies to any type of information technology. Understanding the product offering of local and global internet service providers (ISPs) is not critical for a company's advanced supply chain strategy that utilizes cloud computing. While it may influence the company's internet connectivity and bandwidth, it is not a core component of cloud computing and does not determine the company's cloud implementation or performance.

E-commerce enabled supply chains are designed to fulfill individual consumer orders, which are typically smaller in size compared to traditional bulk shipments to retailers. The nature of e-commerce requires efficient handling, packaging, and shipping of numerous small packages directly to customers' addresses. This makes parcel shipments a key characteristic of e-commerce supply chains. These parcel shipments are often managed through sophisticated logistics networks that can handle high volumes of small packages and provide quick delivery times.

Push system (A) is more associated with traditional retail supply chains where products are pushed to stores based on anticipated demand.

Small number of niche customers (C) is not typically associated with e-commerce, which often aims for a broader market.

Fewer reverse logistics activities (D) is not accurate as e-commerce tends to have a higher rate of returns and requires robust reverse logistics capabilities.

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

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

Cross-docking is a distribution strategy where incoming goods are directly transferred from receiving docks to outbound shipping docks with minimal or no storage time in between. This strategy is characterized by items flowing through a warehouse in an almost continuous manner, reducing storage costs and improving inventory turnover.

Direct shipment (B) involves shipping goods directly from the supplier to the customer without going through a distribution center or warehouse.

Multilevel (C) refers to a distribution strategy involving multiple levels of warehouses or distribution centers.

One-piece flow (D) is a lean manufacturing principle focused on producing one item at a time through various stages of production, rather than a distribution strategy.

Bowersox, D. J., Closs, D. J., & Cooper, M. B. (2012). Supply Chain Logistics Management. McGraw-Hill.

Bartholdi, J. J., & Hackman, S. T. (2011). Warehouse & Distribution Science. Georgia Institute of Technology.

In a market characterized by frequently changing product demand, short lead times, and intense competition, reducing cycle times is critical to maintaining competitiveness. By reducing the time it takes to produce and deliver products, a company can respond more quickly to changes in demand and market conditions, thereby gaining a competitive edge.

Increasing the labor force (A) might help in certain situations but does not address the core issue of responsiveness and efficiency.

Increasing work-in-process (WIP) inventory (B) could lead to higher costs and inefficiencies.

Matching competitors' prices (D) addresses price competition but does not enhance operational competitiveness or responsiveness.

Hopp, W. J., & Spearman, M. L. (2008). Factory Physics. Waveland Press.

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

An effective company strategy for innovative products involves combining them with a responsive supply chain. Innovative products often have unpredictable demand and short life cycles, requiring a supply chain that can quickly respond to changes in demand, accommodate customization, and manage shorter product cycles efficiently.

An efficient supply chain (A) is more suited for functional products with stable demand.

Accurate forecasts (C) are important but difficult to achieve consistently for innovative products.

High inventory levels (D) are generally avoided in innovative product strategies due to the risk of obsolescence.

Fisher, M. L. (1997). What is the right supply chain for your product? Harvard Business Review.

Lee, H. L. (2002). Aligning Supply Chain Strategies with Product Uncertainties. California Management Review.

Strategic purchases are best suited for single sourcing with a preferred supplier to reduce supply chain risk. These purchases are critical to a company's operations and often involve complex and high-value items. By single sourcing with a preferred supplier, a company can establish a strong, collaborative relationship, ensuring quality, reliability, and continuity of supply, while also potentially benefiting from supplier innovation and cost efficiencies.

Routine (B) purchases are low value and low risk, often sourced from multiple suppliers.

Bottleneck (C) items have a high supply risk but are not necessarily strategic; they might require multiple sources or contingency planning.

Leverage (D) items have significant purchasing power and are typically sourced from multiple suppliers to optimize costs.

Kraljic, P. (1983). Purchasing must become supply management. Harvard Business Review.

Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and Supply Chain Management. Cengage Learning.