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Question 398 - CSCP discussion

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A company currently produces a major component and is considering purchasing the component from a foreign supplier. Assuming they were to purchase from the foreign supplier, which of the following factors would most likely impact the domestic manufacturing operations?

A.
Direct cost of the component
Answers
A.
Direct cost of the component
B.
Supplier lead time fluctuations
Answers
B.
Supplier lead time fluctuations
C.
Accuracy of supplier forecasting
Answers
C.
Accuracy of supplier forecasting
D.
Transportation cost from the supplier
Answers
D.
Transportation cost from the supplier
Suggested answer: B

Explanation:

When considering purchasing components from a foreign supplier, supplier lead time fluctuations can significantly impact domestic manufacturing operations due to the following reasons:

Supply Chain Disruption: Variability in lead times can disrupt the production schedule, leading to delays and increased downtime.

Inventory Management: Inconsistent lead times make it challenging to maintain optimal inventory levels, potentially resulting in stockouts or excess inventory.

Cost Implications: Fluctuations can lead to increased costs due to expedited shipping or last-minute adjustments in production schedules.

Quality Control: Variability in lead times can complicate quality assurance processes, making it harder to maintain consistent product quality.

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

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

asked 16/09/2024
Carlos Reyes
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