In its simplest form, logistics

integrates inbound logistics with

outbound logistics.

Warehouse management system (WMS)

based task interleaving combines:

Put-away and replenishment

operations

A logistics manager works within a

business where transportation capacity

is near critical mass. Load planning is

inefficient given the increasing volume

of loads. Which of the following

applications would enable better

decision making and efficiency in

planning loads?

Transportation management system

(TMS)

Which of the following metrics is

considered external thus customerfacing?

(A) Perfect order

Inventory carrying costs generally

include

(A) Inventory capital, storage, service,

and risk costs.

Pallet-flow racking is perfect for

facilitating

(C) first in, first out (FIFO).

The standard gauge of most of the

world's rails will measure a

(B) 4 feet 8 inches

A ship, which is able to carry 6,000

twenty-foot equivalent unit (TEUs), would

maximize its capacity by carrying which

of the following containers?

(B) 3,000 40' containers

Which of the following functions are

associated with a supply-facing

warehouse?

(D) Inbound materials and components

A marketing initiative increases

packaging dimensions for an existing

product that remains unchanged. While

the larger packaging may increase sales

of the product, the impact on

sustainability will be that:

(B) transportation capacity will be

wasted

What type of demand component does the following figure represent?

Seasonal

a predictable repetitive pattern of demand measured within a year where demand grows and declines.
These patterns are calendar related and can appear annually, quarterly, monthly, weekly, daily and/or
hourly

Seasonality (seasonal variation)

A company manufactures special products for select customers. When demand for these products
drops, the manufacturer can switch the production line to a commodity-type product that can be sold
on the open market at reduced terms to generate cash. The company is executing a corporate strategy
that is based on:

multiple upstream supply chains

Suppliers are ______ from the manufacturer

upstream

Which of the following is the most important result when a company implements customer relationship
management?

retention of key customers is increased

What can CRM result to?

larger customer base and improved profitability

Customer service is most appropriately defined as the ability of a company to address:

needs, inquiries, and requests of customers

Customer service represents the supply chain's role in fulfilling

marketing objectives

A customer service strategy must

identify and prioritize all activities required to fulfill customer logistical requirements as well as - or
better than- the competition does

Fundamental measures of basic customer service are

fill rates, lead time monitoring, order status monitoring, and customer satisfaction

PDCA, which refers to a circular model for continuous improvement, is an acronym for

plan, do, check, action

Plan in PDCA

first step - a plan to effect improvement is developed

Do in PDCA

second step- the plan is carried out, preferably on a small scale

Check in PDCA

third step- the effects of the plan are observed

Action in PDCA

last step- results are studied to determine what was learned and what can be predicted

Other name for PDCA

Shewhart cycle / deming circle

Which of the following approaches typically would be most effective in increasing inventory velocity in a
supply chain?

ensuring less idle time for inventory

Increased velocity reduces the expenses involved in ________ inventory

warehousing

In supply chain management, a major benefit of an enterprise resources planning system is:

visibility to real time data

ERP software

a modularized suite of business applications that are seamlessly integrated to provide automated
interactions and a common source of data for a company. Built around a large database with shared
access to real time data

Responsiveness to changing demands through use of a sales portal is an example of connecting suppliers
through which of the following techniques?

Relationship management

SRM Portals

allow individuals to view and react to the results of production changes on supplier product or service
availability and see exception-based information and forecasts based on POS data

Lean supply chains strive to achieve their objectives by using which of the following techniques?

value stream mapping

Value stream mapping is

provides a way to link reporting requirements, stakeholders from multiple functions, managers and
staff, and metrics to sustain a lean initiative across the entire supply chain

Process of value stream mapping

first - completing a value stream map of current state with input and approval from all stakeholders

second- draw a future state map that eliminates all wasteful activities

Which of the following sequences of steps is correct for the process?

1. Define the nature of the problem

2. Measure existing performance and record data and facts that provide information about causes of the
problem

3. Analyze information to determine root causes of the problem

4. Improve the process by effective solutions to the problem

5. Control the process until solutions become ingrained

Five phased of Six Sigma

DMAIC: define, measure, analyze, improve and control

Which of the following statements best defines a business plan?

It is a document consisting of organizational, strategic, and financial tactics.

APICS definition of business strategy

a statement of long range strategy, and revenue, cost, and profit objectives usually accompanied by
budgets, a projected balance sheet, and a cash flow (source and application of funds) statement. Usually
stated in terms of dollars and grouped by product family. Translated into sy cbrinized tactical functional
plans throughout the production planning process (or SOP). Although frequently stated in different
terms (dollar vs units) these tactical plans should agree with each other and the business plan. A
document consisting of the business details (organization, strategy, and financial), prepared by an
entrepreneur to plan for a new business

Which two of the following factors are most important when considering whether to partner with a
supplier?

shared visions and trusts

Which of the following statements does NOT apply to supply chain event management (SCEM)?

SCEM is used to analyze the current state of a company's processes and to compare it with appropriate
industry benchmarking data

SCEM provides users

the ability to flag the occurrence of certain supply chain events to trigger some form of alert or action
within another supply chain application. It can be deployed to monitor supply chain business processes
such as planning, transportation, logistics, or procurement. Can also be applied to supply chain business
intelligence applications to alert user to any unplanned or unexpected event

Which of the following outcomes is one of the major benefits associated with customer relationship
management performed in an e-business environment?

Ability to develop valued, lifetime customer relationships

Which of the following measures most commonly is used for assessing the efficient use of capital?

Return on investment ratio (ROI)

ROI APICs Definition

relative measure of financial performance that provides a means for comparing various investments by
calculating the profits returned during a specified period of time. In the theory of constraints, is
calculated as throughput minus operating expense divided by investment

During medium-range planning activities, safety stock can best be used to:

cushion the company against unknown fluctuations in demand

Safety stock

quantity of stock planned to be in inventory to protect against fluctuations in demand / supply.

Safety Stock (Master Production Scheduling)

additional inventory and capacity planned as protection against forecast errors and short term changes
in the backlog. overplanning can be used to create safety stock

A company has revenues of $100,000, which includes 10% supply chain expense and 80% other
expenses. Which of the following actions will result in the largest increase in gross profit?

Reduce supply chain expense by 5%

Gross profit calculation

Sales - COGS

Which of the following features typically is required for the sales and operations planning (S&OP)
process to be effectively used by an organization?

data integration across multiple functions

A radio frequency tag is used to primarily

automatically capture product data

Radio Frequency Identification (RFID)

a system using electronic tags to store data about items. Accessing these data is accomplished through a
specific radio frequency and does not require close proximity or line-of-sight access for data retrieval.
See: active tag, passive tag, semi-passive tag.

In relation to supply chain cost, which of the following factors is NOT considered when designing a
product for market?

marketing information to the customer

Design for the supply chain refers to

enhancement of a firms product design in consideration of the issues that will arise in the supply chain,
from raw materials to the final stage of the products life cycle (APICS)

Elimination of non value added activities is the primary focus of

lean manufacturing

Lean manufacturing (APICS)

philosophy of production that emphasizes the minimization of the amount of all the resources (including
time) used in various activities of the enterprise. It involves identifying and eliminating non-value-adding
activities in design, production, supply chain management, and dealing with customers. Lean producers
employ teams of multiskilled workers at all levels of the organization and use highly flexible, increasingly
automated machines to produce volumes of products in potentially enormous variety. It contains a set
of principles and practices to reduce cost throughout the relentless removal of waste and through the
simplification of all manufacturing and support processes
The primary benefit of electronic business (e-business) is

business collaboration

An electronic business strategy should

- enable collaboration with the extended supply chain (including integration of customers and suppliers)

collaboration allows faster partner integration so firms have continuously reconfigurable relationships at
every level

The primary reason for a firm to pursue strategic supply chain activities is to

gain competitive advantage

Which of the following characteristics of a supply chain is most desirable when measuring performance
from a stockholder position?

it maximizes velocity and return on assets

Return on assets measures

the return an organization receives on its invested capital supply chain fixed assets, which is a measure
important to stakeholders

What does maximum velocity indicate?

a higher asset turnover for stockholders and faster order-to-delivery response for customers

Which of the following feedback tools would summarize supplier performance?

Scorecards

Which of the following tools creates supply chain plans that incorporate long-range product family
planning and short-term detailed scheduling?

advanced planning and scheduling

Advanced planning and scheduling (APS) refers to

techniques that deal with analysis and plannings of logistics and manufacturing over the short,
immediate and long term time frames. It creates schedules for what should be produced, when and
where production should occur, and the sequence of events that should occur. APS creates holistic
supply chain plans that incorporate long range aggregate planning and short term detailed scheduling

Which of the following examples is a "voice of the customer" activity?

Conducting direct interviews and discussions

A manufacturing company with limited competence in logistics plans to expand into an international
market. The most appropriate initial action the company should take to serve the international market is
to:

engage a third-party logistics company

Third-party logistics provider (3PL)

an entity that provides product delivery services for a buyer and supplier team. Utilizing a 3PL is a
growing trend that incorporates the supply chain management philosophy of concentrating on core
competencies and partnering with other companies to perform in areas outside your competence

A manufacturer produces and sells an average of two machines per day, 7 days per week. The machines
cost $20,000 each. The annual cost of carrying and transporting finished goods inventory is 15%. Which
of the following modes of transportation is most economical?

Rail

The most critical measure of strategic success is the amount of increase in

return on investment (ROI)

Typical measures of success in the use of invested money and assets more generally are

return on investment (ROI), return on assets (ROA), return on owners equity (ROE)

ROI (APICS)

a relative measure of financial performance that provides a means for comparing various investments by
calculating the profits returned during a specified time period. In the theory of constraints, ROI is
calculated as throughput minus operating expense divided by investment

ROA calculation

net income for the previous 12 months / total assets

ROE calculation

Net income/Avg Owners Equity

ROE definiton

financial measurement of how successful a company is in creating income for the owners of the
organization. A comparison of the ROE with the ROA indicates the effectiveness of financial leverage
employed by the firm

ROI calculation

(throughput - operating expense) / investment

Which of the following activities typically is included in a warehouse management system?

product availability estimating

WMS

improves workflow by continuously simplifying and optimizing operations, especially with warehouse
personnel and equipment. It directs management attention to anticipated or existing problem areas in
warehouse activity by continuously profiling performance and then creating exception reports for
activity levels, productivity, warehouse order cycle time, storage density, shipment accuracy, and
inventory accuracy

Change in which of the following supply chain enablers has contributed most to building global
relationships among suppliers and customers?

Information technology

Globalization (APICS)

the interdependence of economies globally that results from the growing volume and variety of
international transactions in goods, services, and capital, and also from the spread of new technology

Technology has allowed business to

- move from department centric spheres of control to a focus on business processes that spans not only
departments but extended supply chains

- as technology has evolved it has enable increasingly complex business strategies, metrics, and analysis
which in turn have sped up the pace of business and given a business a global reach

ABC Corporation is implementing a website that connects clothing distributors and retailers with many
different garment manufacturers from whom they can buy finished goods. This website would be an
example of:

business-to-business commerce

Which of the following food products should be shipped directly from the manufacturer to the retailer?

fresh milk

Which of the following actions is most effective in reducing variations in the relative profit of a product
that is sold globally?

hedging by selling in multiple regions

Currency hedging

used to offset the risks associated with the changing value of current

When a manufacturer is developing a new product to be sold in independent retail stores, the most
critical task for the manufacturer's executives is to ensure:

mutual strategic goals are set for launch and positioning

A company sells small household goods through catalogue and internet ordering. It ships the goods to
customers around the world from a single distribution center located next to the company
headquarters. Approximately 80% of its shipments are domestic. The most appropriate approach to
domestic delivery of goods typically would be to:

contract with a package delivery service

A firm supplies products and services to a wide variety of industries with varying requirements for
responsiveness and reliability. Many customers across these industries are not satisfied with the firm's
ability to meet the lead time and on time delivery requirements. Which of the following tools is most
appropriate for the firm to use to improve customer service?

Market segmentation

Logistics and marketing strategy roles in market segmentation

Logistics must make the product or service available to the customer at a time and place the customer
segment finds convenient. This often involves developing multiple supply chains tailored to specific
customer segments rather than developing a high customer service level for all segments in general at a
much greater cost (some segments will not need or value this higher level of service, for example,
preferring slower service at a lower cost)

The primary output of sales and operations planning (S&OP) typically is

tactical plans to support the business strategies

The total cost of ownership measurement includes:

tangible and intangible costs

Total cost of ownership (TCO)

sum of all the costs associated with every activity of the supply stream. The main insight TCO offers to
the supply chain manager is the understanding that the acquisition cost is often a very small portion of
the TCO

A company that desires to implement a strategy for inventory management first must define which of
the following concepts?

products and markets claasifications

Inventory is aggregated by

demand pattern, production process, stage of production flow, value to the organization, product of SKU
family or type, and distribution pattern

*this is done prior to the implementation to set inventory objectives and policy)

Which of the following is a key information technology capability that can enable a supply chain to
become more than just lean or adaptable, but demand-driven, meaning it can quickly sense and respond
to actual customer demand changes?

technology to quickly determine profitable tradeoffs in response to unplanned events

SCEM technologies provide

real time demand sensing and visibility to changing marketplace requirements. utilizing the technology
can enable an organization to quickly determine the profitability tradeoffs and compromises in response
to unplanned events occuring in the demand channel
A company has designed a new product family that enables stocking base and country specific
components to be configured and shipped after receipt of the customer order. This approach is an
example of:

risk pooling

Risk pooling

Manufacturers and retailers that experience high variability in demand for their products can pool
together common inventory components associated with a broad family of products to buffer the
overall burden of having to deploy inventory for each discrete product

the finish-to-order model is an effective inventory strategy when the product

has a limited set of features

finish to order (FTO) / assemble to order (ATO)

products are partially manufactured and inventoried to await orders. This allows mass customization of
products without long lead times and works well with products that can be tailored to customer taste by
exchanging a limited number of modular components

Which of the following outcomes is the likely result of applying the lean philosophy to supply chain
management?

Low cost and increased susceptibility to significant disruptions from disaster related events

An inventory manager monitors forecast accuracy as the primary key performance indicator (KPI).
Management continues to be unhappy with the warehouse inventory and service levels. Which of the
following actions should the manager consider first?

use broader KPIs

Which of the following objectives would be most appropriate for trading partners implementing
cooperative supply chain management?

ensuring that each trading partner is profitable

Cooperative supply chain partners seek

long term relationships

mutually benefit each other

increase profitability

Which of the following types of plans is a direct output of sales and operations planning?

demand

Inputs to S&OP

strategic, business, and marketing plans

Results of S&OP

product and brand management, marketing and sales reps issuing an updated medium term demand
plan for current and new products. This consensus plan arrived at by the demand-side managers is used
as the basis in both the supply planning phase and the financial reviews.

A store receives frequent deliveries of high-volume commodity items which have a stable customer
demand. Which of the following supply chain strategies is best suited to this store?

continuous replenishment

Continuous replenishment (APICS)

process by which a supplier is notified daily of actual sales or warehouse shipments and commits to
replenishing these sales (size, color) without stockouts and without receiving replenishment orders. the
result is a lowering of associated costs and an improvement in inventory turnover

Goal of continuous replenishment

continuous reduction of inventory levels at the store as the forecasts become more accurate. lost sales
due to stockouts are avoided and inventory turnover is improved

A company has one of its key components sole sourced from a global supplier whose manufacturing
facility is destroyed in a major natural disaster. The immediate impact of this incident on the company's
operational performance is most likely to be a reduction in:

inventory turn

Inventory turnover ratio

measures the efficiency of inventory in supporting sales

- a lower inventory turnover ratio results from decreasing sales and or increasing average inventory

The supply chain manager has recently been told that he must increase the supply chain value to the
external stakeholders. Which stakeholders should he focus on, and what should be done?

Shareholders; increase dividend income.

The purpose of supply chains is to be globally competitive. What are the basic elements in a supply chain
that can impact its ability to respond competitively to changes in the global marketplace?

Collaboration, time, distance

What group is the primary stakeholder in any business activity?

The business itself

Which of the following is true of e-business strategy?

A nucleus firm needs to upgrade its own systems and organization to the desired level of
interorganizational connectivity before seeking partners.

A company that is changing its business model to that of a lateral supply chain most likely would:
use outsourcing

What are key qualities to look for in software for organizations wanting to remain at Stage 4 of supply
chain network technology optimization, the extended enterprise?

Adaptability and scalability

Organization ABC's leaders believe that the organization's supply chain is in the fifth stage of supply
chain maturity, the orchestrated supply chain. What might be a red flag that they are more likely at just
the fourth stage of maturity?

The organization has succeeded in closing visibility gaps in its technology despite a great deal of change
resistance.

What are typically the main external ties for a company at Stage 2 of supply chain network technology
optimization, the semifunctional enterprise?

Providers of functions that are not core capabilities for the organization

In which directions do the four basic flows within a supply chain move?

Physical materials and services flow downstream, cash and the reverse supply chain flow upstream, and
information flows in both directions.

Which of the following is the supply chain evolution stage in which a nucleus company begins initiatives
to improve efficiency, effectiveness, and quality within functional areas?

Semifunctional enterprise

Which is an example of how McDonald's is vertically integrated to some degree?

McDonald's owns the land for all of its United States retail stores.

Which supply chain flow travels through the organization via orders, sales activity, and forecasts?

Customer information

Maria sells her paintings in the street market on weekends. Which of the following are Tier 2 suppliers in
this supply chain model?

Paint wholesaler

An organization that networks its enterprise resources planning (ERP) systems across corporate
boundaries might do which of the following to reduce the bullwhip effect?

Send point-of-sale data directly to suppliers.

What needs to be heavily emphasized in technology solutions if the organization is to truly become
consistent and systematic and achieve the orchestrated supply chain level of supply chain maturity?

Process and cross-organizational data sharing automation

You are working in an organization that is in the second developmental stage of organizational design.
What should you be prepared to do?
Communicate upward or laterally in functional teams.

Many Japanese companies build keiretsu to:

form cooperative relationships, usually through ownership of stock in member companies.

Which of the following is a benefit of lateral supply chains?

Improved business focus and expertise

A firm's highest stage of production is manufacturing resource planning (MRP II), it uses informal
demand planning with disconnected spreadsheets for the supply chain, and it has online catalogs on the
internet. What stage of supply chain development has the firm reached?

Semifunctional enterprise

The APICS Dictionary, 15th edition, refers to a supply chain as a "global network." Which of the following
correctly indicates what could comprise this network?

Entities and processes (the engineered flow) of any size or configuration

According to the law of demand, what is likely to happen if the price of a good or service increases?

Consumption of substitute goods may increase.

After performing an extensive customer survey, what else does an organization need to do to discover
whether there are any customer requirements being missed in the market?

Scan what the competitors are offering.

Microeconomics focuses on the decisions that businesses and people make:

in terms of resource allocation and the prices of products and services.

An automobile company has identified a five-year trend in the price of gasoline, with prices consistently
increasing year over year. How can it respond to capitalize on this trend?

Design and produce vehicles that are more fuel-efficient.

An organization's macro environment has changed for the worse. As part of a demand analysis, what
can the organization's marketing professionals do about this?

Consider whether product end-of-life or new product introductions should be planned for the new
environment.

What is an essential trait for organizations with global supply chains?

Flexibility to withstand disruptions

When market research reveals that some customer segments desire certain features but other
segments desire different features, an organization's primary criteria for deciding on features to include
are those that:

increase net profit margin.

According to macroeconomic theory, as aggregate prices decrease, what happens to the real gross
domestic product (GDP), and why?

Real GDP increases, because there is more real wealth.

What is an example of an inelastic product?

bread

Which is one reason why suppliers will not increase supply past a given point even if the prices keep
getting higher and there is more incentive to produce more supply?

There are diminishing returns.

An organization's marketing department conducts market research by studying the size, location,
nature, and characteristics of markets along with sales (or consumption) data. What else does it need to
do?

Study market share and do consumer research.

Which is a reason why an organization's product portfolio management process (a product assessment)
should be done early in demand management?

A change in product life cycle stage may not be obvious and the product may no longer be appropriate
for the market.

If the overall economy of a country is in a trough but economic leading indicators show a healthy
increase in demand for the next quarter, which would be a good strategic choice for a risk-seeking
organization to make?

Hire high-quality new employees at reasonable salaries.

As part of a regular SWOT analysis, a manufacturer of luxury goods identifies a high likelihood of a
national personal income tax increase in its primary market following sweeping electoral changes. What
potential outcome should the manufacturer prepare for?

Reduction in demand

A manufacturer enlists a marketing company to survey current and prospective customers to determine
their perceptions of the manufacturer's brand and gauge their reactions when shown a series of new
product concepts. What type of marketing research is being conducted?

Consumer research

Consumer research involved

discovery and analysis of consumer attitudes, reactions and preferences

An organization is conducting market research on a targeted set of supply categories. The research is
relying on demand forecasts for the products that require these sourcing categories. What would
improve the quality of this research?

Also find out about related new product introductions.

Which of the following are usually components of the market plan?

Pro forma profit and loss (P&L) statement, management controls, and opportunity and issue analysis

Which of the following statements is true about changing market conditions such as those in the fashion
industry?

Some companies manage this by starting their seasonal product design process early.

Which of the following might cause cyclical movements in a time series of demand data?

Recession

An organization has attempted to forecast demand for a popular product over the last decade. They
have sufficiently accounted for changes due to holidays and climate specifics as well as those due to
advertised sales. They have been accurate when forecasting long-term changes, but over short-term
periods, they have been inaccurate, at times leading to stockouts and excess inventory. What is the
likely cause of their forecast inaccuracy?

Random variation

Random variation (APICS)

fluctuation in data that is caused by uncertain or random occurrences

In order to provide the desired level of customer service but remain profitable, a retailer needs to avoid
carrying unnecessarily high levels of inventory but must be able to respond rapidly to changes in
demand and avoid stockouts. What organizational strategy linking to demand management would be
the best for this retailer?

Communicating demand

Which of the following is a best practice for the creation of demand plans?

Organizations should include a mechanism for recording uncertainty in inputs.

Which of the following describes customer-focused businesses?

They educate customers throughout the purchasing process.

An organization launched a product that failed to get to the growth stage. They want to phase the
product out as soon as possible. How soon could they discontinue the services related to this product,
assuming the services earn them no revenue?

As soon as the warranty period of the last products sold ends

What is a good brand strategy for a product that has just entered maturity?

Focus on a competitive price and dependability.

Which will likely have the most impact on a customer's perceived value of a product or service and may
impact other strategic decisions because customers tend to use it as an order qualifier?

Pricing
Which of the following is true of a situation in which an organization has long lead times when matching
customer orders to supply?

Salespersons should work to educate customers on lead time issues to set expectations.

Which of the following components of a customer-driven marketing strategy could be described as a

variety of activities designed to position what the business is selling to the right people, at the right time,
and in the right manner?

Promotion

Which role is responsible for performing analytical work on data and the demand plan?

Demand manager

Demand manager responsibilities

performing analytical work on data and the demand plan and building consensus on the plan, among
other tasks.

Which is a critical input to logistics capacity forecasting for warehouses, transportation, and materials
handing needs?

Consensus view of supply and demand

Which of the following would promote proper implementation of demand plans and reduce demand
variability?

Using last year's sales data as a "sanity check" on this year's forecasts

In a customer-driven marketing strategy, which of the following must include getting information about
the product to the consumer and giving the consumer a sense of being listened to?

Placement

Which of the following is the most critical aspect of influencing demand with extended supply chain
partners?

Selling the benefits of changes using soft skills such as leadership

"The most profitable period but also the period most vulnerable to competitive inroads." This best
describes what phase of the product life cycle?

Maturity

Which of the following is a type of assistance marketing could provide to a supply chain manager when
one product in a product family is having significant supply lead time problems?

Substitution

Which is a fundamental marketing concept upon which customer-focused marketing is based?

Products and services have more than one market segment.

In collaborative demand management, communicating demand may involve which of the following?

Manufacturers using retailers' demand data rather than their own

Administrative processing of a customer's order for delivery from a specific warehouse

Distributing a copy of the sales order to the customer

When the demand manager serves as a communications focal point, who is he or she likely to
communicate with regarding changes in tactics needed to meet demand or business objectives?

Product and brand managers

In a master scheduling grid, the planning horizon relates to the cumulative lead time in which of the
following ways?

The planning horizon is equal or greater than the cumulative lead time.

An organization's extended supply chain has both domestic and foreign demand for its products and has
multiple owned and partner-owned production plants. Which of the following can synchronize all of
these various plans for demand and supply?

Demand management

MAD

average amount by which the forecast differs from the actual demand

"absolute" because numbers are stated without regard to positive or negative signs. Tracking the
absolute deviation provides information for use in assessing the reliability of forecasts

For an innovative product introduction at a new organization, which of the following would provide the
best guidance for how many items to produce initially?

Expert opinion guided by purchased customer data

If an organization has the following sales and forecasting results over a three-month period, what is the
mean squared error? (Assume a smoothing constant of 0.3 and exponential forecast rounding to the
nearest whole unit.)

April: Actual sales of 20 units, exponential forecast of 18 units

May: Actual sales of 16 units, exponential forecast of 19 units

June: Actual sales of 15 units, exponential forecast of 18 units

7.3

Mean Squared Error (MSE)

Sum of Squared Errors for Each Period/Number of Periods

Which of the following smoothing constants would yield the same result as a naive forecast?

1.0
it would include the entire demand (100%) and none of the latest forecast amount (0%).

Which of the following is a leading economic indicator?

Yield curve

Yield curve

line that results from plotting, at a certain time, the market interest rates of a financial instrument (for
instance, a bond) over a range of maturity dates

An organization forecasts demand for a given month to be 36.82 units. Actual demand for the month is
34 units. What is the forecast error as a percentage?

8.3%

Forecast error

actual demand - forecasted demand / actual demand

The impact of seasonality on demand in a fast-food restaurant might be measured in which of the
following ways?

time of the year, day of the week, hour of the day

A company wants to calculate the tracking signal for a certain product. Over a 4-month period, the
forecast errors were 0.87, 1.38, -1.48, and -1.36. The resulting MAD is 1.27 units. What is the tracking
signal?

-0.46

tracking signal

Sum of Forecast Errors / MAD

*uses negative numbers not absolute values

Which of the following forms the basis for a naive demand forecast?

Data from the last demand period

Basing a demand forecast for major kitchen appliances on housing start data is an example of which of
the following?

Associative forecasting

Associative forecasting (also called casual, correlation, explanatory, or extrinsic)

uses one or more sources of data that can be gathered from internal or external sources as a predictor
of something that is presumed to be correlated and therefore can be predicted.

Which of the following types of information would be appropriate for a qualitative forecast?

Market research
Qualitative forecasting methods are used when

no historical data or other means of calculating demand are available. Market research is the only
option that is not based on historical or numerical information.

A statistical forecast should be:

one of many inputs to demand plans.

For which of the following items should demand be calculated rather than forecast?

All steering wheels for new Chevrolet Bolts

Demand for dependent items

should be calculated from the forecast of demand for their parent items

For one product, one standard deviation (SD) in units equals 3.5 units. A 99.50 percent customer service
level is desired. This is a safety factor of 2.57 for SD or of 3.20 for mean absolute deviation. How many
units should the organization hold in safety stock (round up)?

9 units

Safety Stock calculation

SD in units * safety factor

When used in forecasting, what does standard deviation tell forecasters about a service that is being
forecasted?

How much variability in demand to expect

Standard deviation measures

the amount of variation in actual results from a central tendency (peak of the bell curve) and does not
use forecast error as an input but rather assesses the relative level of variability of actual results as a
proxy for how much error in a forecast is likely

Which of the following could have the unintended consequence of increasing demand variability for an
organization's product or service?

Culture of optimism in demand forecasting

At a time when manufacturers' orders for durable goods are declining and there is an inverted yield
curve in the government treasuries market, what would be the best sustainability initiative?

Effectively reducing product packaging

Which of the following production strategies allows for mass customization without long lead times?

Assemble-to-order

Which of the following professionals should chair the demand planning phase meeting that is part of the
sales and operations planning (S&OP) process?
Highest-ranking demand-side professional

What processes are used in master planning?

Sales and operations planning and resource planning

For make-to-stock production, the master production schedule includes production dates for which of
the following?

End items

How often, under normal circumstances, does a pre-S&OP meeting take place?

Monthly

What parts of the sales and operations planning (S&OP) process are considered reconciliation steps?

Financial review meeting, pre-meeting, and executive meeting

Which of the following is an integral part of the sales and operations planning (S&OP) process because it
promotes meeting brevity and consensus building?

Replanning

If an organization pursues a level production strategy, which of the following occurs in a period with
inventory buildup and low sales in relation to the income statement items of cost of goods sold (COGS)
and general and administrative expenses?

General and administrative expenses will continue to reduce profits during the period.

The demand management person wants to execute an inventory reduction strategy in part by first
prioritizing sales of inventory nearing obsolescence. This person may best get buy-in from the sales
department by finding ways to:

minimize order backlogs for other products.

Which of the following production strategies sometimes meets resistance from distribution centers
because of the increased demands for skills training and capacity expansion?

Assemble-to-order

When a restaurant pursues a chase production strategy, at the points of highest and lowest load,
capacity key performance indicators for hourly labor and perishable inventory should show that there is:

just the right amount of capacity at both the highest and lowest loads.

Chase production method (APICS)

a production planning method that maintains a stable inventory level while varying production to meet
demand

Which of the following phases or meetings in the sales and operations planning (S&OP) process might
end with professionals recommending reducing the demand plan but only as a last resort?
Supply planning phase

The sales and operations plan (S&OP) includes which of the following?

Monthly production figures by product family

Which of the following functional areas is primarily responsible for demand forecasting?

Sales and marketing

Which of the following would be a typical time horizon for sales and operations planning?

12 to 18 months

For an assemble-to-order product, the master production schedule is likely to focus on scheduling which
of the following?

Modules

Which of the following is the most appropriate subject for discussion at the demand planning phase
meeting that is part of the sales and operations planning (S&OP) process?

Strategies to close any gaps between the demand plan and business plan revenue goals

Which of the following provides a point of reference for formulating sales and operations planning?

Business plan

Which of the following meetings is typically used to arrive at a consensus between plant managers,
logistics managers, schedulers, customer service managers, and other supply chain managers prior to
involving executives in sales and operations planning (S&OP)?

Pre-S&OP meeting

Purpose of pre S&OP meeting

get stakeholders from both supply and demand planning in agreement prior to the main S&OP meeting
presided over by executives

What are the significant inputs to the sales and operations planning (S&OP) process?

Strategic planning, demand planning at the family level, and resource planning

Which of the following is sometimes overlooked when designing a supply chain?

Reverse supply chain flow

Redundancies between members of an extended supply chain could be discovered through which of the
following processes?

Mapping the end-to-end supply chain processes

If a company looks internally to determine how a supply chain process can be done less expensively and
in less time and use fewer resources, it is:
efficient.

In an organization that uses cross-functional teams for managing supply from its external resources, the
supply chain manager's role should involve:

educating functional team members on cultural sensitivities.

From an IT perspective, which part of the supply chain exists to collect, analyze, and disseminate market
intelligence?

demand channel

The network configuration of a supply chain:

should be designed to reflect trading partners' capacities.

What is an ongoing cost associated with an IT project?

bug fixes

Which of the following strategies should a company focus on to measure and improve customer service?

Responsiveness

Which is the biggest impediment to reaching Stage 3 of supply chain network technology optimization,
the integrated enterprise, for an organization that has held the majority of market share in its industry
for many years but has slowly lost ground to high-quality foreign competition?

Company egocentrism

Which of the following must champion the relationships to be formed across an extended supply chain?

Nucleus firm

Nucleus firm

defined as the firm that has the most power or brand equity in a relationship, and this firm must take
the initiative to move the extended supply chain network to a higher stage of supply chain development

In the ideal world of supply chain inventory, which of the following should never be at rest in a
warehouse?

Raw materials

Which of the following variables differentiates supply chains in terms of efficiency and responsiveness?

Demand uncertainty and volume

In a supply chain management implementation effort, the channel master is:

the organization that drives the implementation process.

Information technology enables supply chain management by:

creating global visibility, so that even companies with no global operations must compete globally.
How can IT be employed to aid supply chain management?

To deepen trust in existing relationships

An organization wanting to create supply chain resilience is make-to-order and lean. How can it follow
these principles while becoming more resilient?

Develop response plans and methods of detecting red flags that trigger those actions.

What is an example of a tangible benefit to IT investment?

Improved scheduling

Tangible benefits associated with IT investments

lower maintenance cost, improved scheduling, and lower overhead

Which of the following activities should an organization perform for the extended supply chain prior to
integration of external supply chain partner policies, work processes, and tasks and roles?

Business modeling, such as profit allocations

To better respond to unpredicted disruption, supply chains need to build in redundancy. This can be
accomplished by which of the following?

Establishing safety stock

redundancy can be added to a supply chain by

establishing safety stock, using multiple suppliers (even when more expensive), and intentionally setting
low capacity utilization rates

An organization implements a cloud computing solution to better address its needs. After two years, the
total benefits are $85,000. The total cost to implement the system was $68,000. What is the return on
investment (ROI)?

25%

Which of the following best describes the first step of collaborative planning, forecasting, and
replenishment (CPFR)?

Supply chain partners develop a joint business plan.

Which of the following will add to the cost of a warehouse management system initially but almost
always costs less in the long run due to reduced error rates and more efficient processing?

Automatic identification technologies and paperless processing

If applications in the front end and in the back end could handle more traffic but the overall bandwidth
of the system is still limited in some way, what should be investigated next?

Check the middle end to see if it is having trouble scaling upward.

Middle end programmers are concerned with

automating data requests or data transmissions, and the key is to ensure that the interface is simple to
program, simple to document, and simple to modify or scale upward

Scaling upward example

middleware does not become the bottleneck when the front end and back end could handle more traffic

Which of the following systems will automatically come up with an alternate plan based on defined
business workflow rules whenever the specific situation triggers alert resolution logic?

Supply chain event management (SCEM)

Which of the following is true of bar codes?

Bar codes are often integrated with RFID tags printed as a single label.

Which of the following can be used to immediately improve an organization's inventory accuracy even if
it doesn't reduce lead times?

Real-time point-of-sale data updates in the enterprise resources planning (ERP) system

A website that can interface with an enterprise resources planning (ERP) system to provide available-to-
promise (ATP) data to end customers is what type of e-commerce?

Sell-side

Which of the following can happen when you customize an enterprise resources planning (ERP) system?

May unintentionally alter a different module

What functional discipline can be used to enhance the IT discipline and during its plan phase, can make
use of a common data model from a major enterprise resources planning, database, or cloud vendor to
ensure the discipline uses best practices?

Master data management (MDM)

Master data management (MDM)

discipline that works alongside the IT discipline to coordinate the creating, updating, cleansing, and
retiring of master data across an organization's systems

Which of the following is a primary benefit of entering into a vendor-managed inventory (VMI)
agreement?

Greater visibility of inventory management

Which of the following is important in the selection of a decision support system (DSS)?

Transportation costs

Inventory costs

Changes in demand
An organization has a diverse sales force, and salespeople frequently work from home or on the road.
The organization wants to add customer relationship management (CRM) technology solutions very
quickly. Which of the following would best help this organization meet these goals?

Cloud-based CRM system available as a software as a service (SaaS) subscription from a vendor

Increased customer visibility means:

seeing the transaction from the customer's viewpoint.

An organization wants to create automatic communication between its inventory management system
and its main supplier's inventory management system, which are incompatible. They decide to use data-
oriented middleware despite the labor-intensive setup process. What long-term risk is associated with
this selection?

The process may need to be repeated when adding, changing, or upgrading software in the future.

A primary benefit of an enterprise resources planning (ERP) system to the supply chain is:

visibility to real-time supply chain data.

An organization's information system infrastructure features various systems feeding into each other,
allowing for some levels of data integration. Which is the next level of integration that the organization
should plan to move into as it looks to improve upon the current system in a sustainable manner?

Internally integrated technology

In an advanced supply chain, which of the following would be the best data for a buyer to send to a
sheet metal producer?

Sheets of steel required for metal door construction company for the month

Which of the following systems can provide proactive tools such as automatic notification by portable
device when a party needs to act as well as a simple means of reversing prior operations decisions?

Supply chain event management (SCEM)

Which of the following is true of ISO standards for the EPC Gen 2 standard for radio frequency
identification tags?

ISO 18000-6 covers the Gen 2 standard

A big data and data analytics system has very good cybersecurity and cyber insurance. Which is a
significant risk to this system that remains even if the cybersecurity does not fail?

Data privacy risks

How can dashboards empower individual contributors without prior involvement of managers?

By enabling them to plan changes based on information tailored to their roles and responsibilities

Which Altman Z-score would indicate that a publicly financed organization is at risk of bankruptcy but
would be just a watchlist score if it were for a private organization?
1.5

Score of less than ___ would be bankruptcy risk for public organization

1.8

Score would need to be less than ___ for private organization to be at bankruptcy risk

1.1

The value of inventory on the balance sheet is most often based on:

standard costs.

standard costing

assigns a should cost amount to all material, labor and overhead cost

The supply chain manager needs to better understand what is important to customers. Which of the
following should be used to measure this?

Agility, reliability, and responsiveness

Is it a good idea or a bad idea for a manufacturer to shift costs to its distributors to improve its profits?

It is a bad idea if the ultimate price to the consumer is higher.

Supplier A's plexiglass costs US$10 per square meter and has a nonconformance cost of US$3 per square
meter. Supplier B's plexiglass costs US$12 per square meter and has no nonconformance costs. What is
the supplier performance index for each supplier?

Supplier A: 1.3; supplier B: 1.0

Supplier performance index (SPI) calculation

= (Material Cost + Nonconformance Cost)/Material Cost

Which group of financial ratios helps determine whether a supplier is likely to be able to meet its debt
obligations based on relative levels of debt versus equity?

Leverage ratios

Leverage ratios measure

how much debt is being used to finance the business and thus help show whether it is likely to meet
those debt payments

A steel fabricator is figuring the component calculations for the cost of goods sold for a certain
fabrication pattern during the last quarter. It purchased 300 tons of steel at $585 per ton and used 279
tons during the quarter. It used 1,011 standard hours of labor during the quarter at $18.75 per hour.
What is the resulting value for direct materials used given this data?

$163,215

Direct materials calculation

quantity used * unit cost

What would a retail organization most likely use as its measure of inventory when calculating inventory
turnover?

Average inventory at selling price

Supplier capacity measurements show that supplier X consistently has had three times as many units
available as its top competitors. Based on only this metric, what can the organization determine?

The supplier looks promising but should be carefully checked for signs of financial distress.

A strategic profit model calculates return on assets (ROA) using net profit margin times asset turnover.
The model also shows what ratios and calculations are used to calculate the latter ratios. Which is a
good supply chain management use for this model?

You can calculate how much of a loss in sales it would take to make an inventory reduction unprofitable.

An organization is using the Digital Capabilities Model for Supply Networks to increase its supply chain
maturity level. It has invested in state-of-the-art customer relationship management software and
process automation to create a seamless customer experience. What else is needed to create the
model's "connected customer" capability?

People, process, and technology synergy

Which of the following describes a manager's movements as he or she adopts the SCOR model?

From a functional area orientation to a process orientation

SCOR model is composed of linked processes

plan, source, make, deliver, return

A supply chain manager can apply the SCOR model to which of the following?

All market interactions, including understanding aggregate demand via order fulfillment

The only Level 1 SCOR measure of supply chain reliability is:

perfect order fulfillment.

perfect order fulfillment

defined as the percentage of orders meeting delivery performance with complete and accurate
documentation and no delivery damage

Planning and execution are:

Level 2 SCOR process types.

An organization relies on average inventory from its balance sheets rather than cash-to-cash cycle time
to measure how well it is managing its saleable assets. What error might this result in?

Average inventory might obscure a large seasonal inventory buildup.

What is prompting many countries to adopt the International Financial Reporting Standards (IFRS)?

Growth in international shareholders and trade

International Financial Reporting Standards (IFRS) (APICS)

a common global language for business affairs so that company accounts are understandable and
comparable across international boundaries. As a result of growing international shareholding and
trade, they are rules to be followed by accountants to maintain books of accounts which is comparable,
understandable, reliable, and relevant as per the users internal or external

Organizational and supply chain strategies determine the measures of success and incentives for supply
chain improvement initiatives. Those initiatives should be linked to which of the following?

The four perspectives of the balanced scorecard

A supply chain executive has read about an emerging technology called a digital twin and wants you to
create a briefing that indicates potential areas where the technology can be used. What is a fast way to
gather this information?

Refer to the Practices category of the SCOR Digital Standard.

What is an organization's next step in a make-versus-buy analysis after they have determined that they
do not have texting-based customer service as a core competency?

Determine if there is a need for texting in customer service.

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