Global Supply Chain Management Exam
Preparation Guide
Course Introduction
Global Supply Chain Management explores the strategies, processes, and challenges involved in producing and delivering goods and services in a global marketplace. The course examines the flow of materials, information, and finances among suppliers, manufacturers, distributors, and customers across international boundaries. Key topics include global sourcing, logistics, inventory management, risk mitigation, technology integration, cultural and regulatory issues, and the impact of global trends on supply chains. Through case studies and practical applications, students gain a comprehensive understanding of efficient, ethical, and sustainable supply chain design and management in a rapidly evolving business environment.
Recommended Textbook
Supply Chain Management Strategy Planning and Operation 6th Edition by Sunil Chopra
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Chapter 1: Understanding the Supply Chain
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Sample Questions
Q1) Push processes may also be referred to as speculative processes.
A)True
B)False
Answer: True
Q2) Explain the three macro processes within a supply chain.
Answer: All processes within a supply chain can be classified into three macro processes which are Customer Relationship Management (CRM), Internal Supply Chain Management (ISCM), and Supplier Relationship Management (SRM). Customer Relationship Management (CRM) includes all processes that focus on the interface between the firm and its customers such as marketing, sales, call center management and order management. Internal Supply Chain Management (ISCM) includes all processes that are internal to the firm such as finalization of demand and supply plans, preparation of inventory management policies, order fulfillment and planning of capacity. Supplier Relationship Management (SRM) includes all processes that focus on the interface between a firm and its suppliers such as evaluation and selection of suppliers, negotiation of supply terms and communication regarding new products and orders.
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Chapter 2: Supply Chain Performance: Achieving Strategic
Fit and Scope
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Sample Questions
Q1) A ________ strategy specifies the portfolio of new products that a company will try to develop.
A) Product Development
B) Marketing and Sales
C) Supply Chain
D) Finance Answer: A
Q2) The value chain emphasizes the close relationship between all the functional strategies within a company.
A)True
B)False Answer: True
Q3) Greater product variety and shorter life cycles result in shorter windows of opportunity for a supply chain to achieve fit.
A)True
B)False Answer: True
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Page 4
Chapter 3: Supply Chain Drivers and Metrics
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Sample Questions
Q1) Information is potentially the biggest driver of performance in the supply chain as it directly affects each of the other drivers.
A)True
B)False
Answer: True
Q2) Which of the following would be a characteristic of a facility with little excess capacity?
A) Allows a facility to be very flexible and to respond to wide swings in the demands placed on it
B) Costs money and therefore can decrease efficiency
C) Requires proximity to customers and the rest of the network
D) Will likely be more efficient per unit of product it produces
Answer: D
Q3) A facility with little excess capacity will likely be no more or less efficient per unit of product it produces than one with a lot of unused capacity.
A)True
B)False
Answer: False
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5
Chapter 4: Designing Distribution Networks and Applications to e-Business
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Q1) ________ is a cost factor performance characteristic of Retail Storage at Consumer Pickup Sites that is higher than all other options.
A) Transportation
B) Inventory
C) Information
D) Facilities and Handling
Q2) The number of different products/configurations that a customer desires from the distribution network is
A) response time.
B) product variety.
C) product availability.
D) customer experience.
Q3) Which distribution network is also referred to as drop-shipping with product delivered directly from the manufacturer to the customer location?
A) Manufacturer storage with direct shipping
B) Manufacturer storage with direct shipping and in-transit merge
C) Distributor storage with package carrier delivery
D) Distributor storage with last mile delivery
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Chapter 5: Network Design in the Supply Chain
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Sample Questions
Q1) It is very important that long-term consequences be thought through when making facility decisions, because
A) network designers can use this fact to influence the role of the new facility and the focus of people working there.
B) facilities last a long time and have an enduring impact on a firm's performance.
C) it is astounding how often tax incentives drive the choice of location.
D) the location of a facility has a significant impact on the extent and form of communication that develops in the supply chain network.
Q2) Developing countries often create free trade zones where
A) duties and tariffs are imposed as long as production is used primarily for export.
B) duties and tariffs are imposed as long as production is used primarily for import.
C) duties and tariffs are relaxed as long as production is used primarily for export.
D) duties and tariffs are relaxed as long as production is used primarily for import.
Q3) Describe the factors that influence supply chain network design decisions.
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Chapter 6: Designing Global Supply Chain Networks
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Sample Questions
Q1) A negative NPV for an option indicates that the option will lose money for the supply chain.
A)True
B)False
Q2) The tailored strategy "Focus on low-cost, decentralized capacity for predictable demand" follows which risk mitigation strategy?
A) Get redundant suppliers.
B) Increase capacity.
C) Increase responsiveness.
D) Increase inventory.
Q3) Suppose the contractor has found some materials on Craigslist that can drop the construction cost of a large facility to $1,500,000. These materials cannot be used in the construction of the small facility, so its price remains as indicated in Scenario 6.1. Determine the likelihood of high demand that would make the decision maker indifferent between the two alternatives for a two year time period.
A) 1.0
B) 0.72
C) 0.92
D) 0.86
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Page 8
Chapter 7: Demand Forecasting in a Supply Chain
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Sample Questions
Q1) The simple exponential smoothing forecast method is appropriate when A) demand has observable trend or seasonality.
B) demand has no observable trend or seasonality.
C) demand has observable trend and seasonality.
D) demand has no observable level or seasonality.
Q2) Aggregate forecasts are usually more accurate than disaggregate forecasts, as they tend to have a smaller standard deviation of error relative to the mean.
A)True
B)False
Q3) What is the level component of Holt's model for period 0?
A) -2.5
B) 10.3
C) 2.5
D) 6.4
Q4) The result of each stage in the supply chain making its own separate forecast is A) an accurate forecast.
B) a more accurate forecast.
C) a match between supply and demand.
D) a mismatch between supply and demand.
Q5) Describe the basic characteristics of forecasts that managers should be aware.
Page 9
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Chapter 8: Aggregate Planning in a Supply Chain
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Sample Questions
Q1) An aggregate planner requires information on constraints. Which of the following is one of the typical constraints for an aggregate planner?
A) Inventory holding cost
B) Labor/machine hours required per unit
C) Stockout or backlog cost
D) Limits on overtime
Q2) Aggregate planning, to be effective, requires inputs from
A) all customers.
B) all departments.
C) all suppliers.
D) throughout the supply chain.
Q3) Given that forecasts are always wrong to some degree, the aggregate plan needs to have some flexibility built into it if it is to be useful.
A)True
B)False
Q4) A poor aggregate plan may result in a large amount of excess inventory and capacity, thereby raising costs.
A)True
B)False
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Chapter 9: Sales and Operations Planning: Planning Supply and
Demand in a Supply Chain
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Sample Questions
Q1) Offering a promotion during a peak period that has significant forward buying
A) creates a desirable demand pattern.
B) creates a demand pattern less costly to serve.
C) creates a demand pattern even more costly to serve.
D) shifts demand from the peak period to the slow period.
Q2) The pricing and promotion decisions are often made by A) marketing and sales.
B) marketing and operations.
C) operations and sales.
D) marketing, operations, and sales.
Q3) Customers substituting the firm's product for a competitor's product is A) market growth.
B) stealing share.
C) forward selling.
D) forward buying.
Q4) When performing aggregate planning, the goal of all firms in the supply chain should be to maximize individual firm profits.
A)True
B)False
Q5) Discuss the impact of promotion on demand within a supply chain.
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Chapter 10: Coordination in a Supply Chain
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Sample Questions
Q1) Problems in learning within organizations that contribute to the bullwhip effect are referred to as
A) incentive obstacles.
B) information processing obstacles.
C) pricing obstacles.
D) behavioral obstacles.
Q2) The bullwhip effect enables different stages of the supply chain to have a consistent estimate of what demand looks like.
A)True
B)False
Q3) The bullwhip effect decreases
A) transportation cost.
B) profitability.
C) replenishment lead time.
D) shipping and receiving cost.
Q4) The lack of coordination within a supply chain will result in an increase in A) profitability.
B) inventory accuracy.
C) replenishment lead time.
D) level of product availability.
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Chapter 11: Managing Economies of Scale in the Supply
Chain: Cycle Inventory
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Sample Questions
Q1) Aggregating across products, retailers, or suppliers in a single order allows for a reduction in lot size for individual products because
A) fixed ordering and transportation costs are now charged to retailers.
B) fixed ordering and transportation costs are now charged to suppliers.
C) fixed ordering and transportation costs are now spread across multiple products, retailers, or suppliers.
D) holding costs are now charged to retailers or suppliers.
Q2) Drought conditions spike demand during the summer to an annualized rate of 27,000 cans per year and the price rises to $12 per can with a holding cost of 20%. What is the required order cost per lot?
A) 9.2 cents
B) 92 cents
C) $9.20
D) $92.00
Q3) Quantity discounts lead to
A) a significant buildup of cycle inventory in the supply chain.
B) a slight buildup of cycle inventory in the supply chain.
C) a decrease in cycle inventory in the supply chain.
D) minor fluctuations of cycle inventory in the supply chain.
Page 13
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Chapter 12: Managing Uncertainty in a Supply Chain: Safety Inventory
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Sample Questions
Q1) Explain the impact of supplier lead time on safety inventory.
Q2) Aggregation reduces the standard deviation of demand
A) only if demand across the regions being aggregated is perfectly positively correlated.
B) only if demand across the regions being aggregated is not perfectly positively correlated.
C) even if demand across the regions being aggregated is not perfectly positively correlated.
D) whenever demand across the regions being aggregated is not perfectly positively correlated.
Q3) For the same safety inventory, an increase in lot size
A) decreases the fill rate but not the cycle service level.
B) increases the fill rate but not the cycle service level.
C) decreases both the fill rate and the cycle service level.
D) increases both the fill rate and the cycle service level.
Q4) The coefficient of variation measures
A) the accuracy of the demand forecast.
B) the size of the uncertainty relative to demand.
C) the relevance of cycle inventory to demand.
D) the relative certainty of the forecast.
Page 14
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Chapter 13: Determining the Optimal Level of Product Availability
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Sample Questions
Q1) The professor's suitcase has room for 50 boxes of souvenirs. What is his expected profit?
A) $10,241
B) $11,975
C) $9,863
D) $8,127
Q2) The cost of understocking is denoted by C<sub>U</sub> and is the margin lost by a firm for each lost sale because there is no inventory on hand.
A)True
B)False
Q3) A manufacturer of lawn care equipment has introduced a new product. The anticipated demand is normally distributed with a mean of = 100 and a standard deviation of = 50. Each unit costs $75 to manufacture and the introductory price is to be $125 to achieve this level of sales. Any unsold units at the end of the season are unlikely to be very valuable and will be disposed of in a fire sale for $25 each. It costs $10 to hold a unit in inventory for the entire season. What is the cost of overstocking? What is the cost of understocking? What is the optimal cycle service level? How many units should be manufactured for sale?
Q4) Describe the approaches a manager can use to reduce demand uncertainty.
Page 15
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Chapter 14: Transportation in a Supply Chain
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Sample Questions
Q1) Serving a medium density of customers at a medium distance is best done using A) an LTL carrier.
B) a cross dock distribution center with milk runs.
C) a package carrier.
D) a private fleet with milk runs.
Q2) Suppose that a highway is governed by a use fee charged to motorists that is based on congestion, operation and maintenance. The total traffic t is used to determine the cost of 5t² + 7t. What is the marginal cost?
A) 12
B) 5t + 7
C) 10
D) 10t + 7
Q3) A carrier uses transportation to minimize the total cost (transportation, inventory, information, and facility) while providing an appropriate level of responsiveness to the customer.
A)True
B)False
Q4) Milk runs reduce outbound transportation costs by consolidating large shipments.
A)True
B)False
Page 16
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Chapter 15: Sourcing Decisions in a Supply Chain
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Sample Questions
Q1) The difference between the values of the buyer and seller is referred to as the A) value discrepancy.
B) spread.
C) bargaining surplus.
D) negotiation gap.
Q2) Quantity flexibility contracts counter double marginalization by giving the retailer the ability to modify the order based on improved forecasts closer to the point of sale.
A)True
B)False
Q3) A good supplier scoring and assessment process will primarily track performance along the price dimension when evaluating a supplier.
A)True
B)False
Q4) To improve overall profits, the supplier must design a contract that requires the buyer to share in some of the supplier's demand uncertainty.
A)True
B)False
Q5) What factors should be considered when making sourcing decisions?
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Chapter 16: Pricing and Revenue Management in a Supply Chain
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Sample Questions
Q1) If the corporate demand and standard deviation both decrease by 50%, how many rooms should be reserved for corporate clients?
A) 7
B) 8
C) 9
D) 10
Q2) The decision to use overbooking will
A) lead to upset customers and a high cost of providing them space.
B) lead to unutilized assets and lost revenue.
C) lead to reduced profits.
D) depend upon optimization to be successful.
Q3) Shifting demand from peak to off-peak periods is beneficial if the discount given during the off-peak period is more than offset by the decrease in cost because of a smaller peak and the increase in revenue during the off-peak period.
A)True
B)False
Q4) How do firms address the problems of spoilage and spill?
Q5) Explain how differential pricing can benefit a firm.
Q6) How can firms address the problem of perishable assets?
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Chapter 17: Sustainability and the Supply Chain
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Q1) Surveys in sustainable farming have revealed that the typical consumer is willing to pay 25% more for sustainable fare.
A)True
B)False
Q2) A cap and trade system can achieve price stability as long as
A) a price floor is established.
B) intertemporal banking of emission allowances is allowed.
C) both a price floor and intertemporal banking of emissions allowances are allowed.
D) both a price floor and a price ceiling are established.
Q3) In the context of greenhouse gas emission, the GHG protocol initiative defines levels of scope. This level refers to the inclusion of other indirect emissions coming from sources such as the production of purchased materials, outsourced activities, contractor owned vehicles, waste disposal, and employee business travel.
A) Scope 1
B) Scope 2
C) Scope 3
D) Scope 4
Q4) Discuss the factors driving an increased focus on sustainability.
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