Global Supply Chain Management
Textbook Exam Questions
Course Introduction
Global Supply Chain Management explores the strategies, processes, and technologies that organizations use to coordinate production, transportation, sourcing, and distribution across international borders. The course examines the complexities of supply chain networks in the context of globalization, addressing topics such as supplier selection, risk management, logistics, sustainability, and the impact of political, economic, and cultural factors. Through real-world case studies and industry best practices, students develop an understanding of how to optimize supply chain performance and build resilience in a rapidly changing global environment.
Recommended Textbook
Supply Chain Management Strategy Planning and Operation 6th Edition by Sunil Chopra
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Page 2
Chapter 1: Understanding the Supply Chain
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Sample Questions
Q1) The objective of customer order entry is to maintain a record of product receipt and complete payment.
A)True
B)False
Answer: False
Q2) The cycle view of a supply chain holds that
A) the processes in a supply chain are divided into 2 categories.
B) the processes in a supply chain are divided into a series of activities performed at the interface between successive stages.
C) all processes in a supply chain are initiated in response to a customer order.
D) all processes in a supply chain are performed in anticipation of customer orders.
Answer: B
Q3) The manufacturing cycle occurs at the distributor/manufacturer interface. A)True
B)False
Answer: True
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Chapter 2: Supply Chain Performance: Achieving Strategic
Fit and Scope
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Q1) A firm that is not on the cost-responsiveness efficient frontier can improve
A) both responsiveness and cost performance.
B) only responsiveness.
C) only cost performance.
D) responsiveness, but not cost performance.
Answer: A
Q2) Which of the following would be a demand and supply characteristic toward the beginning stages of a product's life cycle?
A) Demand has become more certain and supply is predictable.
B) Margins are lower due to an increase in competitive pressure.
C) Product availability is crucial to capturing the market.
D) Price becomes a significant factor in customer choice.
Answer: C
Q3) Which of the following specifies the portfolio of new products that a company will try to develop?
A) Competitive strategy
B) Product development strategy
C) Marketing and sales strategy
D) Supply chain strategy
Answer: B
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Chapter 3: Supply Chain Drivers and Metrics
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Sample Questions
Q1) What is the range of sale price of the gasoline?
A) 7.51
B) 10
C) 0.69
D) 22.54
Answer: C
Q2) Cycle inventory is inventory that is built up to counter predictable variability in demand.
A)True
B)False
Answer: False
Q3) Which of the following is a characteristic of a facility with excess capacity?
A) Will likely be more efficient per unit of product it produces than one with a lot of unused capacity
B) Would be very flexible and respond to wide swings in the demands placed on it
C) Would be considered a high utilization facility
D) Will have difficulty responding to demand fluctuations
Answer: A
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5
Chapter 4: Designing Distribution Networks and Applications to e-Business
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Q1) Which of the following is a disadvantage of retail storage with customer pickup?
A) Returnability is easier than other options given that pickup location can handle returns.
B) Inventory cost is higher than all other options.
C) Transportation cost is lower than all other options.
D) Facilities and handling costs are lower than other options.
Q2) Distribution occurs between every pair of stages in the supply chain.
A)True
B)False
Q3) Distributors add value to a supply chain between a supply stage and a customer stage
A) if there is a small number of customers requiring a large amount of product.
B) if there is a large number of customers requiring a large amount of product.
C) if there are many small players at the customer stage, each requiring a small amount of the product at a time.
D) if there are a few large players at the customer stage, each requiring a large amount of the product at a time.
Q4) Explain the measures of customer service that are influenced by the structure of the distribution network.
Page 6
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Chapter 5: Network Design in the Supply Chain
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Q1) A facility located primarily to obtain access to knowledge or skills that may exist within a certain region is
A) an offshore facility.
B) a source facility.
C) a server facility.
D) an outpost facility.
Q2) If the production technology is very inflexible and product requirements vary from one country to another, a firm has to set up
A) local facilities to serve the market in each country.
B) a few high-capacity facilities to serve the market in each country.
C) many local facilities because this helps lower transportation costs.
D) a few high-capacity facilities because this helps lower transportation costs.
Q3) Which of the following is the first phase in the design of a global supply chain network?
A) Define a supply chain strategy
B) Define the regional facility configuration
C) Select desirable sites
D) Location choices
Q4) Explain the two situations in which managers use network design models.
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Chapter 6: Designing Global Supply Chain Networks
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Q1) The degree of demand and price uncertainty has
A) no effect on the appropriate portfolio of long- and short-term warehousing space that a firm should carry.
B) a limited influence on the appropriate portfolio of long- and short-term warehousing space that a firm should carry.
C) a minor influence on the appropriate portfolio of long- and short-term warehousing space that a firm should carry.
D) a significant influence on the appropriate portfolio of long- and short-term warehousing space that a firm should carry.
Q2) Use the information from Scenario 6.1 to determine the likelihood of high demand that would make the decision maker indifferent between the two alternatives for a two year operating time.
A) 0.86
B) 0.72
C) 0.28
D) 0.14
Q3) Summarize the steps in the decision tree analysis methodology.
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8
Chapter 7: Demand Forecasting in a Supply Chain
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Q1) Forecasts should include both the expected value of the forecast and a measure of forecast error.
A)True
B)False
Q2) The trend corrected exponential smoothing (Holt's Model) 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 but no seasonality.
D) demand has no observable level or seasonality.
Q3) What is the trend component of Holt's model for period 0?
A) -2.5
B) 10.3
C) 2.5
D) 6.4
Q4) Time series forecasting methods are the most difficult methods to implement.
A)True
B)False
Q5) Explain the basic, six-step approach to help an organization perform effective forecasting.
9
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Chapter 8: Aggregate Planning in a Supply Chain
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Q1) Which of the following is an approach a company can use to create a buffer for forecast error using safety inventory?
A) Overtime
B) Carry extra workforce permanently
C) Build and carry extra inventories
D) Subcontracting
Q2) The planning horizon is
A) the time period over which the aggregate plan is to produce a solution.
B) the duration of each time period in the aggregate plan.
C) the length of time required to produce the aggregate plan.
D) the solution to the aggregate plan.
Q3) Forecasting errors are dealt with in aggregate plans using either safety backlog or safety capacity.
A)True
B)False
Q4) Safety capacity is defined as capacity used to satisfy demand that is lower than forecasted.
A)True
B)False
Q5) Discuss key issues to be considered when implementing aggregate planning.
Page 10
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Chapter 9: Sales and Operations Planning: Planning Supply and Demand in
a
Supply Chain
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Q1) Discuss the approaches a firm can use to manage inventory to meet predictable variability of demand.
Q2) Supply chains can influence demand by using
A) production capacity and inventory.
B) pricing and other promotions.
C) price promotions and inventory.
D) production capacity and inventory promotions.
Q3) Which approach to capacity management may be hard to sustain if the labor market is tight?
A) Time flexibility from workforce
B) Use of seasonal workforce
C) Use of subcontracting
D) Use of dual facilities-dedicated and flexible
Q4) Which approach to capacity management would use production machinery that can be changed easily from producing one product to another?
A) Time flexibility from workforce
B) Use of subcontracting
C) Use of dual facilities-dedicated and flexible
D) Designing product flexibility into the production processes
Chapter 10: Coordination in a Supply Chain
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Sample Questions
Q1) The impact of the lack of coordination on supply chain processes decreases for the following measure:
A) manufacturing cost.
B) level of product availability.
C) transportation cost.
D) replenishment lead time.
Q2) The sales typically measured by a manufacturer are
A) the quantity sold to final customers (sell-through).
B) the quantity sold to distributors or retailers (sell-in).
C) the quantity reported by the salesperson.
D) based on the quantity of supplies purchased from key suppliers.
Q3) The fact that each stage in a supply chain forecasts demand based on the stream of orders received from the downstream stage results in
A) forecasts based on actual consumer demand patterns.
B) a reduction in demand as we move up the supply chain from the retailer to the manufacturer.
C) a magnification of fluctuations in demand as we move up the supply chain from the retailer to the manufacturer.
D) an increase in forecast accuracy.
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Page 12
Chapter 11: Managing Economies of Scale in the Supply
Chain: Cycle Inventory
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Q1) In a supply chain where each stage of the supply chain independently makes its pricing decisions with the objective of maximizing its own profit,
A) supply chain profit is lower than a coordinated solution.
B) supply chain profit is higher than a coordinated solution.
C) supply chain profit is about the same as a coordinated solution.
D) supply chain profit will be maximized.
Q2) Average flow time resulting from cycle inventory is equal to
A) Cycle Inventory/Demand = Q/2.
B) Cycle Inventory/Demand = Q/2D.
C) Cycle Inventory = Q/2.
D) Cycle Inventory = Lot Size = Q.
Q3) A key to reducing lot size without increasing costs is to
A) reduce the holding cost associated with each lot.
B) reduce the fixed cost associated with each lot.
C) reduce the material cost associated with each lot.
D) reduce the manufacturing cost associated with each lot.
Q4) Describe the impact of trade promotions on cycle inventory.
Q5) A key to reducing cycle inventory is the reduction of lot size.
A)True
B)False
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Chapter 12: Managing Uncertainty in a Supply Chain: Safety Inventory
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Sample Questions
Q1) What safety stock should be held to put the expected shortage per cycle at 5 phones?
A) 418 phones
B) 433 phones
C) 462 phones
D) 487 phones
Q2) Suppose the café wishes to erase any hint of impropriety and wants to peg their service level at 99%. How many days of safety inventory they should carry?
A) 4.77 days
B) 5.12 days
C) 5.33 days
D) 5.67 days
Q3) Continuous review policies for inventory replenishment require safety inventory to cover demand during
A) lead time only.
B) the review interval only.
C) both lead time and the review interval.
D) neither lead time or the review interval.
Q4) Explain the impact of supplier lead time on safety inventory.
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Chapter 13: Determining the Optimal Level of Product Availability
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Q1) A managerial lever to increase profitability is to decrease the salvage value of each unit.
A)True
B)False
Q2) In volume-based tailored sourcing,
A) the predictable part of a product's demand is produced at an efficient facility.
B) the uncertain portion is produced at an efficient facility.
C) the predictable part of a product's demand is produced at a flexible facility.
D) the predictable part of a product's demand is outsourced.
Q3) Faced with a 3000 taco capacity constraint, what is the profit resulting from an optimal mix of fish and chicken tacos?
A) $22,577
B) $25,619
C) $24,667
D) $23,580
Q4) Discuss the advantages and disadvantages of quick response.
Q5) Describe managerial levers to increase profitability within a supply chain.
Page 15
Q6) Describe the approaches a manager can use to reduce demand uncertainty.
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Chapter 14: Transportation in a Supply Chain
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Q1) A firm can meet customer needs by using tailored transportation to provide the appropriate transportation choice based on customer and product characteristics, but at a higher cost.
A)True
B)False
Q2) 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.
Q3) Which of these statements about use fees for a highway is best?
A) A flat rate results in lower use by most individuals.
B) A flat rate results in higher use by most individuals.
C) A flat rate has no impact on use by most individuals.
D) A fee based on congestion results in higher use by most individuals.
Q4) The cost of holding inventory incurred by the shipper's supply chain network is
A) transportation cost.
B) inventory cost.
C) facility cost.
D) processing cost.
Page 16
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Chapter 15: Sourcing Decisions in a Supply Chain
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Sample Questions
Q1) Effective sourcing processes within a firm can
A) improve profits for the firm and total supply chain surplus.
B) reduce profits for the firm and total supply chain surplus.
C) reduce total supply chain surplus.
D) reduce profits for the firm.
Q2) The entire set of business processes required to purchase goods and services is
A) procurement.
B) sourcing.
C) supplier scoring and assessment.
D) supplier selection.
Q3) W.W. Grainger and McMaster Carr stock products from more than a thousand manufacturers each to sell to hundreds of thousands of customers and are sterling examples of
A) transportation aggregation by transportation intermediaries.
B) inventory aggregation.
C) warehouse aggregation.
D) transportation aggregation by storage intermediaries.
Q4) Why should design collaboration capability be considered in supplier selection decisions?
Q5) Why should on-time performance be considered in supplier selection decisions?
Page 17
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Chapter 16: Pricing and Revenue Management in a Supply Chain
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Q1) Unused capacity from the past is extremely valuable.
A)True
B)False
Q2) The amount reserved for the spot market should be such that the expected marginal revenue from the spot market equals the current revenue from a bulk sale.
A)True
B)False
Q3) Pricing can be used to
A) change available supply.
B) reduce supply chain costs.
C) influence demand if customers are price sensitive.
D) all of the above
Q4) The tactic of overbooking or overselling the available asset is suitable where
A) there is a clear date beyond which the asset loses a lot of its value.
B) there is no clear date beyond which the asset loses a lot of its value.
C) customers are able to cancel orders and the value of the asset drops significantly after a deadline.
D) customers are unable to cancel orders and the value of the asset drops significantly after a deadline.
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Chapter 17: Sustainability and the Supply Chain
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Q1) 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.
Q2) In general, the reverse logistics function for a manufacturer is more expensive to operate on a per unit basis than the forward logistics function that sends the products to market.
A)True
B)False
Q3) The sustainability damage from landfill additives comes in which form?
A) Potential energy lost
B) Materials lost
C) Terrible smell
D) Both A and B
Q4) Discuss the factors driving an increased focus on sustainability.
Q5) What are some opportunities for improved sustainability in various supply chain drivers?
Q6) Discuss the role of sustainability supply chains.
Page 19
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