APICS Supply Chain & Strategy 2 — Questions and Answers
Question 1: Which supply chain strategy is most appropriate when demand is unpredictable and product variety is high?
- Lean supply chain
- Agile supply chain (Correct answer)
- Efficient supply chain
- Continuous replenishment
Correct answer: Agile supply chain
An agile supply chain is designed to respond quickly to unpredictable demand and high product variety.
Question 2: The 'bullwhip effect' in supply chains refers to:
- Seasonal demand spikes at retail level
- Amplification of demand variability as orders move upstream (Correct answer)
- Supplier lead time variability
- Transportation delays causing stockouts
Correct answer: Amplification of demand variability as orders move upstream
The bullwhip effect describes how small demand fluctuations at the retail level become increasingly amplified as they propagate upstream through the supply chain.
Question 3: A company using a 'postponement' strategy in its supply chain is attempting to:
- Delay supplier payments to improve cash flow
- Defer product differentiation until closer to the point of sale (Correct answer)
- Postpone new product launches until demand is certain
- Delay procurement until prices fall
Correct answer: Defer product differentiation until closer to the point of sale
Postponement delays final product customization or differentiation until demand signals are clearer, reducing the risk of obsolete inventory.
Question 4: Which metric best measures the overall effectiveness of a supply chain in delivering value to customers?
- Inventory turnover ratio
- Perfect Order Fulfillment rate (Correct answer)
- Gross margin return on inventory
- Supplier on-time delivery rate
Correct answer: Perfect Order Fulfillment rate
Perfect Order Fulfillment measures the percentage of orders delivered on time, complete, damage-free, and with accurate documentation — a comprehensive customer-centric KPI.
Question 5: In SCOR (Supply Chain Operations Reference) model, the 'Source' process category primarily covers:
- Manufacturing and production activities
- Procurement of goods and services from suppliers (Correct answer)
- Delivery of finished goods to customers
- Planning supply chain activities
Correct answer: Procurement of goods and services from suppliers
The 'Source' process in SCOR encompasses ordering, receiving, and managing supplier relationships for purchased goods and services.
Question 6: A company's supply chain strategy should primarily align with its:
- Competitor's supply chain model
- Overall business and competitive strategy (Correct answer)
- Industry average lead times
- Current inventory levels
Correct answer: Overall business and competitive strategy
Supply chain strategy must support and align with the company's overall competitive strategy to deliver the right value proposition to customers.
Question 7: Which of the following best describes 'supply chain visibility'?
- The ability to track shipments in real time
- End-to-end awareness of inventory, orders, and disruptions across all supply chain tiers (Correct answer)
- Supplier performance scorecards
- Demand forecasting accuracy metrics
Correct answer: End-to-end awareness of inventory, orders, and disruptions across all supply chain tiers
Supply chain visibility encompasses real-time, end-to-end awareness of all supply chain activities across multiple tiers, enabling proactive decision-making.
APICS Supply Chain & Strategy 2
Which supply chain strategy is most appropriate when demand is unpredictable and product variety is high?