APICS Supply Chain & Strategy 5 — Questions and Answers
Question 1: In the context of supply chain collaboration, 'Collaborative Planning, Forecasting, and Replenishment' (CPFR) is designed to:
- Allow retailers to control all replenishment decisions
- Create a shared forecast between trading partners to align supply and demand plans (Correct answer)
- Outsource forecasting to a third-party service provider
- Standardize EDI message formats across the industry
Correct answer: Create a shared forecast between trading partners to align supply and demand plans
CPFR is a business practice that combines intelligence of multiple trading partners to improve planning accuracy and reduce supply chain variability through shared forecasting.
Question 2: Which of the following best describes a 'make-to-order' supply chain strategy?
- Products are manufactured based on sales forecasts and held in finished goods inventory
- Production begins only after a confirmed customer order is received (Correct answer)
- Components are pre-built and assembled when orders arrive
- Products are designed and manufactured per unique customer specifications
Correct answer: Production begins only after a confirmed customer order is received
Make-to-order (MTO) means production is triggered by actual customer orders, eliminating finished goods inventory risk at the cost of longer customer lead times.
Question 3: A supply chain 'segmentation' strategy recognizes that:
- All customers should receive identical service levels
- Different customer segments or products require different supply chain approaches (Correct answer)
- Segmentation increases supply chain complexity without adding value
- Only the top 20% of customers deserve differentiated service
Correct answer: Different customer segments or products require different supply chain approaches
Supply chain segmentation tailors service, cost, and responsiveness to different customer and product segments based on their unique needs and strategic importance.
Question 4: Which of the following is a primary advantage of nearshoring over offshoring in supply chain strategy?
- Lower labor costs than offshore locations
- Shorter lead times, reduced transportation costs, and easier collaboration due to geographic proximity (Correct answer)
- Access to larger manufacturing capacity
- Elimination of all import duties
Correct answer: Shorter lead times, reduced transportation costs, and easier collaboration due to geographic proximity
Nearshoring moves operations to nearby countries, reducing lead times and transportation costs while enabling easier communication and collaboration compared to distant offshore locations.
Question 5: In supply chain strategy, 'demand shaping' refers to:
- Adjusting production capacity to meet demand
- Using pricing, promotions, or product substitution to influence customer demand toward available supply (Correct answer)
- Forecasting demand more accurately using advanced analytics
- Reducing demand variability through customer contracts
Correct answer: Using pricing, promotions, or product substitution to influence customer demand toward available supply
Demand shaping uses commercial levers like pricing, promotions, and substitution to actively influence customer purchasing behavior to align with supply availability.
Question 6: The primary goal of implementing a 'pull' replenishment system in a supply chain is to:
- Maximize production runs and reduce changeover costs
- Trigger replenishment based on actual consumption, reducing overproduction and excess inventory (Correct answer)
- Ensure suppliers ship at fixed intervals regardless of demand
- Build safety stock at every supply chain node
Correct answer: Trigger replenishment based on actual consumption, reducing overproduction and excess inventory
Pull systems replenish inventory based on actual demand signals, reducing waste from overproduction and excess inventory that characterize push-based systems.
Question 7: When evaluating supply chain partners, 'supplier development' programs are intended to:
- Replace underperforming suppliers with new sources
- Proactively improve supplier capabilities to meet current and future supply chain requirements (Correct answer)
- Reduce the number of approved suppliers in the base
- Transfer quality inspection responsibilities to suppliers
Correct answer: Proactively improve supplier capabilities to meet current and future supply chain requirements
Supplier development involves collaborative efforts to improve a supplier's processes, quality, delivery, and capabilities to meet the buying company's evolving needs.
APICS Supply Chain & Strategy 5
In the context of supply chain collaboration, 'Collaborative Planning, Forecasting, and Replenishment' (CPFR) is designed to: