CBM CBM Supply Chain & Operations Management

Question 1

Which inventory management method assumes the most recently purchased items are sold first?

Accepted Answer

Last In, First Out (LIFO)

Answer

LIFO assumes the most recently acquired inventory is sold first, which in a rising-price environment results in lower taxable income in the US.

Question 2

What is the primary goal of Just-In-Time (JIT) inventory management?

Accepted Answer

To minimize inventory holding costs by receiving goods only as they are needed in production

Answer

JIT aims to reduce waste and carrying costs by synchronizing production schedules with supplier deliveries so inventory arrives precisely when needed.

Question 3

Which supply chain risk is directly caused by small fluctuations in consumer demand being amplified into large swings in upstream orders?

Accepted Answer

Bullwhip Effect

Answer

The Bullwhip Effect describes how minor demand variability at the retail level gets progressively magnified as orders move upstream through distributors, manufacturers, and suppliers.

Question 4

A company wants to reduce the time between receiving a customer order and delivering the product. Which metric directly measures this?

Accepted Answer

Order-to-Delivery Cycle Time

Answer

Order-to-Delivery Cycle Time measures the total elapsed time from order receipt to customer delivery, directly reflecting supply chain responsiveness.

Question 5

What does 'vertical integration' mean in the context of supply chain strategy?

Accepted Answer

A company controls multiple stages of its supply chain, from raw materials to distribution

Answer

Vertical integration occurs when a company acquires or controls upstream suppliers or downstream distributors to gain greater control over its supply chain and reduce dependency on external parties.

CBM - Certified Business Manager Practice Test

CBM - Certified Business Manager Practice Test

CBM CBM Supply Chain & Operations Management