CBS CBS Supply Chain & Operations Strategy 2 — Questions and Answers
Question 1: Nearshoring as an operations strategy means:
- Moving production to a distant low-cost country
- Relocating operations to a nearby country, often in the same region (Correct answer)
- Bringing operations back to the home country
- Automating offshore production facilities
Correct answer: Relocating operations to a nearby country, often in the same region
Nearshoring relocates operations to a nearby country, offering a balance between cost savings and shorter supply chains compared to offshoring.
Question 2: The bullwhip effect in supply chain management describes:
- Rapid price fluctuations in commodity markets
- Amplification of demand variability as orders move up the supply chain (Correct answer)
- The impact of a single large customer on supplier capacity
- Sudden supplier failure causing production halts
Correct answer: Amplification of demand variability as orders move up the supply chain
The bullwhip effect occurs when small fluctuations in consumer demand get amplified at each upstream stage of the supply chain, leading to large swings in orders.
Question 3: In operations strategy, 'capacity utilization' refers to:
- The number of employees in a facility
- The percentage of total production capacity actually being used (Correct answer)
- The ratio of fixed to variable costs
- The number of SKUs in inventory
Correct answer: The percentage of total production capacity actually being used
Capacity utilization measures how efficiently a company uses its available production capacity, expressed as a percentage of maximum output.
Question 4: A make-or-buy decision involves determining whether to:
- Sell or lease company assets
- Produce a component internally or purchase it from a supplier (Correct answer)
- Expand organically or through acquisition
- Launch a new product or exit a market
Correct answer: Produce a component internally or purchase it from a supplier
A make-or-buy decision weighs the costs and strategic benefits of producing something in-house versus outsourcing it to an external supplier.
Question 5: Which operations concept focuses on eliminating waste (muda) and continuously improving processes?
- Six Sigma
- Lean manufacturing (Correct answer)
- Theory of Constraints
- Total Quality Management
Correct answer: Lean manufacturing
Lean manufacturing, rooted in the Toyota Production System, focuses on eliminating waste in all forms to increase value and efficiency.
Question 6: Supply chain resilience is best described as a supply chain's ability to:
- Minimize the number of suppliers used
- Anticipate, adapt to, and recover from disruptions (Correct answer)
- Maximize inventory levels at all times
- Automate all logistics processes
Correct answer: Anticipate, adapt to, and recover from disruptions
Supply chain resilience is the capacity to anticipate disruptions, withstand shocks, and recover quickly to maintain continuous supply flow.
CBS CBS Supply Chain & Operations Strategy 2
Nearshoring as an operations strategy means: