CBS CBS Supply Chain & Operations Strategy 1 — Questions and Answers
Question 1: Which supply chain strategy prioritizes cost efficiency by producing goods based on forecasted demand?
- Pull strategy
- Push strategy (Correct answer)
- Lean strategy
- Agile strategy
Correct answer: Push strategy
A push strategy produces inventory based on demand forecasts, optimizing cost efficiency by manufacturing in advance of actual orders.
Question 2: Just-in-Time (JIT) inventory management aims to:
- Build large safety stocks to prevent stockouts
- Receive goods only as they are needed in production (Correct answer)
- Outsource all warehousing to third parties
- Maximize order batch sizes for volume discounts
Correct answer: Receive goods only as they are needed in production
JIT minimizes inventory holding costs by scheduling deliveries to arrive precisely when needed in the production process.
Question 3: Vertical integration in operations strategy refers to:
- Expanding into new geographic markets
- A company owning multiple stages of its supply chain (Correct answer)
- Partnering with competitors for shared distribution
- Automating all production processes
Correct answer: A company owning multiple stages of its supply chain
Vertical integration occurs when a company controls multiple stages of its supply chain, from raw materials to distribution, reducing dependence on external suppliers.
Question 4: A key performance indicator (KPI) commonly used to measure supply chain efficiency is:
- Employee Net Promoter Score
- Perfect Order Rate (Correct answer)
- Cost per Click
- Market share percentage
Correct answer: Perfect Order Rate
Perfect Order Rate measures the percentage of orders delivered on time, complete, undamaged, and with accurate documentation — a holistic supply chain efficiency metric.
Question 5: Which risk mitigation strategy involves sourcing the same component from multiple suppliers?
- Single sourcing
- Sole sourcing
- Multi-sourcing (Correct answer)
- Nearshoring
Correct answer: Multi-sourcing
Multi-sourcing distributes procurement across multiple suppliers to reduce the risk of supply disruption from any single source.
Question 6: Total Cost of Ownership (TCO) in supply chain decisions includes:
- Only the purchase price of goods
- All costs related to acquiring, using, and disposing of a product or service (Correct answer)
- Only transportation and logistics costs
- Only labor costs in production
Correct answer: All costs related to acquiring, using, and disposing of a product or service
TCO captures all costs across the full lifecycle including purchase price, transportation, holding, maintenance, and disposal costs.
CBS CBS Supply Chain & Operations Strategy 1
Which supply chain strategy prioritizes cost efficiency by producing goods based on forecasted demand?