CGM Supply Chain & Vendor Management 2

Question 1

Which performance metric measures the percentage of customer orders fulfilled completely and on time?

Accepted Answer

Perfect Order Rate

Answer

The Perfect Order Rate tracks orders delivered in full, on time, damage-free, and with accurate documentation, serving as a key supply chain health indicator.

Question 2

When negotiating long-term supply agreements, a general manager should prioritize which of the following to protect the organization from price volatility?

Accepted Answer

Price escalation and de-escalation clauses

Answer

Price escalation/de-escalation clauses link contract prices to agreed indices (e.g., commodity prices, CPI), protecting both parties from unexpected market swings.

Question 3

A make-or-buy analysis helps a general manager decide:

Accepted Answer

Whether to produce a product or service internally versus outsourcing it

Answer

A make-or-buy analysis compares the total costs and strategic implications of in-house production against purchasing from an external supplier.

Question 4

Safety stock is held primarily to:

Accepted Answer

Buffer against demand uncertainty and supplier lead-time variability

Answer

Safety stock acts as a buffer inventory that guards against unexpected spikes in demand or delays in supplier deliveries, preventing stockouts.

Question 5

Which supply chain tier refers to the direct suppliers that provide materials or components to a manufacturer?

Accepted Answer

Tier 1 suppliers

Answer

Tier 1 suppliers have a direct contractual relationship with the manufacturer, supplying parts or services that go directly into the final product.

CGM - Certified General Manager Practice Test

CGM - Certified General Manager Practice Test

CGM Supply Chain & Vendor Management 2