CLP Supply Chain Management & Planning 5 — Questions and Answers
Question 1: Which technology enables real-time tracking of shipments, assets, and inventory using radio frequency signals without requiring line-of-sight scanning?
- Barcode scanning
- RFID (Radio Frequency Identification) (Correct answer)
- EDI (Electronic Data Interchange)
- GPS fleet tracking
Correct answer: RFID (Radio Frequency Identification)
RFID uses radio frequency signals to identify and track tagged items without requiring line-of-sight, enabling bulk scanning and real-time inventory visibility.
Question 2: In lean supply chain management, 'muda' refers to:
- Japanese term for continuous improvement activities
- Any activity that consumes resources without adding customer value (waste) (Correct answer)
- A type of production scheduling system
- The concept of producing only what is needed
Correct answer: Any activity that consumes resources without adding customer value (waste)
Muda is the Japanese term for waste — any activity, process, or resource consumption that does not add value from the customer's perspective.
Question 3: A company's Days Sales of Inventory (DSI) increased from 30 to 45 days over one year. What does this indicate?
- The company is selling inventory faster and more efficiently
- Inventory is building up relative to sales, indicating potential overstocking or slowing demand (Correct answer)
- Transportation lead times have decreased significantly
- The company has improved its cash conversion cycle
Correct answer: Inventory is building up relative to sales, indicating potential overstocking or slowing demand
An increasing DSI means inventory is being held longer before being sold, which may signal excess stock, weakening demand, or poor inventory management.
Question 4: Which supply chain strategy is most appropriate for products with short lifecycles, unpredictable demand, and high contribution margins?
- Efficient supply chain focused on cost minimization
- Agile (responsive) supply chain focused on speed and flexibility (Correct answer)
- Lean supply chain focused on waste elimination
- Risk-hedging supply chain with maximum safety stock
Correct answer: Agile (responsive) supply chain focused on speed and flexibility
Agile supply chains prioritize responsiveness and flexibility, which is critical for short-lifecycle, unpredictable demand products where speed-to-market outweighs cost efficiency.
Question 5: What does 'Total Cost of Ownership' (TCO) analysis reveal when evaluating suppliers that a simple unit price comparison does not?
- Only the shipping costs from the supplier's facility
- All costs associated with acquiring, using, and disposing of a product including quality, lead time, and risk (Correct answer)
- Only the supplier's raw material costs
- The supplier's internal profit margin
Correct answer: All costs associated with acquiring, using, and disposing of a product including quality, lead time, and risk
TCO captures all costs beyond unit price including transportation, quality failures, inventory carrying costs, risk, and administrative costs to provide a true cost comparison.
Question 6: In supply chain management, 'nearshoring' refers to:
- Moving production to the lowest-cost country regardless of location
- Relocating manufacturing or sourcing to geographically closer countries to reduce lead times and risk (Correct answer)
- Eliminating all overseas suppliers from the supply chain
- Shifting production to domestic facilities only
Correct answer: Relocating manufacturing or sourcing to geographically closer countries to reduce lead times and risk
Nearshoring relocates production or sourcing to nearby countries (e.g., Mexico for US companies) to balance cost savings with shorter lead times and reduced supply chain risk.
Question 7: Which supply chain planning process reconciles long-term demand plans with financial budgets and production capacity at an aggregate level across a 12-18 month horizon?
- Master Production Scheduling (MPS)
- Sales and Operations Planning (S&OP) (Correct answer)
- Material Requirements Planning (MRP)
- Distribution Requirements Planning (DRP)
Correct answer: Sales and Operations Planning (S&OP)
S&OP aligns demand, supply, and financial plans at an aggregate level over a medium-term horizon to support strategic and operational decision-making.
CLP Supply Chain Management & Planning 5
Which technology enables real-time tracking of shipments, assets, and inventory using radio frequency signals without requiring line-of-sight scanning?