Supply Chain Management & Logistics Flashcards
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Read the first 7 Supply Chain Management & Logistics flashcards as text
A manufacturer is evaluating whether to make a component in-house or outsource it. Which analytical framework is most commonly used for this decision?
Answer: Make-or-Buy analysis
Make-or-Buy analysis compares the total costs, strategic implications, and competency requirements of internal production versus outsourcing to guide the decision.
Which concept describes the practice of sharing demand forecast data between a retailer and its suppliers to improve inventory accuracy across the supply chain?
Answer: Collaborative demand planning
Collaborative demand planning involves sharing forecasts, sales data, and market intelligence between trading partners to reduce forecast errors and improve stock availability.
In third-party logistics (3PL), what distinguishes a 4PL provider from a 3PL provider?
Answer: A 4PL manages and integrates multiple 3PLs and the client's entire supply chain
A 4PL (Fourth-Party Logistics) provider acts as a supply chain integrator, managing multiple 3PLs and overseeing the entire logistics network on behalf of the client.
Which supply chain metric measures the total time from when a customer places an order to when they receive the product?
Answer: Order-to-Delivery (OTD) cycle time
Order-to-Delivery cycle time measures the elapsed time from order receipt to customer delivery, capturing total supply chain responsiveness.
A company implements a 'dual sourcing' strategy for a critical component. What is the PRIMARY reason for this approach?
Answer: To reduce supply disruption risk by avoiding single-source dependency
Dual sourcing mitigates supply risk by ensuring that if one supplier fails or is disrupted, the second supplier can continue providing the component.
In lean supply chain management, 'muda' refers to:
Answer: Any activity that consumes resources without adding customer value (waste)
Muda is the Japanese term for waste — any process step or activity that uses resources but does not add value from the customer's perspective.
A logistics manager uses a 'freight audit' process. What is the primary objective of this process?
Answer: To verify that freight invoices are accurate and match contracted rates
Freight auditing reviews carrier invoices against contracted rates and shipment data to identify billing errors, overcharges, and discrepancies before payment.