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Supply Chain Strategy Flashcards

7 cards from real CPIM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Supply Chain Strategy flashcards as text

  1. Vertical integration in a supply chain strategy means a company:

    Answer: Owns multiple stages of the supply chain internally

    Vertical integration means a company controls multiple supply chain stages—from raw material to distribution—within its own organizational boundaries.

  2. The bullwhip effect in supply chains is primarily caused by:

    Answer: Demand signal distortion amplifying upstream order variability

    The bullwhip effect occurs when small demand fluctuations at the retail level get amplified into large order swings as information moves upstream.

  3. Which supply chain strategy aligns best with 'innovative' products characterized by high demand uncertainty?

    Answer: Responsive supply chain emphasizing flexibility and speed

    Fisher's framework recommends a responsive supply chain for innovative products because flexibility to match unpredictable demand is more valuable than cost efficiency.

  4. Total cost of ownership (TCO) analysis in supplier selection differs from price-only analysis because it:

    Answer: Includes all costs associated with acquiring and using the product over its life

    TCO captures all direct and indirect costs—purchase price, freight, quality defect costs, service costs—providing a more complete supplier comparison.

  5. A company with a make-to-stock strategy should primarily use which demand signal to drive production planning?

    Answer: Statistical demand forecasts

    Make-to-stock production is driven by forecasts because goods are produced in anticipation of demand before orders are received.

  6. Supply chain segmentation involves:

    Answer: Applying different supply chain strategies to different product/customer groups

    Segmentation recognizes that different products or customers require different supply chain approaches and tailors strategies accordingly.

  7. Which of the following is a key benefit of supply chain visibility tools?

    Answer: Enabling proactive risk response by detecting disruptions earlier

    Real-time visibility allows supply chain managers to detect problems early and respond proactively before disruptions escalate.