CPIM Supply Chain Strategy 5 — Questions and Answers
Question 1: Which of the following is the BEST example of a 'push' supply chain strategy?
- Producing goods only after confirmed customer orders are received
- Manufacturing products based on long-range demand forecasts (Correct answer)
- Assembling products using components pulled by Kanban signals
- Allowing retailers to trigger replenishment via point-of-sale data
Correct answer: Manufacturing products based on long-range demand forecasts
Push strategies produce goods in advance of actual demand using forecasts, pushing inventory downstream through the supply chain.
Question 2: A company reduces its supplier base from 200 to 20 key partners. This strategy is known as:
- Supplier proliferation
- Supplier rationalization (Correct answer)
- Supplier diversification
- Supplier tiering
Correct answer: Supplier rationalization
Supplier rationalization reduces the supply base to a smaller set of strategic partners, enabling deeper relationships and better leverage.
Question 3: In a global supply chain strategy, which factor most commonly drives companies to nearshore manufacturing?
- Access to cheaper raw materials
- Reduced lead times and improved responsiveness (Correct answer)
- Avoidance of all import tariffs
- Elimination of intellectual property risks
Correct answer: Reduced lead times and improved responsiveness
Nearshoring moves production closer to the end market, shortening lead times and improving the ability to respond quickly to demand changes.
Question 4: The SCOR model Level 1 metrics include all of the following EXCEPT:
- Reliability (Perfect Order Fulfillment)
- Responsiveness (Order Fulfillment Cycle Time)
- Agility (Upside Supply Chain Adaptability)
- Innovation (New Product Introduction Rate) (Correct answer)
Correct answer: Innovation (New Product Introduction Rate)
SCOR Level 1 metrics cover Reliability, Responsiveness, Agility, Costs, and Asset Management Efficiency—Innovation is not a SCOR metric.
Question 5: A company decides to share real-time point-of-sale data with its suppliers. This practice most directly helps reduce:
- Product development lead times
- The bullwhip effect and associated demand distortion (Correct answer)
- Warehousing costs at the retail level
- Transportation costs for inbound freight
Correct answer: The bullwhip effect and associated demand distortion
Sharing POS data gives suppliers visibility into true end-consumer demand, reducing the order distortions that cause the bullwhip effect.
Question 6: Which of the following BEST describes a 'lean' supply chain?
- A supply chain that prioritizes speed above all other metrics
- A supply chain focused on eliminating waste and non-value-added activities (Correct answer)
- A supply chain that exclusively uses single sourcing
- A supply chain designed for maximum product variety
Correct answer: A supply chain focused on eliminating waste and non-value-added activities
Lean supply chains apply lean principles to eliminate waste—overproduction, waiting, excess inventory—across the entire supply network.
Question 7: When a supply chain strategy must simultaneously serve both stable commodity demand and volatile specialty demand, the recommended approach is:
- Apply a pure lean strategy across all product lines
- Use a hybrid supply chain combining efficient and responsive elements (Correct answer)
- Outsource all volatile demand products to third parties
- Convert all products to make-to-order to eliminate forecast error
Correct answer: Use a hybrid supply chain combining efficient and responsive elements
A hybrid supply chain applies efficient processes to stable, predictable segments and responsive processes to volatile segments, optimizing both.
CPIM Supply Chain Strategy 5
Which of the following is the BEST example of a 'push' supply chain strategy?