CPL Supply Chain Operations & Logistics Management 3 — Questions and Answers
Question 1: In supply chain risk management, 'supply chain resilience' refers to a system's ability to:
- Eliminate all disruptions through redundancy
- Recover quickly from disruptions and return to normal operations (Correct answer)
- Reduce costs by consolidating suppliers
- Forecast demand with 100% accuracy
Correct answer: Recover quickly from disruptions and return to normal operations
Resilience is the capacity to anticipate, absorb, and recover from disruptions while maintaining continuity of supply.
Question 2: Which of the following best describes the 'bullwhip effect' in supply chains?
- Increased transportation costs due to fuel surcharges
- Amplification of demand variability as orders move upstream through the supply chain (Correct answer)
- The tendency for warehouse automation to reduce labor needs
- Price increases caused by commodity shortages
Correct answer: Amplification of demand variability as orders move upstream through the supply chain
The bullwhip effect occurs when small fluctuations in end-customer demand cause increasingly large swings in orders placed up the supply chain.
Question 3: A logistics manager wants to reduce total landed cost. Which factor would NOT typically be included in that calculation?
- Duties and tariffs
- Freight charges
- Product warranty costs (Correct answer)
- Insurance and handling fees
Correct answer: Product warranty costs
Total landed cost includes purchase price, freight, duties, insurance, and handling, but excludes post-sale costs like warranties.
Question 4: Lean logistics focuses on reducing waste, known in Japanese as:
- Kaizen
- Muda (Correct answer)
- Kanban
- Poka-yoke
Correct answer: Muda
Muda is the Japanese term for waste, and eliminating the seven types of muda is central to lean logistics and manufacturing.
Question 5: Which distribution strategy ships products directly from the manufacturer to the end customer, bypassing intermediaries?
- Postponement
- Drop shipping (Correct answer)
- Milk run
- Zone skipping
Correct answer: Drop shipping
Drop shipping allows retailers to sell products without holding inventory; the manufacturer ships directly to the customer.
Question 6: When evaluating carrier performance, 'transit time reliability' is best measured by:
- Average transit time across all shipments
- Standard deviation of transit times compared to promised delivery dates (Correct answer)
- Total miles driven per shipment
- Fuel efficiency of the carrier's fleet
Correct answer: Standard deviation of transit times compared to promised delivery dates
Reliability is about consistency, so standard deviation (variability around the mean) best captures how predictable a carrier's transit times are.
Question 7: Which costing method assigns logistics costs based on the actual resources consumed by each product or customer?
- Standard costing
- Activity-Based Costing (ABC) (Correct answer)
- Marginal costing
- Absorption costing
Correct answer: Activity-Based Costing (ABC)
Activity-Based Costing traces costs to specific activities (e.g., picking, packing, shipping) and then to the products or customers that use those activities.
CPL Supply Chain Operations & Logistics Management 3
In supply chain risk management, 'supply chain resilience' refers to a system's ability to: