Supply Chain Design Flashcards

In supply chain design, 'total cost of ownership' (TCO) includes:

Answer: Purchase price plus all costs of acquiring, using, and disposing of a product

TCO captures the full life-cycle cost including acquisition, operation, maintenance, and disposal beyond just the purchase price.

Which factor most directly influences the decision to use a centralized versus decentralized distribution network?

Answer: The tradeoff between transportation cost and customer service lead times

Centralized networks reduce inventory holding costs but increase transportation costs and lead times, while decentralized networks do the opposite.

What is 'supply chain segmentation' in the context of CSCP?

Answer: Tailoring supply chain strategies to different customer or product groups based on their unique needs

Supply chain segmentation assigns different service levels, replenishment strategies, or channels to distinct groups of products or customers.

Which of the following best describes 'demand shaping' in supply chain management?

Answer: Using pricing, promotions, and product availability to influence customer demand

Demand shaping proactively influences customer demand through incentives like discounts, promotions, or product substitutions.

A 'hub-and-spoke' distribution network is characterized by:

Answer: Consolidating shipments through central hubs before delivery to end destinations

Hub-and-spoke networks consolidate freight at central hubs to achieve economies of scale before distributing to final destinations.

The concept of 'decoupling point' in supply chain design refers to:

Answer: The point where a product transitions from push-based to pull-based supply chain management

The decoupling point separates the portion of the supply chain driven by forecasts (push) from the portion driven by actual customer orders (pull).