CWLP Supply Chain Operations & Optimization 2 — Questions and Answers
Question 1: Which supply chain strategy positions inventory closer to end customers to reduce lead times and improve responsiveness?
- Centralized distribution
- Forward deployment (Correct answer)
- Cross-docking
- Drop shipping
Correct answer: Forward deployment
Forward deployment places finished goods or components at locations near customers to shorten order fulfillment lead times.
Question 2: A company's order cycle time is 5 days and demand is 200 units/day. Safety stock covers 2 days of demand. What is the reorder point?
- 1,000 units
- 1,400 units (Correct answer)
- 400 units
- 600 units
Correct answer: 1,400 units
Reorder point = (demand rate × lead time) + safety stock = (200 × 5) + (200 × 2) = 1,000 + 400 = 1,400 units.
Question 3: What is the primary goal of supply chain segmentation?
- Reducing the number of suppliers
- Applying differentiated strategies to distinct customer or product groups (Correct answer)
- Standardizing all SKUs across the network
- Eliminating slow-moving inventory
Correct answer: Applying differentiated strategies to distinct customer or product groups
Segmentation recognizes that different products or customers require different service levels and supply chain configurations.
Question 4: In a pull-based supply chain, production or replenishment is triggered by:
- Forecasted demand signals from planners
- Actual customer orders or consumption (Correct answer)
- Scheduled manufacturing runs
- Supplier capacity availability
Correct answer: Actual customer orders or consumption
Pull systems respond to real demand signals rather than forecasts, reducing overproduction and excess inventory.
Question 5: The Total Cost of Ownership (TCO) model in sourcing decisions includes all of the following EXCEPT:
- Purchase price
- Transportation and handling costs
- Supplier's internal R&D budget (Correct answer)
- Quality and warranty costs
Correct answer: Supplier's internal R&D budget
TCO captures all costs the buyer incurs over the product lifecycle; a supplier's internal R&D budget is not a buyer-borne cost.
Question 6: Which metric measures the percentage of customer orders fulfilled completely from available stock without backorders or substitutions?
- Fill rate (Correct answer)
- Order cycle time
- Perfect order rate
- On-time delivery percentage
Correct answer: Fill rate
Fill rate (or line fill rate) specifically measures the proportion of demand satisfied immediately from on-hand inventory.
Question 7: A supply chain risk mitigation technique that involves qualifying multiple suppliers for the same component is called:
- Single sourcing
- Dual or multi-sourcing (Correct answer)
- Sole sourcing
- Nearshoring
Correct answer: Dual or multi-sourcing
Dual or multi-sourcing reduces dependency on any one supplier, providing redundancy if one source is disrupted.
CWLP Supply Chain Operations & Optimization 2
Which supply chain strategy positions inventory closer to end customers to reduce lead times and improve responsiveness?