DMD Supply Chain & Logistics in Manufacturing 2 — Questions and Answers
Question 1: What is 'safety stock' in inventory management?
- Extra inventory held as a buffer against unexpected demand spikes or supply delays (Correct answer)
- Stock stored in a secure vault
- Hazardous materials kept in a designated area
- Minimum order quantities from a supplier
Correct answer: Extra inventory held as a buffer against unexpected demand spikes or supply delays
Safety stock is buffer inventory maintained to prevent stockouts caused by demand variability or supplier lead time uncertainty.
Question 2: In digital manufacturing supply chains, what is a Kanban system used for?
- To signal when inventory needs to be replenished by using visual cues or digital triggers (Correct answer)
- To track employee attendance
- To document quality inspection results
- To program robotic assembly cells
Correct answer: To signal when inventory needs to be replenished by using visual cues or digital triggers
Kanban uses visual or digital signals (cards, bins, alerts) to trigger replenishment of materials only when they are consumed, supporting pull-based production.
Question 3: Which of the following best describes 'supplier qualification' in a manufacturing supply chain?
- The process of evaluating and approving suppliers based on quality, capability, and reliability criteria (Correct answer)
- Issuing purchase orders to suppliers
- Auditing supplier financial statements
- Negotiating lower unit prices with vendors
Correct answer: The process of evaluating and approving suppliers based on quality, capability, and reliability criteria
Supplier qualification assesses whether a supplier can consistently meet quality, delivery, and regulatory requirements before being approved for production use.
Question 4: What is 'vertical integration' in the context of a manufacturing supply chain?
- When a company controls multiple stages of its supply chain, from raw materials to finished goods (Correct answer)
- Stacking storage racks vertically in a warehouse
- Integrating ERP systems across departments
- Combining two manufacturing lines into one
Correct answer: When a company controls multiple stages of its supply chain, from raw materials to finished goods
Vertical integration means a manufacturer owns or controls upstream suppliers and/or downstream distributors, reducing dependency on external parties.
Question 5: What does 'vendor-managed inventory' (VMI) mean in digital manufacturing?
- The supplier monitors and replenishes the customer's inventory based on agreed-upon levels and data sharing (Correct answer)
- The customer manages the supplier's production schedule
- Inventory is stored at the vendor's facility permanently
- The purchasing team manages all vendor contracts
Correct answer: The supplier monitors and replenishes the customer's inventory based on agreed-upon levels and data sharing
In VMI, the supplier takes responsibility for maintaining agreed stock levels at the customer's location, using shared demand and inventory data.
Question 6: Which US regulatory requirement significantly impacts supply chain traceability in industries like aerospace and medical devices?
- AS9100 / FDA 21 CFR Part 820 traceability requirements (Correct answer)
- OSHA 1910 general industry standards
- EPA Clean Air Act emissions reporting
- DOT hazardous materials placarding
Correct answer: AS9100 / FDA 21 CFR Part 820 traceability requirements
AS9100 (aerospace) and FDA 21 CFR Part 820 (medical devices) mandate comprehensive traceability of components and materials through the supply chain.
DMD Supply Chain & Logistics in Manufacturing 2
What is 'safety stock' in inventory management?