MIB Global Supply Chain Management 1 — Questions and Answers
Question 1: What is 'nearshoring' in global supply chain management?
- Moving production to a distant low-cost country
- Relocating operations to a nearby country (Correct answer)
- Setting up offshore financial accounts
- Outsourcing to domestic suppliers
Correct answer: Relocating operations to a nearby country
Nearshoring involves relocating business processes or manufacturing to a geographically close country, balancing cost savings with reduced logistics complexity.
Question 2: The 'bullwhip effect' in supply chains refers to:
- Rapid price fluctuations in commodity markets
- Increasing demand variability as orders move upstream (Correct answer)
- Sudden supplier bankruptcy
- Customs delay volatility
Correct answer: Increasing demand variability as orders move upstream
The bullwhip effect describes how small demand fluctuations at the retail level get amplified into large swings in inventory and orders further up the supply chain.
Question 3: Which inventory management philosophy aims to receive goods only as they are needed in the production process?
- Safety stock management
- Just-In-Time (JIT) (Correct answer)
- Economic Order Quantity (EOQ)
- Vendor Managed Inventory (VMI)
Correct answer: Just-In-Time (JIT)
Just-In-Time (JIT) inventory management minimizes holding costs by synchronizing material deliveries with production schedules, requiring reliable supplier relationships.
Question 4: A 'free trade zone' (FTZ) benefits international supply chains primarily because:
- It eliminates all labor regulations
- Goods can be stored and processed without paying import duties (Correct answer)
- It provides free transportation services
- Currency exchange is eliminated
Correct answer: Goods can be stored and processed without paying import duties
Free trade zones allow goods to be imported, stored, processed, and re-exported without incurring standard customs duties, reducing costs for international supply chains.
Question 5: Which risk management strategy involves sourcing the same component from multiple suppliers in different countries?
- Single sourcing
- Dual sourcing
- Multi-sourcing (Correct answer)
- Sole sourcing
Correct answer: Multi-sourcing
Multi-sourcing distributes procurement across several suppliers in different geographic locations to reduce dependency risk from disruptions affecting any single source.
Question 6: The concept of 'supply chain visibility' in global operations refers to:
- Publishing supplier contracts publicly
- Real-time tracking of goods, orders, and inventory across the supply network (Correct answer)
- Transparency in executive compensation
- Making pricing data available to all partners
Correct answer: Real-time tracking of goods, orders, and inventory across the supply network
Supply chain visibility enables all stakeholders to access real-time data on inventory levels, shipment status, and order fulfillment across the entire supply network.
MIB Global Supply Chain Management 1
What is 'nearshoring' in global supply chain management?