Supply Chain Management Supply Chain Management MCQ 2 — Questions and Answers
Question 1: Which inventory management approach uses real-time demand signals from downstream partners to reduce the bullwhip effect?
- Economic Order Quantity
- Vendor-Managed Inventory (Correct answer)
- Safety Stock Replenishment
- Periodic Review System
Correct answer: Vendor-Managed Inventory
Vendor-Managed Inventory (VMI) gives suppliers access to real-time downstream demand data, allowing them to replenish stock proactively and reduce demand signal distortion.
Question 2: A company sources 80% of its revenue-critical components from a single overseas supplier. Which supply chain risk category does this primarily represent?
- Demand risk
- Process risk
- Supply risk (Correct answer)
- Environmental risk
Correct answer: Supply risk
Heavy reliance on a single supplier for critical components is a supply risk, making the company vulnerable to disruptions at that one source.
Question 3: What does the term 'postponement' mean in supply chain strategy?
- Delaying supplier payments to improve cash flow
- Deferring product differentiation until closer to the point of demand (Correct answer)
- Postponing warehouse construction to reduce capital expenditure
- Scheduling deliveries outside peak hours to cut transportation costs
Correct answer: Deferring product differentiation until closer to the point of demand
Postponement delays final product configuration or customization until actual demand is known, reducing forecast error and excess inventory.
Question 4: In the SCOR (Supply Chain Operations Reference) model, which process element focuses on returning defective or excess products?
- Source
- Make
- Return (Correct answer)
- Enable
Correct answer: Return
The SCOR 'Return' process covers the reverse logistics activities of sending back defective, excess, or maintenance-required products.
Question 5: Which metric measures the percentage of customer orders delivered in full, on time, and without damage or invoice errors?
- Fill rate
- Perfect Order Rate (Correct answer)
- On-Time Delivery (OTD)
- Order Cycle Time
Correct answer: Perfect Order Rate
Perfect Order Rate captures all dimensions of order quality—completeness, timeliness, condition, and documentation accuracy—in a single KPI.
Question 6: A retailer notices that small fluctuations in consumer demand cause increasingly large order swings at the manufacturer level. This phenomenon is called:
- The lean effect
- The bullwhip effect (Correct answer)
- Demand aggregation
- The ripple effect
Correct answer: The bullwhip effect
The bullwhip effect describes how demand variability amplifies upstream in the supply chain due to forecast errors, order batching, and price fluctuations.
Question 7: Which type of layout in a distribution center is designed to allow product to flow directly from receiving docks to outbound shipping docks with minimal storage?
- Rack storage layout
- Cross-docking layout (Correct answer)
- Carousel storage layout
- Zone-picking layout
Correct answer: Cross-docking layout
Cross-docking minimizes warehouse storage time by transferring inbound shipments directly to outbound vehicles, reducing handling costs and lead times.
Supply Chain Management Supply Chain Management MCQ 2
Which inventory management approach uses real-time demand signals from downstream partners to reduce the bullwhip effect?