Supply Chain Management Supply Chain Management MCQ 3

Question 1

Which sourcing strategy involves selecting only one supplier for a specific component to maximize economies of scale and relationship depth?

Accepted Answer

Single sourcing

Answer

Single sourcing concentrates all purchases with one supplier to leverage volume discounts and closer collaboration, though it increases supply risk.

Question 2

Total Cost of Ownership (TCO) in procurement includes which of the following beyond purchase price?

Accepted Answer

All costs incurred throughout the product's life cycle, including acquisition, use, and disposal

Answer

TCO captures every cost associated with a purchase—acquisition, operating, maintenance, and end-of-life disposal—to enable true cost comparisons between suppliers.

Question 3

Which forecasting method uses historical sales data patterns such as trend, seasonality, and cycles to project future demand?

Accepted Answer

Time-series analysis

Answer

Time-series analysis decomposes past demand data into trend, seasonal, cyclical, and random components to forecast future demand.

Question 4

In lean supply chain management, 'muda' refers to:

Accepted Answer

Any activity that consumes resources without adding customer value (waste)

Answer

Muda is the Japanese term for waste—any activity that uses resources but does not add value from the customer's perspective.

Question 5

Which type of contract is commonly used when demand is uncertain, allowing the buyer to purchase up to a maximum quantity at a pre-agreed price?

Accepted Answer

Blanket purchase order

Answer

A blanket purchase order establishes pricing and terms in advance while allowing the buyer to call off quantities as needed within an agreed ceiling.

Supply Chain Management Practice Test

Supply Chain Management Practice Test

Supply Chain Management Supply Chain Management MCQ 3