Supply Chain Management Supply Chain Management MCQ 5 — Questions and Answers
Question 1: A company uses RFID tags on pallets throughout its supply chain. Which primary benefit does this technology provide?
- It eliminates the need for safety stock
- It provides real-time visibility of inventory location and movement (Correct answer)
- It automatically replenishes stock when levels fall below the reorder point
- It forecasts consumer demand using machine learning
Correct answer: It provides real-time visibility of inventory location and movement
RFID enables real-time tracking of tagged items throughout the supply chain without line-of-sight scanning, improving inventory visibility and accuracy.
Question 2: Which term describes a supply chain that is designed to efficiently recover products from end customers for reuse, remanufacturing, recycling, or disposal?
- Green supply chain
- Reverse logistics
- Forward logistics
- Closed-loop supply chain (Correct answer)
Correct answer: Closed-loop supply chain
A closed-loop supply chain integrates both forward distribution and reverse recovery processes to recapture value and reduce waste throughout the product life cycle.
Question 3: Under Incoterms, 'DDP' (Delivered Duty Paid) places maximum responsibility on which party?
- The buyer, who handles all costs from the seller's warehouse onward
- The freight forwarder, who bears all risk during transit
- The seller, who is responsible for all costs and risks through delivery to the named destination including import duties (Correct answer)
- A neutral third-party logistics provider
Correct answer: The seller, who is responsible for all costs and risks through delivery to the named destination including import duties
DDP requires the seller to bear all costs and risks—including export/import duties and final delivery—until the goods reach the buyer's named destination.
Question 4: A retailer shares weekly point-of-sale data with its suppliers and works jointly on a single demand forecast. This collaboration model is known as:
- Efficient Consumer Response (ECR)
- Collaborative Planning, Forecasting, and Replenishment (CPFR) (Correct answer)
- Continuous Replenishment Program (CRP)
- Quick Response (QR)
Correct answer: Collaborative Planning, Forecasting, and Replenishment (CPFR)
CPFR is a structured process where trading partners jointly develop a single shared forecast and replenishment plan using shared POS and inventory data.
Question 5: Which capacity strategy involves building factories or adding equipment in advance of projected demand growth?
- Lag strategy
- Match strategy
- Lead strategy (Correct answer)
- Flexible strategy
Correct answer: Lead strategy
A lead capacity strategy adds capacity before demand arrives, accepting higher short-term costs in exchange for availability and the ability to capture market share.
Question 6: What is the main disadvantage of a highly 'lean' supply chain with minimal inventory buffers?
- Higher carrying costs due to excess stock
- Reduced supplier negotiating power
- Increased vulnerability to supply disruptions (Correct answer)
- Lower product quality from reduced inspection time
Correct answer: Increased vulnerability to supply disruptions
Lean supply chains are efficient but fragile—with little inventory buffer, even a brief supplier disruption can halt production and cause stockouts.
Question 7: Which supply chain sustainability metric measures the total greenhouse gas emissions generated by a company's products and operations, including upstream supplier emissions?
- Carbon footprint (Scope 1 only)
- Carbon intensity ratio
- Scope 3 emissions (Correct answer)
- Carbon offset credits
Correct answer: Scope 3 emissions
Scope 3 emissions cover indirect greenhouse gas emissions across the entire value chain, including purchased goods, transportation, and product use and disposal.
Supply Chain Management Supply Chain Management MCQ 5
A company uses RFID tags on pallets throughout its supply chain.
Which primary benefit does this technology provide?