Free APICS Certified Supply Chain Professional CSCP Exam Practice Test

When evaluating several possible supply chain options, a firm considering the minimal total cost should:

• ensure that the inventory levels are as low as possible to minimize holding costs while still providing adequate customer service.
• account for the combined costs of holding buffer inventory and incurring inventory shortages.
• consider the costs of acquiring, holding, and transporting inventory and of servicing customers.
• place buffer inventory in the lowest cost locations that meet lead time and service level requirements from customers.

Using financial tools to minimize the impact of currency fluctuations is an example of what type of risk management strategy?

• Mitigation
• Recovery
• Prevention
• Diversification

The first information necessary in order to effectively improve product design should come from which of the following supply chain members?

• Supplier
• Distributor
• Manufacturer
• Customer

The United Nations (UN) Global Compact is best defined as a:

• voluntary initiative to advance universal pnnciples on human rights, labor, anticorruption. and environmental stewardship.
• credential that indicates a multinational organization is upholding minimum standards of legal compliance and financial reporting.
• set of guidelines encouraging firms that plan to expand into other countries to adhere to the standards of their home countries.
• set of minimum standards for a wide range of business practices that allows organizations to receive global compliance certification.

An item must be added to inventory to support new business. Which of the following inputs should be considered to determine minimum inventory level?

• Consumption rate
• Qualified supplier
• ABC classification
• Number of sales transactions

Value stream mapping provides the most benefit when:

• analyzing customer requirements.
• identifying nonvalue-added activities.
• planning kaizen events.
• implementing an information technology strategy.

Maintaining a long-term collaborative relationship with a trading partner requires:

• formal and informal communication.
• interconnected information systems.
• one partner regularly exercising power.
• standardized terms of agreement.

Which of the following actions hedges against commodity price fluctuations in a supply chain?

• Purchase always from the lowest bidder
• Increase safety stock levels
• Establish an online auction site
• Purchase future options

Risk pooling is a concept that suggests:

• demand variability is increased if demand is disaggregated across locations.
• demand variability is reduced if demand is disaggregated across locations.
• demand variability is increased if demand is aggregated across locations.
• demand variability is reduced if demand is aggregated across locations.

A supplier is offering a price discount if more is ordered at one time. The offer should be analyzed to determine if a larger order is appropriate considering: the impact of the

• increase in average inventory levels on ABC designations.
• the reduction in material cost compared to the impact on total holding costs.
• the impact of additional items on indirect costs,
• the increase in transportation costs compared to the reduction in ordering cost.