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Quiz Session - Attempts With Random Questions

APICS CSCP Exam Questions

Page 9 of 50

161.

Company TREW builds cables for commercial ships. The boot installation station is consistently overworked and creates a bottleneck in the supply chain. All except which of the following are solutions to a bottleneck?

  • Buy more sealant for the station

  • Change the workforce at this station

  • Change the workflow at this station

  • Change the sealant to one that dries faster

Correct answer: Buy more sealant for the station

Buying more sealant for the station is not a solution to the bottleneck, as it would only create more inventory and it would not fix the bottleneck. A bottleneck is defined as a stage in a process in which the process slows down or completely stops.

Adding personnel and changing the workflow are both possible solutions to the bottleneck. Changing the sealant to one that dries faster will accelerate the process, which will reduce or remove the bottleneck.

162.

Jessica works for a large transportation company and pulls data from multiple transportation providers. Each provider generates data in different formats. What must Jessica do in order to utilize the data from each provider to make meaningful reports?

  • Data normalization

  • Data cleansing

  • Data aggregation

  • Data mining

Correct answer: Data normalization

Data normalization standardizes the data format to the same structure and logic, especially important when pulling data from various sources. Data cleansing makes sure all current data is accurate, complete and unique and gets rid of corrupted or incomplete data. Data aggregation looks at raw data and interprets it in meaningful ways. Data mining extracts useful information based on a certain set of criteria.

163.

Total supply chain management costs is a performance measurement used in supply chain management. Which of the following best describes total supply chain management costs?

  • The costs of planning, sourcing, delivering and returning product

  • The average percentage of orders that arrive on time, complete, and undamaged

  • The average percentage of electronic orders received

  • The percentage of trading partners that have become ISO 14000 certified

Correct answer: The costs of planning, sourcing, delivering and returning product

Total supply chain management costs are the costs to process orders, purchase energy, comply with regulations, manage inventories, and manage supply chain finance. Total supply chain management costs also include the aggregated costs of all organizations that participate in the supply chain, such as raw material producers' costs, component producers' costs, manufacturers' costs, distributors' costs, and retailers' costs.

Supply chain perfect order fulfillment performance is the average percentage of orders that arrive on time, complete, and undamaged. Supply chain e-business performance is the average percentage of electronic orders received. Supply chain environmental performance is the percentage of trading partners that have become ISO 14000 certified.

164.

What type of planning application uses complex algorithms to balance available resources, demand, internal constraints and balance that with the priorities of a company?

  • Advanced Planning and Scheduling (APS)

  • Software as a Service (SaaS)

  • Inventory optimization software

  • Software licensing

Correct answer: Advanced Planning and Scheduling (APS)

Advanced Planning and Scheduling (APS) is an application that calculates demand planning, resource planning, scheduling and resources, and then balances internal constraints. Inventory Optimization software uses algorithms to calculate the best inventory and safety stock levels to provide the best customer service. Software as a Service (SaaS) runs programs and applications for business via the internet. Software licensing allows a company to earn royalties when their software applications are used on other platforms or in other countries.  

165.

The inventory turnover ratio is used to determine how efficiently an organization is using its inventory. Which of the following represents the correct equation for figuring the inventory turnover ratio?

  • Cost of goods sold ÷ average inventory

  • (Average inventory ÷ cost of revenue) × 100

  • (Average inventory × cost of revenue) ÷ 2

  • Average inventory – actual inventory

Correct answer: Cost of goods sold ÷ average inventory

The equation used for figuring the inventory turnover ratio is cost of goods sold ÷ average inventory. This ratio can be used to figure an organization’s inventory turnover ratio for any specific accounting period, such as monthly, quarterly, or annually. The ratio shows management how many times the organization was able to turn its inventory in a specific accounting period.

The other choices are incorrect because they are not formulas that will figure the inventory turnover ratio.

166.

Which of the below is required for a risk classification?

  • A specific time horizon

  • Supplier name and geographic locations

  • Product country of origin

  • ISO certification

Correct answer: A specific time horizon

Risk classification defines a risk as being internal, external, environmental, technical, or organizational. 

The other options are related to supplier and product compliance but not required to identifying and classifying a risk. 

167.

Joe is analyzing his company's direct costs. Which of the following is an example of a direct cost?

  • Labor used to produce an end product

  • Operating supplies

  • Equipment

  • Plant security

Correct answer: Labor used to produce an end product

Labor used to produce an end product is an example of direct cost. Direct costs are costs directly used and can be traced to the production of the end product.

Operating supplies, equipment, and plant security are examples of indirect costs, which are costs that cannot be directly traced to the production of the end product.

168.

The ABC inventory classification with a classic Pareto analysis states that Class C inventory items would determine which of the following?

  • 5% of the inventory value resides in 50% of the products

  • 20% of the inventory value resides in 80% of the products

  • 80% of the inventory value resides in 20% of the products

  • 15% of the inventory value resides in 30% of the products

Correct answer: 5% of the inventory value resides in 50% of the products

The ABC inventory classification with a classic Pareto analysis states that Class C inventory items would determine 5% of the inventory value resides in 50% of the products. Inventory items with a Class C classification have the lowest value in regard to annualized monetary volume.

The ABC inventory classification with a classic Pareto analysis states that Class A inventory items would determine that 80% of the inventory value resides in 20% of the products. The ABC inventory classification with a classic Pareto analysis states that Class B inventory items would determine 15% of the inventory value resides in 30% of the products. 20% of the inventory value resides in 80% of the products is incorrect because it does not describe Class A, B, or C.

169.

Which is a network-based organization that pioneered the world's most widely used sustainability reporting framework?

  • Global Reporting Initiative (GRI)

  • United Nations Global Compact (UNGC)

  • International Standard Organization (ISO)

  • Organization for Economic Co-operation and Development (OECD)

Correct answer: Global Reporting Initiative (GRI)

The Global Reporting Initiative (GRI) has developed and delivered the global best practice for how organizations communicate and demonstrate accountability for their impact on the environment, economy, and people. 

The United Nations Global Compact (UNGC) is a voluntary initiative whereby companies embrace, support, and enact, within their sphere of influence, a set of core values in the areas of human rights, labor standards, the environment, and anti-corruption. The International Standard Organization (ISO) is an international standard development organization composed of representatives from the national standards organizations of member countries. The Organization for Economic Co-operation and Development (OECD) is an intergovernmental organisation to stimulate economic progress and world trade.

170.

A customer is searching to buy a two-season tent from a specialty outdoor goods brand and is convinced by prompts on the company website to purchase the more expensive four-season tent. What is this an example of?

  • Up-selling

  • Cross-selling

  • Sales

  • Marketing

Correct answer: Up-selling

This is an example of up-selling, which is selling a customer a more expensive product than the one they initially intended to buy. 

Cross-selling is asking the customer if they would like to add a product to their purchase, such as adding a paddle with the purchase of a kayak. 

Sales and marketing are general terms for selling and promotion of goods and services. 

171.

The pull system will start manufacturing a product when an actual demand exists. Which of the following production models uses the pull system?

  • Make-to-order

  • Make-to-stock

  • Design-to-value

  • Design-to-stock

Correct answer: Make-to-order

The make-to-order (MTO) strategy only manufactures the product once the customer places the order. The delivery is not immediate, unlike in a push system; however, the strategy does allow more flexibility in customizing the product to the customer's needs.

The make-to-stock (MTS) strategy manufactures products based on forecasted demands. The design-to-value strategy manufactures products based on what customers want, what other companies are offering, and what it costs to make and distribute the product. Design-to-stock is not a strategy used for supply chain management.

172.

The balanced scorecard was designed to help an organization align its performance measures with its goals and strategic plans. The framework of a balanced scorecard consists of four perspectives, one of which is the innovation and learning perspective. 

What does the innovation and learning perspective of the balanced scorecard measure?

  • Employee safety and retaining employees

  • Cash-to-cash cycle time

  • Supplier sustainability

  • New customer acquisition

Correct answer: Employee safety and retaining employees

The innovation and learning perspective of the balanced scorecard measures employee safety and retention of employees. It also measures health and environmental sustainability issues and the enhancement of information technology and systems.

Cash-to-cash cycle time is measured under the financial perspective of the balanced scorecard. Supplier sustainability is measured under the business process perspective. New customer acquisition is measured under the customer perspective.

173.

Use the expected monetary value (EMV) method to calculate true cost if a company is looking to upgrade its transportation management system for $30,000, and there is a 50% chance it will save the business $150,000. What is the EMV total?

  • $60,000

  • $105,000

  • $90,000

  • $80,000

Correct answer: $60,000

Up-front costs must be included in the Expected Monetary Value (EMV) calculation. In this scenario, the cost of the investment in the system upgrade is $30,000, and it will be negative since it is an expense. The impact is a positive outcome with potential savings of $150,000. 

EMV = probability x (impact + cost)

EMV = 0.5 x ($150,000 - $30,000)

EMV = $60,000

EMV can also be used to calculate the total costs of potential negative outcomes. 

174.

Risk tolerance is one of the three ways an organization expresses its attitude towards risk. Which of the following best describes risk tolerance?

  • “An organization’s or stakeholder’s readiness to accept a threat or potential negative outcome in order to achieve its objectives.”

  • “Amount and type of risk that an organization is willing to pursue or retain.”

  • “A cutoff point below which a risk will be accepted and above which some type of proactive response is required.”

  • “A plan of attack focused on how an organization will deal with identified risks.”

Correct answer: “An organization’s or stakeholder’s readiness to accept a threat or potential negative outcome in order to achieve its objectives.”

Risk tolerance is defined by the APICS Dictionary, 15th Edition, as “An organization’s or stakeholder’s readiness to accept a threat or potential negative outcome in order to achieve its objectives.”

Risk appetite is defined by the APICS Dictionary, 15th Edition, as “Amount and type of risk that an organization is willing to pursue or retain.” Risk threshold is stated to be “A cutoff point below which a risk will be accepted and above which some type of proactive response is required.” 

The option, “A plan of attack focused on how an organization will deal with identified risks,” does not define risk tolerance.

175.

Flexibility is a customer-focused metric associated with the time needed to deliver customer order attribute that measures which of the following?

  • The capability to meet unplanned requests from customers

  • The time it takes from when an order is placed to when the order is delivered and ready for use

  • The time it takes to fulfill a customer order when inventory levels are zero

  • The number of times that cycles meet the planned completion time

Correct answer: The capability to meet unplanned requests from customers

Flexibility is a customer-focused metric associated with the time needed to deliver customer order attribute that measures the capability to meet unplanned requests from customers. The five time needed to deliver customer order metrics that are measured due to the importance to customers are speed of performance, supply chain cycle time, delivery consistency, flexibility, and malfunction recovery. Four customer-focused attributes have metrics assigned to them, which are availability, time needed to deliver customer order, product support, and overall satisfaction.

Speed of performance is a customer-focused metric associated with the time needed to deliver customer order attribute that measures the time it takes from when an order is placed to when the order is delivered and ready for use. Supply chain cycle time is a customer-focused metric associated with the time needed to deliver customer order attribute that measures the time it takes to fulfill a customer order when inventory levels are zero. Delivery consistency is a customer-focused metric associated with the time needed to deliver customer order attribute that measures the number of times that cycles meet the planned completion time.

176.

The Supply Chain Operations Reference (SCOR) model allows users to integrate the supply chains and measure performance. The SCOR model utilizes six process categories in order to separate supply chain operations, one of which is make. 

What does the make process category include?

  • Releasing product for delivery

  • Managing the warehouse

  • Authorizing returns

  • Establishing relationships

Correct answer: Releasing product for delivery

The make process category of the SCOR model includes releasing product for delivery. It also includes finalizing engineering for engineer-to-order products.

Managing the warehouse is included in the deliver process category of the SCOR model. Authorizing returns is included in the return process category of the SCOR model. Establishing relationships is included in the enable process category of the SCOR model.

177.

When a company decides to purchase goods from one supplier, even though there may be other suppliers who can make the same items, what type of supplier relationship is this?

  • Single-source supplier

  • Sole source supplier

  • Multisourced supplier

  • Trading partner

Correct answer: Single-source supplier

A single-source supplier has an exclusive relationship with a purchasing company, even though there may be other suppliers who can produce the same items. A sole source supplier is the only supplier who can produce a particular item. Multisourcing means that a buyer purchases the same good or raw material from more than one supplier, and a trading partner is any other company where goods are exchanged. 

178.

A company transports 40-foot containers via multiple modes of transportation that include ocean, rail, and trucks to move goods from their supplier to their warehouse. What is this an example of? 

  • Intermodal transportation

  • Container transportation

  • Flatcar transportation

  • Trainship transportation

Correct answer: Intermodal transportation

Intermodal transportation is the process of using multiple freight modes such as planes, ships, carriers/trucks, and trains/rails with minimal handling or container reloading when changing from one to the other. The process involves overall productivity and efficiency while reducing delivery time and costs. 

The other options refer to specific equipment, vehicles, or methods of transportation. Container transport simply means goods are loaded in a container, or "containerized." A flatcar refers to when a container is loaded on a railroad flatcar. Tranship transportation means railcars are placed on a charge for water transportation. 

179.

Squishy Animals Ltd. manufactures plush toys. They manufacture the same basic shape of the plush toys, but will switch out the eyes, mouth and ears of the plush toys to be more attractive to the local markets they are selling to. For example, they will make a dog or a cat in the US, a bunny or a chicken in Germany, and a tiger or a dragon in China. What is Squishy Animals Ltd. doing?

  • Developing a multi-country strategy

  • Issuing a letter of credit

  • Implementing Incoterms

  • Preparing a consular invoice

Correct answer: Developing a multi-country strategy

A multicountry strategy is when a company makes minor changes to its products to make them attractive and usable to the local markets. A letter of credit is a bank guarantee that payment on an invoice will be made when certain milestones are met. Incoterms indicate which party is responsible for transportation and risk of loss during the movement of goods from the supplier to the buyer. A consular invoice is a commercial invoice issued in the receiving country's language. 

180.

 Incoterms determine where the risk of loss transfers from seller to buyer and which company is responsible for the different legs of transportation. Which Incoterm has the supplier responsible for transporting the goods to the buyer's door and paying all costs, including the cost of duties and taxes in the destination country?

  • DDP

  • FOB

  • FCA

  • CIF

Correct answer: DDP

Delivered Duties Paid (DDP) means that the supplier will pay for all transportation costs, including duty costs, up to the buyer's door. Free on Board (FOB) means the risk of loss transfers once the goods are loaded onto a vessel and is only applicable for ocean shipments. Free to Carrier (FCA) means that risk and costs are transferred once the goods have been delivered to the buyer's chosen carrier. Cost, Insurance, Freight (CIF) means that the seller will pay for all costs, including insurance and bear risk of loss up to the destination port. 

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