Free APICS CSCP Practice Exam with Questions & Answers | Set: 4

The United Nations (UN) Global Compact includes ten principles in the areas of human rights, labor, environment, and anti-corruption. The anti-corruption principle calls for businesses to work against corruption in all its forms, including extortion and bribery. This principle is crucial for promoting transparency and ethical business practices globally.

Trading blocs (A) are not part of the UN Global Compact principles.

Risk management (C) is important but not specifically a principle of the UN Global Compact.

Accounting standards (D) are related to financial reporting but not directly part of the UN Global Compact principles.

References

United Nations Global Compact. (n.d.). The Ten Principles of the UN Global Compact. UN Global Compact.

Incoterms® (International Commercial Terms) are standardized terms used in international and domestic trade contracts to define the responsibilities of buyers and sellers. Here's why option B is correct:

Standardization: Incoterms® provide a set of standardized terms that clarify the responsibilities of buyers and sellers in trade transactions.

Contract Clarity: They specify who is responsible for costs, risks, and tasks involved in the delivery of goods from the seller to the buyer.

Global Use: Incoterms® are globally recognized and used in international trade, ensuring that all parties have a clear understanding of their contractual obligations.

Risk Management: By defining when the risk transfers from the seller to the buyer, Incoterms® help manage and mitigate risks in the supply chain.

When lead time is short and demand is known for a product group, the best type of supply chain strategy to implement is continuous replenishment. Continuous replenishment is a supply chain strategy that aims to maintain optimal inventory levels by replenishing products or materials as they are consumed or sold1. It is based on the principle of pull-based production, where demand triggers supply, rather than push-based production, where supply anticipates demand2. Continuous replenishment can reduce lead time by eliminating the need for large and infrequent orders, minimizing inventory holding costs, improving customer service levels, and increasing responsiveness to demand fluctuations34. The other options are not as suitable for the given scenario. Matching demand with capacity is a supply chain strategy that aims to balance the supply and demand of products or services by adjusting the production capacity or the demand level5. It can reduce lead time by avoiding overproduction or underproduction, but it may not be feasible or cost-effective when demand is highly variable or uncertain. Theory of constraints (TOC) is a management philosophy that focuses on identifying and eliminating the bottlenecks or constraints that limit the performance of a system. It can reduce lead time by improving the throughput and efficiency of the system, but it may not address the root causes of lead time variability or uncertainty. Batch production is a production method that involves producing a set of identical products or materials in batches or lots. It can reduce lead time by achieving economies of scale and reducing setup costs, but it may also increase inventory levels, waste, and quality issues.

Warehouse layout and storage practices are designed to accommodate various operational needs. Here's why option D is correct:

Mixed Storage Needs: Warehouses typically handle both short-term (transit storage for immediate distribution) and long-term (extended storage for stockpiling) requirements.

Space Optimization: Effective warehouse management balances these needs to optimize space utilization and ensure efficient handling of goods.

Product Turnover: High turnover items may require quick access and thus short-term storage, while slower-moving items may be stored for extended periods.

Flexibility: Warehouses must remain flexible to adapt to changing inventory levels, seasonal demands, and other variables that affect storage duration.

When considering storage locations for high volume products, the primary factor is velocity, which refers to the speed at which inventory moves through the supply chain. High-velocity products are those that are sold and restocked frequently, so their storage locations should be optimized to ensure quick and efficient handling and transportation. This minimizes handling time and costs, reduces stockouts, and improves overall supply chain efficiency. Storage locations should be strategically chosen to support fast turnover and easy access to these high-demand products. References: Lambert, D. M., & Cooper, M. C. (2000). Issues in Supply Chain Management, Industrial Marketing Management.

When data is scarce, the Delphi method is the most appropriate forecasting technique. This method involves:

Expert Judgment: Gathering insights and opinions from a panel of experts through multiple rounds of surveys.

Iterative Process: Experts revise their responses based on feedback until a consensus is reached.

Scarcity of Data: Ideal for situations where historical data is limited or unavailable, relying instead on expert knowledge and experience.

Flexibility in supply chain risk management involves the capacity to respond promptly and effectively to disruptions or changes in the supply chain while maintaining customer service levels. This includes being able to switch suppliers, adjust production schedules, and manage inventory dynamically to meet customer demands despite unforeseen events.

Adjusting capacities in a manufacturing environment (A) is a part of flexibility but not as comprehensive as the ability to maintain service levels.

Producing high volume SKUs in multiple locations (C) and producing complex configurations of a product within the standard lead time (D) are aspects of flexibility but do not capture the broader definition related to risk management and customer service.

References

Tang, C. S. (2006). Robust strategies for mitigating supply chain disruptions. International Journal of Logistics Research and Applications.

Sheffi, Y. (2005). The Resilient Enterprise: Overcoming Vulnerability for Competitive Advantage. MIT Press.

The globalization of a supply chain typically increases uncertainty and production lead time. When a supply chain becomes global, it involves longer distances, multiple transportation modes, and more complex logistics operations, all of which contribute to longer lead times. Additionally, global supply chains face uncertainties such as customs delays, geopolitical issues, variability in supplier performance, and risks of natural disasters, which further exacerbate production lead times.

Local competition might increase due to globalization, but it is not directly related to the uncertainties in the supply chain.

Documentation complexity increases with globalization but is a part of the logistical complexities rather than the core uncertainty affecting production lead times.

Product standardization is not a consequence of increased uncertainty but rather a strategy used to manage complexity.

Purpose of Distribution Warehouses: They are meant to store products closer to customers, thus improving delivery times and service levels.

Impact of New Warehouse: Adding a new warehouse reduces the distance products need to travel to reach customers.

Primary Factor: Reduced travel time from the distribution warehouse to the customer leads to faster deliveries.

Supporting Factors: While new material handling equipment and increased safety stock (Options A and B) can contribute to efficiency, the primary reason for reduced lead times is the proximity of the new warehouse to the customer (Option C). References: Distribution Network Design, Logistics Management textbooks.

In Distribution Requirements Planning (DRP), the calculation of projected on-hand inventory is a crucial aspect. The formula used for this calculation is:

Projected On-Hand Inventory=Prior Week’s On-Hand Inventory−Current Week’s Gross Requirements+Scheduled ReceiptsProjected On-Hand Inventory=Prior Week’s On-Hand Inventory−Current Week’s Gross Requirements+Scheduled Receipts

Here's the breakdown:

Prior Week's On-Hand Inventory: This is the amount of inventory available at the end of the previous period.

Current Week's Gross Requirements: These are the total demands for the current period, which includes customer orders and forecasted demand.

Scheduled Receipts: These are the quantities of inventory that are expected to be received in the current period from previously placed orders.

Therefore, to maintain an accurate calculation of on-hand inventory, you subtract the current week's gross requirements from the prior week's on-hand inventory and add any scheduled receipts that are expected to arrive.

References

APICS Dictionary, 16th Edition

"Distribution Requirements Planning: The Gateway to Supply Chain Management" by Donald J. Bowersox, David J. Closs, M. Bixby Cooper

"Manufacturing Planning and Control for Supply Chain Management" by F. Robert Jacobs, William Berry, D. Clay Whybark, Thomas E. Vollmann

The United Nations (UN) Global Compact is a voluntary initiative that encourages businesses worldwide to adopt sustainable and socially responsible policies and to report on their implementation. The initiative is based on ten principles in the areas of human rights, labor, the environment, and anti-corruption. Companies that join the UN Global Compact commit to aligning their operations and strategies with these universal principles, thereby contributing to a more inclusive and sustainable global economy. The initiative provides a framework for businesses to integrate these principles into their operations and to engage in collaborative projects that advance the broader goals of the United Nations.

A commercial invoice is a document used in international trade that includes the valuation of goods for the assessment of duties and taxes. It provides detailed information about the goods being shipped, such as the description, quantity, unit price, total value, and terms of sale. Customs authorities use the commercial invoice to determine the applicable duties and taxes for the shipment. It is a critical document for both the exporter and importer in ensuring compliance with trade regulations.

Improving fill rate is an objective related to the internal business processes perspective of a balanced scorecard. The fill rate measures the ability of a business to meet customer demand from available stock without backordering. Enhancing this metric involves optimizing inventory management, order fulfillment processes, and supply chain efficiency, which are all internal business process activities aimed at improving operational performance and customer satisfaction.

References

Kaplan, R. S., & Norton, D. P. (1996). "The Balanced Scorecard."

Supply Chain Management literature on performance metrics.

An effective company strategy for innovative products involves combining them with a responsive supply chain. Innovative products often have unpredictable demand and short life cycles, requiring a supply chain that can quickly respond to changes in demand, accommodate customization, and manage shorter product cycles efficiently.

An efficient supply chain (A) is more suited for functional products with stable demand.

Accurate forecasts (C) are important but difficult to achieve consistently for innovative products.

High inventory levels (D) are generally avoided in innovative product strategies due to the risk of obsolescence.

References

Fisher, M. L. (1997). What is the right supply chain for your product? Harvard Business Review.

Lee, H. L. (2002). Aligning Supply Chain Strategies with Product Uncertainties. California Management Review.