Which of the following is NOT an objective of performance monitoring and control?

Increase lead time in operations

Enable effective provision of logistics services

Achieve future business objectives

Support planning and control of operations

What is one of the primary reasons organizations choose to outsource logistics operations?

To focus on core business or competence

To eliminate supply chain risks

What is critical for maintaining a good third-party logistics (3PL) and client relationship?

High degree of trust and collaboration

Use of mobile data communication

What are the four principal elements of inventory-holding cost?

Capital financing cost, Service cost, Storage cost, Risk cost

Explain the bullwhip effect in supply chain management.

The bullwhip effect refers to the amplification of small changes in demand as they move back through the supply chain, resulting in larger fluctuations in orders at each level of the supply chain.

What is the difference between cycle stock and safety stock?

Cycle stock is the inventory that a company uses to fulfill regular demand. Safety stock (or buffer stock) is the extra inventory kept to prevent stockouts due to uncertainties in supply and demand.

How can excess inventory be minimized using the ABC analysis method?

The ABC analysis method classifies inventory into three categories: 'A' lines are fast-moving items (~20%). 'B' lines are medium-moving items (~30%). 'C' lines are slow-moving or obsolete items (~50%). Focusing on controlling high-value 'A' items and reducing slow-moving 'C' items helps minimize excess inventory.

What is a push system, and how does it differ from a pull system in inventory management?

A push system anticipates future demand and produces goods to stock in advance. A pull system is demand-driven, meaning products are only made or ordered when a customer places an order.

What are the four perspectives of the balanced scorecard?

Financial perspective, Customer perspective, Internal process perspective, Innovation and learning perspective

Explain the SCOR® model and its role in performance monitoring.

The SCOR® (Supply Chain Operations Reference) model is used to measure performance in a supply chain by focusing on categories such as assets, cost, flexibility, and time. It helps align supply chain management with business objectives.

What is activity-based costing (ABC), and why is it important in logistics?

Activity-based costing (ABC) is an accounting method that assigns costs to products and services based on the activities required to produce them. It helps logistics operations accurately track the true cost of activities and improve cost efficiency.

How does the cost-to-serve® method differ from activity-based costing?

Cost-to-serve® is similar to activity-based costing but less resource-intensive. It focuses specifically on how costs are consumed throughout the supply chain, making it a practical tool for distribution and logistics analysis.

List two common methods for forecasting demand in logistics.

Moving Average/Weighted Moving Average Exponential Smoothing

What are the key factors that influence an organization's decision to outsource logistics?

Organizational factors, Financial factors, Service factors, Physical factors, Partnership and collaboration

Why is trust important in a third-party logistics (3PL) and client relationship?

Trust is essential because a 3PL and client relationship involves close collaboration and sharing of information. A high degree of trust ensures smoother communication, problem-solving, and a stronger partnership to meet business objectives.

What are the main methods used to monitor and control a 3PL operation?

Monitoring against the contract, Service level agreements (SLAs), Budgetary control, Key Performance Indicators (KPIs), Regular review meetings, Activity forecasts, Open book audits

What is the role of Key Performance Indicators (KPIs) in logistics management?

KPIs are used to measure the performance and efficiency of logistics operations. They help managers track progress toward goals, identify areas for improvement, and ensure that operations align with strategic objectives.

Describe one major difference between a dedicated operation and a multi-user distribution operation.

A dedicated operation serves a single client exclusively. A multi-user distribution operation is shared by multiple clients, optimizing costs and resources through shared services.

D470 Competency 3

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MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Why might a company choose to hold stock?

To avoid paying taxes

To minimize production costs and accommodate variations in demand

To reduce customer service needs

To increase lead times

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is NOT a type of stock typically held by companies in supply chains?

Raw material stocks

Seasonal stock

Finished products

Environmental stock

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What does ABC analysis help companies minimize?

Labor costs

Excess inventory

Capital investment

Safety stock

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which system involves centralized inventory from which customers are supplied directly?

Echelon system

Direct system

Mixed system

Push system

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the term used to describe the amplification of small changes in demand as they move back through the supply chain?

Demand surge

Bullwhip effect

Supply chain ripple

Forecast fluctuation

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The balanced scorecard translates a company’s strategic mission into tangible objectives and measures in which four perspectives?

Assets, Cost, Time, Inventory

Financial, Customer, Internal, Innovation & Learning

Profit, Cost, Operations, Forecasting

Productivity, Lead time, Flexibility, Orders

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the purpose of the SCOR® model in supply chain management?

To set logistics KPIs

To enable flexible budgeting

To monitor cost and performance

To provide variance analysis

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D470 Competency 3

Why might a company choose to hold stock?

Which of the following is NOT a type of stock typically held by companies in supply chains?

What does ABC analysis help companies minimize?

Which system involves centralized inventory from which customers are supplied directly?

What is the term used to describe the amplification of small changes in demand as they move back through the supply chain?

The balanced scorecard translates a company’s strategic mission into tangible objectives and measures in which four perspectives?

What is the purpose of the SCOR® model in supply chain management?

Which of the following is NOT an objective of performance monitoring and control?

Which accounting method addresses problems like the inability to identify cost implications for specific markets?

What is one of the primary reasons organizations choose to outsource logistics operations?

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