APICS CSCP Online Practice Questions and Exam Preparation

APICS CSCP Online Questions & Answers

• Question 421:

  A firm is assessing the risk of business disruption due to several types of natural disasters. When determining the risk of each type of disaster, the firm should consider the probability of each type of disaster and the:

  A. consequences of the disruption.
  B. cost of mitigating the disaster.
  C. firm's capability to mitigate the risk.
  D. forecaster's confidence in the risk probability.
  A. consequences of the disruption.

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  Explanation

  When assessing the risk of business disruption due to natural disasters, a firm must evaluate both the probability of each type of disaster occurring and the potential consequences of such disruptions. This approach ensures a comprehensive understanding of the risk landscape and helps prioritize mitigation strategies based on the severity of the impact. The consequences of a disruption can include financial losses, operational downtime, damage to infrastructure, and reputational harm. By assessing the potential consequences, the firm can develop targeted contingency plans, allocate resources effectively, and enhance overall resilience to various types of disasters.

  National Institute of Standards and Technology (NIST). (2015). "Community Resilience Planning Guide for Buildings and Infrastructure Systems." NIST Special Publication 1190. FEMA. (2013). "Threat and Hazard Identification and Risk Assessment Guide." Comprehensive Preparedness Guide (CPG) 201.

• Question 422:

  Which type of purchase is best suited for single sourcing with a preferred supplier to reduce supply chain risk?

  A. Strategic
  B. Routine
  C. Bottleneck
  D. Leverage
  A. Strategic

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  Explanation

  Strategic purchases are best suited for single sourcing with a preferred supplier to reduce supply chain risk. These purchases are critical to a company's operations and often involve complex and high-value items. By single sourcing with a

  preferred supplier, a company can establish a strong, collaborative relationship, ensuring quality, reliability, and continuity of supply, while also potentially benefiting from supplier innovation and cost efficiencies.

  Routine (B) purchases are low value and low risk, often sourced from multiple suppliers.

  Bottleneck (C) items have a high supply risk but are not necessarily strategic; they might require multiple sources or contingency planning. Leverage (D) items have significant purchasing power and are typically sourced from multiple

  suppliers to optimize costs.

  Kraljic, P. (1983). Purchasing must become supply management. Harvard Business Review.

  Monczka, R. M., Handfield, R. B., Giunipero, L. C., and Patterson, J. L. (2015). Purchasing and Supply Chain Management. Cengage Learning.

• Question 423:

  Customer relationship management (CRM) provides the sales and customer service functions with:

  A. on-hand inventory balance for goods experiencing an increase in demand
  B. shipment history, promotional programs, and order status for specific products
  C. master production schedule (MPS) details for upcoming customer orders
  D. customer and market segments for logistics planning
  B. shipment history, promotional programs, and order status for specific products

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  Explanation

  Customer Relationship Management (CRM) systems provide sales and customer service functions with vital information to enhance customer interactions and support:

  Shipment History: Access to past shipment data helps in understanding delivery patterns and addressing customer inquiries.

  Promotional Programs: Information on promotions aids in upselling and cross- selling efforts.

  Order Status: Real-time order status updates help in providing accurate information to customers about their purchases.

  Options A (on-hand inventory balance), C (master production schedule details), and D (customer and market segments) are more relevant to inventory management and logistics planning rather than the primary focus of CRM.

  "Customer Relationship Management: Concept, Strategy, and Tools" by V. Kumar and Werner Reinartz

  Gartner CRM Reports

• Question 424:

  An operations manager wants to measure variability in the delivery time of insurance policies to clients. Which of the following quality tools most appropriately would show the level of variability?

  A. Pareto chart
  B. Histogram
  C. Scatterplot
  D. Check sheet
  B. Histogram

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  Explanation

  A histogram is the most appropriate quality tool to measure variability in the delivery time of insurance policies to clients because: Distribution Visualization: A histogram displays the distribution of data points, showing how delivery times are spread out. This helps in understanding the range and frequency of delivery times. Identifying Variability: It allows for easy visualization of the level of variability or dispersion in the delivery times, highlighting any inconsistencies or outliers in the process. Data Analysis: Histograms provide a clear picture of the central tendency, spread, and shape of the data distribution, which is crucial for identifying patterns and potential areas for improvement. Decision Making: By showing the distribution of delivery times, a histogram helps the operations manager make informed decisions about process adjustments to reduce variability and improve consistency. A Pareto chart (Option A) is used to prioritize problems based on their frequency or impact. A scatterplot (Option C) shows relationships between two variables, not the distribution of one. A check sheet (Option D) is used for data collection and not for showing variability in data.

  "Statistical Quality Control: A Modern Introduction" by Douglas

  C. Montgomery. "The Six Sigma Handbook" by Thomas Pyzdek and Paul Keller.

• Question 425:

  After two firms have established an initial relationship to apply the principles of collaborative planning, forecasting, and replenishment (CPFR) for products, the next logical step is to:

  A. share forecasts for the products with each other.
  B. obtain orders for the products and enter them into the master schedule.
  C. create joint business plans for the products.
  D. negotiate prices and profit expectations for the products.
  C. create joint business plans for the products.

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  Explanation

  After two firms have established an initial relationship for Collaborative Planning, Forecasting, and Replenishment (CPFR), the next logical step is to create joint business plans for the products. This step involves aligning on business objectives, market strategies, and goals for the collaboration. Creating joint business plans ensures that both parties have a clear and shared understanding of their roles, responsibilities, and expectations, which is essential for the success of CPFR initiatives. It helps in setting the stage for effective collaboration, mutual trust, and long-term partnership.

  "Collaborative Planning, Forecasting, and Replenishment: How to Create a Supply Chain Advantage" by Dirk Seifert APICS Dictionary, 16th Edition

• Question 426:

  A firm experiences a supply chain interruption from a second-tier supplier. Which of the following actions is the firm likely to take to minimize future interruptions?

  A. Require the supplier to submit weekly cycle count reports.
  B. Require the supplier to implement a sales and operations planning process.
  C. Map the supplier's supply chain to identify risks and opportunities.
  D. Conduct an ISO 14001 audit of the supplier.
  C. Map the supplier's supply chain to identify risks and opportunities.

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  Explanation

  To minimize future supply chain interruptions from a second-tier supplier, the firm should map the supplier's supply chain to identify risks and opportunities. This involves:

  Supply Chain Mapping: Creating a visual representation of the supplier's supply chain helps in understanding the flow of materials, components, and information. Identifying Risks: By mapping the supply chain, the firm can identify potential

  points of failure, such as single-source dependencies, geographic risks, or capacity constraints.

  Assessing Opportunities: Mapping also reveals opportunities for improvement, such as alternative suppliers, process enhancements, or inventory optimization. Proactive Risk Management: With a comprehensive view of the supply chain, the

  firm can develop risk mitigation strategies, such as diversifying suppliers, increasing safety stock, or enhancing communication channels.

  "The Supply Chain Risk Management Guide" by James

  B. Rice Jr. and Craig A.

  Zsidisin

  APICS, "Risk Management in the Supply Chain"

• Question 427:

  A manufacturer uses standard costing, and a potential supplier uses activity-based costing. This difference most likely will have implications for which of the following types of future decisions?

  A. Price concessions
  B. Make-or-buy
  C. Distribution warehouse locations
  D. Freight terms
  B. Make-or-buy

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  Explanation

  The use of different costing methods by a manufacturer and a potential supplier can have significant implications for make-or-buy decisions. Here's the explanation:

  Standard Costing: This method involves assigning fixed costs to products based on predetermined standards. It simplifies cost control and variance analysis but may not capture all the activities involved in production. Activity-Based Costing

  (ABC): ABC assigns costs based on actual activities and resource usage, providing a more accurate picture of costs associated with specific products or services. Comparison for Make-or-Buy: When a manufacturer using standard costing

  considers outsourcing to a supplier using ABC, it must carefully compare the detailed activity-based costs with its own standard costs. Implications: Differences in cost allocation methods can reveal hidden costs or savings, influencing the

  decision to manufacture in-house or outsource. ABC may highlight inefficiencies in in-house production or justify the cost-effectiveness of outsourcing. Strategic Decisions: Understanding the true cost implications through detailed ABC can

  lead to better strategic decisions regarding resource allocation, production processes, and supplier selection.

  Horngren,

  C. T., Datar, S. M., and Rajan, M. V. (2015). Cost Accounting: A Managerial Emphasis. Pearson.

  Kaplan, R. S., and Cooper, R. (1998). Cost and Effect: Using Integrated Cost Systems to Drive Profitability and Performance. Harvard Business School Press.

• Question 428:

  A company that is having difficulties prioritizing resources against a long list of improvement projects should use which of the following processes?

  A. Control chart
  B. Competitive benchmarking
  C. Pareto analysis
  D. Six Sigma
  C. Pareto analysis

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  Explanation

  Pareto analysis is the most appropriate process for a company having difficulties prioritizing resources against a long list of improvement projects because: Pareto Principle: Based on the Pareto principle (80/20 rule), this analysis helps identify the few critical projects that will deliver the majority of the benefits. This allows for effective prioritization and resource allocation. Focus on Impact: By focusing on the projects that have the highest impact, Pareto analysis ensures that the company's efforts are directed towards initiatives that will provide the greatest return on investment. Visual Representation: It provides a clear visual representation of the relative importance of various projects, making it easier to communicate priorities and gain consensus among stakeholders. Efficient Resource Allocation: By identifying the most significant projects, Pareto analysis helps in allocating resources more efficiently, avoiding the dilution of efforts across too many projects. Control charts (Option A) are used for monitoring process stability. Competitive benchmarking (Option B) involves comparing performance with industry bests, not prioritizing projects. Six Sigma (Option D) is a methodology for process improvement but does not specifically address prioritizing multiple projects.

  "The Lean Six Sigma Pocket Toolbook" by Michael L. George, John Maxey, David Rowlands, and Mark Price. "Lean Six Sigma: Combining Six Sigma Quality with Lean Production Speed" by Michael L. George.

• Question 429:

  Implementation of electronic data interchange (EDI) would be most appropriate for a company that wants to use:

  A. radio frequency technology to identify a container.
  B. encoded information to be read by electronic readers.
  C. standard digital forms for purchase orders.
  D. a bottom-up method to develop stock keeping unit (SKU) forecasts.
  C. standard digital forms for purchase orders.

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  Explanation

• Question 430:

  A company is formally adhering to the principles of the UN Global Compact. After a review of their supply chain, they have found that a key supplier is in violation of the compact. The best action for the company to do first is:

  A. do nothing. The company is not responsible for compliance of suppliers.
  B. replace the supplier as soon as possible with a compliant supplier.
  C. notify the supplier of non-compliance.
  D. require the supplier to become compliant.
  C. notify the supplier of non-compliance.

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  Explanation

  UN Global Compact: Companies adhering to the UN Global Compact commit to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labor, environment, and anti-corruption. Supplier

  Non-Compliance: When a key supplier violates these principles, it affects the company's commitment to the Compact.

  Best Initial Action:

  Conclusion: Notifying the supplier is the most appropriate first step, as it provides an opportunity for the supplier to address the issue and demonstrates the company's commitment to ethical practices.

  United Nations Global Compact. (2020). The Ten Principles of the UN Global Compact. UN Global Compact.

  Sroufe, R. (2017). Integrated Management: How Sustainability Creates Value for Any Business. Emerald Publishing.