1. A company closely monitors supplier performance and notices recent late deliveries from one supplier. The supplier discloses flood damage at the plant. The company quickly shifts sourcing to a new supplier and has minimal loss of sales. Which of the following risk strategies reflects the company's actions?

A) Achieving low cost through reaction
B) Creating an adaptive supply chain community
C) Reducing supply chain vulnerability
D) Investing in redundancy



2. A company ships from its manufacturing facilities directly to its warehouses. If the number of warehouses increases, transportation costs between manufacturing facilities and warehouses most likely will:

A) increase.
B) decrease.
C) not change.
D) become less predictable.



3. Which of the following outcomes occurs when direct shipping is used instead of a distribution network?

A) Outbound transportation cost is reduced.
B) Inventory velocity is reduced.
C) Order-fill rates are reduced.
D) Inventory obsolescence is reduced.



4. Which of the following factors typically is most important in successfully implementing sales and operations planning (S&OP)?

A) Involvement of specialists from all functional groups within an organization
B) Creation of a dedicated S&OP organizational unit
C) Involvement and accountability at senior management level
D) Focus on 3 months to 18 months in the future



5. A company that sells engineered-to-order products is planning implementation of a supplier relationship management system (SRM) for direct materials. Which of the following factors is most likely to make the implementation difficult?

A) Complexity of the purchasing process
B) Cost of the application software upgrades
C) Management of variable lead times
D) Resistance of material suppliers