APICS CSCP Exam Questions

Single sourcing a high-profit product increases overall supply chain risk due to several reasons:

Supplier Dependency: Relying on a single supplier for a critical product creates a high dependency, making the supply chain vulnerable to disruptions if that supplier faces issues (e.g., natural disasters, financial instability).

Lack of Alternatives: Without alternative sources, any disruption can lead to significant delays, shortages, and potential loss of revenue.

Negotiation Leverage: Single sourcing can reduce the buyer's negotiation leverage, potentially leading to higher costs or unfavorable terms.

Outsourcing unsuitable products, identifying multiple sources for risk-prone products, and internally manufacturing IP-sensitive products are strategies to mitigate risk, not increase it.

Chopra, Sunil, and Peter Meindl. 'Supply Chain Management: Strategy, Planning, and Operation.' Pearson.

Harland, Christine, Richard Brenchley, and Helen Walker. 'Risk in Supply Networks.' Journal of Purchasing and Supply Management.

Outsourcing innovative components can lead to several risks, but the primary risk is the loss of competitive knowledge:

Intellectual Property: When innovative components are outsourced, there is a risk that critical intellectual property and proprietary knowledge will be transferred to or accessed by suppliers.

Competitive Advantage: These components often embody the firm's core competencies and technological advantages. Losing control over these can diminish the company's competitive edge.

Dependency on Suppliers: Relying on external suppliers for innovative parts can reduce the firm's ability to rapidly adapt and innovate, leading to decreased flexibility and potential delays in response to market changes.

While decreased flexibility and higher carrying costs are concerns, they are secondary to the risk of losing competitive knowledge.

Pisano, Gary P., and Willy C. Shih. 'Restoring American Competitiveness.' Harvard Business Review.

Quinn, James Brian. 'Strategic Outsourcing: Leveraging Knowledge Capabilities.' Sloan Management Review.

Single sourcing a high-profit product increases overall supply chain risk due to several reasons:

Supplier Dependency: Relying on a single supplier for a critical product creates a high dependency, making the supply chain vulnerable to disruptions if that supplier faces issues (e.g., natural disasters, financial instability).

Lack of Alternatives: Without alternative sources, any disruption can lead to significant delays, shortages, and potential loss of revenue.

Negotiation Leverage: Single sourcing can reduce the buyer's negotiation leverage, potentially leading to higher costs or unfavorable terms.

Outsourcing unsuitable products, identifying multiple sources for risk-prone products, and internally manufacturing IP-sensitive products are strategies to mitigate risk, not increase it.

Chopra, Sunil, and Peter Meindl. 'Supply Chain Management: Strategy, Planning, and Operation.' Pearson.

Harland, Christine, Richard Brenchley, and Helen Walker. 'Risk in Supply Networks.' Journal of Purchasing and Supply Management.

Effective collaboration for item replenishment by external suppliers hinges on the synchronization of information between the buyer and supplier. Among the options provided, close communication about component usage (C) is critical as it enables suppliers to accurately understand the buyer's needs in real time, which in turn allows for more precise planning and timely replenishment of items. Accurate long-term forecasts (A) are important, but they do not address the real-time and ongoing updates that close communication provides. Returnable plastic containers (B) and a process for the reverse supply chain (D) are logistical considerations that, while beneficial, do not directly impact the day-to-day collaborative communication necessary for effective replenishment. Thus, close communication ensures that any changes in demand or usage are quickly communicated, reducing the risk of stockouts or overstock situations.

Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation. Pearson.

Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2007). Designing and Managing the Supply Chain: Concepts, Strategies, and Case Studies. McGraw-Hill.

For a product that requires high quality but is not critical or high-value, the targeted supplier qualification level should be 'Certified.' Certified suppliers have demonstrated their ability to consistently meet quality standards and performance criteria, making them reliable sources for high-quality products. While 'Approved' and 'Preferred' suppliers may meet basic requirements, 'Certified' suppliers have typically undergone more rigorous evaluation processes, ensuring a higher level of quality assurance.

Leenders, M. R., Johnson, P. F., Flynn, A., & Fearon, H. E. (2006). Purchasing and Supply Management. McGraw-Hill.

Trent, R. J. (2005). End-to-End Lean Management: A Guide to Complete Supply Chain Improvement. J. Ross Publishing.