A company has designed its supply chain so that financial losses in one part of the supply chain will be offset by gains in another part. The company is employing which of the following strategies to address global risk?
Correct Answer: D
Hedging is a strategy used to mitigate risk by taking offsetting positions in related markets to balance potential losses in one part of the supply chain with gains in another. This approach is particularly useful in global supply chains where fluctuations in currency exchange rates, commodity prices, or market conditions can impact different parts of the supply chain differently. By employing hedging strategies, companies can protect themselves from adverse financial impacts and stabilize their overall financial performance. Options A, B, and C are different strategies but do not specifically address the financial balancing described. References: * Chopra, S., & Meindl, P. (2015). Supply Chain Management: Strategy, Planning, and Operation. * https://www.investopedia.com
Question 182
In order to bring a new product to market quickly while maximizing customer value and minimizing costs, a company should leverage:
Correct Answer: B
Question 183
Cash-to-cash cycle time is a measure of a firm's:
Correct Answer: B
Cash-to-cash cycle time is a critical measure of a firm's working capital utilization. It calculates the time taken between outlaying cash for raw materials and receiving cash from product sales. Key points include: * Definition: Cash-to-cash cycle time = Days of Inventory Outstanding + Days Sales Outstanding - Days Payable Outstanding. * Working Capital Efficiency: It measures how efficiently a company is managing its working capital. Shorter cycles indicate better utilization of cash resources. * Impact on Liquidity: A shorter cash-to-cash cycle improves liquidity, as the company can quickly turn its inventory into cash. * Operational Performance: This metric reflects overall operational efficiency, including procurement, production, and sales processes. References: * Coyle, J. J., Langley, C. J., Novack, R. A., & Gibson, B. J. (2016). Supply Chain Management: A Logistics Perspective. Cengage Learning. * Bragg, S. M. (2010). Business Ratios and Formulas: A Comprehensive Guide. Wiley.
Question 184
The purchasing manager of a company wants to minimize stock-outs as well as obsolete inventory. Which of the following tools needs to be implemented?
Correct Answer: A
Question 185
A company distributes its products through wholesale, retail stores, and its e-commerce website. Inventory and demand forecasting for each channel is managed separately. The company is experiencing high levels of obsolete inventory. Which of the following strategies is most likely to reduce the levels of obsolescence?
Correct Answer: B
Pooling inventory and demand forecasts across different distribution channels can help reduce obsolescence by providing a more accurate and holistic view of demand. This strategy allows the company to balance inventory levels more effectively, reducing excess stock and minimizing the risk of products becoming obsolete. Managing inventory and forecasts separately for each channel often leads to discrepancies and inefficiencies, whereas pooling helps optimize overall inventory levels. Options A, C, and D may offer some benefits but are less effective in addressing the core issue of high obsolete inventory. : Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2008). Designing and Managing the Supply Chain: Concepts, Strategies, and Case Studies. https://www.supplychaindive.com
