Supply Chain Design and Planning MCQs

1. What is the primary objective of supply chain design?
(A) To establish an effective structure for sourcing, production, storage and distribution
(B) To increase advertising expenses
(C) To eliminate customer service
(D) To reduce product variety

2. Which decision is a major part of supply chain network design?
(A) Employee recruitment
(B) Facility location and capacity
(C) Brand logo selection
(D) Promotional campaign design

3. What does supply chain planning primarily involve?
(A) Coordinating resources and activities to meet expected demand
(B) Designing product advertisements
(C) Managing employee entertainment
(D) Eliminating supplier relationships

4. Which planning activity estimates future customer demand?
(A) Quality inspection
(B) Demand forecasting
(C) Product packaging
(D) Supplier auditing

5. What is the purpose of demand planning?
(A) To match expected customer demand with available supply
(B) To increase unsold inventory
(C) To eliminate market research
(D) To reduce communication between departments

6. Which factor is most important when selecting a warehouse location?
(A) Employee hobbies
(B) Accessibility to suppliers and customers
(C) Office decoration
(D) Brand popularity alone

7. What is the main purpose of capacity planning in a supply chain?
(A) To ensure sufficient resources are available to meet demand
(B) To increase product prices
(C) To eliminate production schedules
(D) To avoid equipment maintenance

8. Which approach involves planning supply chain activities across multiple departments?
(A) Integrated planning
(B) Independent purchasing
(C) Isolated production
(D) Informal marketing

9. What does Sales and Operations Planning (S&OP) aim to achieve?
(A) Alignment between sales plans and operational capabilities
(B) Separation of sales and production departments
(C) Elimination of inventory management
(D) Reduction of customer communication

10. Which planning process determines the materials required for production?
(A) Customer relationship management
(B) Material Requirements Planning (MRP)
(C) Market segmentation
(D) Financial auditing

11. What is the purpose of a master production schedule?
(A) To specify which products will be produced and when
(B) To determine employee vacation policies
(C) To establish advertising budgets
(D) To evaluate supplier reputation only

12. Which supply chain planning activity focuses on the movement and storage of goods?
(A) Human resource planning
(B) Logistics planning
(C) Brand management
(D) Financial reporting

13. What is the main purpose of transportation planning?
(A) To select suitable routes, modes and delivery schedules
(B) To increase unnecessary product handling
(C) To eliminate delivery tracking
(D) To avoid customer locations

14. What does inventory planning help organizations determine?
(A) Appropriate stock levels and replenishment requirements
(B) Employee promotion policies
(C) Product advertising themes
(D) Office furniture requirements

15. What is safety stock maintained for?
(A) Managing unexpected demand and supply variations
(B) Increasing product defects
(C) Replacing demand forecasting
(D) Eliminating warehouse operations

16. Which strategy involves keeping inventory at a central location to serve multiple markets?
(A) Decentralized inventory strategy
(B) Centralized inventory strategy
(C) Independent sourcing strategy
(D) Direct manufacturing strategy

17. What is the purpose of decentralized distribution?
(A) Placing inventory closer to different customer markets
(B) Keeping all products at one factory
(C) Eliminating regional warehouses
(D) Increasing transportation distances in every case

18. Which factor influences the design of a supply chain network?
(A) Customer demand locations
(B) Employee clothing preferences
(C) Office decoration styles
(D) Company social events

19. What is the primary objective of aggregate planning?
(A) Balancing demand and production capacity over a medium-term period
(B) Designing individual product advertisements
(C) Managing daily employee attendance only
(D) Selecting company slogans

20. Which approach uses a stable workforce and production rate to meet changing demand through inventory or backlogs?
(A) Chase strategy
(B) Level strategy
(C) Outsourcing strategy
(D) Emergency strategy

21. What characterizes a chase strategy in aggregate planning?
(A) Adjusting production capacity to follow changes in demand
(B) Maintaining identical production regardless of demand
(C) Eliminating workforce planning
(D) Keeping inventory permanently unchanged

22. What is the main purpose of distribution network design?
(A) Determining how products will move from production facilities to customers
(B) Selecting employee uniforms
(C) Planning advertising content
(D) Designing office interiors

23. Which distribution model delivers products directly from suppliers or manufacturers to customers without intermediate storage?
(A) Cross-docking
(B) Direct shipping
(C) Central warehousing
(D) Retail storage

24. What is the main purpose of cross-docking?
(A) Transferring incoming goods to outgoing transportation with minimal storage
(B) Keeping products in warehouses for long periods
(C) Increasing inventory holding time
(D) Stopping product movement between facilities

25. Which tool helps organizations evaluate alternative supply chain designs under different conditions?
(A) Supply chain simulation
(B) Employee appraisal
(C) Advertising research
(D) Product labeling

26. What is scenario planning in supply chain management?
(A) Evaluating possible future situations and preparing suitable responses
(B) Repeating the same plan without review
(C) Avoiding uncertainty analysis
(D) Eliminating contingency arrangements

27. What is the bullwhip effect in supply chain planning?
(A) Small changes in customer demand causing larger fluctuations in upstream orders
(B) A permanent reduction in transportation costs
(C) A decrease in product quality during storage
(D) A method of warehouse inspection

28. Which practice helps reduce the bullwhip effect?
(A) Sharing accurate demand information among supply chain partners
(B) Increasing order delays
(C) Hiding inventory information
(D) Placing orders without demand analysis

29. What is the purpose of supply chain design optimization?
(A) Finding an effective balance among cost, service, capacity and performance
(B) Maximizing the number of warehouses regardless of need
(C) Increasing operational waste
(D) Eliminating customer satisfaction measures

30. Why should supply chain plans be monitored and revised regularly?
(A) To respond to changes in demand, supply conditions and business objectives
(B) To avoid performance evaluation
(C) To maintain outdated assumptions
(D) To eliminate coordination among departments