1. When relocating production offshore, volatility in which of the following areas most likely would impact profitability without modifying product landed costs?

A) Labor costs
B) Currency exchange rates
C) Commodity prices
D) Product quality



2. Variability in product design can best be reduced by:

A) initiating 100% product inspection.
B) outsourcing the design process.
C) broadening design specifications.
D) applying Six Sigma principles.



3. Which of the following factors is most likely to slow the adoption of collaborative planning, forecasting, and replenishment (CPFR)?

A) The reluctance to share detailed information
B) The cost of electronic data interchange services
C) The risk that changed processes will disrupt operations
D) The risk of security breaches



4. A manufacturer experiences frequent changes in product technology and market preferences, resulting in new product introductions each year. Which of the following sourcing strategies would be most appropriate?

A) Sole sourcing
B) Multiple sourcing
C) Long-term contracting
D) Strategic partnering



5. Which of the following statements describes a continuous replenishment strategy in a retail environment?

A) Retailers make replenishment decisions.
B) Retailers prepare individual orders and share sales data with vendors to improve customer service.
C) Vendors use sales data and prepare shipments to maintain the desired level of inventory.
D) Vendors take full control of inventory policy.