APICS CSCP Exam Questions

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181.

What does a business plan contain?

  • Long-term business strategies

  • Plans for the tactical level

  • Roll-out processes for new products

  • Operational business processes

Correct answer: Long-term business strategies

The business plan contains long-term strategies. A business plan provides an organization its long-range strategy for meeting its objectives. A business plan generally contains key functions, such as finance, engineering, marketing, and operations.

Plans for the tactical level are documented in the program plan. Roll-out processes for new products are documented in the organization's procedures. Operational business processes are documented in the organization's policy and procedure manual.

182.

Which Project Management Body of Knowledge (PMBOK® Guide) Process Group delivers the final product to the customer and finalizes administrative tasks?

  • Closing

  • Planning

  • Executing

  • Monitoring and Controlling

Correct answer: Closing

The PMBOK® Guide’s Closing Process Group includes delivering the final product to the customer and finalizing administrative tasks. The Process Groups identified in the PMBOK® Guide include Initiating, Planning, Executing, Monitoring and Controlling, and Closing.

The PMBOK® Guide’s Planning Process Group includes the selection of detailed requirements and scope, the refinement of objectives, and the statement of what activities are required to meet the objectives.

The PMBOK® Guide’s Executing Process Group includes the completion of project objectives and the gathering of data for later analysis.

The PMBOK® Guide’s Monitoring and Controlling Process Group includes the tracking, reviewing, and controlling of project performance; the identification of required plan changes; the initiation of necessary changes; and the verification that the project deliverables meet the project objectives.

183.

A tree diagram is a continuous improvement tool used for which of the following?

  • Defining tasks and activities in more specific detail

  • Organizing ideas gathered from brainstorming activities

  • Showing relationships between data sets

  • Identifying actions that should be used to avoid mishaps as progress is made toward the desired result

Correct answer: Defining tasks and activities in more specific detail

A tree diagram is a continuous improvement tool used for defining tasks and activities in more specific detail.

An affinity diagram is a continuous improvement tool used for organizing ideas gathered from brainstorming activities. A matrix diagram and a matrix data analysis chart are continuous improvement tools used to show relationships between data sets. A process decision program chart is a continuous improvement tool used for identifying actions that should be used to avoid mishaps as progress is made toward the desired result.

184.

Component commonality and universality are types of which of the following?

  • Standardization

  • Modularization

  • Simplification

  • Customization

Correct answer: Standardization

Component commonality and universality are types of standardization.

The APICS Dictionary, 15th Edition, defines standardization as “the process of designing and altering products, parts, processes, and procedures to establish and use standard specifications for them and their components.” Component commonality is when one part can be used to replace multiple similar parts. The APICS Dictionary, 15th Edition, defines universality as “the strategy of designing a product initially intended for one market in such a way that it can also be sold in other markets.”

The APICS Dictionary, 15th Edition, defines modularization as “the use of standardized parts for flexibility and variety.” The APICS Dictionary, 15th Edition, defines simplification as “improving quality and cutting costs by removing complexity from a product or service.” Customization is the design of products to meet the customer’s specific needs.

185.

Which inventory cost is figured as a percentage of the inventory value per unit of time?

  • Carrying cost

  • Acquisition cost

  • Landed cost

  • Ordering cost

Correct answer: Carrying cost

Carrying cost is the inventory cost that is figured as a percentage of the inventory value per unit of time. Carrying costs include the housing and holding costs of inventory, such as storage costs, capital costs, and risk costs.

Acquisition cost is the inventory cost that is incurred when a unit of an item is obtained. Landed cost is the inventory cost that includes the cost of the product along with the cost of warehousing, transportation, and handling fees. Ordering cost is the inventory cost that is incurred when placing requisitions.

186.

Most export transactions do not require specific approval in the form of licenses from the U.S. government. In fact, a relatively small percentage of all U.S. export transactions require licenses from the U.S. government.

Who is responsible for export compliance?

  • The exporter

  • The importer

  • The manufacturer

  • The end user

Correct answer: The exporter

An export license is a government document that authorizes the export of specific goods in specific quantities to a particular destination. This document may be required for most or all exports to some countries under embargo or other countries only under special circumstances (high value, suspicious end-use, or end-user). Import/export regulations are complex. It is the responsibility of the exporter to ensure export compliance by contacting the U.S. Census Bureau or equivalent government agency in his/her country when in doubt.

187.

In a time of extreme capacity limitations, vessel operators will actually open up a competing forum for shippers. Typically, whomever can offer the highest price for the space will get the space. What type of auction is this?

  • Classic auction

  • Reverse auction

  • Dutch auction

  • Demand auction

Correct answer: Classic auction

A Classic auction is where one seller has multiple buyers competing for the same products and the highest bidder wins. A reverse auction has multiple sellers competing for the same buyer; in this case, usually a combination of the best quality and lowest price wins the sale. A Dutch auction also has one seller and multiple buyers, but the seller will set a price and lower it until one of the buyers accepts the price. A demand auction has multiple sellers and buyers where the buyer can offer a price and one of the sellers may or may not accept it.

188.

Tina is looking to install some new florescent lighting in her manufacturing facility.  he got a bid for $1000 to outfit the distribution area, which she decided to accept. During the installation, the contractor said that he could actually install LED lights that had motion sensors on them. It would cost her $1500 for the installation, but in the long run the energy savings would make up for it. How is this example best defined?

  • Up-selling

  • Cross-selling

  • Supply chain lead time

  • Time horizon

Correct answer: Up-selling 

Up-selling is when a customer is offered a more expensive product or service than they originally intended on buying, like getting an upgraded version of a car, or the next expensive model. Supply chain lead time is the time it takes for a customer order to be completed without consideration for existing stock. Cross-selling is offering an item or service that compliments a customer's initial purchase, like selling an oil change and a car wash. A time horizon is how far out into the future a company plans, usually for a forecast or inventory planning levels; a longer time horizon satisfies more customers with an increased order fill rate. 

189.

The compliance team of a firm that is sourcing raw materials from multiple continents may need to review their supply chain for what?

  • Conflict minerals

  • Supply chain resilience 

  • Churn

  • Dangerous goods

Correct answer: Conflict minerals

Conflict minerals are mined in conditions of armed conflict and human rights abuses and are sold or traded by armed groups. Compliance teams would want to review if conflict materials may be in the supply chain to make sure they comply with regulations like the European Union's Conflict Minerals Regulation. 

The compliance team may not need to be involved directly with supply chain resilience (the ability to adapt). Churn is related to inventory, and it is the process of customers changing their buying preferences because they find better and/or cheaper products and services elsewhere. Dangerous goods, or hazardous materials, are items or materials that require safety precautions and special handling. 

190.

An organization must learn to manage four supply chain processes to control risk. They are: 

  • Identifying risks, assessing and classifying risks, developing a risk response plan, and executing the risk response plan

  • Identifying risks, mitigating risks, avoiding risks, execution

  • Risk exposure, risk identification, mitigation, review

  • Risk review, risk tolerance, risk assessment, risk management

Correct answer: Identifying risks, assessing and classifying risks, developing a risk response plan, and executing the risk response plan

Identifying risk is the first step, which may involve brainstorming and putting together a risk register. 

In the second step, risks are assessed, classified, and risk category codes are assigned. A time horizon is also established. 

In the third step, developing a risk response plan, each risk is documented in a standard format showing root cause, the triggering event, impact on the organization, and overall effect on the supply chain.

In the fourth step, the plan is executed. 

191.

When defining the cost of quality, internal failure costs are which of the following?

  • The costs that are “associated with defects found before the customer receives the product or service”

  • The costs that are “associated with defects found after the customer receives the product or service”

  • The costs that are “incurred to determine the degree of conformance to quality requirements”

  • The costs that are “incurred to keep failure and appraisal costs to a minimum”

Correct answer: The costs that are “associated with defects found before the customer receives the product or service”

When defining the cost of quality, the APICS Dictionary, 15th Edition, refers to internal failure costs as being the costs that are “associated with defects found before the customer receives the product or service.” The costs associated with the cost of quality include internal failure costs, external failure costs, appraisal costs, and prevention costs.

When defining the cost of quality, the APICS Dictionary, 15th Edition, refers to external failure costs as being the costs that are “associated with defects found after the customer receives the product or service.” When defining the cost of quality, the APICS Dictionary, 15th Edition, refers to appraisal costs as being the costs that are “incurred to determine the degree of conformance to quality requirements.” When defining the cost of quality, the APICS Dictionary, 15th Edition, refers to prevention costs as being the costs that are “incurred to keep failure and appraisal costs to a minimum.”

192.

Which of the following does not describe a possible use for a Bill of Lading?

  • Indicate the amount of money exchanged between a supplier and a buyer

  • Act as a contract of carriage between a shipper and carrier

  • Act as a document to transfer ownership of goods

  • Act as a receipt of goods

Correct answer: Indicate the amount of money exchanged between a supplier and a buyer

A bill of lading can be used for many things, such as a contract of carriage between shipper and carrier, act as a document to transfer title, act as a goods receipt, and act as a reference to verify claims for missing items on a shipment.  A Bill of Lading does not indicate any amount of money exchanged between a supplier and a buyer. 

193.

An online e-commerce business like Amazon or Target will typically engage in transactions that go to the end user, rather than going to another company for further processing or use. They will use analytics including past sales of certain items and forecasts of those items in order to know what to stock. What type of commerce does this describe?

  • Business to Consumer

  • Business to Business

  • Wholesale transactions

  • General commerce

Correct answer: Business to Consumer

Business to Consumer sales is where a business will sell directly to the end user. Business to business commerce is a sale from one business to another. A wholesale transaction would typically only be a business to business sale, and general commerce is just a term for any sale. 

194.

There are three types of business strategies organizations use to remain competitive in the market. If an organization invests in new technology in order to underbid its competitor and gain a service contract, which strategy is the organization using?

  • Low-cost advantage strategy

  • Differentiation advantage strategy

  • Focus advantage strategy

  • Touch-point strategy

Correct answer: Low-cost advantage strategy

The low-cost advantage strategy is used when organizations make a large capital investment in new technology in order to control and reduce costs, standardize services, and aim their service offerings at cost-conscious customers. Therefore, if an organization invested in new technology to underbid its competitor to gain a service contract, it used the low-cost advantage strategy.

The differentiation advantage strategy is used when organizations create a unique service. The focus advantage strategy is used when organizations serve narrow target markets or a niche instead of an entire market. Touch-point strategy is not one of the three types of business strategies organizations use to remain competitive in the market.

195.

Supply chain cycle time is a customer-focused metric associated with the time needed to deliver customer order attribute that measures which of the following?

  • The time it takes to fulfill a customer order when inventory levels are zero

  • The time it takes from when an order is placed to when the order is delivered and ready for use

  • The capability to meet unplanned requests from customers

  • The ability to obtain an out-of-stock item from an alternate resource

Correct answer: The time it takes to fulfill a customer order when inventory levels are zero

Supply chain cycle time is a customer-focused metric associated with the time needed to deliver customer order attribute that measures the time it takes to fulfill a customer order when inventory levels are zero. The five time needed to deliver customer order metrics that are measured due to the importance to customers are speed of performance, supply chain cycle time, delivery consistency, flexibility, and malfunction recovery. Four customer-focused attributes have metrics assigned to them, which are availability, time needed to deliver customer order, product support, and overall satisfaction.

Speed of performance is a customer-focused metric associated with the time needed to deliver customer order attribute that measures the time it takes from when an order is placed to when the order is delivered and ready for use. Flexibility is a customer-focused metric associated with the time needed to deliver customer order attribute that measures the capability to meet unplanned requests from customers. Malfunction recovery is a customer-focused metric associated with the time needed to deliver customer order attribute that measures the ability to obtain an out-of-stock item from an alternate resource.

196.

What does the International Organization for Standards do?

  • Develop voluntary, market-driven international standards

  • Develop mandatory government regulations of goods

  • Set Incoterms, such as EXW and FOB

  • File customs entry documents and pay import duties

Correct answer: Develop voluntary, market-driven international standards

The International Organization for Standards (ISO) is an international standards development organization composed of representatives from national standards organizations of member countries. ISO standards themselves are not mandatory unless a government agency adopts them as a mandatory standard. 

Incoterms are set by the International Chamber of Commerce and define liability between a seller and buyer. 

Customs brokers support in filing customs entries and paying duties. 

197.

Flexibility is one of the customer service measures organizations assess. This customer service measure assesses which of the following?

  • Reaction to changes made to customer orders

  • Reaction to information requests

  • Resolution of customer service issues

  • Deliverance of operating information

Correct answer: Reaction to changes made to customer orders

Flexibility is the customer service measure that assesses the reaction to changes made to customer orders.

Response is the customer service measure that assesses the reaction to information requests. Recovery is the customer service measure that assesses the resolution of customer service issues. Post-sales support is the customer service measure that assesses the deliverance of operating information.

198.

The ABC inventory classification with a classic Pareto analysis states that Class B inventory items would determine which of the following?

  • 15% of the inventory value resides in 30% of the products

  • 5% of the inventory value resides in 50% of the products

  • 20% of the inventory value resides in 80% of the products

  • 80% of the inventory value resides in 20% of the products

Correct answer: 15% of the inventory value resides in 30% of the products

The ABC inventory classification with a classic Pareto analysis states that Class B inventory items would determine 15% of the inventory value resides in 30% of the products. Inventory items with a Class B classification have the second highest value in regard to annualized monetary volume.

The ABC inventory classification with a classic Pareto analysis states that Class A inventory items would determine that 80% of the inventory value resides in 20% of the products. The ABC inventory classification with a classic Pareto analysis states that Class C inventory items would determine 5% of the inventory value resides in 50% of the products. 20% of the inventory value resides in 80% of the products is incorrect because it does not describe Class A, B, or C.

199.

HI-Tech Inc, a US-based company that manufactures bionic prosthetics for Tony Stark, has decided to move production of their rotating wrist canon to their new factory in Madagascar to take advantage of the lower labor structure and tax shelters. What is Hi-Tech doing to their manufacturing? 

  • Offshoring

  • Insourcing

  • Outsourcing

  • Strategic sourcing

Correct answer: Offshoring

Offshoring is when a company moves its manufacturing to a different country, usually to take advantage of lower material costs and labor rates. Insourcing is when a company looks at its own internal resources to provide a service or manufacture a product. Outsourcing is when any other company makes a product or provides a service which was previously handled by the original firm. Strategic sourcing is when companies enter into more formalized relationships with suppliers, allowing more collaboration, better relationships and form alliances.  

200.

A business model consists of a business strategy, which outlines how a business plans on growing, distinguishing itself, achieving superior performance, and having a competitive edge. Which of the following hybrid business strategies bases competition on cost and quality?

  • Best cost

  • Low cost

  • Broad differentiation

  • Focused differentiation

Correct answer: Best cost

Best cost is the hybrid business strategy based on competition, cost, and quality. The best cost strategy tries to deliver customers the best value at a low price.

The low-cost strategy is incorrect because cost is the only basis for competition in this strategy. Broad differentiation is incorrect because customer experience and/or quality are the basis for competition in this strategy. Focused differentiation is incorrect because niche marketing and innovation are the basis for competition in this strategy.