Supply Chain Management Midterm Exam Questions Online

Midterms often include a process flow diagram. You might be asked to calculate throughput, identify bottlenecks, or re-sequence tasks.

Question 9 (Bottleneck Analysis) Scenario: A small electronics assembler has three sequential stations:

A) What is the bottleneck? B) What is the system’s maximum throughput per hour? C) If you add a second parallel worker at Station B, what happens to the bottleneck?

Model Answer A: Station B (6 min/unit) is the bottleneck because it has the longest processing time. Answer B: Throughput = 60 minutes / 6 minutes per unit = 10 units per hour. Answer C: Adding a second worker at Station B cuts its effective processing time to 3 min/unit (assuming perfect split). Now, Station C (5 min/unit) becomes the new bottleneck. Throughput rises to 12 units per hour (60/5).

Question 10 (Bullwhip Effect Diagram) Draw a simple four-tier supply chain (Retailer → Wholesaler → Distributor → Factory). Explain how a 5% increase in retail sales can lead to a 40% increase in factory orders. Name two strategies to mitigate this.

Model Answer: The amplification occurs due to: (1) Order batching – each tier rounds up orders to truckload quantities. (2) Price fluctuations – forward buying during discounts. (3) Rationing – if supply is short, customers over-order. Mitigation strategies: (a) Share point-of-sale (POS) data across all tiers. (b) Implement vendor-managed inventory (VMI).

The midterm examination for Supply Chain Management (SCM) is designed to assess your understanding of core concepts, frameworks, and analytical tools covered in the first half of the course. The exam emphasizes both theoretical foundations and practical application in managing the flow of goods, information, and finances across the supply chain.

Q8: Simple Moving Average Given the sales for the last 4 months: Jan (100), Feb (120), Mar (110), Apr (130). Calculate the forecast for May using a 3-month moving average.

Q9: Exponential Smoothing The forecast for June was 500 units. Actual demand in June was 550 units. Use a smoothing constant ($\alpha$) of 0.2 to calculate the forecast for July.

Supply Chain Management midterms test the transition from theoretical knowledge to practical application. Success requires a dual focus: memorizing key definitions and frameworks for essay questions, and mastering the mathematical formulas for inventory and forecasting problems. Students who can link a calculated number (e.g., "High EOQ") back to a strategic implication (e.g., "This reduces ordering costs but increases storage costs") typically perform best.

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Mastering a Supply Chain Management (SCM) midterm requires a blend of conceptual understanding and quantitative precision. This guide covers core topics, typical question formats, and detailed examples to help you prepare effectively. Core Topics for Midterm Preparation

Midterms generally focus on the foundational "pillars" of supply chain management: Planning, Sourcing, Manufacturing, Delivery, and Returns. Key areas often tested include:

Supply Chain Fundamentals: Definitions of SCM, the difference between logistics and supply chain management, and the primary objectives like reducing costs while improving customer service.

Inventory Management: Concepts like Safety Stock, inventory turns, and the Economic Order Quantity (EOQ) model. supply chain management midterm exam questions

Demand Forecasting: The role of demand uncertainty and various forecasting methods (qualitative vs. quantitative).

Network Design: Factors influencing facility location and distribution center optimization.

Sourcing and Procurement: Strategic sourcing, vendor-managed inventory (VMI), and the total landed cost of products.

Logistics and Transportation: Shipment modes (air, truck, water), third-party logistics (3PL), and reverse logistics. Example Multiple-Choice Questions (MCQs)

These are common in the first section of most midterms to test foundational knowledge: What is the "bullwhip effect"? A) The stabilization of production rates.

B) The amplification of demand fluctuations as you move up the supply chain. ✅ C) The reduction of inventory levels. D) Increased collaboration among partners.

Rationale: Small changes in consumer demand can lead to large swings in orders placed with wholesalers and manufacturers.

Which production strategy builds goods only when they are needed? A) Just-in-Time (JIT) ✅ B) Make-to-Stock (MTS) C) Mass Production D) Bulk Ordering

Rationale: JIT focuses on minimizing inventory by aligning production strictly with demand. Which of the following is NOT an inventory holding cost? A) Capital Cost B) Shrinkage Cost C) 3PL Service Cost ✅ D) Storage Cost

Rationale: 3PL costs are typically considered external service fees rather than direct internal holding costs like capital or spoilage. Quantitative Practice Problems

Midterms often include a procedural section where you must calculate specific supply chain metrics. 1. Calculating Total Annual Inventory Cost

An item has an annual demand of 10,000 units. The ordering cost is $50 per order, the unit cost is $100, and the annual carrying cost rate is 25%. If the order quantity is 1,000 units, calculate the total annual cost. Step 1: Calculate Annual Ordering Cost Calculation: Step 2: Calculate Annual Carrying (Holding) Cost Calculation: Step 3: Calculate Total Annual Cost 2. Inventory Turns and Days of Supply

If a company's average inventory was $160,000 and their inventory turnover was 7, what was their Cost of Goods Sold (COGS)? Formula: Calculation: Short Answer & Discussion Questions

These questions test your ability to apply theory to real-world scenarios: Midterms often include a process flow diagram

Question: Why might a company choose to maintain Safety Stock?

Expected Answer: To mitigate demand uncertainty and lead-time variability, ensuring a specific customer service level is met even when supply is delayed or demand spikes.

Question: Discuss the role of RFID technology in modern supply chains.

Expected Answer: RFID improves inventory visibility, reduces manual scanning errors, and enables real-time tracking of goods across the network.

Are you focusing more on the quantitative calculations like EOQ, or do you

What is Supply Chain Management? A Beginner's Guide - MANCOSA

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Supply chain management (SCM) midterm exams typically test your ability to balance cost efficiency with customer service, focusing on the flow of products, information, and funds [31]. Below are core questions categorized by the primary themes of a standard introductory SCM course [5, 21]. 1. Fundamentals and Flow

Define Supply Chain Management: How does it differ from logistics? [5, 18].

Three Key Flows: Name and describe the three flows (Products, Information, and Funds) that move through a supply chain [31].

The Bullwhip Effect: What is the "bullwhip effect," and how can collaborative planning and information sharing reduce it? [6, 18].

Upstream vs. Downstream: Identify the "second-tier supplier" for an end-item manufacturer in a standard chain [19]. 2. Sourcing and Procurement

Make-or-Buy Decision: What factors should a company consider when deciding whether to manufacture a component in-house or outsource it? [12, 19, 20].

Sourcing Strategies: Explain the differences between single, dual, and multiple sourcing. Under what conditions is "sole sourcing" necessary? [20]. A) What is the bottleneck

Total Cost of Ownership (TCO): Beyond the purchase price, what other costs (e.g., acquisition, operational, quality) are included in TCO? [20]. 3. Inventory and Forecasting

Inventory Calculation: If annual demand is 10,000 units, ordering cost is $50/order, and carrying cost is 25% of the $100 unit cost, calculate the Total Annual Cost for an order quantity of 1,000 units [8].

Economic Order Quantity (EOQ): What is the goal of the EOQ model, and which costs does it aim to minimize? [2, 11].

Forecasting Laws: Why are forecasts generally considered "wrong," and why are they still useful for long-term capacity planning? [4].

Safety Stock: Which forecast error metric is traditionally used to calculate safety stock levels? [10]. 4. Operations and Distribution

Lean vs. Responsive: Compare an "efficient" (lean) supply chain with a "responsive" supply chain. Which is better for innovative products? [14, 20].

Warehouse Types: What is the difference between a Consolidation Warehouse and a Breakbulk Warehouse? [19].

Theory of Constraints (TOC): How do you identify and "relieve" a bottleneck in a production process? [11, 12]. 5. Strategy and Performance

The 5 Pillars: Identify the five core stages of SCM: Plan, Source, Make, Deliver, and Return [21, 32, 35].

Facility Location: Using the Weighted Factory Location Model, how would you choose between three sites based on labor costs, currency stability, and proximity to markets? [19].

Supply Chain Metrics: Define Return on Assets (ROA) and explain how inventory turns affect overall profitability [11, 14].

AnswerA typical SCM midterm focuses on the integration of sourcing, making, and delivery, requiring students to solve quantitative problems like EOQ and TCO while explaining qualitative concepts like the Bullwhip Effect and Strategic Fit [2, 18, 20].

Answer hints:

Q3: Compare and contrast "Efficient" vs. "Responsive" Supply Chains. Provide an example of a product suitable for each.

Q4: Define the "Three Flows" in a supply chain.