- What is the primary goal of cost management in supply chains?A) To increase inventory levels
B) To minimize overall supply chain costs while maximizing efficiency and value
C) To expand market reach
D) To enhance employee satisfaction
Answer: B) To minimize overall supply chain costs while maximizing efficiency and value
- Which of the following is a key component of ‘Cost Analysis’ in supply chain management?A) Evaluating the cost of marketing campaigns
B) Assessing and comparing the costs of various supply chain activities and processes
C) Calculating employee bonuses
D) Determining product design costs
Answer: B) Assessing and comparing the costs of various supply chain activities and processes
- What does ‘Activity-Based Costing’ (ABC) help to identify in supply chain management?A) The total revenue generated by the supply chain
B) The specific costs associated with individual activities and processes, providing a more accurate view of cost drivers
C) The market share of the company
D) The number of suppliers used
Answer: B) The specific costs associated with individual activities and processes, providing a more accurate view of cost drivers
- What is ‘Cost-to-Serve’ and why is it important?A) The cost associated with providing customer service; important for evaluating the profitability of different customer segments
B) The cost of manufacturing products; important for setting prices
C) The cost of warehousing; important for inventory management
D) The cost of marketing products; important for sales strategies
Answer: A) The cost associated with providing customer service; important for evaluating the profitability of different customer segments
- How does ‘Just-In-Time’ (JIT) inventory management contribute to cost management?A) By increasing inventory levels to prevent stockouts
B) By reducing inventory holding costs through the timely arrival of materials and products
C) By expanding storage facilities
D) By increasing production lead times
Answer: B) By reducing inventory holding costs through the timely arrival of materials and products
- What is the purpose of ‘Total Cost of Ownership’ (TCO) in cost management?A) To evaluate the initial purchase price of goods only
B) To assess all costs associated with acquiring, using, and disposing of a product over its entire lifecycle
C) To focus solely on the cost of production
D) To analyze marketing expenses
Answer: B) To assess all costs associated with acquiring, using, and disposing of a product over its entire lifecycle
- Which of the following can be considered a fixed cost in supply chain management?A) Cost of raw materials
B) Cost of transportation
C) Lease payments for warehouse space
D) Cost of packaging materials
Answer: C) Lease payments for warehouse space
- What does ‘Cost Variance’ refer to in supply chain cost management?A) The difference between the budgeted cost and the actual cost incurred
B) The variation in production quality
C) The fluctuation in market demand
D) The change in supplier prices
Answer: A) The difference between the budgeted cost and the actual cost incurred
- What is ‘Procurement Cost Management’?A) The process of reducing costs related to the acquisition of goods and services through strategic sourcing and negotiation
B) The management of marketing expenses
C) The control of production costs
D) The assessment of customer service costs
Answer: A) The process of reducing costs related to the acquisition of goods and services through strategic sourcing and negotiation
- Which strategy can help in managing logistics costs effectively?A) Centralizing all warehousing and distribution operations
B) Reducing transportation routes and optimizing delivery schedules
C) Increasing the number of suppliers
D) Expanding the number of distribution centers
Answer: B) Reducing transportation routes and optimizing delivery schedules