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APICS Certified Supply Chain Professional Questions 554–558 (page: 63)

Updated On: 1-Feb-2026

A company evaluating supply chain options compares the lower costs associated with moving to a geographically distant area to the increased costs associated with achieving smooth, consistent, and timely flow of material. The company is determining:

  1. total cost of ownership (TCO).
  2. direct and indirect cost alignment.
  3. complete cost considerations.
  4. full-cost evaluation.

Answer(s): D



Which of the following tools would best aid a company in selecting new site locations for manufactured and distributed stock keeping units (SKUs)?

  1. Distribution requirements planning (DRP)
  2. Reorder point (ROP) system
  3. Transportation management system (TMS)
  4. Network optimization

Answer(s): C



Which of the following circumstances reflects a firm that may consider reshoring to reduce the risk of intellectual property theft?

  1. A textile firm concerned with product quality
  2. A pharmaceutical firm concerned with counterfeit products
  3. An oil firm concerned with political instability
  4. A financial services firm concerned with cyberattacks

Answer(s): B



Which of the following outcomes is most likely to result when lot size increases?

  1. Setup costs will increase.
  2. Inventory carrying cost will increase.
  3. Operating expenses will increase.
  4. Total profit will increase.

Answer(s): B



A key factor for determining the size of a new warehouse is:

  1. the number of forklifts required to perform material handling operations.
  2. understanding the inventory and throughput requirements necessary.
  3. the minimum square feet required to receive local tax breaks.
  4. utility and other overhead costs for the facility.

Answer(s): B



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