27 real Supply Chain & Costing questions from the Production & Plant bank, as asked in Indian campus drives and tech interviews. Every question has a verified answer and an AI-tutor explanation on placd — free to start.
1. What is Should-cost?
Junior
A.purchase price plus logistics, inventory, quality failures, tooling and obsolescence over the life of the part, not just unit price
B.bottom-up estimate of material, conversion, tooling, overhead and margin built independently of the quote and used to negotiate price
C.identifying, auditing, sampling and PPAP-approving a new supplier, then coaching it to the required quality, cost and delivery level
D.comparing full in-house cost with purchase price while weighing core competency, capacity, quality risk and intellectual property
2. Which term means: "bottom-up estimate of material, conversion, tooling, overhead and margin built independently of the quote and used to negotiate price"?
5. Which term means: "classifying inventory so A items (10–20% of items) hold 70–80% of value and get tight control while C items are managed loosely"?
8. Which term means: "comparing full in-house cost with purchase price while weighing core competency, capacity, quality risk and intellectual property"?
A.Make-or-buy decision — comparing full in-house cost with purchase price while weighing core competency, capacity, quality risk and intellectual property
B.Make-or-buy decision — classifying inventory so A items (10–20% of items) hold 70–80% of value and get tight control while C items are managed loosely
C.Make-or-buy decision — purchase price plus logistics, inventory, quality failures, tooling and obsolescence over the life of the part, not just unit price
D.Make-or-buy decision — amplification of small demand changes into large order swings upstream in a supply chain, driven by batching, forecasting and lead times
A.Reorder point — comparing full in-house cost with purchase price while weighing core competency, capacity, quality risk and intellectual property
B.Reorder point — bottom-up estimate of material, conversion, tooling, overhead and margin built independently of the quote and used to negotiate price
C.Reorder point — inventory level, equal to demand during lead time plus safety stock, at which a replenishment order is released
D.Reorder point — amplification of small demand changes into large order swings upstream in a supply chain, driven by batching, forecasting and lead times
17. Which term means: "identifying, auditing, sampling and PPAP-approving a new supplier, then coaching it to the required quality, cost and delivery level"?
A.Vendor development — classifying inventory so A items (10–20% of items) hold 70–80% of value and get tight control while C items are managed loosely
B.Vendor development — inventory level, equal to demand during lead time plus safety stock, at which a replenishment order is released
C.Vendor development — purchase price plus logistics, inventory, quality failures, tooling and obsolescence over the life of the part, not just unit price
D.Vendor development — identifying, auditing, sampling and PPAP-approving a new supplier, then coaching it to the required quality, cost and delivery level
A.Incoterms 2020 — buffer of Z × σ × √lead time held against demand and supply variability to hit a target service level
B.Incoterms 2020 — bottom-up estimate of material, conversion, tooling, overhead and margin built independently of the quote and used to negotiate price
C.Incoterms 2020 — comparing full in-house cost with purchase price while weighing core competency, capacity, quality risk and intellectual property
D.Incoterms 2020 — ICC trade terms such as EXW, FOB, CIF and DDP that fix where risk, cost and customs duty pass from seller to buyer
23. Which term means: "purchase price plus logistics, inventory, quality failures, tooling and obsolescence over the life of the part, not just unit price"?
A.Total cost of ownership — purchase price plus logistics, inventory, quality failures, tooling and obsolescence over the life of the part, not just unit price
B.Total cost of ownership — ICC trade terms such as EXW, FOB, CIF and DDP that fix where risk, cost and customs duty pass from seller to buyer
C.Total cost of ownership — buffer of Z × σ × √lead time held against demand and supply variability to hit a target service level
D.Total cost of ownership — identifying, auditing, sampling and PPAP-approving a new supplier, then coaching it to the required quality, cost and delivery level
26. Which term means: "amplification of small demand changes into large order swings upstream in a supply chain, driven by batching, forecasting and lead times"?
A.Bullwhip effect — inventory level, equal to demand during lead time plus safety stock, at which a replenishment order is released
B.Bullwhip effect — amplification of small demand changes into large order swings upstream in a supply chain, driven by batching, forecasting and lead times
C.Bullwhip effect — ICC trade terms such as EXW, FOB, CIF and DDP that fix where risk, cost and customs duty pass from seller to buyer
D.Bullwhip effect — classifying inventory so A items (10–20% of items) hold 70–80% of value and get tight control while C items are managed loosely
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