Strategic Supply Chain Management Practice Exam

Which of the following is NOT a decision included in Phase 2 of supply chain management?

1. Subcontracting manufacturing

2. Allocating inventory to individual orders

3. Optimizing flexibility

4. Timing and sizing of promotions

The correct answer is: Allocating inventory to individual orders

Phase 2 of supply chain management primarily focuses on planning and executing the supply chain's operational strategies, where various tactical decisions are made regarding how resources are allocated and managed. Among the decisions typically found in this phase, optimizing flexibility, subcontracting manufacturing, and the timing and sizing of promotions are all integral to managing supply chain operations effectively. For instance, subcontracting manufacturing involves deciding when to outsource production to meet demand without overextending internal resources. Optimizing flexibility encapsulates how a supply chain can adapt to changes in demand or supply conditions, while timing and sizing of promotions are crucial for aligning inventory with anticipated market demands. Allocating inventory to individual orders, however, is more operational and often occurs in the context of executing orders rather than as a strategic decision in the planning phase of supply chain management. This particular task is generally part of the fulfillment process, where inventory is distributed based on immediate demand rather than determined through strategic planning decisions characteristic of Phase 2. This distinction highlights why allocating inventory to individual orders does not align with the higher-level strategic focus of Phase 2.