Certified Production & Operations Manager (POM) Practice Exam

What is a global network of organizations and activities that supply a firm with goods and services?

1. Supply chain

2. Value chain

3. Distribution network

4. Logistics system

The correct answer is: Supply chain

The correct answer is the supply chain, which refers to the comprehensive network of organizations, people, activities, information, and resources that are involved in the creation and delivery of a product or service. It encompasses everything from the initial sourcing of raw materials to the final delivery of the finished product to the customer. In this context, the supply chain includes suppliers, manufacturers, transporters, warehouses, retailers, and ultimately, the end consumers. The efficient management of the supply chain is crucial for firms to maximize efficiency, reduce costs, and improve customer satisfaction. The other options represent different components of the business process. The value chain focuses on the series of activities that add value to a product, from inception to delivery. The distribution network emphasizes the methods and channels used to distribute products, while the logistics system deals specifically with the transportation, warehousing, and inventory management aspects of getting goods to their final destination. Therefore, while these terms are related, they do not encompass the full breadth of what a supply chain entails.