Firms focusing on cost leadership tend to find the lowest cost location for their
manufacturing facilities, but only if that means locating very far from the markets they
serve.
To extract the maximum benefit from the online channel for physical goods, firms
should keep it separate from their existing supply chain networks.
Reduction of fixed cost may be achieved by aggregating lots across multiple products,
customers, or suppliers.
Appropriate flexibility is an effective approach for a global supply chain to deal with a
variety of risks and uncertainties. Extra flexibility is always worth the cost.
Revenue management adjusts the pricing and available supply of assets to maximize
profits.
Safety inventoryis inventory carried for the purpose of satisfying demand that exceeds
the amount forecasted for a given period.
The basic trade-off to consider during overbooking is between having wasted capacity
(or inventory) because of few cancellations or having a shortage of capacity (or
inventory) because of excessive cancellations.
Leaders in many supply chains have started moving toward collaborative forecasting to
improve their ability to match supply and demand.
The goal of optimization is to use forecasts of customer behavior to identify a revenue
management tactic that will be most effective.
Average flow time resulting from cycle inventory = Cycle Inventory/Demand = Q/2D.
Outbound transportation costs per unit tend to be lower than inbound costs, because
inbound lot sizes are typically larger.
Strategic planning and financial planning should be combined during supply chain
network design.
Milk runs reduce outbound transportation costs by consolidating large shipments.
Only niche companies will end up using a single distribution network.
Allocating too much capacity to a location results in
A) poor utilization, and as a result, higher costs.
B) high utilization, and as a result, higher costs.
C) poor utilization, and as a result, lower costs.
D) high utilization, and as a result, lower costs.
Bahouth Ltd. is planning for the next two years of production and debating whether to
construct a large cross-dock facility with 40 truck bays or a smaller one with 20 truck
bays. The cost to build the large facility is $2 million and the cost to build the small one
is $1.2 million. If they construct a large facility and demand is as high as they hope,
then operating costs are $450,000 annually. If they construct a large facility and demand
is low, then operating costs are $300,000. If they construct a small facility and demand
is low, the operating costs are $275,000 but if they experience high demand, the
operating cost of a small facility increases to $600,000. After having conducted some
market research, they feel that the likelihood of high demand is 0.7 and the likelihood
of small demand is 0.3.
Use the information from Scenario 6.1 to determine the cost of the best alternative for a
two year period.
A) $2,000,000
B) $1,200,000
C) $2,205,000
D) $2,810,000
Much of the actual cost of recycling or remanufacturing is directly linked to:
A) the repair.
B) the logistics.
C) the production.
D) the design.
Seven-Eleven in Japan’s operations and distribution strategy focuses on
A) convenience in the form of easy access to stores.
B) constantly adding new products and services.
C) low cost for gasoline, which drives traffic to the store.
D) being responsive and having an excellent information infrastructure.
________ allows a firm to increase profits and better match supply and demand if the
firm produces a large variety of products whose demand is unpredictable, not positively
correlated, and is of about the same size.
A) Shortened forecasting window
B) Quick response
C) Postponement
D) Tailored sourcing
One of the characteristics of forecasts is
A) aggregate forecasts are usually less accurate than disaggregate forecasts.
B) disaggregate forecasts are usually more accurate than aggregate forecasts.
C) short-term forecasts are usually less accurate than long-term forecasts.
D) long-term forecasts are usually less accurate than short-term forecasts.
Supply chains can influence demand by using
A) production capacity and inventory.
B) pricing and other promotions.
C) price promotions and inventory.
D) production capacity and inventory promotions.
Improperly structured sales force incentives
A) help create stable demand.
B) have very little effect on the timing of customer orders.
C) tend to create spikes in customer orders.
D) ensure that orders are quickly and accurately entered and communicated to other
affected supply chain processes.
________ forecasting methods are primarily subjective and rely on human judgment.
A) Qualitative
B) Time-series
C) Causal
D) Simulation
Walmart reported that in California, over ________ percent of waste has been diverted
from landfills and made into something else that produces revenue.
A) 25
B) 40
C) 60
D) 80
The lack of coordination within a supply chain will result in a decrease in
A) manufacturing cost.
B) inventory cost.
C) replenishment lead time.
D) level of product availability.
The level of product availability, also referred to as the ________, is one of the primary
measures of a supply chain’s responsiveness.
A) no stock out level
B) reliability level
C) customer service level
D) logistics measure
Mickey the manager reviewed his company’s customers’ orders for the past year and
compared the variability of those orders with the variability of the orders he placed with
his suppliers. This comparison allowed him to estimate his own company’s contribution
to
A) the forecast.
B) supply chain surplus.
C) market demand.
D) the bullwhip effect.
Leaders in many supply chains have started moving
A) toward independent forecasting to improve their ability to match supply and
demand.
B) toward consecutive forecasting to improve their ability to match supply and demand.
C) toward sequential forecasting to improve their ability to match supply and demand.
D) toward collaborative forecasting to improve their ability to match supply and
demand.
The operational parameter concerned with the number of units completed per unit time
(such as per week or per month) is
A) production rate.
B) workforce.
C) overtime.
D) backlog.
Which approach to capacity management makes use of spare plant capacity that exists
in the form of hours when the plant is not operational?
A) Time flexibility from workforce
B) Use of seasonal workforce
C) Use of subcontracting
D) Use of dual facilities-dedicated and flexible
Historical demand for Peeps is as displayed in the table.
The measure of forecast error where the amount of error of each forecast is squared and
then an average is calculated is
A) mean squared error (MSE).
B) mean absolute deviation (MAD).
C) mean absolute percentage error (MAPE).
D) the tracking signal.