The supply chain planning phase exceeds the supply chain design phase in duration.
The goal when making the overbooking decision is to maximize supply chain profits by
minimizing the cost of wasted capacity and the cost of capacity shortage.
Raising the level of safety inventory increases product availability and thus the margin
captured from customer purchases.
The rate of return k is also referred to as the present value of capital.
All supply chain activities within a firm belong to one of three macro processes – CRM,
ISCM and SRM.
Forecasts should include both the expected value of the forecast and a measure of
forecast error.
The value of flexibility increases with an increase in uncertainty.
Long-term forecasts have a larger standard deviation of error relative to the mean than
short-term forecasts.
In case demand in different geographical regions is about the same size and
independent, aggregation increases safety inventory by the square root of the number of
areas aggregated.
Compared to a business with many retail outlets, an online seller with aggregated
inventories tends to have lower per unit transportation costs across the entire supply
chain.
The allocation of supply sources and markets to facilities has a significant impact on
performance because it affects total production, inventory, and transportation costs
incurred by the supply chain to satisfy customer demand.
Forecasting errors are dealt with in aggregate plans using either safety backlog or safety
capacity.
Measuring performance based on sell-through is often justified on the grounds that the
manufacturer’s sales force does not control sell-in.
Which of the following determines the nature of procurement of raw materials,
transportation of materials to and from the company, manufacture of the product or
operation to provide the service, and distribution of the product to the customer along
with follow-up service?
A) Competitive strategy
B) Product development strategy
C) Marketing and sales strategy
D) Supply chain strategy
In the textbook, a detailed analysis by Abbott indicated that their indirect emissions
were about ________ times their direct emissions.
A) 1 to 5
B) 6 to 14
C) 15 to 19
D) 20 to 22
The total amount paid to various carriers for transporting products to customers is
A) transportation cost.
B) inventory cost.
C) facility cost.
D) processing cost.
Inexpensive and inflexible transportation modes tend to
A) perform poorly.
B) perform very poorly when plans change.
C) perform well when everything goes as planned.
D) all of the above
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.
A firm may choose to build a flexible global supply chain even in the presence of little
demand or supply uncertainty if
A) certainty exists in both exchange rates and prices.
B) certainty exists in exchange rates or prices.
C) uncertainty exists in both exchange rates and prices.
D) uncertainty exists in exchange rates or prices.
Which of the following would be a disadvantage of manufacturer storage with direct
shipping?
A) The ability to reduce cost of inventory by centralizing inventories at the
manufacturer.
B) The manufacturer has to postpone customization until after the customer order has
been placed.
C) Supply chains have to eliminate other warehousing space to save on the fixed cost of
facilities.
D) Response times tend to be large because the order has to be transmitted from the
retailer to the manufacturer and shipping distances are on average longer from the
manufacturer’s centralized site.
Why would anyone in their right mind buy a brand new car in the spring when they
know that new car models will appear in late summer and early fall and the dealers will
use
A) markdowns to move that old inventory?
B) information systems to move that old inventory?
C) pull systems to move that old inventory?
D) lost sales to move that old inventory?
Postponement is valuable for a firm that
A) sells a large variety of products with demand that is dependent and comparable in
size.
B) sells a large variety of products with demand that is independent and comparable in
size.
C) sells a small variety of products with demand that is dependent and comparable in
size.
D) sells a small variety of products with demand that is independent and comparable in
size.
________ forecasting methods use historical demand to make a forecast.
A) Qualitative
B) Time-series
C) Causal
D) Simulation
Walmart reduced its energy consumption by
A) adding skylights for natural light.
B) reducing packaging.
C) milk jug redesign.
D) better transportation routing of trucks.
Which of the following defines the set of customer needs that a company seeks to
satisfy through its products and services?
A) Competitive strategy
B) Product development strategy
C) Marketing and sales strategy
D) Supply chain strategy
Which distribution network design is being used when inventory is stored at the
manufacturer or distributor warehouse but customers place their orders online or on the
phone and then come to designated pickup points to collect their orders?
A) Manufacturer storage with direct shipping
B) Manufacturer/distributor storage with customer pickup
C) Distributor storage with package carrier delivery
D) Distributor storage with last mile delivery
The strategy where a stable machine capacity and workforce are maintained with a
constant output rate, with inventory levels fluctuating over time, is the
A) adjustable strategy.
B) chase strategy.
C) level strategy.
D) mixed strategy.
________ can be used to assess the environmental impacts associated with a product’s
life from cradle to grave.
A) CRM
B) SRM
C) LCA
D) MRP
As Adam Smith put it so eloquently in the Wealth of Nations, “If a foreign country can
supply us with a commodity cheaper than we ourselves can make it,…
A) …it is only right that we should learn their method of production, so that we too can
master the commodity…”
B) …then we would be well-served to include them in our supply chain…”
C) …better buy it from them with some part of our own industry…”
D) …we should barter with them or take it by force if they prove to be unreasonable…”