For products where the firm has market power, two-part tariffs can be used to achieve
coordination in the supply chain and maximize supply chain profits.
If price and demand vary over time in a global network, flexible production capacity
can be reconfigured to maximize profits in the new environment.
When faced with seasonal demand, a firm should use a combination of pricing (to
manage demand) and production and inventory (to manage supply) to improve
profitability.
A supply chain needs to achieve a balance between the level of availability and the cost
of inventory that maximizes supply chain revenues.
For physical products, i.e., products that cannot be downloaded, customer requests take
longer to fulfill through online sales than in a retail store setting.
Tailored postponement allows a firm to increase its profitability by only postponing the
uncertain part of the demand and producing the predictable part at a lower cost without
postponement.
Monolithic Lumber has purchased timber from Bunyan Axe, the same wholly-owned
subsidiary, for the last two centuries and plans to do so for another two centuries. It is
crucial that Monolithic continue to demonstrate an agile company scope.
For the same safety inventory, an increase in lot size increases the fill rate but not the
cycle service level.
Simple awareness of what your own electricity consumption is usually reduces a
consumer’s electricity use by between 10% and 15%.
The major drivers of supply chain performance are customers, facilities, inventory,
transportation, and information.
A manufacturer of cat towers wishes to locate a super assembly facility to meet their cat
tower assembly needs for the next millennium. Currently, carpet, cylinders, yarn and
fasteners are purchased in bulk from suppliers in North Haverbrook, Ogden, and
Springfield in the quantities shown in the table. The super assembly facility would ship
to distribution centers located in Seattle, Lubbock, Nashville, and Philadelphia. The
locations of all of these cities on an x-y grid, outbound transportation costs on a ton per
mile basis, and total tonnage are all contained in the table.
What is the optimal location for the Super Assembly Center?
A) (550, 808)
B) (513, 772)
C) (526, 795)
D) (538, 784)
The movement of product from one location to another as it makes its way from the
beginning of a supply chain to the customer’s hands is referred to as
A) transportation.
B) retailing.
C) distribution.
D) manufacturing.
When a firm places orders in lot sizes that are much larger than the lot sizes in which
demand arises,
A) variability of orders is minimized up the supply chain.
B) variability of orders is magnified up the supply chain.
C) suppliers gain better visibility of consumer demand.
D) suppliers gain a more stable demand pattern.
Quantity discounts lower the unit cost
A) but tend to increase the required batch size and as a result, reduce the cycle
inventory.
B) but tend to increase the required batch size and as a result the cycle inventory.
C) and tend to reduce the required batch size and as a result the cycle inventory.
D) and tend to reduce the required batch size and as a result, increase the cycle
inventory.
Which distribution network design is being used when inventory is stored locally at
retail stores and customers walk into the retail store or place an order online or on the
phone and pick it up at the retail store?
A) Manufacturer storage with direct shipping
B) Distributor storage with package carrier delivery
C) Distributor storage with last mile delivery
D) Retail storage with customer pickup
Which approach to aggregation would stock the fast-moving items at decentralized
locations close to the customer and slow-moving items at a centralized location?
A) Information centralization
B) Specialization
C) Product substitution
D) Component commonality
The key players in any transportation that takes place within a supply chain are
A) the shipper and the receiver.
B) the shipper and the supplier.
C) the shipper and the manufacturer.
D) the shipper and the carrier.
The uncertainty of customer demand for a product is the
A) rate of strategic uncertainty.
B) demand uncertainty.
C) implied demand uncertainty.
D) average forecast error.
An third party can increase the supply chain surplus if it has a lower collection cost than
the firm. This is called
A) receivables aggregation.
B) procurement aggregation.
C) information aggregation.
D) relationship aggregation.
The ________ is a good measure of forecast error when the underlying forecast has
significant seasonality and demand varies considerably from one period to the next.
A) MAD
B) MSE
C) MKE
D) MAPE
Geoff strolled into his local big box retailer in search of sunflower seeds for the flock of
cardinals that graced his property during the cold winter. Much to his (and the
cardinals’) dismay, the shelf where the 50 pound bags of sunflower seeds were kept was
bare. He pirouetted and left the store in disgust, empty-handed and fearing the wrath of
an angry flock of cardinals when he returned home. This sad scenario illustrates
A) safety inventory.
B) cycle inventory.
C) a markdown.
D) a lost sale.
When designing a sourcing strategy, it is important for a firm to
A) develop a process that will procure materials at the lowest possible cost.
B) maintain a record of all contracts, receipts, issues and other transactions in the event
of lawsuits.
C) maximize the profitability of the distributors within the supply chain.
D) be clear on the factors that have the greatest influence on performance and target
improvement on those areas.
Retailers of all sizes can explore CPFR as a strategic option, but in order to be scalable,
________ is needed.
A) a process
B) labor
C) money
D) technology
Production can utilize forecasts to make decisions concerning
A) scheduling.
B) sales-force allocation.
C) promotions.
D) budgetary planning.
Which mode of transportation is used primarily for petroleum and natural gas?
A) Air
B) Truck
C) Water
D) Pipeline
What are some opportunities for improved sustainability in various supply chain
drivers?
What factors should be considered when making sourcing decisions?
How does cooperation and trust improve performance in a supply chain partnership?
Discuss the characteristics of a successful multi-echelon supply chain.
Discuss key issues when managing predictable variability of demand within a supply
chain.