Effective sourcing processes within a firm can improve profits for the firm and total
supply chain surplus in a variety of ways.
The present value of a stream of cash flows is what that stream is worth in today’s
dollars.
Inventory is an important supply chain driver because changing inventory policies can
dramatically alter the supply chain’s efficiency and responsiveness.
The amount of the asset reserved for the higher price segment is such that the expected
marginal revenue from the higher priced segment is less than the price to the lower
price segment.
The objective of the customer arrival process is to ensure that orders are quickly and
accurately entered and communicated to other affected supply chain processes.
When performing aggregate planning, the goal of all firms in the supply chain should
be to maximize individual firm profits.
A customer does not necessarily want the highest level of performance along all
dimensions of customer service, including response time, product variety, product
availability, customer experience, order visibility, and returnability.
The objective of customer order fulfillment is to
A) get the correct orders to customers by the promised due date at the lowest possible
cost.
B) maintain a record of product receipt and complete payment.
C) maximize the conversion of customer arrivals to customer orders.
D) ensure that orders are quickly and accurately entered and communicated to other
affected supply chain processes.
When infrastructure is publicly owned, it is important to price usage to reflect
A) the cost of rebuild the infrastructure once it is fully depreciated.
B) the incremental profit from the use of the infrastructure.
C) the marginal impact on the cost to society.
D) the market clearing price.
One key to successful collaboration when the supply chain is performing aggregate
planning is
A) determining how losses will be allocated to different members of the supply chain.
B) determining how profits will be allocated to different members of the supply chain.
C) determining how labor will be allocated to different members of the supply chain.
D) determining how customers will be allocated to different members of the supply
chain.
At a train station where lines intersect, the Mumbai dabbawalas perform
A) a forward logistics function.
B) a reverse logistics function.
C) a milk run.
D) a cross-dock function.
A contract that is used to induce performance improvement from a supplier along
dimensions, such as lead time, where the benefit of improvement accrues primarily to
the buyer, whereas the effort for improvement comes primarily from the supplier is a
A) buyback or returns contract.
B) revenue-sharing contract.
C) quantity flexibility contract.
D) shared savings contract.
The taco stand in the atrium of the new College of Business building carried two items,
fish tacos and chicken tacos. The fish tacos sell for $15 and are made out of $5 of
ingredients and the chicken tacos sell for $10 and are made out of $4 of ingredients.
Some days the taco stand owner has only chicken at his disposal, so he makes nothing
but chicken tacos, and some days the opposite is true and he makes only fish tacos.
Thus, he is able to estimate demand for chicken tacos at 2500 per day with a standard
deviation of 600 and the demand for fish tacos at 2000 per day with a standard
deviation of 500. Any fish or chicken tacos that do not sell at the end of the day can be
sold for $1 each as bait. On days when both proteins are available, the taco stand
manager prefers to make a few of each kind. All tacos are made in his home kitchen and
then transported to campus. Due to time constraints and the capacity of his pickup truck
bed, he is limited to beginning each day with only 3000 tacos.
Faced with a 3000 taco capacity constraint, what is the optimal number of chicken tacos
to prepare?
A) 2758
B) 1736
C) 1264
D) 2500
________ has always worked hard to design products that can be shipped flat to
achieve high volume and weight density during transportation. As a result, the company
not only lowers its transportation costs, it also reduces emissions and energy use.
A) Walmart
B) IKEA
C) 3M
D) Procter & Gamble
The relationship between the manufacturer and supplier during the procurement cycle is
very similar to the relationship between
A) customer and retailer.
B) retailer and distributor.
C) distributor and manufacturer.
The availability of suppliers, transportation services, communication, utilities, and
warehousing infrastructure mostly affect which of the four Global Network Design
Decisions?
A) Phase I – Supply Chain Strategy
B) Phase II – Regional Facility Configuration
C) Phase III – Desirable Sites
D) Phase IV – Location Choices
Supply chain managers are able to
A) increase their forecast accuracy as lead times increase.
B) increase their forecast accuracy as lead times decrease.
C) decrease their forecast accuracy as lead times decrease.
D) decrease their forecast accuracy as lead times increase.
When most of the products a firm produces have the same peak demand season, in
order to meet predictable variability with inventory, it must
A) use common components across multiple products.
B) use a seasonal workforce.
C) build inventory of high demand or predictable demand products.
D) use subcontracting.
The goal of every supply chain should be to track its
A) landfill inventory.
B) transportation utilization.
C) water consumption.
D) packaging materials.
Which mode of transportation is the least expensive?
A) Air
B) Truck
C) Rail
D) Water
Firms should use simulation for evaluating decisions when
A) underlying decision trees are simple and explicit solutions for the underlying
decision tree are difficult to obtain.
B) underlying decision trees are very complex and explicit solutions for the underlying
decision tree are difficult to obtain.
C) underlying decision trees are simple and explicit solutions for the underlying
decision tree are easy to obtain.
D) underlying decision trees are very complex and explicit solutions for the underlying
decision tree are easy to obtain.
A supply chain needs to achieve a balance between the level of availability and the cost
of inventory that
A) maximizes supply chain revenues.
B) minimizes supply chain costs.
C) maximizes supply chain profitability.
D) maximizes supply chain availability.
A static method of forecasting
A) assumes that the estimates of level, trend, and seasonality within the systematic
component do not vary as new demand is observed.
B) assumes that the estimates of level, trend, and seasonality within the systematic
component vary as new demand is observed.
C) the estimates of level, trend, and seasonality are updated after each demand
observation.
D) All of the above are true.
The rising popularity of bubble and squeak as a breakfast item on the menu has resulted
in a steady demand for peas. Over the course of the past week, 457 patrons have
ordered the hearty breakfast and each serving contains a half cup of English peas. It
costs two cents to hold a half cup of peas in inventory for a year and $3 to place an
order (remember they come all the way from England!). It takes two weeks to ship a
container from England loaded with peas.
How many orders per year does the diner place if they order at the economic order
quantity?
A) 18
B) 9
C) 5
D) 14
An third party may increase the supply chain surplus by aggregating warehousing needs
over several firms. This is called
A) capacity aggregation.
B) inventory aggregation.
C) warehouse aggregation.
D) relationship aggregation.
A(n) ________ measure of performance is more effective at capturing sustainability
improvement.
A) scope
B) relative
C) absolute
D) statistical
Walmart’s supply chain features clusters of stores around distribution centers, which
facilitates
A) high transportation costs.
B) frequent but inexpensive replenishment at the stores.
C) rapid design cycles from their R&D group.
D) sharing of information with suppliers.