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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.
What is the average inventory if they order at the optimal order quantity?
A) 2670 cups
B) 2000 cups
C) 1335 cups
D) 667 cups
Decision tree analysis is based on Bellman's principle, which states that for any choice
of strategy in a given state,
A) the optimal strategy is the one that is selected if the entire analysis is assumed to
begin in the first period.
B) the optimal strategy is the one that is selected if the entire analysis is assumed to
begin in the last period.
C) the optimal strategy in the next period is the one that is selected if the entire analysis
is assumed to begin in the last period.
D) the optimal strategy in the next period is the one that is selected if the entire analysis
is assumed to begin in the next period.
Which of these software vendors offer advanced planning systems?
A) SAP
B) Solver
C) Excel
D) Google
A ________ strategy specifies how the market will be segmented and how the product
will be positioned, priced, and promoted.
A) Product Development
B) Marketing and Sales
C) Supply Chain
D) Finance
________ is a social arrangement that encourages all participants to behave such that
they do not contribute to the tragedy of the commons.
A) A zero sum game
B) Escalation of commitment
C) Mutual coercion
D) Barzini Red
In this approach to managing capacity, a firm uses a temporary workforce during the
peak season to increase capacity to match demand.
A) Time flexibility from workforce
B) Use of subcontracting
C) Use of dual facilities-specialized and flexible
D) Use of seasonal workforce
Which of the following would be a strategy to decrease the margin lost in a stockout?
A) Arranging for backup sourcing
B) Discarding the unused material
C) Selling unsold product to an outlet store
D) Reducing the level of cycle inventory
Marlo Stanfield's operation also uses large quantities of prepaid cell phones, on average
1500 per week with a standard deviation of 145. The lead time for their own brand of
prepaid cell phones is three weeks and they have a lot size of 350 phones. To ensure
they never run out, they keep a safety stock of 500 phones with Proposition Joe.
What safety stock should be held to put the expected shortage per cycle at 5 phones?
A) 418 phones
B) 433 phones
C) 462 phones
D) 487 phones
Quick response results in
A) the manufacturer making a lower profit in the long term if all else is unchanged.
B) the manufacturer making a lower profit in the short term if all else is unchanged.
C) the retailer making a lower profit in the short term if all else is unchanged.
D) the distributor making a lower profit in the short term if all else is unchanged.
In the short to medium term, an improved focus on sustainability provides benefits that
A) are shared but costs that may be local to a firm.
B) are local to firms but a cost that is global.
C) are shared and costs that are global.
D) are local and costs that are global.
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.
The taco stand manager decides to make exactly the same quantity of fish tacos as
chicken tacos. If time and capacity are not an issue, and none of the other parameters in
the scenario are changed, what would the retail price of chicken tacos need to be to
make the optimal order quantities identical?
A) $6.00
B) $6.50
C) $7.00
D) $7.50
An order from a lower price buyer
A) should always be accepted rather than waiting for potential revenue from a higher
price buyer.
B) should only be accepted if the expected revenue from a higher price buyer is higher
than the current revenue from the lower price buyer.
C) should be accepted if the expected revenue from a higher price buyer is lower than
the current revenue from the lower price buyer.
D) should not be accepted if the expected revenue from a higher price buyer is lower
than the current revenue from the lower price buyer.
