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In a complex decision tree, there are thousands of possible paths that may result from
the first period to the last.
If facilities have higher fixed costs, many local facilities are preferred because this
helps lower transportation costs.
Discounted cash flow (DCF) analysis evaluates the present value of any stream of
future cash flows and allows management to compare two streams of cash flows in
terms of their financial value.
Rail is the dominant mode of freight transportation in the United States and accounts
for over 75 percent of the nation's freight bill.
With an uncoordinated supply chain each stage tries to maximize its own profits,
resulting in actions that often diminish total supply chain profits.
Supplier viability can be especially important if the supplier is providing
mission-critical products and it would be easy to find a replacement for them.
Supplier performance analysis should be used to build a portfolio of suppliers with
similar strengths.
Network design decisions have a significant impact on performance because they
determine the supply chain configuration and set constraints within which the other
supply chain drivers can be used either to decrease supply chain cost or to increase
responsiveness.
The goal during the supply chain operation phase is to exploit the reduction of
uncertainty and optimize performance.
Safety capacity is defined as capacity used to satisfy demand that is lower than
forecasted.
Companies using seasonal inventory will build up inventory in periods of low demand
and store it for periods of high demand when they will not have the capacity to produce
all that is demanded.
A facility with little excess capacity will likely be no more or less efficient per unit of
product it produces than one with a lot of unused capacity.
The lower the coefficient of variation of an item, the greater the reduction in safety
inventories as a result of centralization.
McDonough and Braungart (2002) discuss the importance of ________ design if we are
to truly limit the landfill inventory generated by a supply chain.
A) cradle to grave
B) cradle to cradle
C) manageable sustainability
D) recyclable content
If quick response allows multiple orders in the season,
A) profits decrease and the overstock quantity decreases.
B) profits decrease and the overstock quantity increases.
C) profits increase and the overstock quantity decreases.
D) profits increase and the overstock quantity increases.
A key to reducing cycle inventory is
A) the reduction of holding cost.
B) the reduction of manufacturing cost.
C) the reduction of lot size.
D) the reduction of warehouse space.
Situations where demand information is distorted as it moves between different stages
of the supply chain, leading to increased variability in orders within the supply chain
are referred to as
A) incentive obstacles.
B) information processing obstacles.
C) operational obstacles.
D) behavioral obstacles.
The moving average forecastmethod is used when
A) demand has observable trend or seasonality.
B) demand has no observable trend or seasonality.
C) demand has observable trend and seasonality.
D) demand has no observable level or seasonality.
When formulating aggregate plans,
A) forecast errors have no impact.
B) forecast errors must be taken into account.
C) forecast accuracy is assumed.
D) forecast accuracy is not a factor.
In tailored sourcing,firms use a combination of two supply sources,
A) one focusing on cost but unable to handle uncertainty well, and the other focusing
on flexibility to handle uncertainty, but at a higher cost.
B) one focusing on cost and able to handle uncertainty well, and the other focusing on
flexibility to handle uncertainty, but at a higher cost.
C) one focusing on cost but unable to handle uncertainty well, and the other focusing on
flexibility to handle uncertainty at a lower cost.
D) one focusing on cost and able to handle uncertainty well, and the other focusing on
flexibility to handle uncertainty at a lower cost.
Managers should ensure that a firm's transportation strategy
A) involves cost minimization.
B) involves profit maximization.
C) supports its competitive strategy.
D) is separate from competitive strategy.
Supplier performance should be compared based on
A) purchase price alone.
B) its impact on total cost.
C) the supplier's quality of material.
D) the ability of the supplier to coordinate forecasting and planning.
Forecasting methods that use historical demand to make a forecast are known as
A) qualitative forecasting methods.
B) time series forecasting methods.
C) causal forecasting methods.
D) simulation forecasting methods.
To differentiate between the various market segments, the firm must
A) create barriers by identifying product or service attributes that the segments value
differently.
B) eliminate barriers that identify product or service attributes that the segments value
differently.
C) negotiate separately with different market segments that value product or service
attributes differently.
D) develop pricing structures based on the volume of various product or service
attributes.
Quantity discounts lead to
A) a significant buildup of cycle inventory in the supply chain.
B) a slight buildup of cycle inventory in the supply chain.
C) a decrease in cycle inventory in the supply chain.
D) minor fluctuations of cycle inventory in the supply chain.
In a complex decision tree there are
A) only a few possible paths that may result from the first period to the last.
B) less than thirty possible paths that may result from the first period to the last.
C) thousands of possible paths that may result from the first period to the last.
D) an infinite number of possible paths that may result from the first period to the last.
