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A company that uses a more expensive short lead time supplier as a backup for a low
cost, long lead time supplier is using
A) tailored sourcing.
B) quick response.
C) postponement.
D) improved forecasting.
When demand is steady, cycle inventory and lot size are related as
A) Cycle Inventory = Lot Size x 2.
B) Cycle Inventory = Q 2.
C) Cycle Inventory = Q/2.
D) Cycle Inventory = Lot Size = Q.
Supply chain network design decisions classified as market and supply allocation are
concerned with
A) what processes are performed at each facility.
B) where facilities should be located.
C) how much capacity should be allocated to each facility.
D) what markets each facility should serve and which supply sources should feed each
facility.
The most common problems in the use of IT in transportation relate to
A) cross-enterprise collaboration.
B) network security.
C) vibration-resistant hardware.
D) maintaining an Internet connection while in motion.
Periodic review policies require
A) more safety inventory than continuous review policies for the same level of product
availability.
B) less safety inventory than continuous review policies for the same level of product
availability.
C) the same safety inventory as continuous review policies for the same level of
product availability.
D) no more safety inventory than continuous review policies for the same level of
product availability.
The NPV (net present value) of a cash stream that is equal to $75 per period for 5
periods with a rate of return of 15% per period would be
A) $261.37.
B) $289.12.
C) $312.74.
D) $322.44.
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.
Suppose the contractor has found some materials on Craigslist that can drop the
construction cost of a large facility to $1,500,000. These materials cannot be used in the
construction of the small facility, so its price remains as indicated in Scenario 6.1.
Determine the likelihood of high demand that would make the decision maker
indifferent between the two alternatives for a two year time period.
A) 1.0
B) 0.72
C) 0.92
D) 0.86
A company that checks inventory status at regular periodic intervals and places an order
to raise the inventory level to a specified threshold is using
A) continuous review.
B) daily review.
C) occasional review.
D) periodic review.
Under a cap and trade system, the price of emissions is
A) determined directly as a function of the output.
B) determined indirectly and can change.
C) determined indirectly and is invariant.
D) determined directly and is invariant.
Customer order fulfillment refers to
A) the point in time when the customer has access to choices and makes a decision
regarding a purchase.
B) the customer informing the retailer of what they want to purchase and the retailer
allocating product to the customer.
C) the process where product is prepared and sent to the customer.
D) the process where the customer receives the product and takes ownership.
The customer order cycle occurs at the
A) customer/retailer interface.
B) retailer/distributor interface.
C) distributor/manufacturer interface.
D) manufacturer/supplier interface.
When setting optimal levels of product availability in practice, it is important to
A) obtain a reasonable estimate of the cost of stocking out.
B) obtain a very precise estimate of the cost of stocking out.
C) focus on the most responsive production method, even if it is not low cost.
D) develop a preset target of product availability.
If facilities have lower fixed costs
A) a few high-capacity facilities are preferred because this helps lower transportation
costs.
B) a few local facilities are preferred because this helps lower transportation costs.
C) many high-capacity facilities are preferred because this helps lower transportation
costs.
D) many local facilities are preferred because this helps lower transportation costs.
Developing countries often create free trade zones where
A) duties and tariffs are imposed as long as production is used primarily for export.
B) duties and tariffs are imposed as long as production is used primarily for import.
C) duties and tariffs are relaxed as long as production is used primarily for export.
D) duties and tariffs are relaxed as long as production is used primarily for import.
The uncertainty that exists due to the portion of demand that the supply chain is
required to meet is the
A) rate of strategic uncertainty.
B) demand uncertainty.
C) implied demand uncertainty.
D) average forecast error.
Among the sources of risk identified in global supply chains, the highest among these
four is
A) shortage of skilled resources.
B) natural disasters.
C) inflexible supply chain technology.
D) customs delays.
George takes an eclectic mix of spices to make his authentic jerk seasoning as a rub for
chicken, pork, and fish. The ingredients and packaging cost $1.50 and he sells the
packets by the case to Jerk Stores in the Caribbean for $2.50 per packet. Tourists to the
islands gladly pay $8.75 for these packets, eager to host their friends for an authentic
Caribbean meal and bore them with vacation photos upon their return. The demand for
the packets is normally distributed, with a mean of 2500 packets and a standard
deviation of 600.
If George and a single Jerk Store act as a vertically integrated supply chain, what is the
optimal quantity for the Jerk Store to order?
A) 2633
B) 2840
C) 3069
D) 3267
