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Over the past several decades, the supply chains of most firms have become easier to
coordinate.
As inputs into the aggregate plan change, managers do not need to make changes to the
aggregate plan.
A planning horizon is usually between three and five years.
The interoperation scope has each stage of the supply chain devising its strategy
independently.
Cycle inventory exists in a supply chain because different stages exploit economies of
scale to lower total cost.
As capacity utilization increases, it becomes less important to perform aggregate
planning.
Transportation is a significant component of the costs incurred by most supply chains.
In general, the reverse logistics function for a manufacturer is more expensive to
operate on a per unit basis than the forward logistics function that sends the products to
market.
The replenishment cycle occurs at the retailer/distributor interface.
Stock keeping unit (SKU) storage is the warehousing methodology that uses a
traditional warehouse to store all of one type of product together.
A company's competitive strategy defines the set of customer needs that it seeks to
satisfy through its products and services.
A negative NPV for an option indicates that the option will lose money for the supply
chain.
As the ratio of the cost of overstocking to the cost of understocking gets smaller, the
optimal level of product availability decreases.
For most firms, the extent of direct emissions is typically only a small fraction of the
extent of indirect emissions in the supply chain.
Which of the following is a disadvantage of manufacturer/distributor storage with
customer pickup?
A) Customer experience is lower than other options because of the lack of home
delivery.
B) Response time is similar to package carrier delivery with manufacturer or distributor
storage.
C) Returnability is somewhat easier given that pickup location can handle returns.
D) Product availability is similar to other manufacturer or distributor storage options.
Which approach to capacity management makes use of overtime, which is varied to
match the variation in demand?
A) Time flexibility from workforce
B) Use of seasonal workforce
C) Use of subcontracting
D) Use of dual facilities-dedicated and flexible
Cost of Goods Sold (COGS) represents
A) less than 20 percent of sales for most major manufacturers.
B) less than 50 percent of sales for most major manufacturers.
C) well over 50 percent of sales for most major manufacturers.
D) well over 80 percent of sales for most major manufacturers.
A company faces the aggregate planning problem shown in the table below. Cost of
regular production is $8 per unit, the cost of producing the same unit on overtime is
$15, the cost of subcontracting is $12 per unit, and the cost of carrying a unit in
inventory from one month to the next is $6.
The labor contract at the plant prohibits both overtime and subcontracting output to
exceed 400 units in any five month window. The plant capacity is 20 units per day
produced using two shifts and the plant runs seven days a week. By policy,
management wants to avoid stockouts.
How many months does the regular time output exceed plant capacity in the optimal
solution to Scenario 8.2?
A) 0
B) 1
C) 2
D) 3
Which transportation network design option has the elimination of intermediate
warehouses and its simplicity of operation and coordination as its major advantage?
A) Direct shipping network
B) Direct shipping with milk runs
C) All shipments via central DC
D) Shipping via DC using milk runs
Amazon uses different prices for the products that are purchased from the company
-often for the speed of the shipping. What is the name of this pricing scheme?
A) Everyday low pricing
B) High-low pricing
C) Fixed price
D) Menu pricing
Much of aggregate planning has traditionally been focused
A) on short-term production scheduling.
B) on customer relationship management.
C) within an enterprise.
D) beyond enterprise boundaries.
________ are the preferred mode of transport for online businesses such as
Amazon.com and Dell, as well as for companies such as W.W. Grainger and
McMaster-Carr that send small packages to customers.
A) Air
B) Package carriers
C) Rail
D) Water
________ continues to be one of the biggest challenges to improved supply chain
sustainability.
A) Good information
B) Waste generation
C) Water consumption
D) Reducing packaging
If higher price buyers have to be turned away because the capacity has already been
committed to lower price buyers, this is
A) spill.
B) spoilage.
C) wastage.
D) excess.
The Stone Lion, a bed and breakfast located in a sleepy town, caters to two groups of
customers, young couples interested in something marginally more exotic than a
staycation, and corporate clients interested in doing some team-building at a location
with no cellular service. Corporations know they can get rooms with minimal notice,
but young couples on tight budgets tend to plan well in advance of their planned stay at
the property. The corporate rate for rooms is $250 per person and the demand pattern is
normal with a mean of 20 and a standard deviation of 10. The proprietor of the Stone
Lion takes pity on the young couples and charges them only $150 for identical
accommodations.
If the corporate price and young couples' price both double, how many additional rooms
should the Stone Lion hold for corporate clients?
A) 3
B) 2
C) 1
D) 0
Suppose that a highway is governed by a use fee charged to motorists that is based on
congestion, operation and maintenance. The total traffic t is used to determine the cost
of 5t2. What is the marginal cost?
A) 5
B) 5t
C) 10
D) 10t
Duties that must be paid when products and/or equipment are moved across
international, state, or city boundaries are referred to as
A) taxes.
B) tax incentives.
C) tariffs.
D) incentives.
The viability of suppliers is especially important for suppliers who
A) provide mission-critical products that would be easy to replace.
B) provide mission-critical products that would be difficult to replace.
C) provide non-critical products that would be difficult to replace.
D) provide non-critical products that would be easy to replace.
Simulation methods are very good at evaluating decisions when
A) the paths are decision dependent.
B) the decision rules are simple.
C) there are different forms of uncertainty.
D) implicit solutions are needed for analysis.
The ________ is the average units of demand that are not satisfied from inventory in
stock per replenishment cycle.
A) ROP
B) ESC
C) EOQ
D) CSL
The margin lost from current as well as future sales if the customer does not return
should be included in
A) the cost of overstocking the product.
B) the cost of stocking the product.
C) the cost of understocking the product.
D) the cost of overselling the product.
Which of these costs was higher for Netflix than for their vanquished competitor,
Blockbuster?
A) Property
B) Inventory
C) Facility
D) Transportation
Forward buying results in
A) a stabilized buying pattern.
B) small orders during the promotion period followed by very small orders after that.
C) small orders during the promotion period followed by large orders after that.
D) large orders during the promotion period followed by very small orders after that.
The tenured professor routinely led student groups on factory tours in exotic locales,
and one popular destination was an island south of Miami. The students enjoyed this
happy little island and the professor liked it because he could supplement his income by
bringing back a few boxes souvenirs he could sell to his friends. The souvenirs cost the
professor $125 a box and he sells them for $290 a box. Souvenirs that dry out due to
age can be sold for $80. Experience has shown that the demand for boxes of these
souvenirs has a mean of 80 with a standard deviation of 20.
Naturally, the professor will purchase the optimal number of boxes. (He's had a course
or two in supply chain management and knows this model well.) What is his expected
profit from purchasing the optimal number of boxes?
A) $11,975
B) $11,455
C) $11,165
D) $10,835
