Promoting during a peak demand month may decrease overall profitability if a
significant fraction of the demand increase results from a forward buy.
In reality, demand and prices are highly uncertain and are likely to fluctuate during the
life of any supply chain decision.
Quick response results in the manufacturer making a lower profit in the short term if all
else is unchanged.
A goal of any supply chain manager is to reduce the level of safety inventory required
regardless of the affect product availability.
Facilities often offer the best opportunity to simultaneously improve the environmental
and financial performance through innovation.
The Intergovernmental Panel on Climate Change, a United Nations body that has been
assessing global warming since 1990, has written that even though most of the buildup
of carbon dioxide in the atmosphere has come from the United States and Western
Europe, it is poorer countries that are closer to the equator that are likely to pay the
biggest price.
Aggregate planning is a process by which a company determines levels of capacity,
production, subcontracting, inventory, stockouts, and even pricing over a specified time
horizon.
The cycle view of the supply chain is useful when considering operational decisions,
because it specifies the roles and responsibilities of each member of the supply chain.
A firm can meet customer needs by using tailored transportation to provide the
appropriate transportation choice based on customer and product characteristics, but at
a higher cost.
As the product margin declines, promoting during the peak demand period becomes
A) less profitable.
B) more profitable.
C) less of a risk.
D) more desirable.
Which factor favors promotion during low-demand periods?
A) High margin
B) High ability to steal market share
C) High ability to increase overall market
D) Low margin
Metrics that would typically be in corporate social responsibility (CSR) reports would
contain
A) revenue.
B) social.
C) environmental.
D) Both B and C
Which set of supply chain flows is correctly described?
A) Funds flow only upstream but information flows both upstream and downstream in a
supply chain.
B) Product flows only downstream and information flows only upstream in a supply
chain.
C) Information and product both flow upstream and downstream in a supply chain.
D) Funds flow both upstream and downstream but product flows only downstream in a
supply chain.
Managers making facility location decisions should carefully consider tariffs and tax
incentives, because
A) network designers can use this fact to influence the role of the new facility and the
focus of people working there.
B) facilities last a long time and have an enduring impact on a firm’s performance.
C) it is astounding how often tax incentives drive the choice of location.
D) the location of a facility has a significant impact on the extent and form of
communication that develops in the supply chain network.
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 each Jerk Store location is acting independently, how many packets of seasoning
should they stock?
A) 2840
B) 3069
C) 3233
D) 3678
In most instances of differential pricing, demand from the segment paying the lower
price
A) arises earlier in time than demand from the segment paying the higher price.
B) arises later in time than demand from the segment paying the higher price.
C) arises about the same time as demand from the segment paying the higher price.
D) arises both earlier and later in time than demand from the segment paying the higher
price.
An increase in forecast accuracy
A) decreases both the overstocked and understocked quantity and decreases a firm’s
profits.
B) decreases both the overstocked and understocked quantity and increases a firm’s
profits.
C) increases both the overstocked and understocked quantity and decreases a firm’s
profits.
D) increases both the overstocked and understocked quantity and increases a firm’s
profits.
Which type of contract is used when agents act on behalf of a principal and the dealer’s
margin is set to be the same as the supply chain margin, and the dealer exerts the right
amount of effort?
A) Buyback or returns contract
B) Revenue-sharing contract
C) Quantity flexibility contract
D) Two-part tariffs
The fraction of product demand that is satisfied from product in inventory is the
A) customer fill rate.
B) product fill rate.
C) order fill rate.
D) cycle service level(CSL).
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.
Without actually solving the aggregate planning problem, it is safe to conclude that in
the optimal solution to Scenario 8.2,
A) the total ending inventory will exceed the number of units made using overtime.
B) the number of units made using subcontracting will exceed the number of units
made using overtime.
C) the number of units made using regular time will exceed the forecast.
D) the number of units made using subcontracting will exceed the number of units
made using regular time.
The decision with the highest NPV (net present value) will provide a supply chain with
A) the highest financial return.
B) the lowest financial return.
C) a reasonable financial return.
D) the least desirable financial return.
The advantage of offering a price promotion during periods of low demand to shift
some of the demand into a slow period is
A) a demand pattern that is less expensive to supply.
B) very high inventory costs because inventory needs to be carried from period to
period.
C) in the fact that a firm could get by with a smaller, more expensive factory.
D) much of the expensive capacity would go unused during most months when demand
was lower.
Which of these services facilitates the function of the value chain but is not considered
a core element of the supply chain?
A) Marketing
B) Information Technology
C) Distribution
D) Service
In which distribution network design is product shipped directly from the manufacturer
to the end customer, bypassing the retailer (who takes the order and initiates the
delivery request)?
A) Manufacturer storage with direct shipping
B) Manufacturer storage with direct shipping and in-transit merge
C) Distributor storage with package carrier delivery
D) Distributor storage with last mile delivery
The procurement process for direct materials should focus on
A) improving coordination and visibility with the supplier.
B) decreasing the transaction cost for each order.
C) consolidation of orders to take advantage of economies of scale and quantity
discounts.
D) minimizing communication with the supplier.
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 profit resulting from an optimal
mix of fish and chicken tacos?
A) $22,577
B) $25,619
C) $24,667
D) $23,580
One advantage of a carbon tax system over a cap and trade system is
A) the carbon tax system is less expensive.
B) the carbon tax system is more expensive.
C) that emissions under the cap and trade system cannot be monitored by outside
agencies.
D) the carbon tax system displays more price stability.
Most concrete action has been observed primarily when a focus on sustainability
A) increases revenue for sustainability initiatives.
B) makes the world more sustainable.
C) attracts customers who value sustainability.
D) reduces risk and improving the financial performance of the supply chain.
Aggregate planning should consider information from
A) only the enterprise as its breadth of scope.
B) downstream partners to produce forecasts.
C) upstream partners to determine constraints.
D) all of the above
Discuss the differences of push and pull supply chain processes.
What are some of the benefits of effective sourcing decisions?
Discuss the various measures of product availability.
Describe the cycle view of the processes within a supply chain.
Explain the role of each of the major drivers of supply chain performance in the
competitive strategy.
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.
What is the difference in order quantity and profit achieved if George and The Jerk
Store act independently versus if they behaved as a vertically integrated supply chain?
How do improperly structured incentives lead to a lack of coordination in the supply
chain?