Pricing obstacles refer to situations in which the pricing policies for a product lead to an
increase in variability of orders placed.
A carrier’s decisions are affected by the prices that the market will bear, but not the
responsiveness it seeks to provide its target segment.
Forecasting and the accompanying managerial decisions are extremely difficult when
either the supply of raw materials or the demand for the finished product is highly
unpredictable.
Offshoring typically lowers labor, working capital and fixed costs but increases risk and
freight costs.
Two-part tariffs and threshold contracts can be used to counter double marginalization
and increase agent effort in a supply chain.
The result when each stage in the supply chain makes its own separate forecast is often
a match between supply and demand because these forecasts are often very different.
Consumers prefer purchasing commoditized products at a one-stop shop.
Under a cap-and-trade system, a firm that emits more than its share of carbon can buy
allowances from a firm that emits less than its share.
A company’s supply chain strategy determines the nature of procurement and
transportation of materials as well as the manufacture and distribution of the product.
Intraoperation scope resulted in minimal supply chain surplus.
Unless adding a supplier with a unique and valuable capability clearly adds to total cost,
the firm’s supply base may be too small.
Globalization has increased the opportunities and decreased the risks for supply chains.
The manufacturing cycle occurs at the distributor/manufacturer interface.
A dabba uses the Mumbai railway system to carry about 40 lunches each day.
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.
Understanding the impact of incentives on the actions of a supply chain partner is
especially important when
A) there are two or more members in the supply chain.
B) the third party’s actions are not fully observable.
C) more than two firms competing for the same pool of customers.
D) the supply chain uses outsourcing.
The selection of suppliers, design of supplier contracts, product design collaboration,
procurement of material, and evaluation of supplier performance are a part of
A) procurement.
B) sourcing.
C) supplier scoring and assessment.
D) supplier selection.
Which transportation network design option uses a combination of other options to
reduce the cost and improve responsiveness of the supply chain?
A) Direct shipping network
B) Direct shipping with milk runs
C) Shipping via DC using milk runs
D) Tailored network
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.
The professor’s suitcase has room for 50 boxes of souvenirs. How many boxes does he
expect to have left once his friends have bought what they want?
A) 0
B) 1
C) 2
D) 3
Which of the following is the first phase in the design of a global supply chain
network?
A) Define a supply chain strategy
B) Define the regional facility configuration
C) Select desirable sites
D) Location choices
A ________ strategy specifies the portfolio of new products that a company will try to
develop.
A) Product Development
B) Marketing and Sales
C) Supply Chain
D) Finance
Which distribution network is also referred to as drop-shipping with product delivered
directly from the manufacturer to the customer location?
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 costs incurred in sending material out of a facility are
A) sourcing transportation costs.
B) outbound transportation costs.
C) crossbound transportation costs.
D) inbound transportation costs.
A key supply chain difference between Gateway and Apple is that
A) Gateway’s stores currently carry a large variety of products made by other
manufacturers, while Apple carries only Apple products.
B) Apple has always carried product in their stores while at one time Gateway stores
carried no inventory.
C) Gateway has always used a push system while Apple has always used a pull system.
D) Gateway has no suppliers, preferring to make everything in-house, while Apple buys
many of their components from suppliers.
In a VMI system, the ________ must share demand information with the ________.
A) manufacturer, customer
B) customer, retailer
C) retailer, manufacturer
D) manufacturer, designer
Which of the following would be a demand and supply characteristic toward the
beginning stages of a product’s life cycle?
A) Demand has become more certain and supply is predictable.
B) Margins are lower due to an increase in competitive pressure.
C) Product availability is crucial to capturing the market.
D) Price becomes a significant factor in customer choice.
Sammy’s is the hot new lunch spot among the hipsters, who flock there at noon for their
artisanal peanut butter and jelly sandwiches, which sell for $12.95. The sandwiches are
made from two slices of their own artisanal bread, which they bake continuously
throughout the day at a rate of seven loaves an hour (each loaf contains twenty slices).
The actual cost of a loaf of bread is $1 and the cost to hold a loaf is 80%, since
freshness is important in baking as well as to hipsters. The cost to run a new batch of a
dough is $3 per loaf. Sammy’s sells their sandwiches at a rate of fifty per hour.
Aggregating across products, retailers, or suppliers in a single order allows for a
reduction in lot size for individual products because
A) fixed ordering and transportation costs are now charged to retailers.
B) fixed ordering and transportation costs are now charged to suppliers.
C) fixed ordering and transportation costs are now spread across multiple products,
retailers, or suppliers.
D) holding costs are now charged to retailers or suppliers.
An intermediary can increase the supply chain surplus by aggregating inventories
across large numbers of customers. This is called
A) capacity aggregation.
B) inventory aggregation.
C) warehouse aggregation.
D) relationship aggregation.
Calculate the MAD for this scenario if the forecasts for periods 1-10 are in order, 176.6,
174.2, 176.1, 178.7, 160.4, 165.4, 177.7, 191.1, 191.0, and 175.2.
A) 11.04
B) 9.52
C) 10.40
D) 12.25
Which forecasting methods are the simplest to implement and can serve as a good
starting point for a demand forecast?
A) Qualitative forecasting methods
B) Time series forecasting methods
C) Causal forecasting methods
D) Simulation forecasting methods
Almost 40 percent of ________ could be achieved at negative marginal costs, meaning
that investing in these options would generate positive economic returns over their life
cycle.
A) greenhouse gas abatement
B) fuel consumption initiatives
C) increased customer base
D) improved company reputation
Over the past two months, Lisa has received several orders for goat grazing services.
The order date, promise date, and delivery dates are shown in the table below.
What is Lisa’s percentage of on-time deliveries?
A) 75%
B) 64%
C) 56%
D) 51%
An effective revenue management tactic when faced with seasonal peaks is to charge a
A) high price during the peak period and a higher price during off-peak periods.
B) higher price during the peak period and a lower price during off-peak periods.
C) lower price during the peak period and a higher price during off-peak periods.
D) low price during the peak period and a lower price during off-peak periods.