For commodity products where price is set by the market, manufacturers can use lot
size based quantity discounts to achieve coordination in the supply chain and decrease
supply chain cost.
Surveys in sustainable farming have revealed that the typical consumer is willing to pay
25% more for sustainable fare.
Network design decisions have a significant impact on performance because they
determine the supply chain configuration and set constraints within which inventory,
transportation, and information can be used to either decrease supply chain cost or
increase responsiveness.
Facility location decisions have a long-term impact on a supply chain’s performance
because it is cost effective to shut down a facility or move it to a different location.
The cycle view of a supply chain holds that the processes in a supply chain are divided
into 2 categories depending on whether they are initiated in response to or in
anticipation of customer orders.
The lack of information sharing between the retailer and manufacturer leads to a large
fluctuation in manufacturer orders.
Determining how profits will be allocated to different members of the supply chain is a
key to successful collaboration.
The social pillar measures a firm’s ability to address issues that are important for its
workforce, customers, and society.
The mode of transportation that results in the lowest transportation cost will lower total
costs for a supply chain.
In reality, there are no actions in a supply chain that improve both sustainability and
supply chain surplus.
A discount is volume-basedif the pricing schedule offers discounts based on the
quantity ordered in a single lot.
Aggregate forecasts are usually more accurate than disaggregate forecasts, as they tend
to have a smaller standard deviation of error relative to the mean.
A firm can vary supply of product by controlling production capacity and inventory.
The goal of any forecasting method is to predict the systematic component of demand
and estimate the random component.
One of the characteristics of forecasts is
A) aggregate forecasts are usually more accurate than disaggregate forecasts.
B) disaggregate forecasts are usually more accurate than aggregate forecasts.
C) short-term forecasts are usually less accurate than long-term forecasts.
D) long-term forecasts are usually more accurate than short-term forecasts.
With the ________ view, firms attempt to align all operations within a function. In this
view, all supply chain functions including sourcing, manufacturing, warehousing, and
transportation must align their strategy to minimize total functional cost.
A) Intrafunctional scope
B) Intraoperation scope
C) Interfunctional scope
D) Intercompany scope
Promoting during a peak demand month may decrease overall profitability if
A) a small fraction of the demand increase results from a forward buy.
B) any of the demand increase results from a forward buy.
C) a significant fraction of the demand increase results from a forward buy.
D) none of the above
Which approach to aggregation has the goal of moving product differentiation as close
to the pull phase of the supply chain as possible?
A) Information centralization
B) Specialization
C) Product substitution
D) Postponement
________ allows a firm to increase profits and better match supply and demand if the
firm produces a large variety of products whose demand is unpredictable, not positively
correlated, and is of about the same size.
A) Shortened forecasting window
B) Quick response
C) Postponement
D) Tailored sourcing
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 + 7t. What is the average cost per motorist?
A) 12
B) 5t + 7
C) 10
D) 10t + 7
________ typically move commodities over large distances at lower costs per unit
shipped.
A) Air
B) Truck
C) Rail
D) Package carriers
Marlo Stanfield’s operation also uses large quantities of prepaid cell phones, on average
1500 per week with a standard deviation of 145. The lead time for their own brand of
prepaid cell phones is three weeks and they have a lot size of 350 phones. To ensure
they never run out, they keep a safety stock of 500 phones with Proposition Joe.
What is the standard deviation of demand during lead time?
A) 251 phones
B) 2187 phones
C) 4500 phones
D) 4751 phones
The fraction of replenishment cycles that end with all the customer demand being met is
the
A) customer fill rate.
B) product fill rate.
C) order fill rate.
D) cycle service level(CSL).
The strategy where workforce (capacity) is kept stable but the number of hours worked
is varied over time in an effort to synchronize production with demand is the
A) flexibility strategy.
B) chase strategy.
C) level strategy.
D) mixed strategy.
Online sales increase ________ when compared to the performance of traditional brick
and mortar retail stores.
A) outbound transportation costs
B) the inventory holding cost
C) the cost of building and maintaining facilities in a supply chain network
D) overall supply chain costs
The amount of the asset reserved for the higher price segment is such that
A) all orders from the lower priced segment will be accepted and filled.
B) the expected marginal revenue from the higher priced segment is more than the price
to the lower price segment.
C) the expected marginal revenue from the higher priced segment is less than the price
to the lower price segment.
D) the expected marginal revenue from the higher priced segment equals the price to
the lower price segment.
The margin lost by a firm for each lost sale because there is no inventory on hand is
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.
When planning, the goal of all firms in the supply chain should be to maximize supply
chain profits because
A) this leaves them less profit to divide among themselves.
B) this leaves them more profit to divide among themselves.
C) this outcome leaves them more profit to pay tax on.
D) this outcome will increase their charitable giving.
Describe the impact of forecasts based on orders rather than actual customer demand.
Discuss key issues of forecasting in practice.
Explain the three macro processes within a supply chain.
What issues need to be considered when evaluating capability for design collaboration?
Tastee Mart sells Frostee Flakes. Demand for Frostee Flakes is 500 boxes per week.
Tastee Mart has a holding cost of 30 percent and incurs a fixed cost of $100 for each
replenishment order it places for Frostee Flakes. Given that cost is $2 per box of
Frostee Flakes, how much should Tastee Mart order in each replenishment lot? If a
trade promotion lowers the price of Frostee Flakes to $1.80 for a month, how much
should Tastee Mart order given the short-term price reduction?
Why should replenishment lead time be considered in supplier selection decisions?
Explain how distributors add value to a supply chain and improve its performance.
How can firms address the problem of perishable assets?