Although a forward buy is often the retailer’s appropriate response and increases their
own profits, it usually increases demand variability with a resulting increase in
inventory and flow times within the supply chain.
With reduced demand uncertainty, a supply chain manager can better match supply and
demand by reducing both overstocking and understocking.
A reduction of lot sizes increases the amount of fluctuation that can accumulate
between any pair of stages of a supply chain, thus increasing the bullwhip effect.
Product availability reflects a firm’s ability to fill a customer order out of available
inventory.
To improve overall profits, the supplier must design a contract that requires the buyer to
share in some of the supplier’s demand uncertainty.
Ignoring inventory costs when making transportation decisions can result in choices
that worsen the performance of a supply chain.
A high level of product availability requires less inventory, which will keep costs down
for the supply chain.
A milk run is a route in which a truck either delivers product from a single supplier to
multiple retailers or goes from multiple suppliers to a single retailer.
When using a continuous review policy, a manager has to account for the uncertainty of
demand during the lead time and the review interval.
As long as inbound transportation economies of scale are maintained, increasing the
number of facilities decreases total transportation cost.
The degree of demand and price uncertainty has a significant influence on the
appropriate portfolio of long- and short-term warehousing space that a firm should
carry.
To retain strategic fit, supply chain strategy must be adjusted over the life cycle of a
product and as the competitive landscape changes.
An example of intrafunctional scope is that outsourcing a key component is reasonable
if the savings in staying current in technology results in improved performance in other
areas of R&D that permit improved overall performance.
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
variable.
Spoilage occurs when the capacity reserved for higher price buyers is wasted because
demand from the higher price segment does not materialize.
A global supply chain with offshoring would tend to see which of these performance
dimensions increase?
A) Labor costs
B) On time delivery
C) Supply chain visibility
D) Minimum order quantity
The functions and stages that devise an integrated strategy with a shared objective are
referred to as
A) competitive strategy.
B) supply chain strategy.
C) scope of strategic fit.
D) scope of marketing strategy.
Serving a high density of customers at a long distance is best done using
A) an LTL carrier.
B) a cross dock distribution center with milk runs.
C) a package carrier.
D) a private fleet with milk runs.
Economies of scale in purchasing and ordering motivate a manager to
A) increase the lot size and cycle inventory.
B) decrease the lot size and cycle inventory.
C) eliminate inventory.
D) increase the lot size and reduce cycle inventory.
Which cost should reflect the incremental change in space cost due to changing cycle
inventory?
A) Cost of capital
B) Obsolescence (spoilage) cost
C) Handling cost
D) Occupancy cost
Capacity used to satisfy demand that is higher than forecasted is
A) safety backlog.
B) safety capacity.
C) safety inventory.
D) safety sales.
The traditional fundraiser for the student chapter of APICS is pint mason jars filled with
a tangy barbecue sauce that the club sponsor whips up in his kitchen. Club officers set
up a card table in the atrium of the business building and take turns staffing it for the
duration of the barbecue season, which is four months. Eighteen sad years of experience
have revealed that demand varies depending on the month of the season. Customer
demand in the first month can be described as 400-p1, in the second month as
400-1.4p2, in the third month 400-1.8p3, and in the fourth month 400-2.2p4.
Responding to customer complaints (primarily from period 1 purchasers) the student
APICS chapter decides to use static pricing over the four month season. What is the
optimal price to charge for their barbecue sauce?
A) $122.50
B) $125.00
C) $127.50
D) $130.00
The distinction between product fill rate and order fill rate is:
A) not significant in a single product situation.
B) significant in a single product situation.
C) not significant when a firm is selling multiple products.
D) significant when a firm is selling multiple products.
________ carriers offer a very fast and fairly expensive mode of transportation for
cargo.
A) Air
B) Truck
C) Rail
D) Water
The aggregate plan needs to
A) be a final product because changes are disruptive to the supply chain.
B) be considered fixed because forecasts are usually accurate.
C) have some flexibility built into it because forecasts are always wrong.
D) have some flexibility built into it because forecasts are usually right.
In general, traditional brick and mortar retail sales outperform online sales along the
dimension of
A) product variety.
B) request fulfillment.
C) time to market for a new product.
D) order status tracking.
For any supply chain,
A) management rests solely in the hands of the manufacturer.
B) management rests solely in the hands of the distributor.
C) if each member focuses on profitability, the overall supply chain profit will be
maximized.
D) there is only one source of revenue, the customer.
In volume-based tailored sourcing,
A) the predictable part of a product’s demand is produced at an efficient facility.
B) the uncertain portion is produced at an efficient facility.
C) the predictable part of a product’s demand is produced at a flexible facility.
D) the predictable part of a product’s demand is outsourced.
Discuss the two key players involved in any transportation in the supply chain.
Discuss the advantages and disadvantages of quick response.
Describe the two types of ordering policies and the impact each has on safety inventory.
Explain how revenue management is beneficial.
Discuss the impact of promotion on demand within a supply chain.
Gang Aft Agley, a manufacturing company, faces the aggregate planning problem
shown in the table below. Cost of regular production is $5 per unit, the cost of
producing the same unit on overtime is $7.50, the cost of subcontracting is $9 per unit,
and the cost of carrying a unit in inventory from one month to the next is $2.
The labor contract at the plant prohibits both overtime and subcontracting output to
exceed 300 units in any five month window. The plant capacity is 600 units per month
produced using two shifts, regardless of the number of days in a month. By policy,
management wants to avoid stockouts.
Formulate the aggregate plan using linear programming and solve it using Solver.
Summarize the steps in the decision tree analysis methodology.