Chapter 7 Supply Chain Management

which of the following does loss risk depend on?

-facility storing of product - product

Which of the following is an objective of product/market classification in the process of inventory management efforts?

-focus -refine

Inventory expense is calculated by multiplying annual inventory carrying cost percent by which of the following?

Average inventory value

Inventory should provide return on the capital invested. Thus, inventory is considered which of the following?

Current Assets

The four functions of inventory is geographical, specialization, ________, balancing supply and demand, and buffering uncertainty.

Decoupling

Planning activities may occur centrally to coordinate inventory allocation and which of the following service?

Delivery

The variation in sales during inventory replenishment is referred to as which of the following uncertainty?

Demand

an exact quantity policy can be determined by balancing the cost of ordering and the cost of maintaining average inventory. Which of the following terms provides a specific quantity of these two cost components.

Economic Order Quantity

Which of the following is not a justification of other special situations to the basic EOQ?

Economical Purchase

True or False: The economic order quantity is the replenishment quantity that maximizes the combined inventory carrying and ordering cost

False

True or false: Reactive and pull inventory systems are not different names that refer to the same definition

False

Instead of being referred to as the probability of a stockout, what does the magnitude refer to?

Fill Rate

What can be used by management to simplify inventory for the fair share allocation, which simplifies inventory that provides each distribution facility with an equitable distribution of available inventory?

Planning

which of the following is the reorder point formula?

R=D*T

which is the formula for calculating the periodic review reorder point?

ROP = D(T+p/2)+SS

postponement strategies and practices serves to ____ the anticipatory risk of supply chain performance

Reduce

Demand and Performance cycles will determine certainty under which of the following?

Reorder point

Which of the following cycles will not be required when combining variables for uncertainty?

Replenishment

specific techniques for collaborative inventory ___ are quick response, vendor managed inventory, and profile replenishment

Replenishment

The manufacturer inventory consists of finished goods that are pre-positioned in a warehouse. A wholesaler purchases large quantities from manufacturers and sells them in smaller quantities. Thus, the buying and selling from wholesalers is functioned by which of the following?

Retailer

Which of the following is a base for capital costs on investment for capital deployed, specified by higher management?

Target Return

DRP planning schedules are developed using weekly increments or time periods known as?

Time buckets

True or False: If the discount at any associated quantity is sufficient to offset the added inventory carrying cost less the reduced cost of ordering, then the quantity discount is a viable choice?

True

True or False: demand does not require forecasting because there is no uncertainty

True

True or false: The key to establishing selective management strategies is the realization that product segments have different degrees of importance with respect to achieving the enterprise mission.

True

True or false: The reorder point defines when a replenishment order is initiated and inventory turns equal total sales divided by average inventory

True

Which type of demand does sale forecasting estimate during the inventory cycle?

Unit

Quantity discounts can be handled directly with the basic EOQ formula by calculating total cost at any given _______ related purchase price

Volume

Local taxing _____ in many areas asses taxes on inventory held warehouses

authorities

Multiple item purchase refers to situations when more than one product are brought concurrently, so quantity and transportation discounts must consider the impact of product _____

combinations

The accountability of _____ measures units on hand at a specific location and tracks additions and deletions

control

product/market classification groups products, markets, or ____ with similar characteristics to facilitate inventory management

customers

Inventory planning methods use a shared ___ to coordinate inventory requirements across multiple locations or stages in the supply chain.

database

performance cycle uncertainty refers to operations not being able to assume which consistent service?

delivery

obsolescence cost results from ____ of product during storage

deterioration

The reactive method responds to a channel member inventory needs by drawing the product through the ______ channel

distribution

The reactive or pull inventory approach uses customer demand to pull product through the ____ channel

distribution

vendor managed inventory refers to a modification or quick response that ___ the need for replenishment orders

eliminates

inventory carrying cost is the _____ associated with maintaining or holding inventory

expense

True or False: A dependent demand situation is characteristic of component parts that are assembled into its initial products.

false

The larger the order quantity, the ___ replenishment orders required per planning period

fewer

What type of loss oes obsolescence result in when a product no longer has appeal or has any demand?

financial

The procedures define data requirement, software applications, performance objectives and decision _______.

guidelines

at the consumer level, most demand is _____ as consumers do not typically let the retailer know when they are arriving to purchase product

independent

the reorder point defines when a replenishment shipment should be ________

initiated

requirements planning is an approach that ___ across the supply chain, taking into consideration unique requirements

integrates

Inventory management focuses on ____ risk management, which varies depending upon a firm's positions in the distribution channel

inventory

The case fill rate is the percentage of units that can be filled when requested from available ____

inventory

What do anticipatory arrangements require to be produced to the final product state and deployed on the basis of forecasts or planned requirements?

inventory

Which type of performance does inventory policy drive?

inventory

what is the managerial procedures for implementing an inventory policy?

inventory control

While fair share allocations coordinates inventory ____ across multiple sites, it does not consider specific factors such as differences in performance cycle time, EOQ or safety stock requirements

levels

insurance cost is an expense based upon estimated risk or ____ over time

loss

Dependant demand follows that no specific safety stock should be necessary to support a time phased procurement program such as _____ requirements planning

materials

The materials, components, work in process, and finished product typically stocked in the logistics system are referred to as inventory, and the rolling ____ across time is referred to as average inventory.

mean

Service levels is often _____ in terms of performance cycle time, case fill rate, line fill rate, order fill or any combination of these

measured

Collaborative efforts to order in quantities that ____ total cost are essential to sound logistical arrangements

minimize

Management must understand inventory relationships to establish inventory policy with respect to when and how much to ______

order

inventory planning consists of determining when and how much to do with which of the following

order

The greater the weight of an order, the lower the cost per pound of transportation. This only applied from which expedition points?

origin of destination

a category profile details the combination of sizes, colors and associated product that usually sell in a particular type of retail ____

outlet

The final step in implementing a focused inventory management strategy is to define which of the following details?

parameters procedures

Which inventory objectives does service level define?

performance

in performance cycle uncertainty, the planner should expect the actual _____ cycle experience will cluster near the expected value and be skewed toward delayed delivery

performance

Even with good forecasting, demand during replenishment cycle typically exceeds or falls short of what is _____

planned

which of the following approaches is an alternative philosophy that proactively allocates or deploys inventory on the basis of forecasted demand and product availability?

planning

an integrated inventory management strategy defines the ___ and ___ used to determine where to place inventory and when to initiate replenishments as well as how much to allocate

policies process

storage cost is facility expense related to?

product holding

storage cost must be allocated on the requirements of specific ____ since it is not related directly to inventory value

products

the operative goal of manufacturing postponement is to maintain _____ in a neutral or non committed status as long as possible

products

a key to understanding the relationship is to remember that average inventory is equal to one half the order _____

quantity

inventory policy consists of guidelines regarding what to purchase or manufacture, when to purchase or manufacture it, and in what ______

quantity

when to order is determined by demand and replenishment lead time average and uncertainty. How much to order is determined by the order _____

quantity

a technology driven cooperative effort between retailers and suppliers to improve inventory velocity while closely matching replenishment supply to consumer buying patterns is considered which of the following?

quick response

capital assessment range from the prime interest ______ to a percent determined by upper management

rate

Manufacturing postponement is one product being manufactured one order at a time with no preparatory work until exact customer specifications are fully known and purchased confirmation states which of the following status?

received

forward deployment of inventory is postponed until customer order are updated to which of the following status?

received

the goal is to establish a supply chain arrangement so flexible and efficient that retail inventory is continuously ____

replenish

A perpetual inventory control process continuously reviews inventory levels to determine inventory _____ needs

replenishment

A perpetual review refers to a perpetual inventory control process which is continuously reviewing inventory levels to determine which inventory need?

replenishment

specific techniques for collaborative inventory ___ are quick response, vendor managed inventory, and profile replenishment

replenishment

quick response is implemented by sharing retail sales for specific products between supply chain participants to facilitate right product assortment availability when and where it is ___

required

Which of the following is included with manufacturers and wholesalers in experimenting with a sophisticated collaboration known as profile replenishment?

retailers

periodic inventory control ____ the inventory status of an item at regular intervals such as weekly or monthly

reviews

Which of the following is not an inventory management practice approach?

safety stock inventory management

The Numerical compounding of two interdependent variables involves multi-nominal expansion. A direct method is to determine the ____ deviations of demand and performance cycle uncertainty, and then to approximate the combined standard deviation using the convolution formula

standard

the basic notion of geographic postponement is to build and ___ a full line inventory at one or a limited number of strategic location

stock

Classifying products and markets, defining segment strategies, and operationalize policies and parameters are steps to what process?

strategy development

effective collaborative replenishment programs require extensive cooperation and information sharing among which of the following?

supply chain partners

The segment strategy includes specification for all aspects of the inventory management process, including service objectives, forecasting, method, management____ and review cycle

technique

Performance cycle uncertainty involves inventory replenishment ___ variation

time

Safety stock is maintained in logistics system to protect against demand and performance cycle ________

uncertainty

the tax rate and means of assessment vary by location. The tax expense is usually a direct levy based on average inventory value on a specific day of the year or average inventory ____ over a period of time

value