Exam Review for Exam 1

A supply chain features a constant flow of

information, product, and funds.

Which questions are answered by the typical inventory model?

timing of orders and order quantity.

Why do we use the basic Economic Order Quantity model?

to minimize the sum of setup (ordering) cost and holding cost.

The time horizon of the operation phase is typically

weekly or daily.

John's House of Pancakes uses a weighted moving average method to forecast pancake sales. It assigns a weight of 5 to the previous month's demand, 3 to demand two months ago, and 1 to demand three months ago. If sales amounted to 3000 pancakes in May, 2200 pancakes in June, and 1000 pancakes in July, what should be the forecast for August?

1622 Step 1: Step 2:

SRM software should be capable of:

All of these 1. Automating transactional processes. 2. Making information flow between partners more visible. 3. Integration of the supply chain making it possible to monitor multiple departments and processes both internally and externally.

Which legal form of transportation is not bound to serve the general public, but rather serve specific customers under contractual agreements?

Contract Carriers

According to video "Amazon Is Quietly Shipping Non-Amazon Orders To Compete With FedEx, UPS", linked in the lecture notes, which service does Amazon primarily outsource to USPS, as mentioned in the video?

Costly rural deliveries

Supply chain surplus involves what two parts?

Customer value and supply chain cost

Among the options provided, which activity can be classified as part of the "Operations" in SCM?

Demand Management

Which of the following is NOT important in developing a successful strategic alliance?

Developing efficient processes that will remain unchanged for the duration of the partnership.

Which of the following is not a step in the forecasting process?

Eliminate any assumptions.

Which time-series model uses BOTH past forecasts and past demand data to generate a new forecast?

Exponential smoothing

A forecast with a time horizon of about 3 months to 3 years is typically called a long-range forecast.

False

It is critical that buyers and suppliers develop stronger relationships and partnerships based on a tactical rather than a strategic perspective.

False

The supply chain planning phase exceeds the supply chain design phase in duration.

False

Which of the following is a disadvantage of "Direct Shipping with Milk Runs" transportation network?

Increased Coordination Complexity

According to the text, key ingredients for developing successful supply partnerships include all of the following EXCEPT:

Individualized Objectives

Which of the following is NOT a form of countertrade?

Kaizen Blitz

What is the best transportation option to meet the needs of Low Density customers at a Medium Distance?

LTL or Package Carrier

Serving a medium density of customers at a long distance is best done using

LTL or package carrier

It is best to aggregate only safety inventory and use inexpensive mode of transportation for replenishing cycle inventory when we have a

Low-value product and low demand.

______________ expresses the error as a percent of the actual values.

MAPE (Mean Absolute Percentage Error)

A forecast with a time horizon of about 3 months to 3 years is typically called a:

Medium-Range Forecast.

The decision to have a third party perform a supply chain function is called

Outsourcing

Which of the following is an intermodal transportation mode?

Piggy-back service

Which of the following is correct about the market-positioned strategy?

Places warehouses close to customers.

Which type of warehouses are owned by for-profit organizations and lease warehousing and distribution services.

Public Warehouses

Which of the following is a reason for favoring single sourcing?

Reduces variabilities in quality levels

Which of the following is NOT a potential challenge for global sourcing?

Relaxed trade barriers

Streamlining the processes and communications between the buyer and supplier using software applications that enable these processes to be managed more efficiently and effectively can be referred to as:

SRM

The entire set of business processes required to purchase goods and services is

Sourcing

Which of the following activities allows buyers to assume the supplier will meet certain product quality and service requirements?

Supplier Certification

What are the four important foundations of the supply chain?

Supply, Operations, Logistics, Integration

Time-series data may exhibit which of the following behaviors?

They may exhibit all of the above 1. Trend 2. Random Variations 3. Seasonality 4. Cycles

Which transportation mode is the most used for freight shipping in the US?

Truck

A seven-step approach to supplier development might include identifying critical suppliers not meeting performance requirements.

True

Decentralized purchasing is the practice where individual, local purchasing departments throughout a single corporation make their own, individual purchasing decisions to fulfill their individual local needs.

True

Offering an awards program to suppliers both motivates the suppliers to commit to a program of continuous improvement as well as provides role models for other suppliers to follow.

True

The procedures for public procurement differ from the private sector.

True

The purchase order is NOT a legally binding contract until it is accepted by the supplier.

True

What is the most inexpensive and slow transportation mode?

Water Carriers

Perform ABC analysis on the following data. Which item do you suggest to be a "Class A" item?

What the answer looks like: YY-32 What the answer looks like in the table given: Item: YY-32 Annual Demand: 12 Unit Cost: $950

If the setup (order) cost is tripled in the basic EOQ model, and other values are unchanged, what will happen to EOQ value?

increases by about 73%.

Using a third party requires a firm to share demand information and in some cases intellectual property. This risk would be described as

leakage of sensitive data and information.

The objective of every supply chain is to

maximize the net value generated.

The process by which companies acquire raw materials, components, products, services, and other resources from suppliers to execute their operations is

procurement.

A seasonal index for a monthly series is about to be calculated on the basis of three years' accumulation of data. The three previous September values were 180, 220, and 170. The average over all months is 230. The approximate seasonal index for September is:

0.826 Step 1: 180 + 220 + 170 = 570 Step 2: 570 / 3 = 190 (Three comes from the Three Previous September Values.) Step 3: 190 / 230 = 0.826

An inventory manager says that after doing the calculations, they have determined their strategy: "When the inventory level falls below 2,500 items, they order 15,000 items from the supplier." Which of the following is TRUE?

2,500 is the reorder point, and 15,000 is the order quantity.

Which mode of transportation is best for shipping light and high-value items to long distances?

Air

Which of the following is important in developing successful relationships in a partnership?

All of these 1. Commitment by top management. 2. Interpersonal business relationships between employees of the companies. 3. Mutual/compatible needs that result in a win-win situation for the partners.

Which of the following is NOT a key tenant of an SRM system?

Lean Operations

Which time-series model below assumes that demand in the next period will be equal to the most recent period's demand?

Naive Approach

Which of the following is an advantage of a centralized purchasing department?

Specialization

An organization's process for evaluating the quality systems of key suppliers in an effort to eliminate incoming inspections can be referred to as:

Supplier Certification

The decision phases in a supply chain include

Supply Chain Operation.

Building Trust, Shared Vision and Objectives, Personal Business Relationships, Mutual Benefits and Needs are key factors that contribute to a lasting supplier partnership.

True

Effective sourcing processes within a firm can improve profits for the firm and total supply chain surplus in a variety of ways.

True