Supply Chain Test 1

Estimate the cost of a stock-out if the margin for the retailer is $1 and half of the time the customer switches brands and the other half of the time the customer doesn't buy.

$.50

Estimate the cost of a stock-out if the margin for the retailer is $1 and 25% of the time customer simply switches brand but 75% of the time they don't buy anything

$.75

Estimate the cost of a stock-out if the margin for the retailer is $1 and 25% of the time the customer doesn't buy anything but 75% of the time they simply buy another brand

$.75

Using the data from question 6, create a forecast for period 5 using Exponential Smoothing with an alpha of .5

50

Using the data from question 1, create a forecast for period 3 using Exponential Smoothing with an alpha of .4

500 - 500 = 0 * .4 = 0 490 - 500 = 10 * .4 = 4 500 - 4 = 496

Using the data from question 1, create a forecast for period 3 using Exponential Smoothing with an alpha of .8

500 - 500 = 0 * .8 = 0 490 - 500 = 10 * .8 = 8 500 - 8 = 492

Using the data from question 6, create a forecast for period 5 using Exponential Smoothing with an alpha of .2

52

Using the data from question 6, create a forecast for period 4 using (5,5).

54

Using the data from question 1, create a forecast for period 5 using (5,3,2).

550 * 5 = 2750 650 * 3 = 1950 490 * 2 = 980 ------------------ 10 5680 5680 / 10 = 568

Use the following for questions 1-5: Period Demand 1 500 2 490 3 650 4 550 5 575 6 Using a Weighted Moving Average (4,3,2,1), create a forecast for period 6.

575 * 4 = 2300 550 * 3 = 1650 650 * 2 = 1300 490 * 1 = 490 ------------------ 10 5740 5740 / 10 = 547

Use the following for the next 5 questions : Period Demand 1 50 2 65 3 42 4 57 5 75 6 Using the above data, create a forecast for period 6 using (4,3).

75 * 4 = 300 57 * 3 = 171 ---------------- 7 471 471 / 7 = 67

With a product that has a mean demand of 50 with a standard deviation of 10, if the seller hold 60 units in stock, what would the customer service level be?

About 84%

With a product that has a mean demand of 50 with a standard deviation of 10, if the seller hold 80 units in stock, what would the customer service level be?

About 99%

A SKU has a demand of 5 everyday but every 4th day, it is out of stock. What is the SKU's Item Fill Rate?

All # of items in stock / Total # of items in category = PIIS 15/20 = 75%

If an item is in stock for 10 days and then out of stock for 2 days, what is the item's Percent of Time in Stock?

All # of items in stock / Total # of items in category = PIIS 10/12 = .83 = 83%

If an item is in stock for 3 days and then out of stock for 3 days, what is the item's Percent of Time in Stock?

All # of items in stock / Total # of items in category = PIIS 3 / 6 = .50 = 50%

Which of the following are considered customer service targets?

All of the above (% of item in stock, % of demand fulfilled, % of time in stock)

Which of the following is something customers can do when faced with an out-of-stock?

All of the above (drop everything and go to another store, purchase a different brand, wait until the next shopping trip to buy the item)

A new DC can affect ROA by

All of the above (increasing the asset portion of the ROA equation, lowering the outbound costs which increases the profit portion of the ROA equation, increasing the inbound cost which decrease the profit portion of the ROA equation)

Processes are defined as

An ordered set of activities and information flow

If we sold 500 units in a year had an average inventory of 100 units, what was our inventory turns

Annual Sales / Average Inventory = Inventory Turns 500 / 100 = 5

Outsourcing can be described as

Any activity or set of activities that us handed over to a third party

The constant difference (higher or lower) between actual demand and forecast demand is called what? It can also be found using the running sum of the forecasting error and the mean forecast error

Bias

Using the data from question 6, create a forecast for period 4 using a 2-Period Moving Average.

Demand of Periods / # of Periods (65 + 42) / 2 = 53.5 = 54

Using the data from question 1, create a forecast for period 6 using a 3-Period Moving Average.

Demand of Periods 5, 3, 2 / # of Periods (650 + 550 + 575) / 3 = 592

The difference between the actual demand and the forecast is called the

Error

An example of Process Design would be

Have the supplier do the forecast rather than doing it yourself

The percent of demand filled from on-hand inventory is called

Item Fill Rate

An example of the Qualitative Method of forecasting is

Jury of Executive Opinion

Walmart focused on rural areas because

Land is cheaper in rural areas

The time between the initiation and completion of a process is known as

Lead Time

The difference between the lead time and the customer's order cycle is called

Lead Time Gap

Management of the flows and storage of inventory so that the total cost is minimized and customer service targets are achieved is the definition of

Logistics

Which of the following sentences are correct?

Logistics helps integrate business processes to manage the trade-offs between total costs and customer service

How much the forecast deviates from the actual observations is called what? It can be found by using MAPE and SDFE

Magnitude

We can use this metric to see the magnitude of our forecast error

Mean Absolute Percent Error

The time over which companies must make demand projections is called the

Planning Horizons

Walmart used SCM to create competitive advantage by

Putting stores close to distribution centers

Being able to change logistics and SCM activities quickly is which of 4R's?

Responsiveness

Which of the following Inventory Holding Costs refers to the cost associated with the chances of a product being stolen?

Risk

We can use this metric to see how much bias is in our forecast

Running Sum of Forecast Error

The expected number of units on hand just before a replenishment is received and available for use or sale is referred to as

Safety Stock

Which of the following Inventory Holding Costs refers to the cost associated with return on investment in inventory?

Space

Walmart would wait to expand geographically until

The current markets they occupied are saturated

"Many other costs outside the acquisition cost" describes

The total cost of ownership

The customer service component that is concerned with percent of items in stock, percent of time an item is in stock, order fill rates, lead times, etc., is

Transaction

Cost specific to Logistics can include

Transportation cost, inventory holding cost, warehousing and procurement

If we sold 1,000 units in a year, had an average inventory of 100 units, and were open 260 days a year, how many days of supply would we have?

Unit Sales / Monitory Turns 1000 / 100 = 10 Turn into fraction 1/10 yrs of supply Yrs of supply * Days open a year = Days of supply 1/10 * 260 = 26

Use the data below for the next three questions Forecast X Forecast Y Forecast Z RSFE -462. 29 -459 MFE -154 9.7 -153 MAPE 13.1 13 12.7 SDFE 24.6 23.4 21.1 Which of the three forecasts has the largest magnitude?

X

Use the data below for the next three questions Forecast X Forecast Y Forecast Z RSFE -462. 29 -459 MFE -154 9.7 -153 MAPE 13.1 13 12.7 SDFE 24.6 23.4 21.1 Using the data from question 16, which one of the three seems to have forecasts that are consistently lower than actual demand?

Y

Use the data below for the next three questions Forecast X Forecast Y Forecast Z RSFE -462. 29 -459 MFE -154 9.7 -153 MAPE 13.1 13 12.7 SDFE 24.6 23.4 21.1 Which one of the three forecasts has the least amount of bias?

Y

Process Redesign

is concerned with improving performance by changing the order of activities or fundamentally changing the activities themselves