Chapter 11 and 12

four main categories of inventory

1. Raw Materials 2. Work-in-Process (WIP) sometimes called Work-in-Progress 3. Finished Goods 4. Maintenance, Repair and Operating (MRO) supplies (not directly related to product creation)

Which of the following statements is​ TRUE? A. All suppliers will be disrupted simultaneously if either a​ super-event occurs or a​ super-event does not occur but a​ unique-event occurs for all of the suppliers. B. Large probabilities of a unique event decrease the likelihood of needing more suppliers. C. To compute the probability of all n suppliers being disrupted​ simultaneously, we assume that the probabilities are all dependent on each other. D. As the probability of a​ super-event decreases, the advantage of utilizing multiple suppliers diminishes.

A. All suppliers will be disrupted simultaneously if either a​ super-event occurs or a​ super-event does not occur but a​ unique-event occurs for all of the suppliers.

Which of the following statements is NOT​ true? A. An increased sales effort may help a firm reach its profit goals more easily than would effective cost cutting. B. A supply chain includes​ suppliers; manufacturers​ and/or service​ providers; and​ distributors, wholesalers,​ and/or retailers who deliver the product​ and/or service to the final customer. C. The objective of supply chain management is to coordinate activities within the supply chain to maximize the supply​ chain's competitive advantage and benefits to the ultimate consumer. D. Supply chain management describes the coordination of all supply chain​ activities, starting with raw​ materials, and ending with a satisfied customer.

A. An increased sales effort may help a firm reach its profit goals more easily than would effective cost cutting.

Which of the following statements is NOT true regarding the bullwhip​ effect? A. The bullwhip effect occurs as order are relayed from​ retails, to​ distributors, to​ wholesalers, to​ manufacturers, with fluctuations decreasing at each step in the sequence. B. Bullwhip fluctuations in the supply chain increase the costs associated with​ inventory, transportation, shipping and receiving. C. Inaccurate information results in distortions and​ fluctuations, causing what is known as the bullwhip effect. D. Bullwhip fluctuations in the supply chain decrease customer service and profitability.

A. The bullwhip effect occurs as order are relayed from​ retails, to​ distributors, to​ wholesalers, to​ manufacturers, with fluctuations decreasing at each step in the sequence.

Faster shipping usually means A. a more expensive shipper and lower holding costs. B. a less expensive shipper and higher holding costs. C. a more expensive shipper and higher holding costs. D. a less expensive shipper and lower holding costs.

A. a more expensive shipper and lower holding costs.

The advantage of having many potential suppliers is their willingness to A. offer lower prices in the short term. B. provide technical expertise. C. participate in JIT. D. provide innovations.

A. offer lower prices in the short term.

Which of the following is NOT one of the major causes of the bullwhip​ effect? A. shared demand information B. order batching C. price fluctuations D. demand forecast errors

A. shared demand information

What event in 2011 caused manufacturers in several industries worldwide to wait 6 months or longer to see their supply chains working normally​ again? A. Chinese flood B. Japanese earthquake and tsunami C. U.S. hurricane D. German tornado

B. Japanese earthquake and tsunami

With regard to the​ cost-based price model negotiation​ strategy, which of the following is​ true? A. Prices float based on what the customer is willing to pay. B. Prices are based upon supplier costs. C. Prices are based in some way upon market standards agreed to by both supplier and purchaser. D. Potential suppliers each submit quotations as to​ price, delivery, and so on.

B. Prices are based upon supplier costs.

A statistical model applicable when product demand or any other variable is not known but can be specified by means of a probability distribution is referred as A. the EOQ. B. a probabilistic model. C. a robust model. D. a quantity discount model.

B. a probabilistic model.

The cost to produce the goods or services sold for a given period is referred to as A. inventory turnover. B. cost of goods sold. C. inventory investment. D. weeks of supply.

B. cost of goods sold.

The advantage of having few suppliers is to A. look for​ short-term attributes. B. form a​ long-term relationship. C. take advantage of diseconomies of scale. D. pursue low cost.

B. form a​ long-term relationship.

The advantage of having few suppliers is to A. take advantage of diseconomies of scale. B. form a​ long-term relationship. C. pursue low cost. D. look for​ short-term attributes.

B. form a​ long-term relationship.

Which of the following statements is NOT​ true? A. A​ closed-loop supply chain prepares for returns prior to product introduction. B. Reverse logistics involves the processes of sending returned products back up the supply chain for​ resale, repair,​ reuse, remanufacture,​ recycling, or disposal. C. A​ closed-loop supply chain is a designed to optimize only reverse flows. D. ​"Closed-loop supply​ chain" is sometimes used as a synonym for​ "reverse logistics."

C. A​ closed-loop supply chain is a designed to optimize only reverse flows.

Extra units that are held in inventory to reduce stockouts are called A. ​just-in-time inventory. B. demand variance. C. safety stock. D. reorder point.

C. safety stock

What is the cost to prepare a machine or process for​ production? A. preparation cost B. holding cost C. setup cost D. ordering cost

C. setup cost

Which of the following is an opportunity for effective management in the supply chain?

Channel assembly

The production order quantity model

is appropriate when units are produced and sold simultaneously.

Airfreight A. is the oldest means of freight transportation. B. represents about​ 10% of the tonnage shipped in the United States. C. is a​ fast-growing mode of shipping. D. is the best way to transport natural gas.

is a​ fast-growing mode of shipping.

Keeping a product generic as long as possible before customizing is known as __________.

postponement

In the​ single-period inventory​ model, the overage cost is A. cost per unit minus salvage value per unit. B. cost per unit minus sales price per unit. C. salvage value per unit. D. sales price per unit minus cost per unit.

A. cost per unit minus salvage value per unit.

Which one of the following distribution systems offers quickness and reliability when emergency supplies are needed overseas?

Airfreight

ABC analysis generally divides on-hand inventory into three classes based upon

Annual Dollar Volume

What is transferring a​ firm's activities that have traditionally been internal to external​ suppliers? A. ​make-or-buy B. outsourcing C. keiretsu network D. vertical integration

B. Outsourcing

ch of the following is NOT one of the basic assumptions of the basic EOQ​ model? A. Lead time is known and consistent B. Receipt of inventory is instantaneous and complete. C. Quantity discounts are possible. D. Demand for an item is known.

C. Quantity discounts are possible.

What is transferring a​ firm's activities that have traditionally been internal to external​ suppliers? A. ​make-or-buy B. outsourcing C. vertical integration D. keiretsu network

Outsourcing

Extra units that are held in inventory to reduce stockouts are called __________.

Safety Stock

The appropriate level of safety stock is typically determined by

choosing the level of safety stock that assures a given service level

The three classic types of negotiation strategies are __________.

cost-based price model, market-based price model, and competitive bidding

In the probabilistic model, increasing the service level will __________.

increase the cost of the inventory policy

Local optimization is a supply-chain complication best described as __________.

optimizing one's local area without full knowledge of the organizational need

The transfer of some of what are traditional internal activities and resources of a firm to outside vendors is __________.

outsourcing

The difference between the basic Economic Order Quantity (EOQ) model and the production order quantity model is that

the production order quantity model does not require the assumption of instantaneous delivery.

The primary purpose of the basic economic order quantity model shown below is

to minimize the sum of setup cost and holding cost.

The three major variations of online catalogs are grouped by __________.

vendors, intermediaries, and buyer exchange systems

The two most important inventory-based questions answered by the typical inventory model are

when to place an order and how many of an item to order.

Which of the following is NOT true about reverse logistics as compared to foward​ logistics? A. Speed is often very important. B. Distribution costs are less directly visible. C. Forecasting is more uncertain. D. Pricing is dependent on many factors.

A. Speed is often very important.

Which of the following statements is NOT one of the differentiation strategy​ decisions? A. Use buffer stocks to ensure speedy supply. B. Gather and communicate market research data. C. Modular design to aid product differentiation. D. Minimize inventory to avoid product obsolescence.

A. Use buffer stocks to ensure speedy supply

Which of the following is TRUE regarding the bullwhip effect​ measure? A. Variance amplification is present if the bullwhip measure is greater than one. B. No amplification is present if the bullwhip measure is equal to zero. C. A smoothing or dampening scenario exists as orders move up the supply chain towards suppliers if the bullwhip measure is greater than one. D. Variance amplification is present if the bullwhip measure is greater than zero.

A. Variance amplification is present if the bullwhip measure is greater than one.

Which of the following statements is​ TRUE? A. When multiple suppliers are​ used, having geographically dispersed suppliers could lessen the probability of all failing simultaneously. B. When multiple suppliers are​ used, having geographically centralized suppliers could lessen the probability of all failing simultaneously. C. The risk mitigation effectiveness of using multiple suppliers has nothing to do with the probability of a​ super-event occurring. D. It is usually less risky to use single suppliers rather than multiple suppliers.

A. When multiple suppliers are​ used, having geographically dispersed suppliers could lessen the probability of all failing simultaneously.

Which of the following is NOT a remedy for the bullwhip​ effect? A. allocate orders based on forecasts B. channel coordination C. information sharing D. price stabilization

A. allocate orders based on forecasts

Which of the following mitigation tactics is NOT designed to reduce the risk of information loss or​ distortion? A. alternate sourcing B. secure IT systems C. redundant databases D. training of supply chain partners on the proper interpretations and use of information

A. alternate sourcing

A system that triggers ordering on a uniform time basis is called A. a​ fixed-period system. B. a​ fixed-quantity system. C. an EOQ system. D. a reorder point system.

A. a​ fixed-period system.

The cost to produce the goods or services sold for a given period is referred to as A. cost of goods sold. B. weeks of supply. C. inventory investment. D. inventory turnover.

A. cost of goods sold.

Inventory record accuracy would be decreased by A. increasing stockroom accessibility. B. ABC analysis. C. reorder points. D. cycle counting.

A. increasing stockroom accessibility.

Airfreight A. is a​ fast-growing mode of shipping. B. is the oldest means of freight transportation. C. is the best way to transport natural gas. D. represents about​ 10% of the tonnage shipped in the United States.

A. is a​ fast-growing mode of shipping.

A response strategy requires suppliers be selected based primarily on A. ​capacity, speed, and flexibility. B. being willing to share information. C. product development skills. D. cost.

A. ​capacity, speed, and flexibility.

Which negotiation strategy bases price on a​ published, auction, or index​ price? A. ​market-based price model B. ​cost-based price model C. ​supply-based price model D. competitive bidding

A. ​market-based price model

Which of the following statements is​ TRUE? A. Large probabilities of a unique event decrease the likelihood of needing more suppliers. B. All suppliers will be disrupted simultaneously if either a​ super-event occurs or a​ super-event does not occur but a​ unique-event occurs for all of the suppliers. C. To compute the probability of all n suppliers being disrupted​ simultaneously, we assume that the probabilities are all dependent on each other. D. As the probability of a​ super-event decreases, the advantage of utilizing multiple suppliers diminishes.

B. All suppliers will be disrupted simultaneously if either a​ super-event occurs or a​ super-event does not occur but a​ unique-event occurs for all of the suppliers.

Which of the following statements is NOT​ true? A. Supply chain management describes the coordination of all supply chain​ activities, starting with raw​ materials, and ending with a satisfied customer. B. An increased sales effort may help a firm reach its profit goals more easily than would effective cost cutting. C. A supply chain includes​ suppliers; manufacturers​ and/or service​ providers; and​ distributors, wholesalers,​ and/or retailers who deliver the product​ and/or service to the final customer. D. The objective of supply chain management is to coordinate activities within the supply chain to maximize the supply​ chain's competitive advantage and benefits to the ultimate consumer.

B. An increased sales effort may help a firm reach its profit goals more easily than would effective cost cutting.

Which of the following statements is NOT true about a​ fixed-period system? A. The disadvantage of the​ fixed-period system is that because there is no tally of inventory during the review​ period, there is the possibility of a stockout during this time. B. A​ fixed-period system is also called​ "continuous review." C. The advantage of the​ fixed-period system is that there is no physical count of inventory items after an item is withdrawn. D. A​ fixed-period system is appropriate when vendors make routine visits to customers to take fresh orders or when purchasers want to combine orders to save ordering and transportation costs.

B. A​ fixed-period system is also called​ "continuous review."

Which of the following statements is NOT​ true? A. The factor weighting approach can help firms evaluate potential suppliers. B. The factor weighting approach does not involve subjective judgment. C. The factor weighting approach can help firms identify the features that are important to them. D. The factor weighting model adds objectivity to decision making.

B. The factor weighting approach does not involve subjective judgment.

Which of the following statements is​ TRUE? A. It is usually less risky to use single suppliers rather than multiple suppliers. B. When multiple suppliers are​ used, having geographically dispersed suppliers could lessen the probability of all failing simultaneously. C. When multiple suppliers are​ used, having geographically centralized suppliers could lessen the probability of all failing simultaneously. D. The risk mitigation effectiveness of using multiple suppliers has nothing to do with the probability of a​ super-event occurring.

B. When multiple suppliers are​ used, having geographically dispersed suppliers could lessen the probability of all failing simultaneously.

What is a​ long-term purchase commitment to a supplier for items that are to be delivered against​ short-term releases to​ ship? A. advanced shipping notice B. blanket order C. postponement D. drop shipping

B. blanket order

A​ single-period inventory model is NOT applicable for A. newspapers. B. furniture. C. seasonal goods. D. milk.

B. furniture.

Which of the following does NOT belong to ordering​ costs? A. clerical support B. interest payments C. cost of supplies D. order processing

B. interest payments

Trucking A. is one of the least flexible transportation modes. B. is increasingly using computers to manage its operations. C. does not play a role in multimodal shipping. D. is the least used transportation mode for manufacturing goods.

B. is increasingly using computers to manage its operations.

Trucking A. is the least used transportation mode for manufacturing goods. B. is increasingly using computers to manage its operations. C. does not play a role in multimodal shipping. D. is one of the least flexible transportation modes.

B. is increasingly using computers to manage its operations.

Policies based on ABC analysis might include investing A. more in inventory security for C items. B. more in supplier development for A items. C. the most time and effort verifying the accuracy of records for B items. D. extra care in forecasting for C items.

B. more in supplier development for A items.

The advantage of having many potential suppliers is their willingness to A. participate in JIT. B. offer lower prices in the short term. C. provide innovations. D. provide technical expertise.

B. offer lower prices in the short term.

Which of the following does NOT belong to holding​ costs? A. ​pilferage, scrap, and obsolescence B. order processing C. storage costs D. insurance on inventory

B. order processing

Three common measures of supply chain performance​ are: A. ​debt/equity ratio, inventory​ turnover, and weeks of supply. B. percentage invested in​ inventory, inventory​ turnover, and weeks of supply. C. percentage invested in​ inventory, inventory​ turnover, and​ debt/equity ratio. D. percentage invested in​ inventory, debt/equity​ ratio, and weeks of supply.

B. percentage invested in​ inventory, inventory​ turnover, and weeks of supply.

Which of the following mitigation tactics could reduce economic​ risk? A. subcontractors on retainer B. purchasing contracts that address price fluctuations C. franchising and licensing D. multiple transportation modes and warehouses

B. purchasing contracts that address price fluctuations

Three criteria for designing distribution networks to meet customer expectations​ are: A. low​ cost, rapid response and product choice. B. rapid​ response, product​ choice, and service. C. rapid​ response, low​ cost, and service. D. low​ cost, product choice and service.

B. rapid​ response, product​ choice, and service.

Efficiency in a warehouse is primarily improved by A. creating wider aisles. B. reducing worker travel time. C. using taller shelves. D. increasing order quantities.

B. reducing worker travel time.

For seasonal​ products, the service level should be set to equal A. overage cost​ / (overage cost minus shortage​ cost). B. shortage cost​ / (overage cost​ + shortage​ cost). C. overage cost​ / (overage cost​ + shortage​ cost). D. shortage cost​ / (overage cost minus shortage​ cost).

B. shortage cost​ / (overage cost​ + shortage​ cost).

The objective of inventory management is to A. provide a selection of goods for anticipated customer demand. B. strike a balance between inventory investment and customer service. C. decouple various parts of the production process. D. take advantage of quantity discounts.

B. strike a balance between inventory investment and customer service.

Which of the following is the first stage of supplier​ selection? A. negotiations B. supplier evaluation C. supplier development D. contracting

B. supplier evaluation

Which of the following is the first stage of supplier​ selection? A. supplier development B. supplier evaluation C. negotiations D. contracting

B. supplier evaluation

Which of the following elements is NOT used in a decision tree analysis for selection of the number of suppliers under​ risk? A. the marginal cost of managing a supplier B. the probability of a​ "unique-event" that would disrupt all suppliers simulataneously C. the financial loss incurred in a supply cycle if all suppliers were disrupted D. the probability of a​ "super-event" that would disrupt all suppliers simultaneously

B. the probability of a​ "unique-event" that would disrupt all suppliers simulataneously

What is developing the ability to produce goods or services previously purchased or actually buying a supplier or a​ distributor? A. outsourcing B. vertical integration C. virtual companies D. horizontal integration

B. vertical integration

Prior to embarking on supply chain​ design, operations managers must first consider A. how to manage supply chain inventory. B. ​"make-or-buy" and outsourcing decisions. C. how to select suppliers. D. what kind of distribution network to have.

B. ​"make-or-buy" and outsourcing decisions.

A lawnmower assembly plant uses a variety of​ nuts, bolts,​ screws, and other fasteners in its operation. Its supplier delivers these items directly to the point of use on the assembly line and ensures that there are always sufficient quantities of fasteners to maintain the production schedule. This is an example of A. postponement. B. ​vendor-managed inventory. C. ​e-procurement. D. single stage control of replenishment.

B. ​vendor-managed inventory.

Which of the following statements is NOT true regarding channel​ assembly? A. Channel assembly postpones final assembly of a product so the distribution channel can assemble it. B. Channel assembly represents one way to implement postponement. C. Channel assembly sends individual​ components, modules, and finished​ products, to the distributor. D. Channel assembly treats distributors more as manufacturing partners than as distributors.

C. Channel assembly sends individual​ components, modules, and finished​ products, to the distributor.

Which of the following statements is NOT​ true? A. Packaging and logistics are important distribution​ decisions, because the manufacturer is usually held responsible for breakages and serviceability. B. ​Top-notch supply chain performance requires good downstream​ management, just as it does good upstream management. C. Finding the optimal number of facilities represents a critical and static decision. D. An effective supplier management program and an effective distribution management program may make the difference between supply chain success and failure.

C. Finding the optimal number of facilities represents a critical and static decision.

Which of the following is NOT one of the benefits accrued from a centralized purchasing​ function? A. Maintain professional control over the purchasing process. B. Devote more resources to the supplier selection and negotiation process. C. Increase the duplication of tasks. D. Leverage purchase volume for better pricing.

C. Increase the duplication of tasks.

Which organization has developed principles and standards to be used as guidelines for ethical​ behavior? A. Institute for Procurement Management B. Institute for Vendor Management C. Institute for Supply Management D. Institute for Purchasing Management

C. Institute for Supply Management

Which of the following is NOT true about reverse logistics as compared to foward​ logistics? A. Pricing is dependent on many factors. B. Forecasting is more uncertain. C. Speed is often very important. D. Distribution costs are less directly visible.

C. Speed is often very important.

A system that keeps track of each withdrawal or addition to inventory continuously is A. a continuous inventory system. B. a constant monitoring system. C. a perpetual inventory system. D. a fixed period system.

C. a perpetual inventory system.

Which of the following statements is NOT generally an implication stemming from an increase in the number of​ facilities? A. increased facility costs B. increased customer satisfaction C. decreased total logistics cost D. quicker response

C. decreased total logistics cost

Supply chain managers outsource logistics to meet three​ goals: A. drive down inventory​ investment, improve delivery reliability and​ speed, and provide better market response. B. drive down inventory​ investment, lower delivery​ costs, and provide better market response. C. drive down inventory​ investment, lower delivery​ costs, and improve delivery reliability and speed. D. lower delivery​ costs, improve delivery reliability and​ speed, and provide better market response.

C. drive down inventory​ investment, lower delivery​ costs, and improve delivery reliability and speed.

Supply chain managers outsource logistics to meet three​ goals: A. drive down inventory​ investment, lower delivery​ costs, and provide better market response. B. drive down inventory​ investment, improve delivery reliability and​ speed, and provide better market response. C. drive down inventory​ investment, lower delivery​ costs, and improve delivery reliability and speed. D. lower delivery​ costs, improve delivery reliability and​ speed, and provide better market response.

C. drive down inventory​ investment, lower delivery​ costs, and improve delivery reliability and speed.

Inventory control models assume that demand for an item is A. always independent on the demand for other items. B. identical to the demand for other items. C. either independent of or dependent on the demand for other items. D. always dependent on the demand for other items.

C. either independent of or dependent on the demand for other items.

Inventory record accuracy would be decreased by A. ABC analysis. B. cycle counting. C. increasing stockroom accessibility. D. reorder points.

C. increasing stockroom accessibility.

Cycle counting A. involves shutting down production once per year to perform the annual inventory count. B. cannot be performed in an independent demand situation. C. is a process by which inventory records are verified. D. increases annual inventory adjustments.

C. is a process by which inventory records are verified.

Three common measures of supply chain performance​ are: A. percentage invested in​ inventory, inventory​ turnover, and​ debt/equity ratio. B. percentage invested in​ inventory, debt/equity​ ratio, and weeks of supply. C. percentage invested in​ inventory, inventory​ turnover, and weeks of supply. D. ​debt/equity ratio, inventory​ turnover, and weeks of supply.

C. percentage invested in​ inventory, inventory​ turnover, and weeks of supply.

Which of the following types of inventory describes inventory that has been purchased but not​ processed? A. ​finished-goods inventory B. ​work-in-process inventory C. raw material inventory D. ​maintenance/repair/operating supply inventory

C. raw material inventory

Which of the following is NOT one of the major causes of the bullwhip​ effect? A. price fluctuations B. order batching C. shared demand information D. demand forecast errors

C. shared demand information

The difference between the basic EOQ model and the production order quantity model is that A. there are no holding costs in the production order quantity model. B. the production order quantity model does not require the assumption of​ known, constant demand. C. the production order quantity model does not require the assumption of instantaneous delivery. D. the EOQ model does not require the assumption of​ known, constant lead time.

C. the production order quantity model does not require the assumption of instantaneous delivery.

What is a supply chain designed to optimize both forward and reverse​ flows? A. ​open-loop supply chain B. ​bullwhip-loop supply chain C. ​closed-loop supply chain D. ​reverse-loop supply chain

C. ​closed-loop supply chain

What is a system for ordering items that have little or no value at the end of a sales​ period? A. ROP B. EOQ C. ​single-period inventory model .D. production order quantity model

C. ​single-period inventory model

A lawnmower assembly plant uses a variety of​ nuts, bolts,​ screws, and other fasteners in its operation. Its supplier delivers these items directly to the point of use on the assembly line and ensures that there are always sufficient quantities of fasteners to maintain the production schedule. This is an example of A. postponement. B. single stage control of replenishment. C. ​vendor-managed inventory. D. ​e-procurement.

C. ​vendor-managed inventory.

What type of negotiation strategy requires the supplier to open its books to the purchasers?

Cost-based price model

Which of the following statements is NOT​ true? A. Inventory holding costs can be computed for various shipping alternatives to better compare their overall cost impact. B. To do transportation mode​ analysis, the operations or logistics manager not only needs to consider the holding cost and shipping​ cost, but also other factors such as​ on-time delivery, getting a new product to​ market, and so on. C. The longer a product is in​ transit, the longer the firm has its money invested. D. A less expensive shipper tends to result in slower shipments and lower holding costs.

D. A less expensive shipper tends to result in slower shipments and lower holding costs.

Which of the following statements is NOT​ true? A. Reverse logistics involves the processes of sending returned products back up the supply chain for​ resale, repair,​ reuse, remanufacture,​ recycling, or disposal. B. A​ closed-loop supply chain prepares for returns prior to product introduction. C. ​"Closed-loop supply​ chain" is sometimes used as a synonym for​ "reverse logistics." D. A​ closed-loop supply chain is a designed to optimize only reverse flows.

D. A​ closed-loop supply chain is a designed to optimize only reverse flows.

Which of the following statements is NOT true regarding channel​ assembly? A. Channel assembly postpones final assembly of a product so the distribution channel can assemble it. B. Channel assembly represents one way to implement postponement. C. Channel assembly treats distributors more as manufacturing partners than as distributors. D. Channel assembly sends individual​ components, modules, and finished​ products, to the distributor.

D. Channel assembly sends individual​ components, modules, and finished​ products, to the distributor.

Which of the following statements is NOT true about the factor weighting​ technique? A. The factor weighting technique considers multiple supplier criteria. B. Each factor must be assigned an importance weight. C. Each potential supplier is scored on each factor. D. Factors can be scored using different scales.

D. Factors can be scored using different scales.

Which of the following statements is NOT​ true? A. An effective supplier management program and an effective distribution management program may make the difference between supply chain success and failure. B. ​Top-notch supply chain performance requires good downstream​ management, just as it does good upstream management. C. Packaging and logistics are important distribution​ decisions, because the manufacturer is usually held responsible for breakages and serviceability. D. Finding the optimal number of facilities represents a critical and static decision.

D. Finding the optimal number of facilities represents a critical and static decision.

Which of the following is NOT one of the assumptions of​ fixed-period systems? A. Items are independent of one another. B. The only relevant costs are the ordering and holding costs. C. Lead times are known. D. Lead times are variable.

D. Lead times are variable.

A supply chain ends with A. manufacturers. B. suppliers. C. distributors. D. a satisfied customer.

D. a satisfied customer.

Which of the following could reduce distribution​ risk? A. ​cross-country diversification B. use multiple suppliers C. secure IT systems D. careful​ selection, monitoring and effective contracts with penalties

D. careful​ selection, monitoring and effective contracts with penalties

The appropriate level of safety stock is typically determined by A. taking the square root of the economic order quantity. B. carrying sufficient safety stock so as to eliminate all stockouts. C. minimizing the expected stockout cost. D. choosing the level of safety stock that assures a given service level.

D. choosing the level of safety stock that assures a given service level.

nventory turnover is equal to A. inventory investment​ / (annual cost of goods sold​ / 52​ weeks). B. ​(total inventory investment​ / total ​assets) times 100. C. ​(total assets​ / total inventory ​investment) times 100. D. cost of goods sold​ / inventory investment.

D. cost of goods sold​ / inventory investment.

Which of the following statements is NOT generally an implication stemming from an increase in the number of​ facilities? A. increased facility costs B. quicker response C. increased customer satisfaction D. decreased total logistics cost

D. decreased total logistics cost

Which of the following risks is NOT a form of disaster​ risk? A. terrorism B. hurricanes C. tsunamis D. exchange rate fluctuations

D. exchange rate fluctuations

Which of the following statements is NOT one of the response strategy​ decisions? A. low setup time B. fast transportation C. use buffer stocks to ensure speedy supply D. gather and communicate market research data

D. gather and communicate market research data

How is​ cash-to-cash cycle time​ computed? A. days of receivables outstanding​ + days of payables outstanding minus inventory days of supply B. inventory days of supply​ + days of receivables outstanding​ + days of payables outstanding C. inventory days of supply​ + days of payables outstanding minus days of receivables outstanding D. inventory days of supply​ + days of receivables outstanding minus days of payables outstanding

D. inventory days of supply​ + days of receivables outstanding minus days of payables outstanding

Which of the following strategies is part​ collaboration, part purchasing from few​ suppliers, and part vertical​ integration? A. horizontal integration B. virtual companies C. joint ventures D. keiretsu networks

D. keiretsu networks

Given a set of items needing to be stored in a warehouse in which the number of daily trips and blocks of storage space needed are both known for all​ items, the item with which of the following should be placed furthest from the​ dock? A. lowest value of TRIPS​ × BLOCKS B. highest value of TRIPS​ × BLOCKS C. highest value of TRIPS​ ÷ BLOCKS D. lowest value of TRIPS divided by BLOCKS

D. lowest value of TRIPS divided by BLOCKS

Which of the following does NOT belong to holding​ costs? A. ​pilferage, scrap, and obsolescence B. storage costs C. insurance on inventory D. order processing

D. order processing

When determining the optimal number of​ facilities, logistics-related costs do NOT usually include which of the following​ costs? A. transportation B. inventory C. facility D. purchasing

D. purchasing

Which of the following mitigation tactics could reduce economic​ risk? A. franchising and licensing B. subcontractors on retainer C. multiple transportation modes and warehouses D. purchasing contracts that address price fluctuations

D. purchasing contracts that address price fluctuations

Three criteria for designing distribution networks to meet customer expectations​ are: A. low​ cost, rapid response and product choice. B. rapid​ response, low​ cost, and service. C. low​ cost, product choice and service. D. rapid​ response, product​ choice, and service.

D. rapid​ response, product​ choice, and service.

Efficiency in a warehouse is primarily improved by A. creating wider aisles. B. using taller shelves. C. increasing order quantities. D. reducing worker travel time.

D. reducing worker travel time.

The objective of inventory management is to A. take advantage of quantity discounts. B. decouple various parts of the production process. C. provide a selection of goods for anticipated customer demand. D. strike a balance between inventory investment and customer service.

D. strike a balance between inventory investment and customer service.

With a probabilistic​ model, increasing the service level A. will decrease the level of safety stock. B. will reduce the cost of the inventory policy. C. will have no impact on the cost of the inventory policy. D. will increase the cost of the inventory policy.

D. will increase the cost of the inventory policy.

Prior to embarking on supply chain​ design, operations managers must first consider A. what kind of distribution network to have. B. how to select suppliers. C. how to manage supply chain inventory. D. ​"make-or-buy" and outsourcing decisions.

D. ​"make-or-buy" and outsourcing decisions

Which of the following statements is true regarding​ cross-sourcing? A. ​Cross-sourcing describes suppliers who become part of a company coalition. B. ​Cross-sourcing develops the ability to produce goods or services previously purchased or actually buying a supplier or distributor. C. ​Cross-sourcing enhances technological skills. D. ​Cross-sourcing uses one supplier for a component and a second supplier for another​ component, where each supplier acts as a backup for the other.

D. ​Cross-sourcing uses one supplier for a component and a second supplier for another​ component, where each supplier acts as a backup for the other.

What is a​ long-term purchase commitment to a supplier for items that are to be delivered against​ short-term releases to​ ship? A. drop shipping B. postponement C. advanced shipping notice D. blanket order

D. Blanket Order

Which of the following industries has the highest supply chain cost as a percentage of​ sales? A. metals B. restaurants C. automobile D. petroleum

D. Petroleum

Which one of the following performance measures is not true of a world class firm?

Long Lead Time

Which of the following supply-chain strategies creates value by allowing suppliers to have economies of scale?

Long-term partnering with a few suppliers

Which of the following is NOT a type of​ inventory? A. MRP B. ​work-in-process C. raw material D. finished goods

MRP

Which of the following is not a concern of the supply chain?

Maintenance Scheduling

Which of the following is an aspect of environmental risk in supply-chain management?

Political Issues

With the growth of the JIT, which of the following distribution systems has been the biggest loser?

Railroads

Which of the following types of inventory describes inventory that has been purchased but not​ processed? A. ​finished-goods inventory B. ​maintenance/repair/operating supply inventory C. ​work-in-process inventory D. raw material inventory

Raw-Material Inventory

Which of the following should be higher in P systems than Q systems?

Safety Stock

Which of the following is not an advantage of the "few suppliers" concept?

Sharing Trade secrets between firms

Which one of the following is not a supply-chain strategy?

Short-term relationship with few suppliers

A disadvantage of the "few suppliers" strategy is __________.

The high cost of changing partners

Which of these conditions is not necessary for the economic order quantity model to be valid?

The item has a constant purchase price.

What term is used to describe the outsourcing of logistics?

Third-Party Logistics

Which of the following best describes vertical integration?

To produce goods or services previously purchased

A system that triggers ordering on a uniform time basis is called

a fixed period system

A system that keeps track of each withdrawal or addition to inventory continuously is __________.

a perpetual inventory system

A supply chain ends with A. a satisfied customer. B. suppliers. C. manufacturers. D. distributors.

a satisfied customer

A disadvantage of the fixed-period inventory system is that

a stockout is possible.

If demand is not uniform and constant, the stockout risks can be controlled by __________.

adding safety stock

A furniture maker has delivered a dining set to the end consumer rather than to the furniture store. The furniture maker is practicing __________.

drop shipping

The trucking industry is establishing Web sites, which let shippers and truckers find each other in order to ________.

improve logistics efficiency

Inventory record accuracy would be decreased by __________.

increasing stockroom accessibility

Cycle Counting

is a process by which inventory records are verified for accuracy

The purchasing approach that holds the suppliers responsible for maintaining the necessary technology, expertise, and forecasting ability plus cost, quality, and delivery competencies is __________.

many suppliers

Inventory management policies based on ABC analysis might include investing

more in supplier development for A items.

A restaurant runs a special promotion on lobster and plans to sell twice as many lobsters as usual. When this large order is sent to the distributer, the distributer assumes the large size is a trend, not a one-time event. The distributer, therefore, places an even larger order with the lobsterman. This is the result of __________.

the bullwhip effect

One use of inventory is

to provide a hedge against inflation

Most inventory models attempt to minimize __________.

total inventory based costs

The three stages of vendor selection, in order, are __________.

vendor evaluation, vendor development, and negotiations