OTM FINAL

Firm A manufactures brake pads, a component of a braking system, and sells them to Firm B, who sells braking systems used in vehicles. Firm A is best described as a: A. tier 2 supplier B. tier 1 supplier C. manufacturer D. distributor E. reatiler

A. tier 2 supplier

T or F: Deseasonalizing old demand data is the process of reintroducing the seasonal effect to forecasted data.

False

T/F: in an AON graph of a project, there only exists one path from the first to the last activity.

False

T or F: A start-up has a demand that goes up by 50% each year. This demand increase is multiplicative.

True

An online shoe retailer's annual cost of holding inventory is 30 percent. The firm operates with a days-of-supply of 16 days, and assume there are 365 days per year. What is the inventory holding cost in $ for a pair of shoes that the firm purchased for 49

0.64 365/16 = 22.81 48/22.81 = 2.15 2.15 * 30% = 0.64

Which of the following possible responses by a customer who is faced with a stockout is the most costly to the firm? 1. Lose the sale and lose the customer. 2. Lose the sale. 3. Lose the sale of one item, but the customer purchases another item. 4. Customer waits for the item to become available.

1. Lose the sale and lose the customer

A grocery chain recently reported annual sales of $90 billion, inventory of $7.3 billion, and annual cost of goods sold of $86 billion. What is the firm's annual inventory turns

11.8 86 b / 7.3 b

An electronics manufacturer has 19 days-of-supply of inventory for a particular cell phone model. Assuming 365 days per year, what is the annual inventory turns of this cell phone

19.2 365 / 19 = 19.2

Computers lose value as they are stored in inventory. This is an example of which component of a firm's inventory holding cost? 1. Opportunity cost of capital 2. Storage cost 3. Spoilage cost 4. Obsolescence cost

4. Obsolescence cost

A firm uses the order-up-to model to manage its inventory. It wants to increase its in-stock probability while decreasing its holding costs (i.e., reducing its average inventory). Which of the following actions will help to achieve this goal? (Consider each action independently.) I. Decrease the lead time. II. Increase the order-up-to level. III. Increase the average quantity on order. A .Only I B. Only II C. Only III D. I and II E. I and III F. II and III G. any of them will help H. none of them will help

A .Only I

Which of the following is NOT an assumption of the EOQ model? A. It is possible to receive a purchase discount if the order quantity is sufficiently large. B. There is a fixed cost to submit each order that is independent of the amount ordered. C. Demand occurs at a constant rate per unit of time. D. There is a cost to hold each unit of inventory per unit of time.

A. It is possible to receive a purchase discount if the order quantity is sufficiently large.

Characterize the following decision as either tactical or strategic: "The discounts to offer on inventory available for an end-of-season sale" A. tactical B. Strategic

A. tactical

Which of the following is the best reason to add a second supplier for a critical component? A. The primary supplier is located in a flood-prone region, while the second supplier's location is not subject to flooding B. The second supplier is able to offer the same lead time as the first supplier C. Adding a second supplier helps reduce the bullwhip effect D. Adding a second supplier will increase the firm's purchasing power for the component

A. The primary supplier is located in a flood-prone region, while the second supplier's location is not subject to flooding

A company uses the newsvendor to manage its inventory and face to normally distributed demand with a coeficient of variation 0.75 The company decides to order exactly equal the mean of its demand forecast. Which of the following is true regarding this company's perform measure? A. There is 0.5 probability that there is enough inventory to serve all demand. B. Expected inventory is 50% of the mean of the demand forecast. C. The stockout probability is 0.25 D. Expected inventory is 0

A. There is 0.5 probability that there is enough inventory to serve all demand.

Over time consumers have less of a need for a broad product offering. How does this shift in preferences alter the desirability of make-to-stock production relative to make-to-order production? A. it increases it; that is, make=to-stock becomes more desirable B. it has no impact C. it decreases it; that is, make-to-stock becomes less desirable D. we cannot determine from the given information

A. it increases it; that is, make=to-stock becomes more desirable

Retailers order in full truckload quantities from a distributor. Suppose, due to a slow-down in the economy, there is an industrywide decline in demand (i.e., each retailer experiences a reduction in its sales). If retailers continue to order in full truckload quantities, what will happen to the frequency of their orders? A. it will decrease B. it will not change C. it will increase D. we cannot determine how it will change from the given information

A. it will decrease

A newsvendor orders the quantity that maximizes expected for both products, A & B. The critical ratio for both product is 0.8. The demand forecast for both products is 9,000 units and both are normal distributed. Product A has more uncertain demand in the sense that it has a larger standard deviation. Of which one product the vendor should order more? A. product A, because it has less certain demand. B. product B, because it has more certain demand. C.Order the same quantity because they have the same critical ratio. D. More information is needed to determine which product has higher order quantity.

A. product A, because it has less certain demand.

Which of the following changes in the in-stock probability increases the order quantity the most?- An increase in the in-stock probability from 70% to 80% An increase in the in-stock probability from 70% to 85% An increase in the in-stock probability from 80% to 90% An increase in the in-stock probability from 70% to 75%

An increase in the in-stock probability from 80% to 90%

Product A's annual inventory turns is 8 and product B's annual inventory turns is 5. Which product spends more time in inventory on average? a. A b. B c. cannot be determined (could be either)

B

If the order quantity doubles, what happens to the frequency of orders (i.e., the number of orders submitted per unit of time)? A. Decreases by more than 50% B. Decreases by 50% C. Remains unchanged D. Increases by 50% E. Increases by more than 50%

B. Decreases by 50%

Demand in each period follows the same normal distribution (i.e., there is one demand distribution that represents demand in any single period). Assuming demand is independent across periods, which of the following statements about mean demand over five periods is true? A. it equals the mean of demand over one period B. It is greater than the mean of demand over one period but less than five times the mean of demand over one period C. It equals five times the mean of demand over one period D. It is even more than five times the mean of demand over one period

C. It equals five times the mean of demand over one period

The EOQ minimizes the sum of the ordering cost and which of the following costs? A. Stockout cost B. Holding cost C. Purchasing cost D. Quality cost

B. Holding cost

Demand in each period follows the same normal distribution (i.e., there is one demand distribution that represents demand in any single period). Assuming demand is independent across periods, which of the following statements about the standard deviation of demand over five periods is true? A. It equals the standard deviation of demand over one period B. It is greater than the standard deviation of demand over one period but less than five times the standard deviation of demand over one period C. It equals five times the standard deviation of demand over one period D. It is even more than five times the standard deviation of demand over one period

B. It is greater than the standard deviation of demand over one period but less than five times the standard

When creating a time series-based forecast for the amount of soda to be sold in the cafeteria next week, which data sources can you include in your forecasting process? A. the opinion of the principal B. Old demand data C. data about upcoming sports events D. The age of the cafeteria worker

B. Old demand data

Characterize the following decision as either tactical or strategic: "To operate make-to-stock or make-to-order" A. tactical B. Strategic

B. Strategic

Suppose in the order-up-to model the target in-stock probability is 0.95 and demand across periods are independent and Normally distributed. If the lead time is doubled but the target in-stock probability remains 0.95, what happens to the order up-to level? A. it more than doubles (increases by more than a factor of two) B. It doubles (increases exactly by a factor of two) C. It increases but by less than a factor of two D. It decreases E. The answer cannot be determined with the given information

C. It increases but by less than a factor of two

A company wants to use regression analysis to forecast the demand for the next quarter. In such a regression model, demand would be the independent variable. A. true B. false

B. false

Each day QBlitz, a Seattle based startup, offers a single product through its website. The product is available for order only on one day and no other product is available during that day. To add to this odd selling strategy, QBlitz does not post prices for its products. Instead, for each product there is a reserve price. On the day a product is available, customers can submit bids. All of the bids that exceed the reserve price are told at the end of the day that they "won" the product and they pay the price they bid. QBlitz then adds up all of the winning bids and submits an order to a supplier for the needed quantity, which is shipped to customers when the product arrives. The QBlitz system is best described as: A. make-to-stock. B. make-to-order. C. assemble to order. D. mass customization.

B. make-to-order.

A retailer has two merchandizers, Sue and Bob, who are responsible for setting order quantities for the products they manage. For all of their products the critical ratio is 0.7 and the coefficient of variation of their demand forecasts are 0.35. At the end of the season, Sue is proud to report that she sold the entire inventory she purchased. Bob, on the other hand, sold out only about a third of his products. Who is more likely to be choosing quantities that maximize expected profit? Sue, because she doesn't incur the cost of salvaging inventory Sue, because she must have sold more units than Bob Bob, because even leftover inventory generates some additional revenue Bob, because he is probably ordering more than the mean of the demand forecast

Bob, because he is probably ordering more than the mean of the demand forecast

Which reason for holding inventory guards against a reduction in the flow rate when one assembly station is disrupted in a production line? Seasonality Uncertain demand Buffers Batching

Buffers

Which of the following statements best explains why distributors tend to spend less on storage space per square meter per year than retailers? A. distributors provide break bulk service B. Distributors don't actually make products C. Distributors can store more items per square meter and require space that is less aesthetically pleasing D. distributors enjoy higher gross margins than retailers

C. Distributors can store more items per square meter and require space that is less aesthetically pleasing

Suppose inventory is managed using the order-up-to model. Which of the following actions will certainly lead to a higher order-up-to level? in all cases assume the characteristics of demand process do not change. i. Increase in the target in -stock probability (for the same lead time). ii. increase in the lead time (for the same in-stock probability). A. I only B. II only C. I and II D. None of the above

C. I and II

A firm evaluates its EOQ quantity to equal 180 cases but it chooses an order quantity of 200 cases. Relative to the order quantity of 180 cases, the order quantity of 200 cases has: A. Higher ordering cost and higher holding cost B. Higher ordering cost and lower holding cost C. Lower ordering cost and higher holding cost D. Lower ordering cost and lower holding cost

C. Lower ordering cost and higher holding cost

If the order quantity doubles but the flow rate remains constant, what happens to the sum of ordering and holding costs? A. Decreases by 50% B. Decreases by less than 50% C. Remains unchanged D. Increases by less than 50% E. Increases by 50%

C. Remains unchanged

In the order-up-to model, assume that the mean of demand in a period remains the same and the target in-stock probability is ket at a constant level. If the demand uncertainty (the standard deviation of demand in each period) increases, then A. Expected on-hand inventory increases B. expected on-hand inventory decreases C. expected on-hand inventory remains the same D. expected on-hand inventory may increase or decrease, depending on the demand distribution and other parameters

C. expected on-hand inventory remains the same

A company is deciding whether to produce a new gadget at a plant located located in a country close to consumers at a higher labor cost and shorter lead time or to outsource it to a country with a low labor cost but a longer lead time. All else being equal, which of the following considerations would provide the most support to produce in the high-cost location? A. the holding costs per unit are low B. Transportation costs per unit per km are low C. the in-stock probability retirement for the product is high D. customers are willing to wait for delivery

C. the in-stock probability retirement for the product is high

If a firm wanted to reduce the annual EOQ cost as a percentage of the annual purchase cost by 50%, how would the demand rate have to change? A. Decrease by 50% B. Remain unchanged C. Increase by 50% D. Double E. Quadruple

D. Double

A firm manages its inventory with an order-up-to model. Each period is one day, the lead time is two days, the order-up-to level is 10, and its inventory position at the start of a day (before it submits an order for that day) is -4. Which of the following statements is definitely true? A. Demand was four units yesterday B. Demand was 10 units yesterday C. There are at least four units backordered D. There are 14 units on order before it orders today E. After today's order, there will be 14 units on order F. It will receive more inventory today

D. There are 14 units on order before it orders today

Product A's demand is normally distributed with mean 150 and standard deviation 50. Product B's demand is also normally distributed with mean 150 and standard deviation 50. The sum of demand for these two products is normally distributed with a mean of 300 and a standard deviation of 50. Which of the following results is most likely? Demands for these products are negatively correlated Demands for these products are positively correlated Demands for these products are independent It is not possible to determine with this information the correlation of these products.

Demands for these products are negatively correlated

Sorlini Pasta sells pasta throughout Italy. Which of the following is the strongest evidence that Sorlini Pasta is suffering from the bullwhip effect? A. They hold a considerable amount of inventory, enough to satisfy their average demand for the next four weeks B. Just before a snowstorm in the northern part of the country, sales of past increased considerably C. Sorlini sells both fresh and dry pasta products through different types of retailers D. Most retailers only carry a subset of all the pasts Sorlini offers E. The volatility of the orders Sorlini receives from its distributors is greater than the volatility of pasta demand at retailers F. Pasta consumption per capita in southern Italy is higher than in northern Italy

E. The volatility of the orders Sorlini receives from its distributors is greater than the volatility of pasta demand at retailers

Suppose the order-up-to model is used. The probability that you end any given period with no on-hand inventory equals A. The in stock probability B. The critical ratio C. The gross margin D. The ratio of inventory turns to days of supply E. the stockout probability

E. the stockout probability

Suppose the newsvendor model is used to manage inventory. Which of the following can happen when the order quantity is increased by one unit? Expected sales increase by more than one unit Expected leftover inventory increases by more than one unit Expected sales decrease by less than one unit Expected leftover inventory increases by less than one unit

Expected leftover inventory increases by less than one unit

A newsvendor faces normally distributed demand and the critical ratio is 0.8. If the profit maximizing quantity is ordered, which of the following statements is true? Expected sales is less than expected demand Expected sales is greater than expected demand Expected sales is exactly equal to expected demand Expected sales could be less than, equal to, or greater than expected demand

Expected sales is less than expected demand

Which of the following is NOT true about the distribution function for a normal distribution? It ranges from 0 to 1 It increases as the quantity increases It generally has a bell shape when graphed It returns the probability that the outcome from the normal distribution is a certain quantity or lower

It generally has a bell shape when graphed

Over time, consumers have less of a need for a broad product offering. How does this shift in preferences alter the desirability of make-to-stock production relative to make-to-order production? It increases it; that is, make-to-stock becomes more desirable It has no impact. It decreases it; that is, make-to-stock becomes less desirable. We cannot determine from the given information.

It increases it; that is, make-to-stock becomes more desirable

For which of the following products is there the highest probability that demand is within 50% of the mean of the demand forecast? Mean = 1,000, standard deviation = 200 Mean = 1,000, standard deviation = 300 Mean = 2,000, standard deviation = 300 Mean = 2,000, standard deviation = 500 Mean = 4,000, standard deviation = 1,600 Mean = 4,000, standard deviation = 2,000

Mean = 2,000, standard deviation = 300

Computers lose value as they are stored in inventory. This is an example of which component of a firm's inventory holding cost? Opportunity cost of capital Storage cost Spoilage cost Obsolescence cost

Obsolescence cost

A delivery truck from a food wholesaler has just delivered fresh meat and produce to a local restaurant. This meat and produce would be categorized as which type of inventory by the restaurant? Raw materials inventory Work-in-process inventory Finished goods inventory Seasonal inventory

Raw materials inventory

A company is deciding whether to produce a new gadget at a plant located in a country close to consumers at a higher labor cost and shorter lead time or to outsource it to a country with a low labor cost but a longer lead time. All else being equal, which of the following considerations would provide the most support to produce in the high-cost location? The holding costs per unit are low. Transportation costs per unit per km are low. The in-stock probability requirement for the product is high. Customers are willing to wait for delivery.

The in-stock probability requirement for the product is high.

What is the relationship between the average inventory and the in-stock probability? The more inventory, the lower the in-stock probability. There isn't a definitive relationship - more inventory could mean a lower or a higher in-stock probability. The more inventory, the higher the in-stock probability.

The more inventory, the higher the in-stock probability.

A change in which of the following does not result in a change in the mismatch costs incurred by a newsvendor? The quantity ordered The revenue received from salvaging inventory The regular selling price of the product The coefficient of variation of the demand forecast The quality of the product

The quality of the product

Consider two products A and B that have identical cost, retail price and demand parameters and the same short selling season (the summer months from May through August). The newsvendor model is used to manage inventory for both products. Product A is to be discontinued at the end of the season this year, and the leftover inventory will be salvaged at 75% of the cost. Product B will be re-offered next summer, so any leftovers this year can be carried over to the next year while incurring a holding cost on each unit left over equal to 20% of the product's cost. The quantity of each product is selected to maximize expected profit. How do those quantities compare? The quantity of product A is higher The quantity of product B is higher The quantities are equal The answer cannot be determined from the data provided

The quantity of product B is higher

The regular selling price of the productsThe maximum profit depends on the profit earned per unit and the mean of the demand forecast. The profit earned per unit depends on the selling price. A change in which of the following results in a change in the maximum profit in a newsvendor setting?- The revenue received from salvaging inventory The regular selling price of the product The standard deviation of the demand forecast The coefficient of variation of the demand forecast

The regular selling price of the product

Suppose the newsvendor model describes a firm's operations decision. Is it possible to have positive stockout probability and positive expected leftover inventory? Choose the best answer.* No - if there is left over inventory then a stockout doesn't occur No - if the stockout probability is positive, then expected inventory must be negative No - actual demand can differ from sales Yes - a firm does not stockout and have leftover inventory at the same time, but the stockout probability can be positive even though there is positive expected leftover inventory Yes - as long as the underage cost is greater than the overage cost.

Yes - a firm does not stockout and have leftover inventory at the same time, but the stockout probability can be positive even though there is positive expected leftover inventory

A sales organization creates a new sales forecast by simply taking the average of demand forecasts that each sales manager generated individually. What type of subjective forecasting approach best describes this? a) Forecast combination b) Forecast with consensus building c) Prediction market d) Time-series forecasting

a) Forecast combination

How big is the effect of statistical noise on the naive forecast? a) large b) medium c) small

a) large

Product A's annual inventory turns is 10 and product B's annual inventory turns is 15. Which product has a higher months-of-supply? a. A b. B c. cannot be determined (could be either)

a. A

Which of the following descriptions best captures the project manager's responsibilities? a. Define the project, plan the project, control the project b. List all activities, determine the critical path, compute slack time c. Raise money, determine a budget, and keep costs under control d. None of these descriptions are correct

a. Define the project, plan the project, control the project

What is the relationship between the earliest start time (EST) of an activity and the earliest completion time (ECT) of the activity? a. EST+ activity time = ECT b. EST * activity time = ECT c. EST = ECT d. None of these are correct.

a. EST+ activity time = ECT

What is the late start schedule for a project? a. It is the latest start and the latest completion time of the project activities so that the overall project is still completed on time b. It is a schedule that measures the amount of time an ongoing project is late c. It is an accelerated schedule in order to get a project with a late start still complete on time d. None of these statements are correct

a. It is the latest start and the latest completion time of the project activities so that the overall project is still completed on time

46. A project manager is concerned about rework, specifically about having to iterate on two activities that are on the critical path. A consultant tells the project manager to not worry, as the effect of uncertain activity times is likely to dominate the effect of iteration. The project manager disagrees. Who is right? a. The project manager b. The consultant

a. The project manager

38. The key objectives of a project are given by: a. Time, scope, and budget. b. Cost, Quality, Location. c. Customers, suppliers, employees. d. Efficiency, effectiveness, and success.

a. Time, scope, and budget.

A pizza chain wants to forecast the demand rate for each store each hour in the day. What type of forecasting method are they most likely to deploy? a. automated forecasting b. expert panel forecasting c. weather forecasting d. macroeconomic forecasting

a. automated forecasting

If the target in-stock probability increases, then the expected time between stockouts a. increases. b. remains the same. c. decreases. d. could increase or decrease.

a. increases.

A delivery truck from a food wholesaler has just delivered fresh meat and produce to a local restaurant. This meat and produce would be categorized as which type of inventory by the restaurant? a. raw materials inventory b. work in process inventory c. finished goods inventory d. seasonal inventory

a. raw materials inventory

Consider two projects that have the same activities and the same dependencies. In the first project, the activity times are expected outcomes. The actual times will vary. In the second project, the activity times are always as expected. On average (in expectation), which project will be completed first? a. the first b. the second c. cannot be determined

a. the first

Using the double exponential smoothing based forecast, is it possible to forecast a demand that is bigger than any previously observed demand? a. yes b. no

a. yes

It is costly to hold inventory, but inventory can also be useful in a process because adding inventory to a process will shorten the average time a unit spends in a process. adding inventory to a process can help reduce situations in which sales are lost due to uncertain demand. adding inventory to a process is likely to increase quality. adding inventory to a process will increase the profit margin of the item.

adding inventory to a process can help reduce situations in which sales are lost due to uncertain demand.

The mode of transportation that is generally the most expensive is which of the following? airplane railroad truck cargo ship

airplane

Which of the following statements are correct with respect to an AON graph of a project? a. In an AON graph, the activities are on the edges of a graph. b. In an AON graph, the activities are on the nodes of a graph. c. AON stands for the American Operations Norm. d. None of these statements are correct.

b. In an AON graph, the activities are on the nodes of a graph.

Consider a project with two activities that are interdependent. Which of the following statements is correct? a. Both activities can be carried out in parallel without coordination b. Static coordination of the two activities implies that the two activities are carried out in an iterative manner c. Dynamic coordination of the two activities implies that the two activities are carried out in an iterative manner d. None of these statements are correct

b. Static coordination of the two activities implies that the two activities are carried out in an iterative manner

Which of the following is a strategic decision for a grocery retailer? a. The number of boxes of cereal to order in the first week of a month. b. Whether to open new stores that have twice the square footage of current stores. c. Whether or not to hire Bob for a store manager position. d. Which items to place on the end of an aisle for this week's promotion.

b. Whether to open new stores that have twice the square footage of current stores.

It is costly to hold inventory but inventory can also be useful in a process because a. adding inventory to a process:- will shorten the average time a unit spends in a process b. can help to reduce situations in which sales are lost due to uncertain demand- c. is likely to increase quality- d. will increase the profit margin of the item

b. can help to reduce situations in which sales are lost due to uncertain demand-

Using the exponential smoothing based forecast, is it possible to forecast a demand that is bigger than any previously observed demand? a. yes b. no

b. no

Using the moving average based forecast, is it possible to forecast a demand that is bigger than any previously observed demand? a. yes b. no

b. no

39. What is the effect of overlapping activities that are not on the critical path? a. An earlier project completion time b. A later project completion time c. No effect

c. No effect

Sarah is a buyer for department store. A supplier offers her a 5% discount is she triples her usual order quantity. Which of the following best explains why Sarah should take the deal? a. Even though the increase in the operating costs is likely to exceed the benefit of the 5% discount, Sarah feels that her customers expect the lowest possible price. b. Sarah hopes that customers are likely to purchase more if they see an increase in the inventory in the store. c. Sarah knows that even though she may triple her order quantity, this would increase her operating costs by far less than a factor of three. d. Sarah knows that the sum of operating cost is probably less than 5% of the purchase cost, so an increase in the operating cost is unlikely to be a concern.

c. Sarah knows that even though she may triple her order quantity, this would increase her operating costs by far less than a factor of three.

Which reason for holding inventory guards against a reduction in the flow rate when one assembly station is disrupted in a production line?- a. seasonality- b. uncertain demand- c. buffers- d. batching

c. buffers-

Product A's annual inventory turns is 4 and product B's annual inventory turns is 6. Which product has the higher amount of inventory, measured in dollars? a. A b. B c. cannot be determined (could be either one)

c. cannot be determined (could be either one)

tablets and laptops would be categorized as which type of inventory by an electronics retailer? a. raw materials inventory b. work in process inventory c. finished goods inventory d. seasonal inventory

c. finished goods inventory

A company has an unbiased forecast for their demand. What does that mean? a. all forecast errors are equal to zero b. all forecast errors are less than 1 percent c. the average of all forecast errors is zero d. the standard deviation of forecast errors is zero

c. the average of all forecast errors is zero

what is the definition of a forecast error? a. the average difference between the forecast and the actual outcome b. the maximum difference between the forecast and the actual outcome c. the different between the forecast and the actual outcome d. the percentage difference between the forecast and the actual outcome

c. the different between the forecast and the actual outcome

Which of the following would be a good example of market mediation costs in the supply chain? product costs costs of smaller margins on discounted excess products transportation costs costs of doing an annual inventory audit

costs of smaller margins on discounted excess products

Which of the following statements is correct with respect to slack time? a. The slack time of an activity is the latest completion time of the activity minus the earliest completion time. b. The slack time of an activity is the latest start time of the activity minus the earliest start time. c. The slack time of an activity determines by how much an activity can be delayed without impacting the overall completion of the project. d. All of these statements are correct.

d. All of these statements are correct.

A project has four activities that take 4, 3, 6, and 7 days respectively. What is the total completion time for the project? a. 3 days, as this is the minimum time b. 7 days, as this is the maximum time2 c. 0 days, as this is the sum of the times d. It is not possible to determine the total completiontime from the given information

d. It is not possible to determine the total completiontime from the given information

The critical path in a project is the sequence of activities that: a. has the shortest time. b. has the smallest number of activities. c. has the shortest budget. d. None of these statements are correct.

d. None of these statements are correct.

Vetox sells industrial chemicals and one of their inputs can be purchased either in jugs or barrels. A jug contains 1 gallon while a barrel contains 55 gallons. The price per gallon is the same with either container. Vetox is charged a fixed amount per order whether they purchased using jugs or barrels. The inventory holding cost per gallon per month is the same with either jugs or barrels. Vetox choose an order quantity to minimize ordering and holding cost per year.Would Vetox purchase a greater number of gallons with each order if they purchase with jugs or if they purchase with barrels? a. With barrels b. They would order the same number of gallons with either container c. With jugs d. They might order a greater number of gallons with jugs or with barrels, depending on various factors like the demand rate, ordering cost and holding cost.

d. They might order a greater number of gallons with jugs or with barrels, depending on various factors like the demand rate, ordering cost and holding cost.

Which reason for holding inventory enables a firm to reduce the impact of large fixed costs that the firm incurs whenever it places an order to a supplier?- a. seasonality- b. uncertain demand- c. buffers- d. batching

d. batching

We would expect a(n) ______________ firm to have the highest inventory, while a(n) ______________ firm should have the longest leadtime. a. make-to-order, make-to-stock b. assemble-to-order, make-to-stock c. make-to-stock, assemble-to-order d. make-to-stock, make-to-order

d. make-to-stock, make-to-order

the intuition behind the MSE metric to evaluate past forecasts is a. to sum up the forecast errors b. to sum up the squared forecast errors c. to sum up the absolute values of the forecast errors d. to average the squared forecast errors

d. to average the squared forecast errors

Which of the following statements is correct with respect to a Gantt chart?- a. The x-axis of a Gantt chart shows a time line- b. The y-axis shows the activities of a project- c. The Gantt chart itself does not show all dependencies among activities- d. The Gantt chart is named after 19th century industrialist Henry Gantt- e. All of these statements are correct

e. All of these statements are correct

For products with a slow moving demand, e.g., 1 unit per week, the Poisson distribution is likely to be a better model for demand than the Normal distribution because: a. The Poisson's standard deviation is equal to the square root of its mean b. The normal distribution does not allow the freedom to choose any standard deviation for any given mean c. The Poisson distribution is a continuous distribution d. Only the standard normal distribution would apply in this setting e. The Poisson distribution does not assign any probability to negative outcomes

e. The Poisson distribution does not assign any probability to negative outcomes

The intuition behind the MAE metric to evaluate old forecasts is a. to sum up the forecast errors b. to sum up the squared forecast errors c. to sum up the absolute values of the forecast errors d. to average the squared forecast errors e. to average the absolute values of the forecast errors

e. to average the absolute values of the forecast errors

T or F: The seasonality index is based on demand fluctuations that are additive

false

T/F: If two firms have the same annual inventory turns, they also have the same days-of-supply.

false

TRUE/FALSE: Firms in the same industry will have the same inventory turns.

false

Demand each period is normally distributed and an order-up-to model is used to decide order quantities. Which of the following influences the chosen order-up-to level (i.e., a change in which of the following would change the chosen order-up-to level)? I. The mean of demand in one period II . The standard deviation of demand over L+1 periods III. The target in-stock probability a) Only I b) Only II c) Only II d) I and II e) I and III f) II and III g) I, II and III

g) I, II and III

At which stage of the Gartner S&OP maturity model was Red Wing Shoes prior to updating their process? reacting anticipating collaborating orchestrating

reacting

Which of the following is not one of the key elements of revenue management in the airline industry? scheduling of crews overbooking of flights discount allocation traffic management

scheduling of crews

Which of the following would best describe a chase plan for sales and operations planning? a level workforce produces the same amount each period a level workforce is combined with the use of varying amounts of overtime in order to match production to demand a combination of temporary workers and subcontracting are used to match production to demand the workforce is varied from period to period in order to match production to demand

the workforce is varied from period to period in order to match production to demand