SCM 303 Exam #3

An offered discount makes no change to determining optimal order quantity

False

Ordering cost only consists of the shipping cost from supplier to customer

False

The P-system of inventory submits inventory orders at random times

False

The critical fraction formula output is the optimal quantity to order in a newsvendor model

False

The time value of money, opportunity cost, is not part of the calculation of EOQ holding cost

False

the standard deviation of demand during lead time is the same whether or not lead time is variable

False

Holding cost is which type of cost?

Fixed

Evidence of the growth and influence of supply management in an organization includes

Involvement in strategic planning and executive status of the chief supply officer

The ABC analysis used for analyzing inventory is an example of

Pareto's Law

Which of the following is not input needed for an APS?

Past inventories

The use of the concepts of purchasing, procurement, supply, and supply chain management will vary from organization to organization depending on

The organizations stage of development and/or sophistication, the industry in which they operate and the organization's competitive position

Which of the following optimizes resources to move materials and goods within supply chains to minimize cost while meeting deadline constraints?

Transportation planning

Company image may be directly influenced by

Treating suppliers in a fair and equitable manner, complying with regulatory requirements and sustainability practices of suppliers

Safety stock is inventory held to guard against uncertainty

True

The Q-system of inventory submits inventory orders at random times

True

The newsvendor model works well for perishable products

True

Which of the following is not a purpose of APS planning charts?

aid employees in understanding production purposes

Which of the following is not a theoretical factor of forcecasting?

amount

When planning for an increase in production, APS helps to

both determine what is best for the customer and identify and calculate the cost of strategic options are correct

When small changes generated by a customer produce progressively larger changes at each stage upstream in the supply chain, this is known as

bullwhip effect

taxes and insurance costs are an example of which of the following costs?

carrying (or holding) costs

Which of the following is not a stage in the S&OP maturity model?

competing

Which of the following is not a key component of forecast accuracy?

competition

What is another name for the "Q-system" of inventory?

continuous review inventory system

promotions such as "buy one get free" are somewhat risky in terms of forecasting. Why?

could decrease future sales

Which of the following is NOT often associated with supplier-managed inventory (SMI) arrangements?

customers recommend to suppliers how they should schedule production

The critical fraction gives us a probability because

demand is unknown

Which is typically the first planning stage of the APS technology tool?

demand planning

Which of the following is not an APS application issue

financial flow

__________ inventory is the costliest form of inventory one can hold

finished goods

Which of the following is not a demand planning requirement?

handle time fences

The optimization module of an advanced planning and scheduling (APS) system

is the computational engine of the supply chain planning system

Which of the following is not true about CPFR?

it is good for low-volume items

The basic calculation in the newsvendor model will result in a calculation of

optimal probability of running out

If I calculate the EOQ with the new, discounted material cost and the resulting quantity is enough to get the discount, what should I do?

order the discounted EOQ amount

What is another name for the "P-system" of inventory?

periodic review inventory system

In the end, the point of using the EOQ formula is to

point us toward the possible lowest cost option

which of the following is not a reason for increased importance of S&OP?

precise demands by key customers

In a situation where there are low economies of scale and a long response time, the supply chain strategy should focus on

production flexibility since detailed and accurate forecasting is not of critical importance

Advanced planning and scheduling (APS) facilitates improvements in customer service by

reducing the time to make accurate commitments to customers

what does the R stand for in CPFR?

replenish

What is the great benefit of the Q-system?

responsiveness

What is the great benefit of the P-system?

simplicity in managing the system

Finding average demand during lead time involves doing which of the following?

summing the daily average demand per day

which of the following is not a benefit of sales and operations planning?

the S&OP process eliminates the need to have finished goods inventory

Which of the following statements is true when comparing the total cost curve a product without discounting and the total cost curve with discounting?

the discounted curve is always below the undiscounted curve but does not really exist for values less than the minimum order amount to receive the discount

The "right" amount of safety stock is often a function of Service level. Service Level is:

the probability of meeting demand during a delay

Safety stock exists for which of the following reasons?

to provide protection against the uncertainties of supply and demand

ordering cost is which type of cost?

variable

Since standard deviations don't sum, we have to sum which thing instead?

variance

A batch of Raisin Bran that has been made at Kellohh's but not yet packaged in its final cereal box would be an example of what type of inventory?

work in process

The newsvendor model balances which two costs?

-cost of ordering too many -running out and losing profits

The critical fraction formula balances which two costs

-cost of over stock (ordering too many) -cost of ordering too few (under stock)

Which two things drive the need for safety stock?

-demand variability -delays

When lead time and demand are both variable, the formula we use consists of which two parts?

-demand variability -lead time variability

what are the 3 main challenges of the Q-system?

-inventory monitoring system -having enough when you order -figuring out how much to order

What are the two main challenges of the "P-system"

-length of review period -amount of inventory to have

Which of the following would be considered part of ordering cost?

-minimum shipping charge -renting a truck to haul the order (and only this order, no other business is used for this truck's one time rental)

Which of the following would be considered a direct holding cost?

-refrigeration costs -weekly inventory quality checks for every unit in inventory

Which of the following is true about forecasting errors?

-the accuracy of forecasting has improved over time -forecasting becomes easier when the specifications are more detailed

What is the safety stock that Highlife corporation should carry for its desired service level of 95 percent?

149

Which of the following is not a benefit that is offered by advanced planning and scheduling (APS)?

improved forecast accuracy

Which of the following is not a role of inventory?

increasing quality of finished goods