MGT 325 HW 5

If service level is 85%, stock-out probability has to be

15%

Which of the following is one of the assumptions of EOQ model?

Annual demand is known and even throughout the year

Which of the following is incorrect about the Bullwhip effect?

Bullwhip effect is a desirable thing for supply chains

Efficient supply chains usually have larger number of smaller facilities

FALSE

Slower modes of transportation allows greater responsiveness to supply chains

FALSE

Which of the following lists supply chain drivers?

Facilities, Inventory, Transportation, Information

There is no need to keep safety stock if there is no uncertainty

TRUE

What are inventory types?

Work in process (WIP) inventory Finished goods inventory Pipeline inventory Raw material inventory

If responsiveness is a strategic competitive priority

a firm can locate larger amounts of inventory closer to customers

What is the overall objective of inventory management?

to achieve satisfactory levels of customer service while keeping inventory costs reasonable

What are the two fundamental questions of inventory management?

How much/many to order? When to order?

What are the major remedies for Bullwhip effect?

Supplier coordination Information sharing