Chapter 7 Supply Chain Management
which of the following does loss risk depend on?
-facility storing of product - product
Which of the following is an objective of product/market classification in the process of inventory management efforts?
-focus -refine
Inventory expense is calculated by multiplying annual inventory carrying cost percent by which of the following?
Average inventory value
Inventory should provide return on the capital invested. Thus, inventory is considered which of the following?
Current Assets
The four functions of inventory is geographical, specialization, ________, balancing supply and demand, and buffering uncertainty.
Decoupling
Planning activities may occur centrally to coordinate inventory allocation and which of the following service?
Delivery
The variation in sales during inventory replenishment is referred to as which of the following uncertainty?
Demand
an exact quantity policy can be determined by balancing the cost of ordering and the cost of maintaining average inventory. Which of the following terms provides a specific quantity of these two cost components.
Economic Order Quantity
Which of the following is not a justification of other special situations to the basic EOQ?
Economical Purchase
True or False: The economic order quantity is the replenishment quantity that maximizes the combined inventory carrying and ordering cost
False
True or false: Reactive and pull inventory systems are not different names that refer to the same definition
False
Instead of being referred to as the probability of a stockout, what does the magnitude refer to?
Fill Rate
What can be used by management to simplify inventory for the fair share allocation, which simplifies inventory that provides each distribution facility with an equitable distribution of available inventory?
Planning
which of the following is the reorder point formula?
R=D*T
which is the formula for calculating the periodic review reorder point?
ROP = D(T+p/2)+SS
postponement strategies and practices serves to ____ the anticipatory risk of supply chain performance
Reduce
Demand and Performance cycles will determine certainty under which of the following?
Reorder point
Which of the following cycles will not be required when combining variables for uncertainty?
Replenishment
specific techniques for collaborative inventory ___ are quick response, vendor managed inventory, and profile replenishment
Replenishment
The manufacturer inventory consists of finished goods that are pre-positioned in a warehouse. A wholesaler purchases large quantities from manufacturers and sells them in smaller quantities. Thus, the buying and selling from wholesalers is functioned by which of the following?
Retailer
Which of the following is a base for capital costs on investment for capital deployed, specified by higher management?
Target Return
DRP planning schedules are developed using weekly increments or time periods known as?
Time buckets
True or False: If the discount at any associated quantity is sufficient to offset the added inventory carrying cost less the reduced cost of ordering, then the quantity discount is a viable choice?
True
True or False: demand does not require forecasting because there is no uncertainty
True
True or false: The key to establishing selective management strategies is the realization that product segments have different degrees of importance with respect to achieving the enterprise mission.
True
True or false: The reorder point defines when a replenishment order is initiated and inventory turns equal total sales divided by average inventory
True
Which type of demand does sale forecasting estimate during the inventory cycle?
Unit
Quantity discounts can be handled directly with the basic EOQ formula by calculating total cost at any given _______ related purchase price
Volume
Local taxing _____ in many areas asses taxes on inventory held warehouses
authorities
Multiple item purchase refers to situations when more than one product are brought concurrently, so quantity and transportation discounts must consider the impact of product _____
combinations
The accountability of _____ measures units on hand at a specific location and tracks additions and deletions
control
product/market classification groups products, markets, or ____ with similar characteristics to facilitate inventory management
customers
Inventory planning methods use a shared ___ to coordinate inventory requirements across multiple locations or stages in the supply chain.
database
performance cycle uncertainty refers to operations not being able to assume which consistent service?
delivery
obsolescence cost results from ____ of product during storage
deterioration
The reactive method responds to a channel member inventory needs by drawing the product through the ______ channel
distribution
The reactive or pull inventory approach uses customer demand to pull product through the ____ channel
distribution
vendor managed inventory refers to a modification or quick response that ___ the need for replenishment orders
eliminates
inventory carrying cost is the _____ associated with maintaining or holding inventory
expense
True or False: A dependent demand situation is characteristic of component parts that are assembled into its initial products.
false
The larger the order quantity, the ___ replenishment orders required per planning period
fewer
What type of loss oes obsolescence result in when a product no longer has appeal or has any demand?
financial
The procedures define data requirement, software applications, performance objectives and decision _______.
guidelines
at the consumer level, most demand is _____ as consumers do not typically let the retailer know when they are arriving to purchase product
independent
the reorder point defines when a replenishment shipment should be ________
initiated
requirements planning is an approach that ___ across the supply chain, taking into consideration unique requirements
integrates
Inventory management focuses on ____ risk management, which varies depending upon a firm's positions in the distribution channel
inventory
The case fill rate is the percentage of units that can be filled when requested from available ____
inventory
What do anticipatory arrangements require to be produced to the final product state and deployed on the basis of forecasts or planned requirements?
inventory
Which type of performance does inventory policy drive?
inventory
what is the managerial procedures for implementing an inventory policy?
inventory control
While fair share allocations coordinates inventory ____ across multiple sites, it does not consider specific factors such as differences in performance cycle time, EOQ or safety stock requirements
levels
insurance cost is an expense based upon estimated risk or ____ over time
loss
Dependant demand follows that no specific safety stock should be necessary to support a time phased procurement program such as _____ requirements planning
materials
The materials, components, work in process, and finished product typically stocked in the logistics system are referred to as inventory, and the rolling ____ across time is referred to as average inventory.
mean
Service levels is often _____ in terms of performance cycle time, case fill rate, line fill rate, order fill or any combination of these
measured
Collaborative efforts to order in quantities that ____ total cost are essential to sound logistical arrangements
minimize
Management must understand inventory relationships to establish inventory policy with respect to when and how much to ______
order
inventory planning consists of determining when and how much to do with which of the following
order
The greater the weight of an order, the lower the cost per pound of transportation. This only applied from which expedition points?
origin of destination
a category profile details the combination of sizes, colors and associated product that usually sell in a particular type of retail ____
outlet
The final step in implementing a focused inventory management strategy is to define which of the following details?
parameters procedures
Which inventory objectives does service level define?
performance
in performance cycle uncertainty, the planner should expect the actual _____ cycle experience will cluster near the expected value and be skewed toward delayed delivery
performance
Even with good forecasting, demand during replenishment cycle typically exceeds or falls short of what is _____
planned
which of the following approaches is an alternative philosophy that proactively allocates or deploys inventory on the basis of forecasted demand and product availability?
planning
an integrated inventory management strategy defines the ___ and ___ used to determine where to place inventory and when to initiate replenishments as well as how much to allocate
policies process
storage cost is facility expense related to?
product holding
storage cost must be allocated on the requirements of specific ____ since it is not related directly to inventory value
products
the operative goal of manufacturing postponement is to maintain _____ in a neutral or non committed status as long as possible
products
a key to understanding the relationship is to remember that average inventory is equal to one half the order _____
quantity
inventory policy consists of guidelines regarding what to purchase or manufacture, when to purchase or manufacture it, and in what ______
quantity
when to order is determined by demand and replenishment lead time average and uncertainty. How much to order is determined by the order _____
quantity
a technology driven cooperative effort between retailers and suppliers to improve inventory velocity while closely matching replenishment supply to consumer buying patterns is considered which of the following?
quick response
capital assessment range from the prime interest ______ to a percent determined by upper management
rate
Manufacturing postponement is one product being manufactured one order at a time with no preparatory work until exact customer specifications are fully known and purchased confirmation states which of the following status?
received
forward deployment of inventory is postponed until customer order are updated to which of the following status?
received
the goal is to establish a supply chain arrangement so flexible and efficient that retail inventory is continuously ____
replenish
A perpetual inventory control process continuously reviews inventory levels to determine inventory _____ needs
replenishment
A perpetual review refers to a perpetual inventory control process which is continuously reviewing inventory levels to determine which inventory need?
replenishment
specific techniques for collaborative inventory ___ are quick response, vendor managed inventory, and profile replenishment
replenishment
quick response is implemented by sharing retail sales for specific products between supply chain participants to facilitate right product assortment availability when and where it is ___
required
Which of the following is included with manufacturers and wholesalers in experimenting with a sophisticated collaboration known as profile replenishment?
retailers
periodic inventory control ____ the inventory status of an item at regular intervals such as weekly or monthly
reviews
Which of the following is not an inventory management practice approach?
safety stock inventory management
The Numerical compounding of two interdependent variables involves multi-nominal expansion. A direct method is to determine the ____ deviations of demand and performance cycle uncertainty, and then to approximate the combined standard deviation using the convolution formula
standard
the basic notion of geographic postponement is to build and ___ a full line inventory at one or a limited number of strategic location
stock
Classifying products and markets, defining segment strategies, and operationalize policies and parameters are steps to what process?
strategy development
effective collaborative replenishment programs require extensive cooperation and information sharing among which of the following?
supply chain partners
The segment strategy includes specification for all aspects of the inventory management process, including service objectives, forecasting, method, management____ and review cycle
technique
Performance cycle uncertainty involves inventory replenishment ___ variation
time
Safety stock is maintained in logistics system to protect against demand and performance cycle ________
uncertainty
the tax rate and means of assessment vary by location. The tax expense is usually a direct levy based on average inventory value on a specific day of the year or average inventory ____ over a period of time
value