Supply Chain Management Exam #2
T/F: An RFID reader does not require direct line of sight to read the information stored in an RFID tag.
T
T/F: Cycle counting counts the physical inventory to ensure that physical inventory matches against records.
T
T/F: Examples of forecasting accuracy measures the Mean Absolute Deviation, Mean Absolute Percentage Error, and Mean Square Error.
T
T/F: Future trends in CRM include coping with the delicate issue of privacy, outsourcing CRM programs to technical specialists, and adapting CRM programs for global use.
T
T/F: In the delphi forecasting method, a group of internal and external experts are surveyed during several rounds in terms of future events and long-term forecasts of demand but the group members do not physically meet.
T
T/F: It is best to segregate information about and results relating to marketing efforts like customer loyalty programs, frequent user cards, and credit card applications within an organization. Integrating the efforts of these programs between employees and an organization's IT systems can help managers make more informed customer-focused decisions.
T
T/F: One important element for CRM is to segment customers on the basis of things like products purchased, sales history, demographic information, and desired product features.
T
T/F: One of the goals of an effective CPFR system is to minimize the negative impacts of the bullwhip effect on supply chains.
T
T/F: Sales force automation products help salespeople better manage their accounts, their business opportunities, and communications away from the office.
T
T/F: Some of the benefits of CPFR include strengthening partner relationships, providing an analysis of sales and order forecasts both upstream and downstream, and allowing collaboration on future requirements and planning.
T
According to the book, which is TRUE? a. CRM stands for customer relationship management b. ASP stands for automated service program c. CRM stands for customer resource management d. ASP stands for accelerated shipment process
a. CRM stands for customer relationship management
When an organization attempts to offer the right products and services to customers at the right time through the offer of individual promotions tied to specific events, like birthdays and anniversaries, this is referred to as: a. Event-based marketing b. Segmented selling c. Personal holiday marketing d. Extreme segmentation marketing
a. Event-based marketing
Dependent demand and independent demand items differ in that I. for any product, all components are dependent-demand items II. the need for independent-demand items is forecast III. the need for dependent-demand items is calculated a. I only b. I&II only c. I&III only d. II&III only e. I, II, & III
e. I, II, & III
Which of the following is NOT an assumption of the classic Economic Order Quantity (EOQ)? a. Lead time is known and constant b. Demand is known and constant c. Instantaneous replenishment d. There is no quantity discount e. The production rate must be greater than the consumption rate.
e. The production rate must be greater than the consumption rate.
most frequently used quantitative forecasting model and follow the premise that the future is an extension of the past
time series models
movement of a variable over time
trend variation
T/F: The (s,S) continuous review inventory system orders the same quantity Q when physical inventory reaches the reorder points.
F
T/F: The periodic inventory review system reviews physical inventory at specific points in time.
T
T/F: Electronic Product Code (EPC) is the only RFID standard adopted by the commercial sector and the U.S. Department of Defense.
F
T/F: If you felt that recent demand trends were more significant, and thus should be emphasized more in formulating a forecast, then in forecasting demand for the upcoming demand period, you would probably favor using a simple moving average over the conventional weighted moving average.
F
T/F: If you were calculating a forecast using an exponential smoothing model, a calculating using alpha=0.2 would be putting a greater emphasis on recent data, while a calculation using alpha=0.8 would be putting a greater emphasis on past data. Thus a lower alpha is a more responsive to changes in demand in the most recent periods.
F
T/F: In the economic manufacturing, the annual composition rate must be higher than the annual production rate.
F
T/F: Inventory turnover ratio shows how many times a firm turns over its inventory in an accounting period. Faster turnovers are generally viewed as negative because it indicates instability in the firm's inventory level.
F
T/F: Quantitative forecasting methods are based on opinions and intuition, whereas qualitative forecasting methods use mathematical models and relevant historical data to generate forecasts.
F
T/F: Segmenting customers on the basis of things like products purchased, sales history, demographic information, and desired product features can dilute the results of a CRM program; segmenting customers should be avoided.
F
T/F: Service parts sold to the repair shops are examples of dependent demand.
F
T/F: The Institute of Supply Management (ISM) surveys more than 300 purchasing and supply executives in the US using a questionnaire seeking information on "changes in production, new orders, new export orders, imports, employment, inventories, prices, lead-times, and the timeliness of supplier deliveries in their companies comparing the current month to the previous month." The ISM report on business focuses only on the manufacturing sector.
F
T/F: The continuous review inventory system orders the same quantity Q when physical inventory reaches the reorder point.
F
T/F: The four broad categories of inventories are raw materials, work-in-process, subassemblies, and finished goods.
F
T/F: The modern day business environment must deal with a more homogenous consumer base, which has caused the evolution of a more "push" oriented environment where suppliers must focus on manufacturing high volumes of standardized goods.
F
T/F: The objective of CPFR is to optimize the supply chain by improving demand forecast accuracy, delivering the right product at the right time to the right location, reducing inventories across the supply chain, avoiding stock-outs, and improving customer service. As a result of the many benefits attributed to CPFR, this business practice has been widely adopted.
F
T/F: The total annual inventory cost is the sum of annual purchase cost, the annual holding cost, the annual capacity cost, and the annual ordering cost.
F
T/F: The true value of CPFR comes from the sophisticated forecasting algorithms that provide companies with highly accurate forecasts, not from the exchange of forecasting information.
F
T/F: When web sites suggest other items for purchase based on already purchased items, this is an example of Clickstream Selling.
F
T/F: While a well-planned and organized CRM plan can be extremely useful in developing effective and efficient marketing programs for retailer, they are not particularly helpful for manufacturing companies like GM and Toyota since their touches with the customer are few.
F
T/F: up until now CRM has been very effective for most companies because it has focused on building customers' trust and loyalty, ultimately building a strong relationship with the customer through programs that make it easy for the customer to return products and get information from people inside the organization.
F
T/F: As customers navigate through a website CRM software can record and analyze the customer's clickstream so website images and ads can be tailored to the needs and desires of that individual customer.
T
T/F: As tighter control limits are instituted for the tracking signal, there is a greater probability of finding exceptions that require no action, but it also means catching changes in demand earlier.
T
T/F: Because integrated supply chains require good suppliers to act as good supply-chain customer partners, CRM programs should include first-tier customer training and education to ensure proper use of purchase products.
T
T/F: Radio frequency identification (RFID) is considered an eventual replacement of bar code because of its ability to store huge amount of information to differentiate specific unit of good.
T
T/F: Relaxing the constant price assumption of the classic EOQ model results in the Quantity discount model.
T
T/F: Relaxing the instantaneous replenishment assumption of the EOQ model results in the Economic Manufacturing Quantity model.
T
T/F: Some of the important steps involved in implementation of a CPRF process model include developing a collaborative arrangement, creating a sales forecast, creating an order forecast, and generating those orders.
T
T/F: Some of the leading suppliers of CPFR solutions mentioned in the textbook are JDA Software Group, i2 Technologies, and Oracle.
T
T/F: Some of the ways customers evaluate the customer service capabilities of an organization are through their experiences with human response call centers, automated response call centers, consumer web sites, and field service employees.
T
T/F: The ABC inventory control system categorizes inventory items into 3 groups, A, B, C. A item are given highest priority, while C items have the lowest priority. Prioritization may be based on annual dollar usage, shelf life, or sales volume.
T
T/F: The ABC inventory matrix is used to monitor whether the firm is stocking the correct type of inventory and to detect obsolete stock.
T
T/F: The ABC inventory matrix shows an ABC inventory classification based on annual usage on the vertical axis and an ABC inventory classification based on physical inventory on the horizontal axis.
T
T/F: The EOQ, also known as the economic order quantity, is the optimal order size in terms of cost because it minimizes the annual total inventory cost. The EOQ is the lot size where inventory holding costs equal annual ordering costs.
T
T/F: The difference between a simple regression forecast and a multiple regression forecast is that simple regression is used when there is only one explanatory (or independent) variable, while multiple regression is used when there are numerous explanatory variables.
T
T/F: The optimal order quantity for the quantity discount may exist at a price breakpoint.
T
T/F: Through the use permission marketing programs, customers are allowed to select the type of communications companies can make with them. Actually, customers can even choose to be completely eliminated from both e-mail and traditional mailing lists.
T
T/F: When demand and lead time are constant, reorder point is the demand during lead time.
T
T/F: When web sites suggest other items for purchase based on already purchased items, this is an example of Cross-selling.
T
T/F: While a company's Internet presence may be desirable for finding information or conducting product transfers, touching products and talking face-to-face with company representatives remains an integral part of the supplier-customer interface.
T
Since many companies do not have the knowledge, resources (money/people), or capability of building an infrastructure to support a CRM program, many companies have chosen to outsource this responsibility to a(n): a. ASP b. Customer Support Specialist Firm c. DSS d. Marketing Facilitator
a. ASP
Which of the following would most likely be considered a dependent demand item? a. Bicycle tires used to assemble a bicycle b. Television (TV) c. Couch d. Lawn mower
a. Bicycle tires used to assemble a bicycle
Which of the following is a disadvantage of excessive inventory? a. It hides production and other problems b. it leads to higher inventory ordering cost c. It leads to lower average inventory d. It eliminates cycle stock e. It reduces the need to conduct cycle count
a. It hides production and other problems
Which of the following indices provided by the Institute for Supply Management (ISM) is considered the most important by economists because it is a composite of five weighted, seasonally adjusted indices? a. Purchasing Managers Index b. Export Orders Index c. Production and Inventory Index d. New orders Index
a. Purchasing Managers Index
What inventory factor may be omitted from the basic EOQ derivation because it is a constant? a. Annual order-processing cost b. Annual purchase cost of goods c. Annual capital cost d. Annual setup costs e. all of these
b. Annual purchase cost of goods
In the absence of demand and delivery lead time uncertainty, reorder point is the ________. a. demand during lead time b. safety stock c. sum of demand during lead time and safety stock d. economic order quantity e. average inventory
a. demand during lead time
According to the book, which is TRUE? a. CRM stands for customer resource management. b. ASP stands for application service provider. c. CRM stands for centralized resource management. d. ASP stands for accelerated shipment process.
b. ASP stands for application service provider.
What does the acronym CPFR represent? a. Coordinated planning and forecasting relationships b. Collaborative planning, forecasting, and replenishment c. Centralized purchasing and forecasting relationships d. Collaborative purchasing, forecasting, and receivables
b. Collaborative planning, forecasting, and replenishment
Which of the following customer service elements can be classified as examples of post-transaction elements? a. Salesperson politeness b. Customer complaint resolution c. Customer service policies d. The company's choice of organizational structure
b. Customer complaint resolution
Which one of the following statements regarding the economic order quantity is true? a. The EOQ model combines several different item orders to the same multiplier. b. If an order quantity is larger than the EOQ, the annual holding cost exceeds the annual ordering cost. c. The EOQ model assumes a variable demand pattern. d. When the interest rate drops, both the holding cost and the EOQ decreases. e. EOQ is used to determine the optimum shipping quantity.
b. If an order quantity is larger than the EOQ, the annual holding cost exceeds the annual ordering cost.
According to the textbook, which of the following is NOT a way to closely match supply and demand? a. Holding high amounts of inventory b. Maintaining a rigid pricing system c. Utilizing overtime d. Hiring temporary workers
b. Maintaining a rigid pricing system
Which of the following are required elements of an effective CRM initiative? a. Sending out promotional materials via email and traditional mail to a large random group of potential customers. b. Segmenting customers c. Preserving traditional sales forces that communicate with the supply chain via a traditional paper document/contract system d. all the above
b. Segmenting customers
If an item is ordered at its economic order quantity, the annual carrying cost should be: a. slightly less than the annual ordering cost b. equal to the annual ordering cost c. twice the annual purchase price d. the square root of the annual ordering cost e. cannot be determined because there is insufficient information provided.
b. equal to the annual ordering cost
Companies hold a supply of inventory for all of the following reasons except: a. meet variation in product demand b. increase production change/setup costs c. allow production scheduling flexibility d. purchase in bulk to take advantage of quantity discounts e. maintain independence of operations (decoupling)
b. increase production change/setup costs
The exponential smoothing forecast has the same value as the naive forecast when alpha in the exponential smoothing model is equal to: a. 0 b. 0.5 c. 1 d. Insufficient information provided to determine answer.
c. 1
Some measures of forecasting accuracy include mean absolute deviation, mean absolute percentage error, and mean squared error. The formula for each is dependent on the forecast error, which is calculating by using the equation: a. Actual demand for period t divided by the forecasted demand for period t. b. Actual demand for period t plus the forecasted demand for period t. c. Actual demand for period t minus the forecasted demand for period t. d. The average of actual demand for period t and forecasted demand for period t.
c. Actual demand for period t minus the forecasted demand for period t.
CRM can allow organizations to identify which customers have stopped purchasing products or services from the organization so that the organization can target those former customers for future promotions and/or perhaps to investigate why they stopped purchasing in the first place. The CRM attribute is called: a. Customer profitability determination b. Customer-base retention initiative c. Customer defection analysis d. Customer clickstream analysis
c. Customer defection analysis
__________, such as lubricants for machine, are used in the production process, but do not become parts of the final products. a. Raw materials b. Work-in-process c. Maintenance, repair and operating supplies d. Finished goods e. Cycle stock
c. Maintenance, repair and operating supplies
Which of the following organizations were featured ad two of the main providers of CRM software applications? a. Consumer Reflex and Response.com b. Aviata and OpenExchange.com c. Net Suite and Oracle d. Terrier Group and Ascension
c. Net Suite and Oracle
The EOQ model with quantity discounts attempts to determine... a. what is the lowest purchasing price b. whether to use fixed-quantity or fixed period order policy c. how many units should be ordered d. what is the shortest lead time e. what is the lowest amount of inventory necessary to satisfy a certain service level
c. how many units should be ordered
If the actual order quantity is the economic order quantity in a problem that meets the assumptions of the model, the average amount of inventory on hand a. is zero b. is affected by the amount of product cost c. is one-half of the economic order quantity d. is smaller than the holding cost per unit e. cannot be determined from the given information
c. is one-half of the economic order quantity
In the presence of demand and delivery lead time uncertainty, reorder point is the ________. a. demand during lead time b. safety stock c. sum of demand during lead time and safety stock d. economic order quantity e. average inventory
c. sum of demand during lead time and safety stock
use the same historical data figures but assume that one or more factors will impact future demand
cause and effect models
The cost of a widget is $5, and the carrying rate is 40%; cost of processing an order is $25, annual demand is for 400 widgets, and supply and usage patterns are stable. What is the economic order quantity? (EOQ) a. 5 b. 20 c. 25 d. 100 e. 200
d. 100
Which of the following is a method that organizations typically use in attempting to effectively manage the relationships between the organization and its customers at the customer service level? a. Reengineering and/or automating call centers based on past call center data b. Developing web sites that allow customers to access their personal accounts and/or information like hours of operation, store locations, and product information. c. Utilizing CRM programs to administer personalized surveys based on specific customer segments. d. All of these
d. All of these
Which of the following are required elements of an effective CRM initiative? a. Automating the salesforce b. Segmenting customers c. Personalizing customer communications through the use of cross-selling d. All the above
d. All the above
Which of the following statements about consumer focused programs/initiatives is TRUE? a. Customers want additional support services and other offerings that add value to their initial product or service purchases. b. CRM programs are simple in that they involve treating customers properly and making them feel valued. c. CRM programs are complex in that they involve identifying all customers, their needs, and then creating a system geared towards completely satisfying the customer. d. All the above
d. All the above
The online retailer Ecatalog.com has decided to send consumers of the new John Grisham book an email with suggestions for books with similar themes and has also offered them a 20% discount if those suggested books were purchased. This type of marketing/promotion is an example of: a. Target marketing b. Segmented selling c. Clickstream selling d. Cross-selling
d. Cross-selling
Which of the following customer service elements can be classified as examples of pre-transaction elements? a. Salesperson politeness and order processing capabilities b. Warranty repair capabilities and customer complaint resolution c. Product returns and information about the operation of the product purchased d. Customer service policies and the company's choice of organizational structure
d. Customer service policies and the company's choice of organizational structure
In the quantity discount model, the optimum order quantity that minimizes annual total costs may exist at: I. economic order quantity II. economic manufacturing quantity III. a price break point IV. the average inventory V. the reorder point a. I only b. II only c. III only d. I and III only e. II and III only
d. I and III only
Which one of the following is not a type of qualitative forecasting? a. Sales force composite b. Consumer survey c. Jury of executive opinion d. Naive method
d. Naive method
Which of the following is not an assumption of the economic order quantity model? a. Demand is known, constant, and independent. b. Lead time is known and constant c. Quantity discounts are not possible. d. Production and use can occur simultaneously. e. The only variable costs are setup cost and holding (or carrying) cost.
d. Production and use can occur simultaneously.
According to the textbook, the top three challenges for CPFR implementation include all of the following except: a. Making organizational and procedural changes b. Trust between supply chain managers c. Cost d. Supplier lead times
d. Supplier lead times
If usage is constant, as order size increases, annual order costs __________ but annual carrying costs __________. a. increase....increase b. decrease...decrease c. increase...decrease d. decrease...increase e. remain the same...increase
d. decrease...increase
Which of the following cannot be considered as independent demand items? a. wholesale and retail merchandise items b. maintenance, repair, and operating supplies at a manufacturing company c. maintenance, repair, and operating supplies at a service firm d. raw material items that become part of the final product at a manufacturing firm e. service industry items such as hospital supplies or office supplies for law firms
d. raw material items that become part of the final product at a manufacturing firm
Which of the following is not an example of an ordering cost for products purchased from a supplier? a. the cost of transmitting the order b. the cost of receiving the product c. the cost associated with processing the invoice d. the opportunity cost of not ordering from a least cost supplier e. the cost of handling the product
d. the opportunity cost of not ordering from a least cost supplier
The primary purpose of the basic economic order quantity model is... a. to calculate the reorder point, so that replenishments take place at the proper time b. to minimize the sum of carrying cost and holding cost c. to maximize the customer service level d. to minimize the sum of setup cost and holding cost e. to calculate the optimum safety stock
d. to minimize the sum of setup cost and holding cost
The process of combining statistical forecasting techniques and judgement to construct demand estimates for products or services across the supply chain from suppliers' raw materials to the individual consumer's needs
demand planning
