Week 7-15 HW

If you were trying to make a decision to consolidate the demand forecast by aggregating the demand data from two locations. What would you want the correlation coefficient of the demand data between the locations to be?

-0.9

Select the countermeasure suggested for the cause of bullwhip effect 1. Sales promotions 2. Shortage gaming 3. Order batchinig

1. Every day ow prices 2. Proportional and rational scheme 3. Small and frequent orders

The demand over lead time is normally distributed with a mean of 85. The reorder point for a 95% service level is 105. What is the standard deviation of demand over the lead time

12

The average daily demand for a product is 25 and the lead time is 4 weeks. The standard deviation of demand each week is constant at 4.For a 95% service level calculate The safety stock [SS]

13.2

General piping has 9 warehouse locations across the country that they are considering consolidating to 3. The current inventory value is 3,767,137 dollars. What is your estimate of the future value of inventory after consolidation? (Only enter whole numbers, no comma or $ signs)

2,174,958 margin of error +/- 2

The annual demand for a product is 2000 units. The order quantity is 200 and the holding costs are $10/unit/year. If the annual costs are $1200, what is the ordering cost per order? (Only enter numbers)

20

Target stores carries over 100,000 SKUs (stock keeping units). How many SKUs likely account for the bulk of the inventory value?

20000

The annual demand for sand used during the winter months for the city of Boulder is 750000 pounds. The holding cost is $0.1 per lb per year and the ordering costs at $65 per order. Currently all the sand is stored in one location in the north end of town. The demand is 50% in the north and 50% in the south so the city is considering opening a second storage location. What is the estimate of the total cycle inventory between both the warehouses?

22,079.49

The annual demand is 2000 units and the lead time for restocking is 3 days. Assuming 50 weeks a year and 5 days a week what is the pipeline inventory?

24

The annual demand for a product is 2000 units. The holding costs are $10/unit and the ordering costs are $25/order. If the current annual costs are $1250/year, what would be the savings if the company were to order using an economic order quantity? (Enter numbers only)

250

The demand for a certain product is show below. The lead time is 3 days and the order quantity is 40 units. At the start of the day 1 the inventory on hand is 100 units. The demand shown occur during the day. Restocking orders are placed at the end of the day after the business closes. Incoming shipments are received during the day on the 4th day (after the order is placed, i.e. 3 days lead time). The reorder point is 70.

3 and 6

A product has a 4 week lead time. The standard deviation of demand for each of the week is given below. What is the standard deviation of demand over the lead time?

30.64

Four warehouses have variable demand and the standard deviation of demand is shown below. What would be the reduction in safety stock at 95% service level (Z=1.65) if the locations were consolidated into one location

63.24

If the current total inventory value across 10 warehouses is $6500000, and the company plans to expand it's operations to 13 warehouses, what would be your best estimate of the new total inventory value? (enter whole numbers, no commas or $ signs)

7,411,140

The daily demand for a product is 28 units. A company operates 5 days a week and 50 weeks a year. What is the annual demand

7000

The average daily demand for a product is 25 and the lead time is 4 weeks (assume 7 days a week). The standard deviation of demand during the lead time is 8. For a 95% service level calculate The reorder point [ROP] (round to the nearest whole number)

713

The annual demand for sand used during the winter months for the city of Boulder is 750000 pounds. The holding cost is $0.1 per lb per year and the ordering costs at $65 per order. Currently all the sand is stored in one location in the north end of town. The demand is 50% in the north and 50% in the south so the city is considering opening a second storage location. The total annual cost for the single sand storage location was estimated at $3123. What is the estimated total cost for the city when there are two storage locations?

Between 4,415 and 4,416

Best Buy carries an electronic component whose cost is $20 per unit. The annual demand for the component is 250000 units. Holding costs are $2/unit per year. Ordering costs are $15/order. The component is currently stocked in 3 warehouses around the state and used to supply the retail locations. The company is considering consolidating to a single warehouse location. What is the expected savings from the consolidation?

Between 4,910 and 4,912

As holding costs increase and setup costs increase the EOQ will

Depends on the relative increase in holding costs and ordering costs

The main categories of purchased goods are

Direct and indirect materials

In a continuous review system when demand and lead time are constant and certain, the reorder point is

Equal to the demand over the lead time

Demand pooling is effective when the demand is highly positively correlated

False

EOQ can be used when ordering costs and holding costs are highly variable

False

Offering a very large variety of similar products makes the job of demand forecasting easier

False

One of the disadvantages of location pooling is lower service levels

False

True or False, The longer the cycle time the smaller the cycle inventory

False

True or False: Risk pooling suggests that demand variability increases as a result of aggregating demand

False

In vendor managed replenishment systems the customer manages the inventory system and decides on the inventory policies

False, The supplier is responsible for the inventory policies and the inventory levels not the customer

Effective consumer response requires demand management but not supply management

False, it requires both

As the amount of inventory increases the customer service level typically

Goes up

Customers are expecting (select all that apply)

Greater customization of products, Ever-higher levels of performance, Continuous reduction in costs

As setup costs increase the EOQ will

Increase

What are two tangible effects of sustainability efforts that motivate companies to pursue sustainability?

Increase in revenues and Reduction in costs

As the delay (Lag) time increases in the supply chain what is likely to happen to the bullwhip effect

It will get amplified

Which of the following is not inventory

Items in a customer's shopping cart

One of the major challenges in sustainability reporting is

Lack of common measures

What drives companies to adopt sustainable practices?

Legislation and customers

3PL companies take over a company's

Logistics function

The cycle inventory depends on

Lot size ordered

Reasons for outsourcing often include

Lower costs, Specialized knowledge

Suppliers evaluation and selection should be based on comparing

Lowest overall cost

The triple bottom line refers to what three things

People, Profit, and Planet

Location pooling results in

Reduced inventory levels and Reduced total demand variability

The major challenges with data integrity in ERP systems has to do with (select all that apply)

Redundancy, Data integrity, Inconsistency

What makes a block chain immutable?

Requires control of at least 50% of the computers on the network to make the ledgers equivalent and Changes in a block requires recomputation of all blocks that are following

The S & OP process has a focus on

Revenue and profitabilty

The three elements of strategic sourcing are

Selection, Management, and Sourcing

A hurricane is forcasted for the Gulf coast. In anticipation people are stocking up on plywood and essential groceries. As a result stores are stocking out of these products This is an example of

Shortage gaming

Postponement can lead to .. (select all that apply)

Shorter lead times, Higher product variety, larger batches when process times are long

The major processes that make up procurement are

Sourcing and purchasing

In a continuous replenishment strategy

Suppliers ship at agreed upon frequency

The push pull boundary is determined by

Supply chain timeline

Having flexible capacity allows you to better manage

Supply with uncertain demand

In a quick response strategy

The inventory decision maker is the retailer

EOQ refers to which of the following

The lot size that minimizes the total annual inventory ordering and holding costs

If the demand variation (std deviation of demand) in multiple independent locations is the same, then the std. deviation of demand of a single pooled location will be equal to

The product of the square root of the number of locations and the demand variation of a single location

A decoupling point is where inventory is held for final product differentiation

True

An ERP system produces and shares real-time information across the enterprise

True

Achieving service excellence requires

Understanding how the customer defines service

A small automotive parts shop uses a continuous review system to restock cases of oil. At the start of the day they have 175 quarts. The reorder point is 200 and the order quantity is 48. They have 48 quarts scheduled to arrive in the next 2 days. A customer walks in and buys 35 quarts. Should they place another order? Yes or No

Yes

The choice to in-source is often made when (select all that apply)

assured supply is needed, there is a quality advantage

In automating common processes within the ERP system the focus is on (select all that apply)

decision making processes, value added processes

The goal of the procurement process is enabling orders to be placed and delivered _______ at the _________

on schedule, lowest overall cost

In the push/pull view of the supply chain the processes are categorized based on whether they are performed in ___ to customer orders, or in ___ of customer orders

response, anticipation

The S&OP process deals with not just whether planned ____can be ____ in time, but also answers the questions that arise when you consider the ____that exist between the key figures of the supply chain

sales, produced, interdependencies

In evaluating good and services for outsourcing it is important to review them in the context of

Cost and Criticality

In the cycle view the processes within the supply chain are broken up into a series of

Cycles

In order to use EOQ which of the following must be true (select all that apply)

Demand is constant, lead time is constant