Question 1

The overarching goal of inventory management is to reduce inventory investment.

Accepted Answer

A) True 
 B)False  False

Question 2

Sales Forecasting needs to be perfect, or near perfect, to be useful.

Accepted Answer

A) True 
 B)False  False

Question 3

Maintaining inventory is how firms support services such as product availability and delivery time.

Accepted Answer

A) True 
 B)False  True

Question 4

There is a cost trade-off that firms must consider when deciding how much inventory to order. The trade-off is between sales commission and the cost of hiring new supply chain employees.

Accepted Answer

A) True 
 B)False

Question 5

Commonly used qualitative forecasting methods include:

Accepted Answer

A)  Consensus panel, the Delphi method, and sales force estimates 
B)  Direct, Indirect, and Estimation methods 
C)  Balance sheet, Income statement, and cash flow statement methods 
D)  Derivative method, pre-ship staging, and back-trace flow estimates 
A)  Consensus panel, the Delphi method, and sales force estimates 
B)  Direct, Indirect, and Estimation methods 
C)  Balance sheet, Income statement, and cash flow statement methods 
D)  Derivative method, pre-ship staging, and back-trace flow estimates

Question 6

How did Sony Electronics achieve a 40% increase in sales forecast accuracy?

Accepted Answer

A)  Sony fired half of its staff and became a subsidiary of Wal-Mart Stores, Inc. 
B)  Sony instituted additional security measures to protect its own sales data and decreased the number of staff with access to critical data. 
C)  Sony used both its Sales & Operations Planning plan along with its Collaborative Planning, Forecasting, & Replenishment process to increase forecast accuracy. 
D)  Sony increased its asset base by 18% and invested an additional 20% in statistical tools. 
A)  Sony fired half of its staff and became a subsidiary of Wal-Mart Stores, Inc. 
B)  Sony instituted additional security measures to protect its own sales data and decreased the number of staff with access to critical data. 
C)  Sony used both its Sales & Operations Planning plan along with its Collaborative Planning, Forecasting, & Replenishment process to increase forecast accuracy. 
D)  Sony increased its asset base by 18% and invested an additional 20% in statistical tools.

Question 7

Forecasting methods can be divided into two groups: qualitative and quality.

Accepted Answer

A) True 
 B)False

Question 8

If annual demand is 24,000 units, and the order quantity is 3,000 units, then which of the following is true?

Accepted Answer

A)  The annual number of order placements will be 8, and average inventory levels will be 1,500. 
B)  The annual number of order placements will be 8, and average inventory levels will be 3,000. 
C)  The annual number of order placements will be 12, and average inventory levels will be 12,000. 
D)  The annual number of order placements will be 24, and average inventory levels will be 12,000 
A)  The annual number of order placements will be 8, and average inventory levels will be 1,500. 
B)  The annual number of order placements will be 8, and average inventory levels will be 3,000. 
C)  The annual number of order placements will be 12, and average inventory levels will be 12,000. 
D)  The annual number of order placements will be 24, and average inventory levels will be 12,000

Question 9

Forecast error decreases the farther into the future the period covered by the forecast.

Accepted Answer

A) True 
 B)False

Question 10

Which of the three Forecast Error Measures described in the text is simply a measure of the average error for all time periods considered?

Accepted Answer

A)  Mean Squared Error (MS
E)  
B)  Mean Absolute Percent Error (MAP
E)  
C)  Mean Absolute Deviation (MA
D)  
D)  None of the measures can be described this way. 
A)  Mean Squared Error (MS
E)  
B)  Mean Absolute Percent Error (MAP
E)  
C)  Mean Absolute Deviation (MA
D)  
D)  None of the measures can be described this way.

Question 11

The Mini-Mart in Oxford Ohio holds monthly sales of slower moving goods to make room for incoming products. This is:

Accepted Answer

A)  An example of good inventory management 
B)  An example of innovation in inventory management 
C)  An example of meeting customer service expectations 
D)  A symptom of poor inventory management 
A)  An example of good inventory management 
B)  An example of innovation in inventory management 
C)  An example of meeting customer service expectations 
D)  A symptom of poor inventory management

Question 12

When historical sales data is deemed a good indicator of future sales, quantitative methods of forecasting are recommended.

Accepted Answer

A) True 
 B)False

Question 13

What is a key reason why a firm would hold inventory?

Accepted Answer

A)  To maintain a source of supply 
B)  To prepare for the introduction of a new product introduction 
C)  To support a customer service policy 
D)  To prepare for back-to-school sales 
A)  To maintain a source of supply 
B)  To prepare for the introduction of a new product introduction 
C)  To support a customer service policy 
D)  To prepare for back-to-school sales

Question 14

Under conditions of uncertainty, the average inventory is equal to ½ of the order quantity.

Accepted Answer

A) True 
 B)False

Question 15

Quantitative forecasts are based on the judgment of one or more knowledgeable forecasters and are used when historical data is scarce.

Accepted Answer

A) True 
 B)False

Question 16

Once inventory levels are decided, a firm can then determine what level of customer service it will provide.

Accepted Answer

A) True 
 B)False

Question 17

For a given product, the order placement cost is $5, the holding cost per unit per year is $10, and annual demand is 1,600 units. If the EOQ is used, total annual logistics costs will amount to which of the following?

Accepted Answer

A)  $100 
B)  $200 
C)  $400 
D)  $800 
E)  None of these 
A)  $100 
B)  $200 
C)  $400 
D)  $800 
E)  None of these

Question 18

Which of the following statements is true concerning Sales & Operations Planning (S&OP)?

Accepted Answer

A)  It is an integrative process used to develop more accurate forecasts. 
B)  Uses both qualitative and quantitative tools 
C)  The Operations and Sales teams bear the primary burden of meeting targets 
D)  Uses a formal S&OP team to develop the final plan 
E)  All of these options are true 
A)  It is an integrative process used to develop more accurate forecasts. 
B)  Uses both qualitative and quantitative tools 
C)  The Operations and Sales teams bear the primary burden of meeting targets 
D)  Uses a formal S&OP team to develop the final plan 
E)  All of these options are true

Question 19

Since carrying inventory is relatively inexpensive (compared to transportation, production, marketing, etc.) firm should hold enough inventory to meet customer demand.

Accepted Answer

A) True 
 B)False

Question 20

One important factor impacting safety stock is inventory lead time.

Accepted Answer

A) True 
 B)False

The overarching goal of inventory management is to reduce inventory investment.

Sales Forecasting needs to be perfect, or near perfect, to be useful.

Maintaining inventory is how firms support services such as product availability and delivery time.

There is a cost trade-off that firms must consider when deciding how much inventory to order. The trade-off is between sales commission and the cost of hiring new supply chain employees.

Commonly used qualitative forecasting methods include:

How did Sony Electronics achieve a 40% increase in sales forecast accuracy?

Forecasting methods can be divided into two groups: qualitative and quality.

If annual demand is 24,000 units, and the order quantity is 3,000 units, then which of the following is true?

Forecast error decreases the farther into the future the period covered by the forecast.

Which of the three Forecast Error Measures described in the text is simply a measure of the average error for all time periods considered?

The Mini-Mart in Oxford Ohio holds monthly sales of slower moving goods to make room for incoming products. This is:

When historical sales data is deemed a good indicator of future sales, quantitative methods of forecasting are recommended.

What is a key reason why a firm would hold inventory?

Under conditions of uncertainty, the average inventory is equal to ½ of the order quantity.

Quantitative forecasts are based on the judgment of one or more knowledgeable forecasters and are used when historical data is scarce.

Once inventory levels are decided, a firm can then determine what level of customer service it will provide.

For a given product, the order placement cost is $5, the holding cost per unit per year is $10, and annual demand is 1,600 units. If the EOQ is used, total annual logistics costs will amount to which of the following?

Which of the following statements is true concerning Sales & Operations Planning (S&OP)?

Since carrying inventory is relatively inexpensive (compared to transportation, production, marketing, etc.) firm should hold enough inventory to meet customer demand.

One important factor impacting safety stock is inventory lead time.

Supply Chain Management: Operations and Integration

Customer Service and Satisfaction

The Role of Information in Supply Chains

Transportation: Overview, Infrastructure, Measures, and Management

Warehouse Management

Materials Management and Handling in the Supply Chain

Sourcing and Procurement

The Role of Manufacturing, Marketing and Finance in Supply Chains

Managing Relationships With Customers and Suppliers

Supply Chain Process Integration

Global Supply Chain Management

Managing Supply Chains in Global Markets

Strategic Supply Chain Network Design

Collaboration, Cooperation and Integration in the Supply Chain

Supply Chain Performance Measurement and Metrics

Filters

Exam 4: Sales Forecasting and Inventory Management

The overarching goal of inventory management is to reduce inventory investment.

Sales Forecasting needs to be perfect, or near perfect, to be useful.

Maintaining inventory is how firms support services such as product availability and delivery time.

There is a cost trade-off that firms must consider when deciding how much inventory to order. The trade-off is between sales commission and the cost of hiring new supply chain employees.

Commonly used qualitative forecasting methods include:

How did Sony Electronics achieve a 40% increase in sales forecast accuracy?

Forecasting methods can be divided into two groups: qualitative and quality.

If annual demand is 24,000 units, and the order quantity is 3,000 units, then which of the following is true?

Forecast error decreases the farther into the future the period covered by the forecast.

Which of the three Forecast Error Measures described in the text is simply a measure of the average error for all time periods considered?

The Mini-Mart in Oxford Ohio holds monthly sales of slower moving goods to make room for incoming products. This is:

When historical sales data is deemed a good indicator of future sales, quantitative methods of forecasting are recommended.

What is a key reason why a firm would hold inventory?

Under conditions of uncertainty, the average inventory is equal to ½ of the order quantity.

Quantitative forecasts are based on the judgment of one or more knowledgeable forecasters and are used when historical data is scarce.

Once inventory levels are decided, a firm can then determine what level of customer service it will provide.

For a given product, the order placement cost is $5, the holding cost per unit per year is $10, and annual demand is 1,600 units. If the EOQ is used, total annual logistics costs will amount to which of the following?

Which of the following statements is true concerning Sales & Operations Planning (S&OP)?

Since carrying inventory is relatively inexpensive (compared to transportation, production, marketing, etc.) firm should hold enough inventory to meet customer demand.

One important factor impacting safety stock is inventory lead time.

Supply Chain Management: Operations and Integration

Customer Service and Satisfaction

The Role of Information in Supply Chains

Transportation: Overview, Infrastructure, Measures, and Management

Warehouse Management

Materials Management and Handling in the Supply Chain

Sourcing and Procurement

The Role of Manufacturing, Marketing and Finance in Supply Chains

Managing Relationships With Customers and Suppliers

Supply Chain Process Integration

Global Supply Chain Management

Managing Supply Chains in Global Markets

Strategic Supply Chain Network Design

Collaboration, Cooperation and Integration in the Supply Chain

Supply Chain Performance Measurement and Metrics

Filters