Question 1

As retailers decrease the level of safety inventory they carry,the distributor will have to

Accepted Answer

A)  decrease his or her safety inventory. 
B)  increase his or her safety inventory. 
C)  keep his or her safety inventory at the same level. 
D)  increase his or her cycle inventory. 
A)  decrease his or her safety inventory. 
B)  increase his or her safety inventory. 
C)  keep his or her safety inventory at the same level. 
D)  increase his or her cycle inventory. B

Question 2

Periodic review policies for inventory replenishment require safety inventory to cover demand during

Accepted Answer

A)  lead time only. 
B)  the review interval only. 
C)  both lead time and the review interval. 
D)  neither lead time or the review interval. 
A)  lead time only. 
B)  the review interval only. 
C)  both lead time and the review interval. 
D)  neither lead time or the review interval. C

Question 3

The ability of a supply chain to delay product differentiation or customization until closer to the time the product is sold is

Accepted Answer

A)  information centralization. 
B)  specialization. 
C)  product substitution. 
D)  postponement. 
A)  information centralization. 
B)  specialization. 
C)  product substitution. 
D)  postponement. D

Question 4

Which of the following is not a measure of product availability?

Accepted Answer

A)  Customer fill rate 
B)  Product fill rate 
C)  Order fill rate 
D)  Cycle service level (CSL) 
A)  Customer fill rate 
B)  Product fill rate 
C)  Order fill rate 
D)  Cycle service level (CSL)

Question 5

Order fill rate is the fraction of product demand that is satisfied from product in inventory.

Accepted Answer

A) True 
 B)False

Question 6

Discuss the role of safety inventory in the supply chain and the trade-offs involved.

Accepted Answer

The primary role of safety inventory is

Question 7

If aggregation reduces the required safety inventory for a product by a small amount,it may be best to carry the product in multiple decentralized locations to reduce response time and transportation cost.

Accepted Answer

A) True 
 B)False

Question 8

Periodic review policies require more safety inventory than continuous review policies for the same level of product availability.

Accepted Answer

A) True 
 B)False

Question 9

Given the product variety and high demand uncertainty in most high-tech supply chains,a significant fraction of the inventory carried is safety inventory.

Accepted Answer

A) True 
 B)False

Question 10

Postponement allows the supply chain to delay product differentiation,which results in disaggregating most of the inventories in the supply chain.

Accepted Answer

A) True 
 B)False

Question 11

The required safety inventory

Accepted Answer

A)  increases with an increase in the lead time and the standard deviation of periodic demand. 
B)  decreases with an increase in the lead time and the standard deviation of periodic demand. 
C)  remains stable with an increase in the lead time and the standard deviation of periodic demand. 
D)  increases with a decrease in the lead time and the standard deviation of periodic demand. 
A)  increases with an increase in the lead time and the standard deviation of periodic demand. 
B)  decreases with an increase in the lead time and the standard deviation of periodic demand. 
C)  remains stable with an increase in the lead time and the standard deviation of periodic demand. 
D)  increases with a decrease in the lead time and the standard deviation of periodic demand.

Question 12

Which of the following is not a suggested method for estimating and managing safety inventory in practice?

Accepted Answer

A)  Adjust inventory policies if demand is seasonal 
B)  Monitor service levels 
C)  Focus on increasing safety inventories 
D)  Use simulation to test inventory policies 
A)  Adjust inventory policies if demand is seasonal 
B)  Monitor service levels 
C)  Focus on increasing safety inventories 
D)  Use simulation to test inventory policies

Question 13

The fraction of product demand that is satisfied from product in inventory is the

Accepted Answer

A)  customer fill rate. 
B)  product fill rate. 
C)  order fill rate. 
D)  cycle service level (CSL). 
A)  customer fill rate. 
B)  product fill rate. 
C)  order fill rate. 
D)  cycle service level (CSL).

Question 14

The appropriate level of safety inventory is determined by the uncertainty of both demand and supply and the desired level of cycle inventory.

Accepted Answer

A) True 
 B)False

Question 15

Continuous review policies for inventory replenishment require safety inventory to cover demand during

Accepted Answer

A)  lead time only. 
B)  the review interval only. 
C)  both lead time and the review interval. 
D)  neither lead time or the review interval. 
A)  lead time only. 
B)  the review interval only. 
C)  both lead time and the review interval. 
D)  neither lead time or the review interval.

Question 16

A goal of any supply chain manager is to reduce the level of safety inventory required regardless of the affect product availability.

Accepted Answer

A) True 
 B)False

Question 17

The lower the coefficient of variation of an item,the greater the reduction in safety inventories as a result of centralization.

Accepted Answer

A) True 
 B)False

Question 18

The expected shortage per replenishment cycle (ESC)is the average units of demand that are satisfied from inventory in stock per replenishment cycle.

Accepted Answer

A) True 
 B)False

Question 19

A key to the success of any supply chain is to figure out ways to decrease the level of safety inventory carried without hurting the level of product availability.

Accepted Answer

A) True 
 B)False

Question 20

Aggregation reduces the standard deviation of demand

Accepted Answer

A)  only if demand across the regions being aggregated is perfectly positively correlated. 
B)  only if demand across the regions being aggregated is not perfectly positively correlated. 
C)  even if demand across the regions being aggregated is not perfectly positively correlated. 
D)  whenever demand across the regions being aggregated is not perfectly positively correlated. 
A)  only if demand across the regions being aggregated is perfectly positively correlated. 
B)  only if demand across the regions being aggregated is not perfectly positively correlated. 
C)  even if demand across the regions being aggregated is not perfectly positively correlated. 
D)  whenever demand across the regions being aggregated is not perfectly positively correlated.

As retailers decrease the level of safety inventory they carry,the distributor will have to

Periodic review policies for inventory replenishment require safety inventory to cover demand during

The ability of a supply chain to delay product differentiation or customization until closer to the time the product is sold is

Which of the following is not a measure of product availability?

Order fill rate is the fraction of product demand that is satisfied from product in inventory.

Discuss the role of safety inventory in the supply chain and the trade-offs involved.

If aggregation reduces the required safety inventory for a product by a small amount,it may be best to carry the product in multiple decentralized locations to reduce response time and transportation cost.

Periodic review policies require more safety inventory than continuous review policies for the same level of product availability.

Given the product variety and high demand uncertainty in most high-tech supply chains,a significant fraction of the inventory carried is safety inventory.

Postponement allows the supply chain to delay product differentiation,which results in disaggregating most of the inventories in the supply chain.

The required safety inventory

Which of the following is not a suggested method for estimating and managing safety inventory in practice?

The fraction of product demand that is satisfied from product in inventory is the

The appropriate level of safety inventory is determined by the uncertainty of both demand and supply and the desired level of cycle inventory.

Continuous review policies for inventory replenishment require safety inventory to cover demand during

A goal of any supply chain manager is to reduce the level of safety inventory required regardless of the affect product availability.

The lower the coefficient of variation of an item,the greater the reduction in safety inventories as a result of centralization.

The expected shortage per replenishment cycle (ESC)is the average units of demand that are satisfied from inventory in stock per replenishment cycle.

A key to the success of any supply chain is to figure out ways to decrease the level of safety inventory carried without hurting the level of product availability.

Aggregation reduces the standard deviation of demand

Understanding the Supply Chain

Supply Chain Performance: Achieving Strategic Fit and Scope

Supply Chain Drivers and Metrics

Designing Distribution Networks and Applications to E-Business

Network Design in the Supply Chain

Designing Global Supply Chain Networks

Demand Forecasting in a Supply Chain

Aggregate Planning in a Supply Chain

Sales and Operations Planning: Planning Supply and Demand in a Supply Chain

Coordination in a Supply Chain

Managing Economies of Scale in the Supply Chain: Cycle Inventory

Determining the Optimal Level of Product Availability

Transportation in a Supply Chain

Sourcing Decisions in a Supply Chain

Pricing and Revenue Management in a Supply Chain

Information Technology in a Supply Chain

Sustainability and the Supply Chain

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Exam 12: Managing Uncertainty in a Supply Chain: Safety Inventory

As retailers decrease the level of safety inventory they carry,the distributor will have to

Periodic review policies for inventory replenishment require safety inventory to cover demand during

The ability of a supply chain to delay product differentiation or customization until closer to the time the product is sold is

Which of the following is not a measure of product availability?

Order fill rate is the fraction of product demand that is satisfied from product in inventory.

Discuss the role of safety inventory in the supply chain and the trade-offs involved.

If aggregation reduces the required safety inventory for a product by a small amount,it may be best to carry the product in multiple decentralized locations to reduce response time and transportation cost.

Periodic review policies require more safety inventory than continuous review policies for the same level of product availability.

Given the product variety and high demand uncertainty in most high-tech supply chains,a significant fraction of the inventory carried is safety inventory.

Postponement allows the supply chain to delay product differentiation,which results in disaggregating most of the inventories in the supply chain.

The required safety inventory

Which of the following is not a suggested method for estimating and managing safety inventory in practice?

The fraction of product demand that is satisfied from product in inventory is the

The appropriate level of safety inventory is determined by the uncertainty of both demand and supply and the desired level of cycle inventory.

Continuous review policies for inventory replenishment require safety inventory to cover demand during

A goal of any supply chain manager is to reduce the level of safety inventory required regardless of the affect product availability.

The lower the coefficient of variation of an item,the greater the reduction in safety inventories as a result of centralization.

The expected shortage per replenishment cycle (ESC)is the average units of demand that are satisfied from inventory in stock per replenishment cycle.

A key to the success of any supply chain is to figure out ways to decrease the level of safety inventory carried without hurting the level of product availability.

Aggregation reduces the standard deviation of demand

Understanding the Supply Chain

Supply Chain Performance: Achieving Strategic Fit and Scope

Supply Chain Drivers and Metrics

Designing Distribution Networks and Applications to E-Business

Network Design in the Supply Chain

Designing Global Supply Chain Networks

Demand Forecasting in a Supply Chain

Aggregate Planning in a Supply Chain

Sales and Operations Planning: Planning Supply and Demand in a Supply Chain

Coordination in a Supply Chain

Managing Economies of Scale in the Supply Chain: Cycle Inventory

Determining the Optimal Level of Product Availability

Transportation in a Supply Chain

Sourcing Decisions in a Supply Chain

Pricing and Revenue Management in a Supply Chain

Information Technology in a Supply Chain

Sustainability and the Supply Chain

Filters