Question 1

Carrying excessive inventory can help counter demand volatility when new products come on the market.

Accepted Answer

A) True 
 B)False

Question 2

The expected shortage per replenishment cycle (ESC)is

Accepted Answer

A)  the units of demand that are not satisfied from inventory in stock in a given replenishment cycle. 
B)  the units of demand that are satisfied from inventory in stock in a given replenishment cycle. 
C)  the average units of demand that are not satisfied from inventory in stock per replenishment cycle. 
D)  the average units of demand that are satisfied from inventory in stock per replenishment cycle. 
A)  the units of demand that are not satisfied from inventory in stock in a given replenishment cycle. 
B)  the units of demand that are satisfied from inventory in stock in a given replenishment cycle. 
C)  the average units of demand that are not satisfied from inventory in stock per replenishment cycle. 
D)  the average units of demand that are satisfied from inventory in stock per replenishment cycle.

Question 3

A replenishment policy

Accepted Answer

A)  consists of decisions regarding when to reorder and how much to reorder. 
B)  determines the cycle and safety inventories along with the fr and the CSL. 
C)  may take several forms. 
D)  All of the above are true. 
A)  consists of decisions regarding when to reorder and how much to reorder. 
B)  determines the cycle and safety inventories along with the fr and the CSL. 
C)  may take several forms. 
D)  All of the above are true.

Question 4

Given a lot size of Q (which is also the average demand in a replenishment cycle)

Accepted Answer

A)  the fraction of demand lost is thus ESC + Q. 
B)  the fraction of demand lost is thus ESC - Q. 
C)  the fraction of demand lost is thus ESC/Q. 
D)  the fraction of demand lost is thus ESC × Q. 
A)  the fraction of demand lost is thus ESC + Q. 
B)  the fraction of demand lost is thus ESC - Q. 
C)  the fraction of demand lost is thus ESC/Q. 
D)  the fraction of demand lost is thus ESC × Q.

Question 5

Cycle inventory is inventory carried to satisfy demand that exceeds the amount forecasted for a given period.

Accepted Answer

A) True 
 B)False

Question 6

With periodic review,inventory status is checked at regular intervals and an order is placed to raise the inventory level to a specified threshold.

Accepted Answer

A) True 
 B)False

Question 7

The trade-off that a supply chain manager must consider when planning safety inventory is

Accepted Answer

A)  increasing product availability versus increasing inventory holding costs. 
B)  decreasing product availability versus decreasing inventory holding costs. 
C)  increasing product availability versus raising the level of safety inventory. 
D)  decreasing product availability versus decreasing the level of safety inventory. 
A)  increasing product availability versus increasing inventory holding costs. 
B)  decreasing product availability versus decreasing inventory holding costs. 
C)  increasing product availability versus raising the level of safety inventory. 
D)  decreasing product availability versus decreasing the level of safety inventory.

Question 8

Inventory carried for the purpose of satisfying demand that exceeds the amount forecasted for a given period is

Accepted Answer

A)  cycle inventory. 
B)  demand inventory. 
C)  safety inventory. 
D)  security inventory. 
A)  cycle inventory. 
B)  demand inventory. 
C)  safety inventory. 
D)  security inventory.

Question 9

For the same safety inventory,an increase in lot size

Accepted Answer

A)  decreases the fill rate but not the cycle service level. 
B)  increases the fill rate but not the cycle service level. 
C)  decreases both the fill rate and the cycle service level. 
D)  increases both the fill rate and the cycle service level. 
A)  decreases the fill rate but not the cycle service level. 
B)  increases the fill rate but not the cycle service level. 
C)  decreases both the fill rate and the cycle service level. 
D)  increases both the fill rate and the cycle service level.

Question 10

Which approach to aggregation requires an information system that allows access to current inventory records from each location?

Accepted Answer

A)  Information centralization 
B)  Specialization 
C)  Product substitution 
D)  Component commonality 
A)  Information centralization 
B)  Specialization 
C)  Product substitution 
D)  Component commonality

Question 11

Lead time is the gap between when an order is placed and when it is received.

Accepted Answer

A) True 
 B)False

Question 12

As the uncertainty of supply or demand ________,the required level of safety inventories ________.

Accepted Answer

A)  grows, increases 
B)  increases, decreases 
C)  decreases, grows 
D)  decreases, increases 
A)  grows, increases 
B)  increases, decreases 
C)  decreases, grows 
D)  decreases, increases

Question 13

Which approach to aggregation has the goal of moving product differentiation as close to the pull phase of the supply chain as possible?

Accepted Answer

A)  Information centralization 
B)  Specialization 
C)  Product substitution 
D)  Postponement 
A)  Information centralization 
B)  Specialization 
C)  Product substitution 
D)  Postponement

Question 14

Which of the following is correct?

Accepted Answer

A)  Average inventory = cycle inventory + safety inventory 
B)  Average inventory = cycle inventory - safety inventory 
C)  Average inventory = cycle inventory × safety inventory 
D)  Average inventory = cycle inventory / safety inventory 
A)  Average inventory = cycle inventory + safety inventory 
B)  Average inventory = cycle inventory - safety inventory 
C)  Average inventory = cycle inventory × safety inventory 
D)  Average inventory = cycle inventory / safety inventory

Question 15

The coefficient of variation measures the size of the relative certainty of cycle inventory.

Accepted Answer

A) True 
 B)False

Question 16

As the desired level of product availability increases,the required level of safety inventory decreases.

Accepted Answer

A) True 
 B)False

Question 17

Safety inventory is inventory carried for the purpose of satisfying demand that exceeds the amount forecasted for a given period.

Accepted Answer

A) True 
 B)False

Question 18

As the uncertainty of supply or demand grows,the required level of safety inventories increases.

Accepted Answer

A) True 
 B)False

Question 19

Shortage occurs in a replenishment cycle only if the demand during the lead time exceeds the ROP.

Accepted Answer

A) True 
 B)False

Question 20

The use of one product to satisfy demand for a different product is

Accepted Answer

A)  information centralization. 
B)  specialization. 
C)  product substitution. 
D)  component commonality. 
A)  information centralization. 
B)  specialization. 
C)  product substitution. 
D)  component commonality.

Carrying excessive inventory can help counter demand volatility when new products come on the market.

The expected shortage per replenishment cycle (ESC)is

A replenishment policy

Given a lot size of Q (which is also the average demand in a replenishment cycle)

Cycle inventory is inventory carried to satisfy demand that exceeds the amount forecasted for a given period.

With periodic review,inventory status is checked at regular intervals and an order is placed to raise the inventory level to a specified threshold.

The trade-off that a supply chain manager must consider when planning safety inventory is

Inventory carried for the purpose of satisfying demand that exceeds the amount forecasted for a given period is

For the same safety inventory,an increase in lot size

Which approach to aggregation requires an information system that allows access to current inventory records from each location?

Lead time is the gap between when an order is placed and when it is received.

As the uncertainty of supply or demand ,the required level of safety inventories .

Which approach to aggregation has the goal of moving product differentiation as close to the pull phase of the supply chain as possible?

Which of the following is correct?

The coefficient of variation measures the size of the relative certainty of cycle inventory.

As the desired level of product availability increases,the required level of safety inventory decreases.

Safety inventory is inventory carried for the purpose of satisfying demand that exceeds the amount forecasted for a given period.

As the uncertainty of supply or demand grows,the required level of safety inventories increases.

Shortage occurs in a replenishment cycle only if the demand during the lead time exceeds the ROP.

The use of one product to satisfy demand for a different product is

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

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

Carrying excessive inventory can help counter demand volatility when new products come on the market.

The expected shortage per replenishment cycle (ESC)is

A replenishment policy

Given a lot size of Q (which is also the average demand in a replenishment cycle)

Cycle inventory is inventory carried to satisfy demand that exceeds the amount forecasted for a given period.

With periodic review,inventory status is checked at regular intervals and an order is placed to raise the inventory level to a specified threshold.

The trade-off that a supply chain manager must consider when planning safety inventory is

Inventory carried for the purpose of satisfying demand that exceeds the amount forecasted for a given period is

For the same safety inventory,an increase in lot size

Which approach to aggregation requires an information system that allows access to current inventory records from each location?

Lead time is the gap between when an order is placed and when it is received.

As the uncertainty of supply or demand ________,the required level of safety inventories ________.

Which approach to aggregation has the goal of moving product differentiation as close to the pull phase of the supply chain as possible?

Which of the following is correct?

The coefficient of variation measures the size of the relative certainty of cycle inventory.

As the desired level of product availability increases,the required level of safety inventory decreases.

Safety inventory is inventory carried for the purpose of satisfying demand that exceeds the amount forecasted for a given period.

As the uncertainty of supply or demand grows,the required level of safety inventories increases.

Shortage occurs in a replenishment cycle only if the demand during the lead time exceeds the ROP.

The use of one product to satisfy demand for a different product is

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

As the uncertainty of supply or demand ,the required level of safety inventories .