Question 1

Discuss the various measures of product availability.

Accepted Answer

Product availability reflects a firm's a

Question 2

Weekly demand for 12" frames at the Frame Shop is normally distributed with a mean of 250 and a standard deviation of 150.The store manager continuously monitors inventory and currently orders 1,000 frames each time the inventory drops to 600 frames.The manufacturer currently takes two weeks to fill an order.How much safety inventory does the store carry?

Accepted Answer

ROP = DL + ss
ROP =

Question 3

Which of the following is not a major disadvantage of aggregating all inventory in one location?

Accepted Answer

A)  Increase in forecast accuracy of customer demand. 
B)  Increase in response time to customer order. 
C)  Increase in transportation cost to customer. 
D)  All of the above are disadvantages. 
A)  Increase in forecast accuracy of customer demand. 
B)  Increase in response time to customer order. 
C)  Increase in transportation cost to customer. 
D)  All of the above are disadvantages.

Question 4

Which use of common components in a variety of products has been a very effective supply chain strategy to exploit aggregation and reduce component inventories?

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 5

A shortage occurs in a replenishment cycle

Accepted Answer

A)  only if the demand during the lead time exceeds the ROP. 
B)  only if the demand during the lead time is less than the ROP. 
C)  only if the demand during the lead time exceeds the average demand. 
D)  only if the demand during the lead time is less than the average demand. 
A)  only if the demand during the lead time exceeds the ROP. 
B)  only if the demand during the lead time is less than the ROP. 
C)  only if the demand during the lead time exceeds the average demand. 
D)  only if the demand during the lead time is less than the average demand.

Question 6

Weekly demand for loaves of Blunder Bread at a Kroger store is normally distributed with a mean of 500 and a standard deviation of 200.Blunder Bread takes two weeks to supply a Kroger order.Kroger is targeting a CSL of 90 percent and monitors its inventory continuously.How much safety inventory of bread loaves should Kroger carry? What should their ROP be?

Accepted Answer

ss = Fs-1(CSL)× σL
=

Question 7

When using a continuous review policy,a manager has to account for the uncertainty of demand during the lead time and the review interval.

Accepted Answer

A) True 
 B)False

Question 8

Explain the impact of aggregation on safety inventory.

Accepted Answer

Aggregation reduces the standard deviati

Question 9

The required safety inventory grows rapidly with a decrease in the desired product availability.

Accepted Answer

A) True 
 B)False

Question 10

The distinction between product fill rate and order fill rate is significant in a single product situation.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is not a method by which a supply chain can extract the benefits of aggregation without having to physically centralize all inventories in one location?

Accepted Answer

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

Question 12

Explain the impact of supplier lead time on safety inventory.

Accepted Answer

The required safety inventory increases

Question 13

A key to success at which company has been its ability to provide a high level of product availability to customers while carrying very low levels of safety inventory in its supply chain?

Accepted Answer

A)  Compaq 
B)  Hewlett-Packard 
C)  Dell 
D)  Packard-Bell 
A)  Compaq 
B)  Hewlett-Packard 
C)  Dell 
D)  Packard-Bell

Question 14

The fraction of replenishment cycles that end with all the customer demand being met 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 15

The appropriate level of safety inventory is determined by

Accepted Answer

A)  the uncertainty of both demand and supply. 
B)  the desired level of product availability. 
C)  the processes in a supply chain are divided into 2 categories depending on all of the above 
D)  A and B only 
A)  the uncertainty of both demand and supply. 
B)  the desired level of product availability. 
C)  the processes in a supply chain are divided into 2 categories depending on all of the above 
D)  A and B only

Question 16

The required safety inventory increases with an increase in the lead time and the standard deviation of periodic demand.

Accepted Answer

A) True 
 B)False

Question 17

A(n)________ in supply uncertainty can help ________ safety inventory required without hurting product availability.

Accepted Answer

A)  reduction, increase 
B)  increase, reduce 
C)  reduction, reduce 
D)  reduction, cancel 
A)  reduction, increase 
B)  increase, reduce 
C)  reduction, reduce 
D)  reduction, cancel

Question 18

Which approach to aggregation would stock the fast-moving items at decentralized locations close to the customer and slow-moving items at a centralized 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 19

A company that tracks inventory and places an order for a lot size Q when the inventory declines to the reorder point (ROP)is using

Accepted Answer

A)  continuous review. 
B)  daily review. 
C)  occasional review. 
D)  periodic review. 
A)  continuous review. 
B)  daily review. 
C)  occasional review. 
D)  periodic review.

Question 20

Aggregation reduces the standard deviation of demand only if demand across the regions being aggregated is not perfectly positively correlated.

Accepted Answer

A) True 
 B)False

Discuss the various measures of product availability.

Which of the following is not a major disadvantage of aggregating all inventory in one location?

Which use of common components in a variety of products has been a very effective supply chain strategy to exploit aggregation and reduce component inventories?

A shortage occurs in a replenishment cycle

When using a continuous review policy,a manager has to account for the uncertainty of demand during the lead time and the review interval.

Explain the impact of aggregation on safety inventory.

The required safety inventory grows rapidly with a decrease in the desired product availability.

The distinction between product fill rate and order fill rate is significant in a single product situation.

Which of the following is not a method by which a supply chain can extract the benefits of aggregation without having to physically centralize all inventories in one location?

Explain the impact of supplier lead time on safety inventory.

A key to success at which company has been its ability to provide a high level of product availability to customers while carrying very low levels of safety inventory in its supply chain?

The fraction of replenishment cycles that end with all the customer demand being met is the

The appropriate level of safety inventory is determined by

The required safety inventory increases with an increase in the lead time and the standard deviation of periodic demand.

A(n) in supply uncertainty can help safety inventory required without hurting product availability.

Which approach to aggregation would stock the fast-moving items at decentralized locations close to the customer and slow-moving items at a centralized location?

A company that tracks inventory and places an order for a lot size Q when the inventory declines to the reorder point (ROP)is using

Aggregation reduces the standard deviation of demand only if demand across the regions being aggregated is not perfectly positively correlated.

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

Discuss the various measures of product availability.

Which of the following is not a major disadvantage of aggregating all inventory in one location?

Which use of common components in a variety of products has been a very effective supply chain strategy to exploit aggregation and reduce component inventories?

A shortage occurs in a replenishment cycle

When using a continuous review policy,a manager has to account for the uncertainty of demand during the lead time and the review interval.

Explain the impact of aggregation on safety inventory.

The required safety inventory grows rapidly with a decrease in the desired product availability.

The distinction between product fill rate and order fill rate is significant in a single product situation.

Which of the following is not a method by which a supply chain can extract the benefits of aggregation without having to physically centralize all inventories in one location?

Explain the impact of supplier lead time on safety inventory.

A key to success at which company has been its ability to provide a high level of product availability to customers while carrying very low levels of safety inventory in its supply chain?

The fraction of replenishment cycles that end with all the customer demand being met is the

The appropriate level of safety inventory is determined by

The required safety inventory increases with an increase in the lead time and the standard deviation of periodic demand.

A(n)________ in supply uncertainty can help ________ safety inventory required without hurting product availability.

Which approach to aggregation would stock the fast-moving items at decentralized locations close to the customer and slow-moving items at a centralized location?

A company that tracks inventory and places an order for a lot size Q when the inventory declines to the reorder point (ROP)is using

Aggregation reduces the standard deviation of demand only if demand across the regions being aggregated is not perfectly positively correlated.

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

A(n) in supply uncertainty can help safety inventory required without hurting product availability.