Question 1

The bullwhip effect can occur when orders decrease as well as when they increase.

Accepted Answer

A) True 
 B)False  True

Question 2

A shipment of parts valued at $75,000 needs to be shipped from Tampa,FL,to Chicago,IL.They could be shipped by rail,taking 15 days at a cost of $1,575,or by truck,taking 4 days at a cost of $2,640.The annual holding cost rate for this type of item has been estimated at 22%.What option is more economical?

Accepted Answer

Daily cost of holding the item is .22(75,000)/365 = $45.21
Days saved by using truck is 15 - 5 = 11 days
11 days × $45.21 = $497.31
Extra shipping cost = $2,640 - $1,575 = $1,065
The $497.27 savings does not offset the extra shipping cost of $1,065.Send the shipment by rail.

Question 3

Which of the following statements is TRUE regarding the 2011 Tohoku earthquake and tsunami?

Accepted Answer

A) It devastated eastern sections of Japan. 
B) Some manufacturers around the globe had been relying exclusively on suppliers located in the affected zones. 
C) Japanese-built vehicle outputs for Toyota and Honda were down more than 60% in the month following the disaster. 
D) Manufacturers in several industries worldwide took 6 months or longer before they saw their supply chains working normally again. 
E) All of the above are true. 
A) It devastated eastern sections of Japan. 
B) Some manufacturers around the globe had been relying exclusively on suppliers located in the affected zones. 
C) Japanese-built vehicle outputs for Toyota and Honda were down more than 60% in the month following the disaster. 
D) Manufacturers in several industries worldwide took 6 months or longer before they saw their supply chains working normally again. 
E) All of the above are true. E

Question 4

Walsh Construction is considering two options for its supplier portfolio.Option 1 uses two local suppliers.Each has a "unique-event" risk of 8%,and the probability of a "super-even" that would disable both at the same time is estimated to be 2.5%.Option 2 uses two suppliers located in different countries.Each has a "unique-event" risk of 18%,and the probability of a "super-event" that would disable both at the same time is estimated to be 1.2%.
(a)What is the probability that both suppliers will be disrupted using option 1?
(b)What is the probability that both suppliers will be disrupted using option 2?
(c)Which option would provide the lowest risk of a total shutdown?

Accepted Answer

(a)S = 0.025;U = 0.08
From (S11 - 1),P(2

Question 5

Consider the disaster risk decision tree model.
(a)Derive a formula to represent the amount that the probability of all suppliers being disrupted simultaneously,P(n),will increase if the super-event probability S is doubled.
(b)Test your formula by computing the amount of increase if the original S equals 1% and there are two suppliers,each with U = 4%.

Accepted Answer

(a)Formula (S11 - 1)can be rewritten as:

Question 6

The primary trade-off in transportation mode analysis involves evaluating holding cost against the cost of shipping.

Accepted Answer

A) True 
 B)False

Question 7

A grocery store is trying to find a new supplier for carrots.Its three most important supplier criteria are freshness,lot size,and cost,with factor weights of 0.6,0.1,and 0.3,respectively.What would a supplier with ratings of 6,8,and 10 in the three respective categories score as a weighted total?

Accepted Answer

A) 24 
B) 1 
C) 7.4 
D) 9.8 
E) 8 
A) 24 
B) 1 
C) 7.4 
D) 9.8 
E) 8

Question 8

Which of the following elements of the factor weighting technique in supplier selection analysis does NOT contain a certain degree of subjectivity?

Accepted Answer

A) the formula used to calculate the total weighted score for each supplier 
B) the weights applied to each supplier criterion 
C) the scores for each potential supplier on each criterion 
D) the set of supplier criteria 
E) the numerical scale used to rate suppliers 
A) the formula used to calculate the total weighted score for each supplier 
B) the weights applied to each supplier criterion 
C) the scores for each potential supplier on each criterion 
D) the set of supplier criteria 
E) the numerical scale used to rate suppliers

Question 9

What technique does the text use to determine the best number of suppliers to manage disaster risk?

Accepted Answer

A) linear programming 
B) factor weighting technique 
C) transportation model 
D) decision tree 
E) simulation 
A) linear programming 
B) factor weighting technique 
C) transportation model 
D) decision tree 
E) simulation

Question 10

Tommy's Family Furniture is looking for a new supplier for its armchairs.Tommy is primarily interested in only two criterion: price and name brand value.He considers the value of the name brand to be three times more important than price.Tommy has narrowed his choices to two suppliers.On a 10-point scale,he has assigned Amy's Armchairs a score of 8 on price and 5 on name brand value.He has assigned Annie's Armchairs a score of 3 on price and 6 on name brand value.Apply the factor weighting technique to help Tommy choose a new armchair supplier.

Accepted Answer

To determine the appropriate weights for

Question 11

Suzy Jones is trying to decide whether to use one or two suppliers for the motors than go into the chain saws that her company produces.She wants to use local suppliers because her firm runs a JIT operation.Her factory is located in a coastal town that is prone to hurricanes.She estimates that the probability in any year of a "super-event" that might shut down all suppliers at the same time for at least two weeks is 5%.Such a total shutdown would cost the company approximately $100,000.She estimates the "unique-event" risk for any of the suppliers to be 10%.Assuming that the marginal cost of managing an additional supplier is $12,000 per year,should Suzy use one or two suppliers?

Accepted Answer

S = 0.05,U = 0.10,L = $100,000,C = $12,0

Question 12

The bullwhip effect describes the tendency for larger order size fluctuations in the supply chain as orders move from suppliers toward retailers.

Accepted Answer

A) True 
 B)False

Question 13

Identify the four primary causes of the bullwhip effect and the remedy for each.

Accepted Answer

(1)Cause: Demand forecast errors (cumula

Question 14

Firms often use multiple suppliers for important components to mitigate the risks of total supply disruption.

Accepted Answer

A) True 
 B)False

Question 15

Under the disaster risk decision tree model,which of the following conditions would create the HIGHEST incentive to use FEWER suppliers?

Accepted Answer

A) lower L,lower C 
B) lower L,higher C 
C) higher L,lower C 
D) higher L,higher C 
E) lower L,higher C,lower S 
A) lower L,lower C 
B) lower L,higher C 
C) higher L,lower C 
D) higher L,higher C 
E) lower L,higher C,lower S

Question 16

Suppose that the manager of a company has estimated the probability of a super-event sometime during the next three years that will disrupt all suppliers as 2%.In addition,the firm currently uses four suppliers for its main component,and the manager estimates the probability of a unique-event that would disrupt one of them sometime during the next three years to be 20%.Supplier management costs during this period are $50,000 per supplier.The financial cost incurred if all four suppliers are disrupted at the same time is estimated to be $10,000,000.What is the expected monetary value (cost)of the current supplier diversification arrangement?

Accepted Answer

A) $412,800 
B) $415,680 
C) $10,200,000 
D) $215,680 
E) $8,240,000 
A) $412,800 
B) $415,680 
C) $10,200,000 
D) $215,680 
E) $8,240,000

Question 17

The primary trade-off in transportation mode analysis involves evaluating ________ against the cost of shipping.

Accepted Answer

The answer of The primary trade-off in transportation mode analysis...

Question 18

A bullwhip measure value greater than zero indicates that the bullwhip effect exists.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is NOT REQUIRED information to obtain to conduct the factor weighting technique in supplier selection analysis?

Accepted Answer

A) a set of supplier criteria 
B) a weight for each supplier criterion 
C) a score for each potential supplier on each criterion 
D) a qualitative scale on which to rate suppliers 
E) a numerical scale on which to rate suppliers 
A) a set of supplier criteria 
B) a weight for each supplier criterion 
C) a score for each potential supplier on each criterion 
D) a qualitative scale on which to rate suppliers 
E) a numerical scale on which to rate suppliers

Question 20

The overarching solution to the bullwhip effect is simply for supply chain members to share information and work together.

Accepted Answer

A) True 
 B)False

Exam 21: Supply Chain Modeling

The bullwhip effect can occur when orders decrease as well as when they increase.

Which of the following statements is TRUE regarding the 2011 Tohoku earthquake and tsunami?

The primary trade-off in transportation mode analysis involves evaluating holding cost against the cost of shipping.

A grocery store is trying to find a new supplier for carrots.Its three most important supplier criteria are freshness,lot size,and cost,with factor weights of 0.6,0.1,and 0.3,respectively.What would a supplier with ratings of 6,8,and 10 in the three respective categories score as a weighted total?

Which of the following elements of the factor weighting technique in supplier selection analysis does NOT contain a certain degree of subjectivity?

What technique does the text use to determine the best number of suppliers to manage disaster risk?

The bullwhip effect describes the tendency for larger order size fluctuations in the supply chain as orders move from suppliers toward retailers.

Identify the four primary causes of the bullwhip effect and the remedy for each.

Firms often use multiple suppliers for important components to mitigate the risks of total supply disruption.

Under the disaster risk decision tree model,which of the following conditions would create the HIGHEST incentive to use FEWER suppliers?

The primary trade-off in transportation mode analysis involves evaluating ________ against the cost of shipping.

A bullwhip measure value greater than zero indicates that the bullwhip effect exists.

Which of the following is NOT REQUIRED information to obtain to conduct the factor weighting technique in supplier selection analysis?

The overarching solution to the bullwhip effect is simply for supply chain members to share information and work together.

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Forecasting Demand

Product Design

Quality Management and International Standards

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Layout Decisions

Job Design and Work Measurement

Supply Chain Management

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