Question 1

Decisions made during the supply chain design phase regarding significant investments in the supply chain,such as the number and size of plants to build,the number of trucks to purchase or lease,and whether to build or lease warehouse space,

Accepted Answer

A) can be altered in the short term. 
B) cannot be altered in the short term. 
C) cannot be altered in the long term. 
D) can only be altered in the short term.

Question 2

Offshoring typically lowers labor,working capital and fixed costs but increases risk and freight costs.

Accepted Answer

A) True 
 B)False

Question 3

Scenario 6.1 - The Big Box
Bahouth Ltd.is planning for the next two years of production and debating whether to construct a large cross-dock facility with 40 truck bays or a smaller one with 20 truck bays.The cost to build the large facility is $2 million and the cost to build the small one is $1.2 million.If they construct a large facility and demand is as high as they hope,then operating costs are $450,000 annually.If they construct a large facility and demand is low,then operating costs are $300,000.If they construct a small facility and demand is low,the operating costs are $275,000 but if they experience high demand,the operating cost of a small facility increases to $600,000.After having conducted some market research,they feel that the likelihood of high demand is 0.7 and the likelihood of small demand is 0.3.
-Suppose the contractor has found some materials on Craigslist that can drop the construction cost of a large facility to $1,500,000.These materials cannot be used in the construction of the small facility,so its price remains as indicated in Scenario 6.1.Determine the likelihood of high demand that would make the decision maker indifferent between the two alternatives for a two-year time period.

Accepted Answer

A) 1.0 
B) 0.72 
C) 0.92 
D) 0.86

Question 4

A recently-accredited College of Business discovers it is in dire financial trouble and wants to examine demand for services and costs to provide them next year.Market conditions may become more favorable,resulting in a 10% increase in enrollment,with a probability of 0.5,stay the same,with a probability of 0.3,or become less favorable,with a probability of 0.2 and a decrease in enrollment of 10%.There is a 0.9 probability that their costs to provide services will rise by 5% and a 0.1 probability that their costs will be the same.This year,they charge each of their 2000 students $3000 to take a full course load and spend $1500 on each student.
-What is the revenue for the college if it experiences an increase in enrollment and an increase in their cost to provide services?

Accepted Answer

A) $4,000,000 
B) $4,400,000 
C) $5,465,000 
D) $6,600,000

Question 5

The main advantage of simulation models is that they can provide low-cost evaluations of complex situations.

Accepted Answer

A) True 
 B)False

Question 6

Decision tree analysis is based on Bellman's principle,which states that for any choice of strategy in a given state,

Accepted Answer

A) the optimal strategy is the one that is selected if the entire analysis is assumed to begin in the first period. 
B) the optimal strategy is the one that is selected if the entire analysis is assumed to begin in the last period. 
C) the optimal strategy in the next period is the one that is selected if the entire analysis is assumed to begin in the last period. 
D) the optimal strategy in the next period is the one that is selected if the entire analysis is assumed to begin in the next period.

Question 7

The rate of return k is also referred to as the present value of capital.

Accepted Answer

A) True 
 B)False

Question 8

A chained network configuration means that

Accepted Answer

A) all plants in the network are capable of producing one product. 
B) all plants in the network are capable of producing all products. 
C) each plant in the network is capable of producing at least two products. 
D) each plant in the network is capable of producing one product.

Question 9

In reality,demand and prices are

Accepted Answer

A) highly certain and not likely to fluctuate during the life of any supply chain decision. 
B) highly certain and likely to fluctuate during the life of any supply chain decision. 
C) highly uncertain and not likely to fluctuate during the life of any supply chain decision. 
D) highly uncertain and likely to fluctuate during the life of any supply chain decision.

Question 10

What type of network design is represented in the diagram?

Accepted Answer

A) Dedicated network 
B) Fully flexible network 
C) Chained network with one long chain 
D) Chained network with two long chains

Question 11

A chained network with one long chain

Accepted Answer

A) is more flexible than a dedicated network and more costly than a fully flexible network. 
B) is more flexible than a dedicated network and less costly than a fully flexible network. 
C) is less flexible than a dedicated network and less costly than a fully flexible network. 
D) is less flexible than a dedicated network but more costly than a fully flexible network.

Question 12

As flexibility is increased,

Accepted Answer

A) the marginal benefit of additional flexibility is decreased. 
B) the marginal benefit of additional flexibility is increased. 
C) the total cost of flexibility is decreased. 
D) the total flexibility is decreased.

Question 13

A global supply chain with offshoring would tend to see metrics decline associated with which of these performance dimensions?

Accepted Answer

A) Working capital 
B) On-time delivery 
C) Stockouts 
D) Product returns

Question 14

When faced with uncertain conditions,it is always best to sign long-term contracts (because they are typically cheaper)and avoid all flexible capacity (because it is more expensive).

Accepted Answer

A) True 
 B)False

Question 15

A decision tree is

Accepted Answer

A) a graphic device used to evaluate decisions under certainty. 
B) a graphic device used to evaluate decisions under uncertainty. 
C) a tabular device used to evaluate decisions under certainty. 
D) a tabular device used to evaluate decisions under uncertainty.

Question 16

When supply disruptions occur,

Accepted Answer

A) smaller chains outperform a network with one long chain. 
B) one long chain outperforms a network with several smaller chains. 
C) a dedicated network outperforms a network with one long chain. 
D) a dedicated network outperforms a network with several smaller chains.

Question 17

A recently-accredited College of Business discovers it is in dire financial trouble and wants to examine demand for services and costs to provide them next year.Market conditions may become more favorable,resulting in a 10% increase in enrollment,with a probability of 0.5,stay the same,with a probability of 0.3,or become less favorable,with a probability of 0.2 and a decrease in enrollment of 10%.There is a 0.9 probability that their costs to provide services will rise by 5% and a 0.1 probability that their costs will be the same.This year,they charge each of their 2000 students $3000 to take a full course load and spend $1500 on each student.
-What is the probability that the college experiences a decrease in enrollment and an increase in their cost to provide services?

Accepted Answer

A) 0.45 
B) 0.27 
C) 0.18 
D) 0.02

Question 18

The value of flexibility increases with an increase in uncertainty.

Accepted Answer

A) True 
 B)False

Question 19

Which of these is a disadvantage of a chained network configuration?

Accepted Answer

A) The fixed cost of building several small chains far exceeds the cost of building a single long chain. 
B) They are effective when dealing with supply disruptions but ineffective when confronted with demand fluctuations. 
C) They are incapable of producing the products they are designed for. 
D) The effect of any fluctuation ripples to all facilities in the chain.

Question 20

In reality,demand and prices are highly uncertain and are likely to fluctuate during the life of any supply chain decision.

Accepted Answer

A) True 
 B)False

Exam 6: Designing Global Supply Chain Networks

Decisions made during the supply chain design phase regarding significant investments in the supply chain,such as the number and size of plants to build,the number of trucks to purchase or lease,and whether to build or lease warehouse space,

Offshoring typically lowers labor,working capital and fixed costs but increases risk and freight costs.

The main advantage of simulation models is that they can provide low-cost evaluations of complex situations.

Decision tree analysis is based on Bellman's principle,which states that for any choice of strategy in a given state,

The rate of return k is also referred to as the present value of capital.

A chained network configuration means that

In reality,demand and prices are

What type of network design is represented in the diagram?

A chained network with one long chain

As flexibility is increased,

A global supply chain with offshoring would tend to see metrics decline associated with which of these performance dimensions?

When faced with uncertain conditions,it is always best to sign long-term contracts (because they are typically cheaper)and avoid all flexible capacity (because it is more expensive).

A decision tree is

When supply disruptions occur,

The value of flexibility increases with an increase in uncertainty.

Which of these is a disadvantage of a chained network configuration?

In reality,demand and prices are highly uncertain and are likely to fluctuate during the life of any supply chain decision.