1
BUAD EXAM 4/ACTUAL EXAM QUESTIONS WITH
COMPLETE SOLUTIONS /NEWEST UPDATE
Just in time supply chain - ..(answers)..Keeping a bigger buffer stock to help
manage fluctuations in supply and demand in a highly volatile commercial
environment
Where did the idea of the just-in-time supply chain come from?
What was the initial goal of it? - ..(answers)..JIT was pioneered in the
manufacturing sector by Japanese car maker Toyota Motor Corp.
The initial goal of it was to minimize inventory costs.
Why is the author arguing that JIT inventory management practice is the way to
go? - ..(answers)..The benefits of just-in-time supply chain remain just as
important now as they were before today's disruptions, and should continue to
guide well-designed supply chains in a post-pandemic world.
Inventory - ..(answers)..Stock or quantity of items kept to meet demand
Example of inventory management in real life - ..(answers)..Going to the grocery
store --> making a list, if you're having a party, you check your cabinets and see
what you need, --> inventory management
, 2
Types of Inventory - ..(answers)..- raw material inventory, work in progress/ in
progress, finished goods inventory, labor, purchased components or parts, capital
($), pipeline inventory
Static Inventory: only one opportunity to buy and sell units
Dynamic Inventory: Ongoing need for units, recording must take place (tickets to
the Super Bowl)
Types of Demand - ..(answers)..-Dependent demand: items are used internally to
produce a final product
-Independent demand: items are final products demanded by external customers
Why is inventory important? - ..(answers)..- to meet anticipated customer
demand
--> anticipated stocks: stocks to satisfy expected demands, considered because of
the expected demand
--> safety stocks: stocks in excess of expected demand to compensate for
variabilities in demand
-to smooth production requirements
--> seasonal inventory; Christmas busy time, fall downtime
- in event of operations mishaps
- hedge against price increases
-quantity discounts
, 3
Inventory Costs - ..(answers)..Stockout costs: Temporary or permanent loss of
sales/goods when demand cannot be met
Carrying costs: storage, warehousing, insurance, security, taxes, opportunity cost,
depreciation
Ordering costs: determining quantities needed, preparing documentation,
shipping, and inspection of goods
When talking about inventory management, we are trying to figure out... -
..(answers)..- How much and when to order inventory
Goals - ..(answers)..- to keep enough inventory to meet customer demand and
also be cost-effective
- to determine the amount of inventory to keep in stock, how much to order, and
when to order
Inventory Management Requirements - ..(answers)..-A system to keep track of
the inventory on hand and on order
-A reliable forecast of demand
-Knowledge of lead times
-Reasonable estimates of inventory costs
Considerations - ..(answers)..- lead time: time interval between ordering and
receiving the order
- Cycle counting: physical count of items in inventory
BUAD EXAM 4/ACTUAL EXAM QUESTIONS WITH
COMPLETE SOLUTIONS /NEWEST UPDATE
Just in time supply chain - ..(answers)..Keeping a bigger buffer stock to help
manage fluctuations in supply and demand in a highly volatile commercial
environment
Where did the idea of the just-in-time supply chain come from?
What was the initial goal of it? - ..(answers)..JIT was pioneered in the
manufacturing sector by Japanese car maker Toyota Motor Corp.
The initial goal of it was to minimize inventory costs.
Why is the author arguing that JIT inventory management practice is the way to
go? - ..(answers)..The benefits of just-in-time supply chain remain just as
important now as they were before today's disruptions, and should continue to
guide well-designed supply chains in a post-pandemic world.
Inventory - ..(answers)..Stock or quantity of items kept to meet demand
Example of inventory management in real life - ..(answers)..Going to the grocery
store --> making a list, if you're having a party, you check your cabinets and see
what you need, --> inventory management
, 2
Types of Inventory - ..(answers)..- raw material inventory, work in progress/ in
progress, finished goods inventory, labor, purchased components or parts, capital
($), pipeline inventory
Static Inventory: only one opportunity to buy and sell units
Dynamic Inventory: Ongoing need for units, recording must take place (tickets to
the Super Bowl)
Types of Demand - ..(answers)..-Dependent demand: items are used internally to
produce a final product
-Independent demand: items are final products demanded by external customers
Why is inventory important? - ..(answers)..- to meet anticipated customer
demand
--> anticipated stocks: stocks to satisfy expected demands, considered because of
the expected demand
--> safety stocks: stocks in excess of expected demand to compensate for
variabilities in demand
-to smooth production requirements
--> seasonal inventory; Christmas busy time, fall downtime
- in event of operations mishaps
- hedge against price increases
-quantity discounts
, 3
Inventory Costs - ..(answers)..Stockout costs: Temporary or permanent loss of
sales/goods when demand cannot be met
Carrying costs: storage, warehousing, insurance, security, taxes, opportunity cost,
depreciation
Ordering costs: determining quantities needed, preparing documentation,
shipping, and inspection of goods
When talking about inventory management, we are trying to figure out... -
..(answers)..- How much and when to order inventory
Goals - ..(answers)..- to keep enough inventory to meet customer demand and
also be cost-effective
- to determine the amount of inventory to keep in stock, how much to order, and
when to order
Inventory Management Requirements - ..(answers)..-A system to keep track of
the inventory on hand and on order
-A reliable forecast of demand
-Knowledge of lead times
-Reasonable estimates of inventory costs
Considerations - ..(answers)..- lead time: time interval between ordering and
receiving the order
- Cycle counting: physical count of items in inventory
