MGT 8803 - Exam 3 (Supply Chain) UPDATED ACTUAL
Questions and CORRECT Answers
A Responsive Supply Chain DOES NOT high asset utilization
focus on:
Which of the following are NOT low demand uncertainty; low stockout costs; low
characteristics typical of Innovative obsolescence costs
products
T/F: Management seeks to select suppliers FALSE
primarily for speed, flexibility and quality
when using an efficient supply chain model
T/F: The goal of the Newsvendor model is to FALSE
maximize expected revenue
What is NOT a reason companies keep To economize on holding costs
inventory?
A Responsive Supply Chain focuses on: deploying excess capacity; aggressively reducing lead times;
deploying significant safety and buffer stocks; responding to
unpredictable demand
Why do companies keep inventory? hedge against uncertain supply; economize on order costs;
smooth production schedules; hedge against uncertain
demand
Push/Pull: Eliminates WIP accumulating at PULL
bottlenecks
Push/Pull: Keeps materials buys, not PULL
operators
, Push/Pull: Every worker maximizes their own PUSH
output
Push/Pull: If a problem arises there is no PULL
slack in the system
Push/Pull: Kanban cards PULL
Push/Pull: More difficult to respond to PUSH
special orders and order changes
What is the key consideration in setting the You don't want on hand inventory to be depleted before the
reorder point? replenishment order arrives
Economic Order Quantity establishes: the quantity of items an organization would have to order
each time to minimize total inventory costs
At what quantity does the basic economic Where ordering cost equals holding cost
order quantity occur?
T/F: For non-perishable goods, holding TRUE
costs are the costs that are most directly
associated with being overstocked?
T/F: As long as price p, cost c and salvage TRUE
value remain constant, the profit maximizing
service level determined by the
Newsvendor model will not change --
regardless of any significant changes in
product demand
US Razors is a chain especially known for its in stock rate
selection of high-end shaving products, with
the Parker Badger being its most popular
and highest margin product. Customers
looking to buy the Parker will not accept
substitutes and customers that buy the
brush will almost always purchase the
shaving mug and specialty shaving cream.
What should be the most important criterion
in determining a service level for the Parker
brush?
T/F: The company should keep its safety FALSE
stocks decentralized regardless of the
primary network configuration (centralized
vs. decentralized)
T/F: High delivery responsiveness is an TRUE
attribute of a decentralized supply chain
network
Questions and CORRECT Answers
A Responsive Supply Chain DOES NOT high asset utilization
focus on:
Which of the following are NOT low demand uncertainty; low stockout costs; low
characteristics typical of Innovative obsolescence costs
products
T/F: Management seeks to select suppliers FALSE
primarily for speed, flexibility and quality
when using an efficient supply chain model
T/F: The goal of the Newsvendor model is to FALSE
maximize expected revenue
What is NOT a reason companies keep To economize on holding costs
inventory?
A Responsive Supply Chain focuses on: deploying excess capacity; aggressively reducing lead times;
deploying significant safety and buffer stocks; responding to
unpredictable demand
Why do companies keep inventory? hedge against uncertain supply; economize on order costs;
smooth production schedules; hedge against uncertain
demand
Push/Pull: Eliminates WIP accumulating at PULL
bottlenecks
Push/Pull: Keeps materials buys, not PULL
operators
, Push/Pull: Every worker maximizes their own PUSH
output
Push/Pull: If a problem arises there is no PULL
slack in the system
Push/Pull: Kanban cards PULL
Push/Pull: More difficult to respond to PUSH
special orders and order changes
What is the key consideration in setting the You don't want on hand inventory to be depleted before the
reorder point? replenishment order arrives
Economic Order Quantity establishes: the quantity of items an organization would have to order
each time to minimize total inventory costs
At what quantity does the basic economic Where ordering cost equals holding cost
order quantity occur?
T/F: For non-perishable goods, holding TRUE
costs are the costs that are most directly
associated with being overstocked?
T/F: As long as price p, cost c and salvage TRUE
value remain constant, the profit maximizing
service level determined by the
Newsvendor model will not change --
regardless of any significant changes in
product demand
US Razors is a chain especially known for its in stock rate
selection of high-end shaving products, with
the Parker Badger being its most popular
and highest margin product. Customers
looking to buy the Parker will not accept
substitutes and customers that buy the
brush will almost always purchase the
shaving mug and specialty shaving cream.
What should be the most important criterion
in determining a service level for the Parker
brush?
T/F: The company should keep its safety FALSE
stocks decentralized regardless of the
primary network configuration (centralized
vs. decentralized)
T/F: High delivery responsiveness is an TRUE
attribute of a decentralized supply chain
network
