ISDS 3115 EXAM 3 QUESTIONS WITH VERIFIED
ANSWERS
True/False: Outsourcing is a form of specialization that allows the outsourcing firm to
focus on its key success factors. - Answers - True
True/False: The bullwhip effect refers to the increasing fluctuations in orders that often
occur as orders move through the supply chain. - Answers - True
What is the practice of keeping a product generic as long as possible before
customizing? - Answers - Postponement
A rice mill in south Louisiana purchases the trucking firm that transports packaged rice
to distributors. This is an example of of which of the following?
A. current transformation
B. Keirestsu
C. Horizontal integration
D. Backward Integration
E. Forward Integration - Answers - E. Forward Integration
Local optimization is a supply-chain complication best described as: - Answers -
Optimizing one's local area without full knowledge of supply chain needs.
Hewlett-Packard withholds customization of its laser printers as long as possible. This is
an example of what? - Answers - Postponement
Which of the following would NOT generally be a motive for a firm to hold inventories?
A. to hedge against inflation
B. take advantage of quantity discounts
C. to decouple various parts of the production process
D. to minimize holding cost - Answers - D. to minimize holding cost
The two most basic inventory questions answered by the typical inventory are: -
Answers - Timing of orders and order quantity
Which of the following statements about the basic EOQ model is true?
-If the annual demand were to double, the number of orders per year would increase
-If the carrying cost were to increase, the EOQ would fall
-If the annual demand were to double, the EOQ would increase
-if the ordering cost were to double the EOQ would rise
- All are true - Answers - All statements are true
, Which of the following statements regarding the production order quantity model is true?
- Answers - It relaxes the assumption that all the order quantity is received at one time
The proper quantity of safety stock is typically determined by: - Answers - setting the
level of safety stock so that a given stockout risk is not exceeded
which of the following should be higher in P system than Q system?
Order size
Lead time
Safety stock
Order spacing,
Demand - Answers - Safety stock
Aggregate planning would entail which production aspects at BMW for a 12 month
period? - Answers - Total number of cars to produce
Dependence on an external source of supply is found in which aggregate planning
strategy? - Answers - Subcontracting
Which of these is among the demand options of aggregate planning?
A. Changing inventory levels
B. Subcontracting
C. Varying workforce
D. Back ordering during high demand periods
E. Varying production rates through overtime or idle time - Answers - D
Which aggregate planning strategy is a demand option? - Answers - Changing price
which of the following statements regarding aggregate planning is true? - Answers -
Mixed strategies in aggregate planning may utilize inventory, work force, and production
rate changes over the planning horizon
Aggregate planning for service firms that provide intangible output deals mainly with -
Answers - planning for human resource requirements and managing demand
A restaurant runs a special promotion on lobster and plans to sell twice as many
lobsters as usual. When this large order is sent to the distributor, the distributor,
assumes the large size is trend, not a one time event. The distributor therefore places
an even larger order with the lobsterman.
This behavior is the result of what? - Answers - The Bull whip effect
Which of the following is an advantage of the postponement technique?
A. reduction in automation
B. Early customization
C. Better quality of product
D. Reduction in training cost
ANSWERS
True/False: Outsourcing is a form of specialization that allows the outsourcing firm to
focus on its key success factors. - Answers - True
True/False: The bullwhip effect refers to the increasing fluctuations in orders that often
occur as orders move through the supply chain. - Answers - True
What is the practice of keeping a product generic as long as possible before
customizing? - Answers - Postponement
A rice mill in south Louisiana purchases the trucking firm that transports packaged rice
to distributors. This is an example of of which of the following?
A. current transformation
B. Keirestsu
C. Horizontal integration
D. Backward Integration
E. Forward Integration - Answers - E. Forward Integration
Local optimization is a supply-chain complication best described as: - Answers -
Optimizing one's local area without full knowledge of supply chain needs.
Hewlett-Packard withholds customization of its laser printers as long as possible. This is
an example of what? - Answers - Postponement
Which of the following would NOT generally be a motive for a firm to hold inventories?
A. to hedge against inflation
B. take advantage of quantity discounts
C. to decouple various parts of the production process
D. to minimize holding cost - Answers - D. to minimize holding cost
The two most basic inventory questions answered by the typical inventory are: -
Answers - Timing of orders and order quantity
Which of the following statements about the basic EOQ model is true?
-If the annual demand were to double, the number of orders per year would increase
-If the carrying cost were to increase, the EOQ would fall
-If the annual demand were to double, the EOQ would increase
-if the ordering cost were to double the EOQ would rise
- All are true - Answers - All statements are true
, Which of the following statements regarding the production order quantity model is true?
- Answers - It relaxes the assumption that all the order quantity is received at one time
The proper quantity of safety stock is typically determined by: - Answers - setting the
level of safety stock so that a given stockout risk is not exceeded
which of the following should be higher in P system than Q system?
Order size
Lead time
Safety stock
Order spacing,
Demand - Answers - Safety stock
Aggregate planning would entail which production aspects at BMW for a 12 month
period? - Answers - Total number of cars to produce
Dependence on an external source of supply is found in which aggregate planning
strategy? - Answers - Subcontracting
Which of these is among the demand options of aggregate planning?
A. Changing inventory levels
B. Subcontracting
C. Varying workforce
D. Back ordering during high demand periods
E. Varying production rates through overtime or idle time - Answers - D
Which aggregate planning strategy is a demand option? - Answers - Changing price
which of the following statements regarding aggregate planning is true? - Answers -
Mixed strategies in aggregate planning may utilize inventory, work force, and production
rate changes over the planning horizon
Aggregate planning for service firms that provide intangible output deals mainly with -
Answers - planning for human resource requirements and managing demand
A restaurant runs a special promotion on lobster and plans to sell twice as many
lobsters as usual. When this large order is sent to the distributor, the distributor,
assumes the large size is trend, not a one time event. The distributor therefore places
an even larger order with the lobsterman.
This behavior is the result of what? - Answers - The Bull whip effect
Which of the following is an advantage of the postponement technique?
A. reduction in automation
B. Early customization
C. Better quality of product
D. Reduction in training cost
