ASU SCM 300 FINAL EXAM DAVILA Questions with Correct
Answers (Grade A+)
Question 1: Competitive Priorities (M1)
Answer: cost, quality, speed, flexibility
Question 2: Productivity vs. Value (M1)
Answer: WHAT DID I BUY / WHAT DID IT COST ME -ration of outputs to inputs --> maximize amount
of outputs that can be produced and delivered while minimizing inputs // ratio of outputs purchased divided
by inputs used to purchase
Question 3: What is SCM (M1)
Answer: effective and efficient integration of the suppliers, manufacturers, transportation organizations as
well as the other parties responsible for collectively bringing products and services to market
Question 4: Operations Management (M1)
Answer: making business processes effective and efficient; create high quality products/services using the
fewest resources as possible; DO IT THE EASIEST WAY POSSIBLE; improve how things are done
Question 5: Logistics (M1)
Answer: responsible for developing the transportation itinerary and finding the appropriate transportation
and storage partners to successfully navigate the flow of materials from point of origin to final destination
point
Question 6: Procurement (M1)
Answer: the brand responsible for acquiring materials, equipment, products, and services; developing
relationships and negotiating
Question 7: Upstream vs. Downstream vs. Reverse Logistics 1st Tier / Reverse Logistics 2nd Tier
(M1)
Answer: Upstream: direction that points to suppliers; manager would try and get empty boxes at the retailer
back to distributor to reuse Downstream: supply chain direction that points towards the customer -- that's the
goal is getting to customer 1st: company's direct supplier 2nd: the suppliers to 1st tier - having week S2 can
create problems for whole system
Page 1
, Question 8: Safety Stock (M2)
Answer: buffer inventory kept for variation and uncertainty in demand / to intended to be used (ex: car
insurance)
Question 9: Pipeline Inventory (M2)
Answer: inventory in transit between two points / on it's way inventory, orders placed but not paid for or
received by customer
Question 10: Vertical Integration (M2)
Answer: company taking on additional supply chain responsibilities that were formally done by outside
parties
Question 11: Benefits of High and Low Inventory Levels/Purchases (M2)
Answer: more inventory to have on hand in case someone runs out but also cost of holding and having
somewhere to put and more chance of breaking or getting ruined
Question 12: What is the EOQ? (M2)
Answer: ECONOMIC ORDER QUANTITY; lot size (Q) that will minimize total annual inventory cost
(TC); optimal lot size
Question 13: EOQ's relationship to Holding/Ordering costs (M2)
Answer: determines how low or high the Total Cost (TC) will be which determines how much to order
which affects holding costs
Question 14: What does it mean if AHC > AOC (M2)
Answer: holding cots are too high and to the right of EOQ and should decrease lot size to reduce TC
Question 15: What does it mean if AOC > AHC (M2)
Answer: holding costs are too low and to the left of EOQ and increase lot size to reduce TC
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Answers (Grade A+)
Question 1: Competitive Priorities (M1)
Answer: cost, quality, speed, flexibility
Question 2: Productivity vs. Value (M1)
Answer: WHAT DID I BUY / WHAT DID IT COST ME -ration of outputs to inputs --> maximize amount
of outputs that can be produced and delivered while minimizing inputs // ratio of outputs purchased divided
by inputs used to purchase
Question 3: What is SCM (M1)
Answer: effective and efficient integration of the suppliers, manufacturers, transportation organizations as
well as the other parties responsible for collectively bringing products and services to market
Question 4: Operations Management (M1)
Answer: making business processes effective and efficient; create high quality products/services using the
fewest resources as possible; DO IT THE EASIEST WAY POSSIBLE; improve how things are done
Question 5: Logistics (M1)
Answer: responsible for developing the transportation itinerary and finding the appropriate transportation
and storage partners to successfully navigate the flow of materials from point of origin to final destination
point
Question 6: Procurement (M1)
Answer: the brand responsible for acquiring materials, equipment, products, and services; developing
relationships and negotiating
Question 7: Upstream vs. Downstream vs. Reverse Logistics 1st Tier / Reverse Logistics 2nd Tier
(M1)
Answer: Upstream: direction that points to suppliers; manager would try and get empty boxes at the retailer
back to distributor to reuse Downstream: supply chain direction that points towards the customer -- that's the
goal is getting to customer 1st: company's direct supplier 2nd: the suppliers to 1st tier - having week S2 can
create problems for whole system
Page 1
, Question 8: Safety Stock (M2)
Answer: buffer inventory kept for variation and uncertainty in demand / to intended to be used (ex: car
insurance)
Question 9: Pipeline Inventory (M2)
Answer: inventory in transit between two points / on it's way inventory, orders placed but not paid for or
received by customer
Question 10: Vertical Integration (M2)
Answer: company taking on additional supply chain responsibilities that were formally done by outside
parties
Question 11: Benefits of High and Low Inventory Levels/Purchases (M2)
Answer: more inventory to have on hand in case someone runs out but also cost of holding and having
somewhere to put and more chance of breaking or getting ruined
Question 12: What is the EOQ? (M2)
Answer: ECONOMIC ORDER QUANTITY; lot size (Q) that will minimize total annual inventory cost
(TC); optimal lot size
Question 13: EOQ's relationship to Holding/Ordering costs (M2)
Answer: determines how low or high the Total Cost (TC) will be which determines how much to order
which affects holding costs
Question 14: What does it mean if AHC > AOC (M2)
Answer: holding cots are too high and to the right of EOQ and should decrease lot size to reduce TC
Question 15: What does it mean if AOC > AHC (M2)
Answer: holding costs are too low and to the left of EOQ and increase lot size to reduce TC
Page 2
