OPMA 317 FINAL EXAM 2025/2026
QUESTIONS AND ANSWERS 100% PASS
During the SCM Exercise Graph Commonalities - ANS Fluctuations, amplification, and a time
lag between the retailer to the factory
Beer Game Average - ANS Everyone averaged around the same even though some came from
different backgrounds yet the players control the game, you can't blame customer demand
What caused people to act the way they did during the beer game? - ANS 1) Lack of
communication/cooperation
- guessing of the customer demand-->arbitrary ordering
RESULT: BULLWHIP EFFECT
2) Long lead time: results in panic when inventory does not instantly arrive and solve your
growing backlog, you panic and order even more
Bullwhip effect - ANS information (orders) going back through the supply chain is distorted
and them amplified
What are the business implications of the supply chain structure? - ANS Stockouts at times ->
loss of profit and potential lost goodwill
Excess inventory at times-> holding costs, risk of obsolence
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,Overtime costs-> increase in labour cost
Layoff/Rehiring costs->match staffing levels to fluctuating demand
Expediting-> rush transportation costs
How does the supply chain structure affect consumers? - ANS Leads to high costs throughout
the supply chain, leading to a higher end price for the consumer
How to improve the supply chain? - ANS 1) Communication and Cooperation
Determine actual consumer demand through technology
Forecasting (promotions, shutdowns, etc, share forecasts, schedules, and decision making) (ex.
Canadian Tire reduced lead time from 46 days to 15!)
2) Shorten Lead times (allows a faster response) - How?
Administration (ordering) lead time - Information Tech
Physical Manufacturing Lead time (just in time production systems)
Transportation lead time (have suppliers geographically close by)
How to encourage communication and cooperation? - ANS Incentives to share information
(lower unit cost for actual data)
Vendor Managed Inventory
- lower admin costs for the retailer
- vendor sees actual consumer demand
What is on-shoring? - ANS Ikea's furniture provider opened up shop in the US which most
people thought they were crazy to do so. But the thing is it was very costly for IKEA to transport
the furniture. Having a plant in the US would reduce lead times, sourcing costs, currency
exposure, transportation concerns
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, What is next-shoring? - ANS local production near demand "next to"
Reduces logistics costs
- improves environmental performance
Reduces length of lead times
Reduces variability of lead times
Easier to identify local needs
Consumer perception: "jobs in home country"
--> It is a growing focus on countering traditional offshoring by locating facilities closer to a
company's home base
What if you cannot change the supply chain structure? - ANS Try to understand the structure
and adapt to it and manage
Ex: "the aspirin rule" - 10 min after taking two aspirin, you likely still have a headache- why don't
you take 2 more right then? YOU ARE AWARE OF THE LEAD TIME AND DONT PANIC
Adapting to the supply chain structure - ANS Don't panic and recognize delays
Systems thinking - before you do anything, analyze how it will impact your supply chain
How to avoid supply chain problems? - ANS Change the supply chain structure (if possible)
- Communication and cooperation
- Shorter lead times (admin, manufacturing, distribution)
If you can't change the supply chain structure
- Adapt and recognize delays and predict ordering impacts
Choose "capable" suppliers (don't focus on cost)
- Can they accommodate temporary demand changes
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
QUESTIONS AND ANSWERS 100% PASS
During the SCM Exercise Graph Commonalities - ANS Fluctuations, amplification, and a time
lag between the retailer to the factory
Beer Game Average - ANS Everyone averaged around the same even though some came from
different backgrounds yet the players control the game, you can't blame customer demand
What caused people to act the way they did during the beer game? - ANS 1) Lack of
communication/cooperation
- guessing of the customer demand-->arbitrary ordering
RESULT: BULLWHIP EFFECT
2) Long lead time: results in panic when inventory does not instantly arrive and solve your
growing backlog, you panic and order even more
Bullwhip effect - ANS information (orders) going back through the supply chain is distorted
and them amplified
What are the business implications of the supply chain structure? - ANS Stockouts at times ->
loss of profit and potential lost goodwill
Excess inventory at times-> holding costs, risk of obsolence
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,Overtime costs-> increase in labour cost
Layoff/Rehiring costs->match staffing levels to fluctuating demand
Expediting-> rush transportation costs
How does the supply chain structure affect consumers? - ANS Leads to high costs throughout
the supply chain, leading to a higher end price for the consumer
How to improve the supply chain? - ANS 1) Communication and Cooperation
Determine actual consumer demand through technology
Forecasting (promotions, shutdowns, etc, share forecasts, schedules, and decision making) (ex.
Canadian Tire reduced lead time from 46 days to 15!)
2) Shorten Lead times (allows a faster response) - How?
Administration (ordering) lead time - Information Tech
Physical Manufacturing Lead time (just in time production systems)
Transportation lead time (have suppliers geographically close by)
How to encourage communication and cooperation? - ANS Incentives to share information
(lower unit cost for actual data)
Vendor Managed Inventory
- lower admin costs for the retailer
- vendor sees actual consumer demand
What is on-shoring? - ANS Ikea's furniture provider opened up shop in the US which most
people thought they were crazy to do so. But the thing is it was very costly for IKEA to transport
the furniture. Having a plant in the US would reduce lead times, sourcing costs, currency
exposure, transportation concerns
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, What is next-shoring? - ANS local production near demand "next to"
Reduces logistics costs
- improves environmental performance
Reduces length of lead times
Reduces variability of lead times
Easier to identify local needs
Consumer perception: "jobs in home country"
--> It is a growing focus on countering traditional offshoring by locating facilities closer to a
company's home base
What if you cannot change the supply chain structure? - ANS Try to understand the structure
and adapt to it and manage
Ex: "the aspirin rule" - 10 min after taking two aspirin, you likely still have a headache- why don't
you take 2 more right then? YOU ARE AWARE OF THE LEAD TIME AND DONT PANIC
Adapting to the supply chain structure - ANS Don't panic and recognize delays
Systems thinking - before you do anything, analyze how it will impact your supply chain
How to avoid supply chain problems? - ANS Change the supply chain structure (if possible)
- Communication and cooperation
- Shorter lead times (admin, manufacturing, distribution)
If you can't change the supply chain structure
- Adapt and recognize delays and predict ordering impacts
Choose "capable" suppliers (don't focus on cost)
- Can they accommodate temporary demand changes
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
