ISDS 3115 EXAM 3 EXAM QUESTIONS
WITH 100% CORRECT ANSWERS |
LATEST VERSION 2025/2026.
True/False: Outsourcing is a form of specialization that allows the outsourcing firm to focus on
its key success factors. - ANS True
True/False: The bullwhip effect refers to the increasing fluctuations in orders that often occur
as orders move through the supply chain. - ANS True
What is the practice of keeping a product generic as long as possible before customizing? -
ANS 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 - ANS E. Forward Integration
Local optimization is a supply-chain complication best described as: - ANS Optimizing one's
local area without full knowledge of supply chain needs.
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,Hewlett-Packard withholds customization of its laser printers as long as possible. This is an
example of what? - ANS 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 - ANS D. to minimize holding cost
The two most basic inventory questions answered by the typical inventory are: - ANS 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 - ANS All statements are true
Which of the following statements regarding the production order quantity model is true? -
ANS It relaxes the assumption that all the order quantity is received at one time
The proper quantity of safety stock is typically determined by: - ANS 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
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, Safety stock
Order spacing,
Demand - ANS Safety stock
Aggregate planning would entail which production aspects at BMW for a 12 month period? -
ANS Total number of cars to produce
Dependence on an external source of supply is found in which aggregate planning strategy? -
ANS 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 - ANS D
Which aggregate planning strategy is a demand option? - ANS Changing price
which of the following statements regarding aggregate planning is true? - ANS 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 -
ANS 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? - ANS The Bull whip effect
3 | Page @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
WITH 100% CORRECT ANSWERS |
LATEST VERSION 2025/2026.
True/False: Outsourcing is a form of specialization that allows the outsourcing firm to focus on
its key success factors. - ANS True
True/False: The bullwhip effect refers to the increasing fluctuations in orders that often occur
as orders move through the supply chain. - ANS True
What is the practice of keeping a product generic as long as possible before customizing? -
ANS 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 - ANS E. Forward Integration
Local optimization is a supply-chain complication best described as: - ANS Optimizing one's
local area without full knowledge of supply chain needs.
1 | Page @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
,Hewlett-Packard withholds customization of its laser printers as long as possible. This is an
example of what? - ANS 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 - ANS D. to minimize holding cost
The two most basic inventory questions answered by the typical inventory are: - ANS 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 - ANS All statements are true
Which of the following statements regarding the production order quantity model is true? -
ANS It relaxes the assumption that all the order quantity is received at one time
The proper quantity of safety stock is typically determined by: - ANS 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
2 | Page @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, Safety stock
Order spacing,
Demand - ANS Safety stock
Aggregate planning would entail which production aspects at BMW for a 12 month period? -
ANS Total number of cars to produce
Dependence on an external source of supply is found in which aggregate planning strategy? -
ANS 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 - ANS D
Which aggregate planning strategy is a demand option? - ANS Changing price
which of the following statements regarding aggregate planning is true? - ANS 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 -
ANS 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? - ANS The Bull whip effect
3 | Page @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
