Ch. 11, 12, 13

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McDonald's was able to utilize existing plants and transportation systems in preparing the supply chain for opening its stores in Moscow.

False

A fast-food retailer that acquired a spice manufacturer would be practicing backward integration.

true

Which of the following statements is true regarding the leverage of supply-chain savings?

Supply chain savings exert more leverage as the firm has a lower net profit margin.

A rice mill in south Louisiana purchases the trucking firm that transports packaged rice to distributors. This is an example of

Forward integration

Local optimization is a supply-chain complication best described as

optimizing one's local area without full knowledge of organizational or supply chain needs.

What term is used to describe the outsourcing of logistics?

Third-Party Logistics

Which of the following statements about ABC analysis is false?

ABC analysis is based on the presumption that all items must be tightly controlled to produce important cost savings.

The two most basic inventory questions answered by the typical inventory model are

timing and quantity of orders

Which of the following statements regarding the production order quantity model is true?

It relaxes the assumption that all the order quantity is received at one time.

Which of the following statements about quantity discounts is false?

The large annual demand, the less attractive a discount schedule will be.

The fixed-period inventory model requires more safety stock than the fixed-quantity models because

a stockout can occur during the review period as well as during the lead time.

Which of the following statements about aggregate planning is true?

Aggregate planning uses the adjustable part part of capacity to meet production requirements.

What directly results from disaggregation of an aggregate plan?

a master production schedule

Which of these aggregate planning strategies adjusts capacity to match demand?

using part-time workers

In aggregate planning, which one of the following is not a basic option for altering demand?

subcontracting

Which choice best describes level scheduling?

Inventory goes up or down to buffer the difference between demand and production

Which of the following is not an ingredient for controlling labor cost in services?

contract overseas labor to obtain a lower wage scale

Outsourcing is a form of specialization that allows the outsourcing firm to focus on its key success factors.

True

The bullwhip effect refers to the increasing fluctuations in orders that often occur as orders move through the supply chain.

True

Which of the following is not a concern of the supply chain?

maintenance scheduling

Giving quantity discounts based on annual volume instead of single order size helps to control which supply-chain issue?

the bullwhip effect

Hewlett-Packard withholds customization of its laser printers as long as possible. This is an example of

postponement

ABC analysis is based upon the principle that

there are usually a few critical items, and many items which are less critical

ABC analysis divides on-hand inventory into 3 classes, generally based upon

annual dollar volume

Which of these statements about the production order quantity model is false?

All else equal, the smaller the ratio of demand rate to production rate, the larger is the production order quantity

Which of the following statements about quantity discounts is false?

The larger annual demand, the less attractive a discount schedule will be.

Which of the following should be higher in P systems than Q?

Safety stock

The objective of aggregate planning is to meet demand while ______ over the planning period.

Minimizing cost

Dependence on an external source of supply is found in which of the following aggregate planning strategies?

Subcontracting

Which of these aggregate planning strategies adjusts capacity to match demand?

using part-time workers

Which of the following aggregate planning strategies is a "demand option"?

changing price

Which of the following is not consistent with a pure level strategy?

Varying production levels and/or work force to meet demand requirements

Yield management is most likely to be used in which one of the following situations?

an airline attempting to fill "perishable' seats at maximum revenue

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