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Social Science
Economics
Finance
SCMT 2103 Esper Test 1 Spring 2016
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Terms in this set (61)
A process is an ordered set of _____.
activities
The management of the flow and storage of inventory, such that total costs are minimized and customer service targets are achieved is referred to as:
Logistics
Economies of scale is defined as a reduction in average cost per unit when volumes are increased.
True or False
True
The use of third-party logistics (3PL) providers for supply chain management services is a diminishing trend.
True or False
False
Effective supply chain management emphasizes the allocation of scarce resources
True or False
True
What do Logistics costs include?
Inventory holding costs
Material handling costs
Warehousing costs
All of these and more
Supply chain management is the management of the _______ of business processes between functions in a firm and with suppliers and customers.
Integration
Some companies do not outsource because they do NOT want to ________________.
lose their ability to manage the activity
Reliability in the 4 R's of supply chain competition is defined as being able to _________________.
consistently execute an activity or process at a target level of performance
A supply chain strategically emphasizing reliability is likely to hold extra inventory to deal with problems such as late delivery
True
Which of the following products would you expect to require the most safety stock?
Prdct A:Standard Deviation of Sales= 18, Standard Deviation of Lead Time = 23
Prdct B:Standard Deviation of Sales= 20, Standard Deviation of Lead Time = 20
Prdct C: Standard Deviation of Sales= 30, Standard Deviation of Lead Time = 31
Prdct D: Standard Deviation of Sales= 29, Standard Deviation of Lead Time = 15
Product C
Safety stock is _______________.
the expected number of units on hand just before a replenishment is received and available for use or sale
Resilience in the 4 R's is defined as being able to deliver products to customers that are demanding it.
True or False
False
The cost of capital has little influence on a firm's inventory holding cost factor.
True or False
False
Average inventory last year was $160,000 and turns were 7. What was cost of goods sold last year?
$1,120,000
(160,000 * 7)
The inventory holding cost factor is 25% and the average inventory next year is expected to be $185,000. What is the expected inventory holding cost?
$46,250
(185,000 * .25)
What is NOT a potential inventory holding cost:
3PL cost
There is an opportunity cost associated with holding inventory.
True or False
True
A distribution center has 180,000 pounds of sugar and the forecast is 1,200 pounds of sugar per day. What is the estimate of the days of supply?
150
(180,000/1,200)
A company operates 365 days a year. Annual inventory turns is 12. How many days of supply does that represent?
30
(365/12)
According to the video, which two countries' costs of production are now about equal?
Mexico and United states
The pre-transaction component of customer service are the more common metrics of customer service such as percentage of items in stock, percentage of time an item is in stock, fill rate, lead time, etc.
False
Which of the following is NOT a common element of the total cost of ownership model:
Loading cost
When firms first started offshoring, the differential cost of labor was so dramatic that trade-offs, such as transportation costs, were irrelevant.
True
If store perpetual inventory is greater than zero for 45 days of the 100 days checked for a particular item in a category, then
the calculated percentage of time in stock is 45% (assuming perpetual inventory is accurate)
If store perpetual inventory is greater than zero for 40 of the 100 SKUs in a category, then
the calculated percentage of items in stock is 40% (assuming perpetual inventory is accurate)
Everything else held equal, if an item has the same demand every day, then its PTIS and IFR are the same.
True or False
True
The amount received by a firm is 200 units and it sold 125 units. Assuming initial inventory is zero, what is the perpetual inventory?
75 units
_____________________tells you lost sales using the percentage of demand fulfilled from on hand inventory.
the item fill rate (IFR)
When a shopper in a retail store encounters an out-of-stock, there are a number of reactions that are possible. Which of the following are options discussed in this lesson?
Switch to another brand
Switch to another size, flavor, or type, within the same brand
Switch to another category but same product type
An item is called a destination item when the customer goes to the store specifically to purchase that item.
True or False
True
Retail shelf space is very expensive and that's because the land is expensive.
True or False
False
One approach to estimating the cost of a stockout per unit of lost sale is to calculate an estimate of the ____________.
expected valu
Imagine a customer is looking for a giant specialty candy bar in a store but it is not on the shelf. Suppose that the retail margin on the candy bar is $4.50 and that 27% of the customers forgo having the candy bar but the other 73% switch to another brand. Suppose that the margin the retailer makes on this brand is also $4.50 per unit. Then the cost of a stockout per unit of lost sale to the retailer is ____.
$1.22
($4.50 * .27)
You want to compute an optimal service level for stocking inventory. The correct formula is:
The cost of not having enough per unit, divided by the sum of the cost of having too much and the cost of not having enough.
When a store manager says: "I shoot for a 95% service level," the manager means that she is willing to be out of stock of an inventory item less than 95% of the time that a customer wants it.
True or False
False
When the customer wants a product, she wants it to be there at least 95% of the time.
You can estimate the standard deviation by _______________
The variance
In a normal distribution, 68% of all observations will fall within +/-3 standard deviation of the mean.
True or False
False
The % of demand fulfilled from on hand inventory is called GMROI
True or False
False
One of the effects of adding distribution centers is reducing store lead time and inventory. If store inventory is reduced, the ROA will _______.
increase
ROA is profit divided by _____
Assets
Inventory is a component of __________ on the balance sheet.
Assets
GMROI measures the performance of particular inventory
True or False
True
The direct effect of a (an) _______ in transportation costs is to _____ ROA.
increase; reduce
Everything else held equal, an increase in price will increase GMROI.
True or False
True
Because firms have unique strategies, you cannot compare GMROI, ROA, and Inventory Turns between them.
True or False
False
Unit sales divided by average inventory is called ______.
inventory turns
Evaluate the following statement: "If I want to manage inventory in the aggregate I have to measure in aggregate. If I want to manage SKUs then I need to measure at a SKU level.
True or False
True
Periods of supply is a metric that tells you how many times your inventory will turn over in a period.
True or False
False
Which of the following metrics can be used in evaluating SKU inventory performance?
Inventory turns
GMROI
Periods of supply
When calculating inventory turns, it is acceptable to use _______________ in the numerator and __________ in the denominator.
Unit Sales; Average Unit Inventory & Cost of Goods Sold; Average Inventory Cost
Which is a component of logistics lead time?
I. Customers order cycle time
II. Procurement time
III. Manufacturing time & delivery time
II and III
The lead time gap is defined as the difference between the logistics lead time and the customer's order cycle.
True or False
True
Extended lead times _________ agility and flexibility
...
As the planning horizon increases, forecast error is expected to increase.
True or False
True
Logistics lead time is the time from when an order is manufactured until it's unloaded from the truck at a distribution center.
True or False
False
For a product influenced by seasonality, the influence could be completely obscured by predictable variations in demand.
False
Seasonality is the component of demand which represents the degree to which the data is increasing or decreasing over time.
False
In pantry loading, the rate of ____________ is the same, but the frequency of _______ is reduced.
consumption; purchase
Noise is random variation in demand that ______.
cannot by explained
In general, forecasters must consider what?
trend
seasonality
noise
promotional activity
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