Chapter 11, 12, 15

Term
1 / 40
Firm A manufactures brake pads, a component of a braking system, and sells them to Firm B, who sells braking systems used in vehicles. Firm A is best described as a
tier 2 supplier.
tier 1 supplier.
manufacturer.
distributor.
retailer.
Click the card to flip 👆
Terms in this set (40)
Firm A manufactures brake pads, a component of a braking system, and sells them to Firm B, who sells braking systems used in vehicles. Firm A is best described as a
tier 2 supplier.
tier 1 supplier.
manufacturer.
distributor.
retailer.
Tier 2 supplier
Characterize the following decision as either tactical or strategic: Which tier 1 supplier should be used for a particular component system?

Tactical
Strategic
Strategic
For 9 percent of the products in a category, a firm fails to satisfy all demand during the month.

What is its in stock probability?
91%
A supply chain with a distributor has more product handling than one without a distributor.

True/False
True
Tier 2 suppliers are primary suppliers to manufacturers.

True/False
False
Inventory availability is a service metric to evaluate the performance of a supply chain.

True/False
True
Which of the following statements is TRUE regarding tier 1 suppliers?

Tier 1 suppliers are the starting point of a supply chain.
Tier 1 suppliers are the primary suppliers to tier 2 suppliers.
Tier 1 suppliers are the primary suppliers to manufacturers.
Tier 1 suppliers are the primary suppliers to retailers.
Tier 1 suppliers are the primary suppliers to manufacturers.
A supermarket is typically at the __________ level of a supply chain.

supplier
manufacturer
distributor
retailer
retailer
A distribution center is also called a __________.

tier 1 supplier
tier 2 supplier
fulfillment center
finishing center
fulfillment center
Which of the following is an advantage of a supply chain without a distributor?

Faster delivery lead times to retailers
Smaller order quantities
Cost-effective storage of inventory
Less product handling
less product handling
The four key costs associated with a supply chain include all of the following EXCEPT __________. lead time transportation labor procurementlead time__________ is the cost of goods purchased from suppliers. Revenue Procurement Supply NegotiationProcurementWhich of the following is a tactical decision in the context of supply chain management? To decide whether to produce locally or not To decide whether to make or buy To decide whether to expand capacity or not To decide whether to use overtime this week or notTo decide whether to use overtime or not________ products are relatively ________ because they can experience substantial variability. Functional, safe Functional, risky Innovative, risky Innovative, safeInnovative, riskyCharacteristics of market-responsive supply chains include all of the following EXCEPT ______. flexibility emphasized over cost low factory utilization functional products fast and expensive mode of transportationFunctional productsWhich of the following is NOT a component of demand variability? Level Innovation Variety LocationInnovationThe bullwhip effect is the tendency for ______ to be more volatile at _______ levels of the supply chain. supply, higher demand, higher demand, lower supply, lowerdemand, higherWhich of the following is NOT a reason for the bullwhip effect? Ordering a quantity that exceeds demand Ordering a quantity that exactly matches demand Stocking up with items on sale Placing orders in batchesOrdering a quantity that exactly matches demandReasons for overseas sourcing include ______. Multiple Choice Reducing inventory costs Reducing labor costs Reducing transportation costs Reducing product valueReducing labor costsThe EOQ minimizes the sum of the ordering cost and which of the following costs? Stockout cost Holding cost Purchasing cost Quality costHolding costA firm's ordering cost per year is independent of its order quantity decision. True/FalseFalseAs demand increases, the optimal economic order quantity increases at the same rate of demand. True/FalseFalseWhen solving for an optimal order quantity in the presence of order quantity restrictions, the best approach is to order at a feasible quantity closest to the economic order quantity. True/FalseTrueThe assumptions behind the economic order quantity (EOQ) model include all of the following EXCEPT __________. a constant rate of demand a fixed ordering cost per year a fixed lead time a fixed purchase price per unita fixed ordering cost per yearThe parameters of the economic order quantity (EOQ) model include all of the following Except __________. order quantity demand rate holding cost per unit per year ordering cost per orderorder quantityBakery A uses 60 bags of flour each month. The flour is purchased from a supplier for a price of $80 per bag and an ordering cost of $20 per order. Bakery A's annual inventory holding cost percentage is 40%. If Bakery A chooses to use the economic order quantity for flour purchases, what will be its average inventory? 30 15 9 4.515 Holding cost per bag per year = $80 × 40% = $32. EOQ = SQRT((2×60×12×20)/32) = 30 bags. Average inventory = 30/2 = 15.As demand increases, the sum of ordering and holding costs per period for the economic order quantity _______ at a rate _________ than demand. increases, faster decreases, faster increases, slower decreases, slowerincreases, slowerWhich of the following is a consequence of economies of scale according to the economic order quantity model? If a product is not popular, its total economic order quantity costs are a small portion of the purchase cost. If the demand rate for a product is high, its total economic order quantity costs are a large portion of the purchase cost. More product variety always results in higher profit. More product variety does not always result in higher profit.More product variety does not always result in higher profit.Product ___________ refers to the situation when customers are willing to purchase a less preferred version when their most preferred version is not available. substitution promotion economy sustainabilitysubstitutionWhen is expanding product variety not a good idea? When adding variety increases overall margin. When adding variety increases total demand insignificantly When adding variety increases consumer value significantly When adding variety increases overall profitabilityWhen adding variety increases total demand insignificantlyWhen solving for an optimal order quantity in the presence of a quantity discount, the best approach is to select an order quantity which takes advantage of the discount. True/FalseFalseShort-term forecasts tend to be automated forecasts.True______ analysis is the statistical process of estimating the relationship between dependent and ______ variables. Regression, independent Time series, outcome Regression, outcome Time series, latentRegression, independentThe forecast error for period t is the _________ the forecast and actual values for period t. sum of difference between product of quotient ofdifference betweenThe ______ forecasting method creates a forecast for the next period by using the ______ value of the last period. moving average, predicted moving average, forecast naïve, actual naïve, forecastnaïve, actualA store has the following sales figures: Year Sales (in millions of dollars) 1 10 2 5 3 8 4 15 What is its sales forecast for year 2 using the naïve method? Multiple Choice 10 5 8 1510A store has the following demand figures for the last four years: Year Demand 1 100 2 150 3 98 4 112 With a three-year moving average, what is the demand forecast for year 4?116A(n) ________ forecast allows for _________ input into the forecasting method. objective, human subjective, human objective, predictive subjective, predictivesubjective, humanThe biggest strength of subjective forecasting is ______. use of human intelligence for time series extrapolation use of human intelligence to replace forecasts done by analytical methods use of automated methods to replace human intuition use of automated methods to refute human intuitionuse of human intelligence to replace forecasts done by analytical methodsDeseasonalizing old demand data is the process of reintroducing the seasonal effect to forecasted data. True/FalseFalse