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1.

Periodic review policies for inventory replenishment require safety


inventory to cover demand during
Select one:
a. Lead time only.
b. Neither lead time or the review interval.
c. Both lead time and the review interval.
d. The review interval only.

2.Cheaper modes of transport typically have


Select one:
a. Longer lead times and larger minimum shipment quantities.
b. Shorter lead times and smaller minimum shipment quantities.
c. Shorter lead times and larger minimum shipment quantities.
d. Longer lead times and smaller minimum shipment quantities.
3.A goal of any supply chain manager is to
Select one:
a. Reduce the level of safety inventory required regardless of the effect on
product availability.
b. Increase the level of safety inventory required regardless of the effect on
product availability.
c. Reduce the level of safety inventory required in a way that does not
adversely affect product availability.
d. Increase the level of safety inventory required in a way that does not
adversely affect product availability.
4.Supply chain managers are able to
Select one:
a. Increase their forecast accuracy as lead times increase.
b. Decrease their forecast accuracy as lead times decrease.
c. Decrease their forecast accuracy as lead times increase.
d. Increase their forecast accuracy as lead times decrease.
5.A high level of product availability requires
Select one:

a. Large inventories and tends to raise costs for the supply chain.
b. Small inventories and tends to reduce costs for the supply chain.
c. Large inventories and tends to reduce costs for the supply chain.
d. Small inventories and tends to raise costs for the supply chain.
6.Replenishment orders in multi-echelon supply chains should be
Select one:
a. Synchronized to facilitate supplier evaluation and selection.
b. synchronized to keep cycle inventory and order costs low.
c. Synchronized to increase cycle inventory and order costs.
d. Separated to increase cycle inventory and order costs.
7.A key to reducing cycle inventory is
Select one:
a. The reduction of holding cost.
b. The reduction of lot size.
c. The reduction of manufacturing cost.
d. The reduction of warehouse space.
8.The coefficient of variation measures
Select one:
a. The size of the uncertainty relative to demand.
b. The relative certainty of the forecast.
c. The accuracy of the demand forecast.
d. The relevance of cycle inventory to demand.
9.Cycle inventory is primarily held to
Select one:
a. Take advantage of economies of scale and increase cost within the
supply chain.
b. Take advantage of diseconomies of scale and increase cost within the
supply chain.
c. Take advantage of diseconomies of scale and reduce cost within the
supply chain.
d. Take advantage of economies of scale and reduce cost within the supply
chain.

10.The key players in any transportation that takes place within a supply
chain are
Select one:
a. The shipper and the carrier.
b. The shipper and the supplier.
c. The shipper and the manufacturer.
d. The shipper and the receiver.
11.Inventory holding costs would include which of the following?
Select one:
a. Buyer time
b. Obsolescence cost
c. Transportation cost
d. Receiving cost
12.As the safety inventory is increased
Select one:
a. Fill rate increases and cycle service level decreases.
b. Fill rate decreases and cycle service level increases.
c. Both fill rate and cycle service level increase.
d. Both fill rate and cycle service level decrease.
13.The cost of carrying one unit in inventory for a specified period of time,
usually one year, is referred to as
Select one:
a. The fixed ordering cost and is denoted by S.
b. The material cost and is denoted by C.
c. The purchase price and is denoted by P.
d. The holding cost and is denoted by H.
14The expected shortage per replenishment cycle (ESC) is
Select one:
a. The average units of demand that are not satisfied from inventory in
stock per replenishment cycle.
b. The units of demand that are satisfied from inventory in stock in a given
replenishment cycle.

c. The units of demand that are not satisfied from inventory in stock in a
given replenishment cycle.
d. The average units of demand that are satisfied from inventory in stock
per replenishment cycle.
15.A ________ occurs when a retailer purchases in the promotional period
for sales in future periods.
Select one:
a. Backward buy
b. Pricing incentive
c. Forward buy
d. Inventory shift
16.The trade-off that a supply chain manager must consider when planning
safety inventory is
Select one:
a. Increasing product availability versus raising the level of safety
inventory.
b. Decreasing product availability versus decreasing the level of safety
inventory.
c. Increasing product availability versus increasing inventory holding costs.
d. Decreasing product availability versus decreasing inventory holding
costs.
17.The use of one product to satisfy demand for a different product is
Select one:
a. Product substitution.
b. Information centralization.
c. Specialization.
d. Component commonality.
18.Aggregation reduces the standard deviation of demand
Select one:
a. Even if demand across the regions being aggregated is not perfectly
positively correlated.
b. Whenever demand across the regions being aggregated is not perfectly
positively correlated.
c. Only if demand across the regions being aggregated is not perfectly
positively correlated.

d. Only if demand across the regions being aggregated is perfectly


positively correlated.
19.A price discount where the discount is based on the total quantity
purchased over a given period, regardless of the number of lots purchased
over that period is
Select one:
a. Volume based.
b. Customer based.
c. Lot size based.
d. Supplier based.
20. The costs of overstocking and under-stocking have a direct impact on
Select one:
a. Neither the optimal cycle service level or profitability.
b. The optimal cycle service level but not profitability.
c. Profitability but not the optimal cycle service level.
d. Both the optimal cycle service level and profitability.
21Quantity discounts lead to
Select one:
a. A decrease in cycle inventory in the supply chain.
b. Minor fluctuations of cycle inventory in the supply chain.
c. A slight buildup of cycle inventory in the supply chain.
d. A significant buildup of cycle inventory in the supply chain.
22.The required safety inventory
Select one:
a. Remains stable with an increase in the desired product availability.
b. Grows rapidly with an increase in the desired product availability.
c. Decreases with an increase in the desired product availability.
d. Grows rapidly with a decrease in the desired product availability.
23. If quick response allows multiple orders in the season,
Select one:
a. Profits increase and the overstock quantity increases.

b. Profits decrease and the overstock quantity increases.


c. Profits decrease and the overstock quantity decreases.
d. Profits increase and the overstock quantity decreases.
24. As the ratio of the cost of overstocking to the cost of understocking
gets smaller,
Select one:
a. The optimal level of product availability decreases.
b. The optimal level of product availability increases.
c. The optimal level of product availability becomes irrelevant.
d. The optimal level of product availability remains stable.
25. A company with multiple products, that chooses to delay product
differentiation until closer to the point of sale, is using
Select one:
a. Quick response.
b. Tailored sourcing.
c. improved forecasting.
d. Postponement.