Exam 2 Study Guide

1. What
a.
b.
c.
d.

is one major issue that still exists in a lean fulfillment model:

Inventory must be held in anticipation of customer orders
Longer lead times
Greater uncertainty in raw material inventory
Need for expedited deliveries

2. A company is contemplating different order fulfillment techniques to

use for a particular product. They have run cost models and come up
with the data shown above. Assuming they decided to adopt full
agile/responsive order fulfillment, which case above would exemplify
the costs associated with this strategy?
a. Case A
b. Case B
c. Case C
d. Case D
3. In class we discussed 3-dimensional printers. Which of the following is
NOT expected to be one of the benefits?
a. Lower finished product inventory
b. Reduced demand uncertainty
c. Reduction in transportation times
d. Reduced lead times
4. What is one benefit of buyer-seller collaboration in a synchronized
supply chain?
a. Information is transmitted up the supply chain after long lag
times
b. Demand and supply information is communicated and
shared in near real-time
c. Demand data is held and used to gain lower prices from suppliers
d. Demand data is forecasted and changed as it moves up the
supply chain
5. Among Lowes product categories, nails are one of the basic products
that have low customization, long product life cycle, and stable

demand. Which of the fulfillment techniques is the best fit for ordering
nails?
a. Agile
b. Just-in-time
c. Anticipatory
d. Lean
6. A supply chain that utilizes an agile fulfillment technique will:
a. Minimize cycle stock by building and shipping small volumes of
product frequently
b. Minimize cost of goods sold by buying in large lot sizes
c. Reduce costs by minimizing production set-ups and changeovers
d. Use batch manufacturing of anticipated orders to smooth
production levels
e. Base manufacturing on actual customer orders
7. Noodles & Company uses Coca-Cola Freestyle machines that people to
select from more than 100 regular and low-calorie brands. What kind
of order fulfillment technique is Coca-Cola Freestyle beverage machine
using?
a. Hybrid lean and agile
b. Agile
c. EOQ
d. Lean
8. Enterprise Resource Planning systems, or ERP, form one critical part of
the IT infrastructure. Its role is best represented as:
a. Facilitation the assignment of specific tasks to specific tools at
specific times
b. Analysis and decision-support
c. Enhancing forecast accuracy throughout the supply chain
d. Providing an organization-wide platform for collecting
and disseminating data
e. Simultaneous, constraint-based planning
9. What are two primary enablers of differentiated supply chain
management used to optimize value to both customers and the
delivering firm?
a. Information technology & relationships
b. Rewards & punishments
c. Information technology & better product design
d. Relationships & rewards
e. Better product design & relationships

10.
With regard to supply chain information flows, planning is
performed in the ____________ flows while order processing occurs in
the _____________ flows.
a. Operating, Forecasting
b. Forecasting, Coordination
c. Coordination, Operating
d. Forecasting, Operating
e. Operating, Coordination
11.
Which of the following is NOT an example of an
informationenabled supply chain?
a. Nike website allows customers to customize a pair of sneakers
b. General Electric employee in Boston posts a supplier contract to
the company intranet using groupware for use by the Frankfort
factory
c. A retailer sends point of sale data to Nestle
d. Teds Wicked Dive Shop shares inventory information with
suppliers only when placing orders

12.
a.
b.
c.
d.
13.
a.
b.
c.
d.

Which value represents the total cycle time?

11
15
16
19
Which of the following is NOT a driver of time-based competition?
Increased focus on customer segmentation
Shortening product (and service) life cycles
Customers drive for reduced inventories
Volatile markets make forecasting dangerous

14.
Supply chain pipeline management seeks to meet the
competitive challenge of increasing the speed of response to market
needs through:

a. Lowering transportation costs by holding orders and shipping in

bulk
b. Lowering negotiated rates with suppliers to offset poor delivery
performance
c. Lowering the cost of production by outsourcing to China
d. Improving visibility into demand and supply combined
with faster order cycle time
e. Increasing demand for product through constant promotions
15.
Amazon holds forecasted inventory of products in regional
warehouses and then ships direct to customers after orders are placed.
What kind of order fulfillment technique is Amazon using?
a. Lean
b. EOQ
c. Hybrid lean and agile
d. Agile
16.
Ted recently bought a new dishwasher at Sears. He chose the
Magician 5000 in black at the store, but had to wait three days for GE
to deliver the dishwasher to this house. Between placing the order and
it arriving, GE attached a black door to the Magician 5000. How does
GE benefit from postponement of this final step?
a. Lower finished goods inventory
b. Lower operating costs
c. Increases safety stock
d. Increased raw materials inventory
17.

The economic order quantity (EOQ) model attempts to:

a. Calculate the optimal amount of inventory to be
reordered by balancing ordering costs with carrying costs
b. Minimize total supply chain landed costs
c. Establish the optimal amount of inventory to be reordered by
balancing carrying costs with transportation costs
d. Minimize inventory costs by eliminating safety stock

18.

Which of the following is false concerning supply chain mapping?

a. It can be a helpful tool in a supply chain re-engineering project
b. The proportion of non-value added time to value added time
portrayed
c. It shows only the amount of time during which value is
added in the supply chain
d. A supply chain map can reveal opportunities for reducing total
pipeline time
e. The supply chain map reveals both non-value added time as well
as the time value is being added

19.
Which of the following is the recommended system for a product
with long lead-times for raw materials because of unpredictable
demand for finished goods?
a. Kanban
b. Lean
c. Agile
d. Just-in-Time
e. Hybrid
20.
Lean order fulfillment differs from traditional order fulfillment in
that lean utilizes:
a. Larger inventory deployment and longer time between orders
b. Smaller inventory deployment and shorter time between
orders
c. There is no difference between lean and traditional order
fulfillment
d. Smaller inventory deployment and longer time between orders
e. Larger inventory deployment and shorter time between orders
21.
Which component of a supply chain information system provides
operations manager with tools needed to execute supply chain
operations?
a. Supply chain planning & scheduling
b. Enterprise resource planning
c. Supply chain execution software
d. Advanced planning & scheduling
e. Advanced production systems

22.
In the above Economic Order Quantity (EOQ) model, the
manager wants to optimize fulfillment. As a SCM consultant, what will
you suggest to the manager?
a. Only lower cycle stock by reducing demand variance
b. Lower cycle stock by reducing ordering/set up costs and
lower safety stock by reducing demand and supply
variance
c. Only lower safety stock by reducing supplier variance
d. Lower cycle stock by reducing manufacturing variance and lower
safety stock by reducing demand variance

23.
a.
b.
c.
d.

What is the EOQ amount ordered in the figure above?

10 days worth of inventory
20 days worth of inventory
30 days worth of inventory
40 days worth of inventory

24.
The time the raw material inventory spends at a manufacturing
plant waiting to be converted into finished goods is an example of
which of the following?
a. Non value added time
b. Lead time gap
c. Place utility creation
d. Time utility creation
e. Value added time
25.
Which of the following is NOT one of the three questions you
should ask when making an order fulfillment decision?
a. What should we produce or purchase?
b. Where should we position the product?
c. How should we price the product?
d. How much should we produce or purchase?
26.
Ted and his friend Matt start a new company called Crabman
Auto Parts. They have heard about agile order fulfillment and are
interested in implementing it to decrease costs. Which of the following
best describes the strategy Crabman Auto Parts should follow to take
advantage of agile order fulfillment?
a. Synchronize information exchange across the supply
chain and form strategic relationships with key customers
and suppliers
b. Purchase off-season products in bulk to take advantage of
manufactures discounts
c. Increase complexity in the supply chain to ensure products are
made to Automobile manufacturers strict specifications
d. Increase variability of demand by running frequent promotional
campaigns and discounts for select products
e. Select suppliers based on lowest unit purchase price regardless
of delivery reliability
27.
a.
b.
c.
d.
e.

The best way to reduce safety stock is to:

Decrease lead time
Increase cycle stock
Increase order quantity
Decrease inventory levels
Decrease variation

28.
The opening of the new Haslam CBA Building was nearly delayed
until June 2009 due to the fact that the manufacturer of classroom
furniture could not order raw materials because they could not get
credit from a bank due tot eh credit crisis in September 2008. Dr. Tom
Ladd, the Associate Dean responsible for the building project, arranged
for UT to extend credit to the manufacturer so that raw materials could
be purchased and finished furniture could be built and delivered on
time to teach classes in January 2009. This represents what type of
strategic supply chain lead time technique?
a. Synchronization of UT and manufacturer IT systems to better
plan the production schedule in advance
b. Working with the manufacturer to reduce production cycle times
and speed pipeline inventory
c. Use of extended enterprise collaboration between the
manufacturer raw material supplier, and UT to create an
innovative credit solution
d. Use of postponement of delivery until just before it was needed
(JIT)
29.
In a synchronized supply chain using time-based competition,
information is usually substituted for what?
a. Agile fulfillment
b. Additional inventory
c. Customer data
d. Profits
e. Form utility
30.
Although bar codes on consumer goods have enhanced the
consumer experience by decreasing time spent in the check out line,
the major supply chain benefit of bar codes to capture actual sales is:
a. Enabling the supply chin to be alerted to actual consumer
sales in real time
b. Allowing decision analysis of consumer data
c. Reducing the time it takes for consumers to find products on
shelves
d. Providing new information equipment to enhance IT industry
sales
e. Targeting specific promotions to individual consumers
31.
Average daily demand for a product is 5 units and average leadtime for an order to arrive is 6 days. What is the re-order point (ROP)
for the product?
a. 30 units
b. 70 units
c. 100 units
d. 110 units
e. 130 units

32.
What is the lead-time for receiving inventory once an order is
placed in the figure above?
a. 10 days and 200 units of inventory
b. 5 days
c. 100 units of inventory
d. 30 days
e. 10 days
33.
In class we discussed Dells strategy and how logistics and
supply chain management has been instrumental in helping achieve
Dells competitive advantage. Dell sells direct to consumers, so that
they do not actually start making computers until the customer order
comes in, at which point they then order from their suppliers and have
the computer manufactured very quickly. The point where the
customer order triggers this response in manufacturing is called:
a. Logistics response trigger
b. Operational action point
c. Inventory holding point
d. Order penetration point
34.
Which component of a supply chain information system involves
simultaneous planning of all elements of the supply chain with
constraint-based scenarios?
a. Advanced planning & scheduling
b. Enterprise resource planning
c. Supply chain execution software
d. Supply chain planning & scheduling
e. Advanced production systems

35.
In the figure above, the point where the inventory carrying cost
curve and the order/set-up cost curve cross represents which of the
following
a. Economic Order Quantity
b. Re-order point
c. Safety stock
d. Efficient Consumer Response
e. Average inventory level

36.
Referring to the figure above and Teds in-class example of
having to replace his Apple computer, Apple operations contributes to
the total order cycle time only during which portion of the order cycle?
a. Invoice and billing to Order complete
b. Recognize need to Order receipt/processing
c. Order receipt/processing to Order shipment
d. Order receipt/processing to Order transmittal
e. Order preparation to Order fulfillment

37.
Which of the following is an incorrect statement about the Nave
EOQ process?
a. It takes into account order and set-up costs
b. It is the order quantity at the point where the slope of the total
inventory cost curve is zero
c. It attempts to minimize the cost activity in a firms inventory
management process
d. It balances order costs against inventory carrying costs to
determine optimum order quantity
e. It accounts for lead time variance and demand variance
38.
Supply chain mapping techniques enable managers to see where
value is added in the supply chain. To improve the value added time
ratio, manager should seek to:
a. Lowering transportation costs by holding orders and shipping in
bulk
b. Lowering negotiated rates with suppliers to offset poor delivery
performance
c. Daily inspections to be sure no oil is leaking from the pipeline
d. Shorten times products sit waiting for have form, time or
place value added
e. Increasing demand for product through constant promotions
39.
In sit-down restaurants, steaks are generally cooked after the
waiters/waitresses place the order to the kitchen with customers
preferences. Which of the following techniques best describes the
fulfillment of steak order to the final customer?
a. Agile
b. Postpone
c. Lean
d. Anticipatory
40.
Teds Wicked Dive Shop needs to put together a re-order plan for
breathing regulators. Given that this product is high cost and highly
customized in order to meet the unique demands of different divers,
Ted should realize which of the following strategies?
a. Order regulators in bulk using a manufacturing demand forecast
model coupled with a long lead-time based EOQ to take
advantage of manufacturing and transportation discounts
b. Order regulators based on actual customer orders and
work with supplier-partners to quickly configure and ship
the regulators directly to customers
c. Order regulators when all existing stock reaches the re-order
point (ROP)
d. Order product from the supplier that gives him the best price at
the time of order
e. Order regulators twice per year to keep set-up and order
placement costs to a minimum