OMGT 3123 FINAL EXAM ECU STUDY GUIDE
QUESTION ONE: Define the four modes of transportation and at least one strength and
weakness from each one. - Answers -Highway,Water,Rail, Air
QUESTION ONE: Highway Strengths/Weaknesses - Answers -Strength:
Flexibility to deliver where and when needed. Often the best balance among cost,
flexibility, and reliability/ speed of delivery.
Weakness:
Neither the fastest nor the cheapest option.
QUESTION ONE: Water Strengths/Weaknesses - Answers -Strength:
Highly cost-effective for bulky items.Most effective when linked to a multimodal system.
Weakness:
Limited locations.Relatively poor delivery reliability/speed.
QUESTION ONE: Rail Strengths/Weaknesses - Answers -Strength:
Highly cost-effective for bulky items. Can be most effective when linked to a multimodal
system.
Weakness:
Limited locations, although less so than with water. Not as fast as highway, but
improving over time.
QUESTION ONE: Air Strengths/Weaknesses - Answers -Strength:
Quickest mode of delivery. Flexible, especially when linked to the highway mode.
Weakness:
Often the most expensive mode on a per-pound basis
QUESTION TWO: Describe the concept of a landed cost and provide an example of a
landed cost vs. a purchase price. - Answers -Landed cost is the cost of a product plus
all costs driven by logistics activities, such as transportation, warehousing, handling,
customs fees, and the like.
Example: Landed cost is the total expenditure involved in buying a product and shipping
charges for importing it to your warehouse. Apart from the cost price of the product or
purchasing price, landed cost is made up of different charges like customs duties,
currency conversion, insurance and other costs up to the destination store where as
purchasing price is the cost of the product without including these costs.
QUESTION THREE: Identify and describe the four laws of forecasting (LAW ONE) -
Answers -Law 1: Forecasts Are Almost Always Wrong (But They Are Still Useful)
Even at the best conditions no forecast can predict the exact level of demand, supply or
price needed for the future. This is because there are too many factors that go into
, these forecast which therefore affects the numbers. Forecasts should only be used to
receive close estimates by businesses
QUESTION THREE: Identify and describe the four laws of forecasting (LAW TWO) -
Answers -Law 2: Forecasts for the Near Term Tend to Be More Accurate
Law 2 recognizes that in the near term, the factors that affect the forecast variable are
not likely to change greatly. Meaning when forecasting it is easier to do so in closer
periods of time like months , rather than years or longer periods of time.
QUESTION THREE: Identify and describe the four laws of forecasting (LAW THREE) -
Answers -Law 3: Forecasts for Groups of Products or Services Tend to Be More
Accurate
Many businesses have found that it is easier and more accurate to forecast for groups
of products or services than it is to forecast for specific ones. The reason is simple: The
demand, supply, or price of a specific item is usually affected by many more factors.
Meaning it is harder to forecast the demand for Red Coffee Cups rather than just Coffee
Cups.
QUESTION THREE: Identify and describe the four laws of forecasting (LAW FOUR) -
Answers -Law 4: Forecasts Are No Substitute for Calculated Values
Forecasts should be used only when better approaches to determining the variable of
interest are not available. Basically when you are able to calculate something don't
forecast it just calculate so you have the materials that you need, not having too little or
too much.
QUESTION FOUR: Identify and describe 3 characteristics of the 2 major approaches to
S&OP planning. - Answers -The two major approaches are Top Down and Bottom Up.
QUESTION FOUR: Identify and describe 3 characteristics of the 2 major approaches to
S&OP planning. (TOP DOWN) - Answers -Top Down :
1. Develop the aggregate sales forecast and planning values. Top-down planning starts
with the aggregate sales forecast. The planning values are used in the next two steps to
help management translate the sales forecast into resource requirements and
determine the feasibility and costs of alternative S&OP strategies.
2. Translate the sales forecast into resource requirements. The goal of this second step
is to move the analysis from "sales" numbers to the "operations and supply chain"
numbers needed for tactical planning. Some typical resources include labor hours,
equipment hours, and material dollars, to name a few.
3. Generate alternative production plans. In this step, management determines the
feasibility and costs for various production plans. We will describe three particular
approaches— level production, chase production, and mixed production—in more detail
later.
QUESTION ONE: Define the four modes of transportation and at least one strength and
weakness from each one. - Answers -Highway,Water,Rail, Air
QUESTION ONE: Highway Strengths/Weaknesses - Answers -Strength:
Flexibility to deliver where and when needed. Often the best balance among cost,
flexibility, and reliability/ speed of delivery.
Weakness:
Neither the fastest nor the cheapest option.
QUESTION ONE: Water Strengths/Weaknesses - Answers -Strength:
Highly cost-effective for bulky items.Most effective when linked to a multimodal system.
Weakness:
Limited locations.Relatively poor delivery reliability/speed.
QUESTION ONE: Rail Strengths/Weaknesses - Answers -Strength:
Highly cost-effective for bulky items. Can be most effective when linked to a multimodal
system.
Weakness:
Limited locations, although less so than with water. Not as fast as highway, but
improving over time.
QUESTION ONE: Air Strengths/Weaknesses - Answers -Strength:
Quickest mode of delivery. Flexible, especially when linked to the highway mode.
Weakness:
Often the most expensive mode on a per-pound basis
QUESTION TWO: Describe the concept of a landed cost and provide an example of a
landed cost vs. a purchase price. - Answers -Landed cost is the cost of a product plus
all costs driven by logistics activities, such as transportation, warehousing, handling,
customs fees, and the like.
Example: Landed cost is the total expenditure involved in buying a product and shipping
charges for importing it to your warehouse. Apart from the cost price of the product or
purchasing price, landed cost is made up of different charges like customs duties,
currency conversion, insurance and other costs up to the destination store where as
purchasing price is the cost of the product without including these costs.
QUESTION THREE: Identify and describe the four laws of forecasting (LAW ONE) -
Answers -Law 1: Forecasts Are Almost Always Wrong (But They Are Still Useful)
Even at the best conditions no forecast can predict the exact level of demand, supply or
price needed for the future. This is because there are too many factors that go into
, these forecast which therefore affects the numbers. Forecasts should only be used to
receive close estimates by businesses
QUESTION THREE: Identify and describe the four laws of forecasting (LAW TWO) -
Answers -Law 2: Forecasts for the Near Term Tend to Be More Accurate
Law 2 recognizes that in the near term, the factors that affect the forecast variable are
not likely to change greatly. Meaning when forecasting it is easier to do so in closer
periods of time like months , rather than years or longer periods of time.
QUESTION THREE: Identify and describe the four laws of forecasting (LAW THREE) -
Answers -Law 3: Forecasts for Groups of Products or Services Tend to Be More
Accurate
Many businesses have found that it is easier and more accurate to forecast for groups
of products or services than it is to forecast for specific ones. The reason is simple: The
demand, supply, or price of a specific item is usually affected by many more factors.
Meaning it is harder to forecast the demand for Red Coffee Cups rather than just Coffee
Cups.
QUESTION THREE: Identify and describe the four laws of forecasting (LAW FOUR) -
Answers -Law 4: Forecasts Are No Substitute for Calculated Values
Forecasts should be used only when better approaches to determining the variable of
interest are not available. Basically when you are able to calculate something don't
forecast it just calculate so you have the materials that you need, not having too little or
too much.
QUESTION FOUR: Identify and describe 3 characteristics of the 2 major approaches to
S&OP planning. - Answers -The two major approaches are Top Down and Bottom Up.
QUESTION FOUR: Identify and describe 3 characteristics of the 2 major approaches to
S&OP planning. (TOP DOWN) - Answers -Top Down :
1. Develop the aggregate sales forecast and planning values. Top-down planning starts
with the aggregate sales forecast. The planning values are used in the next two steps to
help management translate the sales forecast into resource requirements and
determine the feasibility and costs of alternative S&OP strategies.
2. Translate the sales forecast into resource requirements. The goal of this second step
is to move the analysis from "sales" numbers to the "operations and supply chain"
numbers needed for tactical planning. Some typical resources include labor hours,
equipment hours, and material dollars, to name a few.
3. Generate alternative production plans. In this step, management determines the
feasibility and costs for various production plans. We will describe three particular
approaches— level production, chase production, and mixed production—in more detail
later.
