OSC Final Exam with all Correct & 100% Verified Answers
|Actual Complete Exam |Already Graded A+
Which of these will require the greatest increase in safety stock? ✔Correct Answer-Increasing
the service level from 98% to 99%
What is safety stock? ✔Correct Answer-Inventory you hold even though you don't think you
will need it
In Summer of 2021 many firms experienced shortages of the components used in making their
products - all the way from shortages of glass bottles used in packaging of salad dressing to
shortages of microprocessor chips used to make cars. Firms were chastised (by some) for not
holding enough safety stock to prevent such shortages. If firms had held more safety stock,
what would this have done to its service level? ✔Correct Answer-Increased its service level
In the picture below, we take the perspective that 1) jobs arrive at some rate; 2) jobs get
processed at this rate; and 3) jobs depart at the same rate. From the firm's "high-level
perspective," which of these answer choices best describes the rate at which jobs depart (where
the "number of jobs" is represented by their dollar value)? ✔Correct Answer-The COGS
number from the income statement.
In the picture below, we take the perspective that 1) jobs arrive at some rate; 2) jobs get
processed at this rate; and 3) jobs depart at this same rate. From the firm's "high-level
perspective," which of these answer choices is the formula for the "throughput time" (the time
between when the inputs arrive and when they depart as outputs)? ✔Correct Answer-T = I /
R, by Little's Law
In Summer of 2021 many firms experienced shortages of the components used in making their
products - all the way from shortages of glass bottles used in packaging of salad dressing to
shortages of microprocessor chips used to make cars. Firms were chastised (by some) for not
holding enough safety stock to prevent such shortages. If firms had held more safety stock,
what would this have done to its inventory turns? ✔Correct Answer-Reduced the inventory
turns
Cat's balance sheet shows inventory of $2.842 as of Dec. 31, '98. The value of inventory handled
is reflected by the COGS, given on their income statement as $15.031 (all values in billions).
What is the frequency at which it turns its inventory? ✔Correct Answer-Once per 69 days.
All the other answers are correct.
1.3 times/quarter
5.3 times per year
, In the picture below, we show a timeline for a firm. The Accounts Payable Ledger balance would
be plugged into Little's Law to help find which number? (Since the answer choices cannot
include subscripts or italics, we will denote the time in accounts receivable, TAR , by T-sub-AR).
✔Correct Answer-T-sub-AP
In the picture below, we show a timeline for a firm. The COGS number from the income
statement would be plugged into Little's Law to help find which number? (Since the answer
choices cannot include subscripts or italics, we will denote the time in accounts receivable, TAR ,
by T-sub-AR). ✔Correct Answer-T-sub-I
In the picture below, we show a timeline for a firm. The picture shows TAP < TAP. What is the
interpretation if we find by our calculations that the CCC is negative? ✔Correct Answer-It
means that, for this firm, "Get paid (for FG)" comes before "Pay (for RM)".
In Summer of 2021 many firms experienced shortages of the components used in making their
products - all the way from shortages of glass bottles used in packaging of salad dressing to
shortages of microprocessor chips used to make cars. Firms were chastised (by some) for not
holding enough safety stock to prevent such shortages. If firms had held more safety stock,
what would this have done to its cash conversion cycle? (Assume TAP and TAR are not impacted
by holding more safety stock). ✔Correct Answer-Lengthened it
How should a firm set its service levels? ✔Correct Answer-Set a higher service level for critical
items, and a lower service level for less-critical-items.
The over/under model applies in a setting where you are deciding "how far to go" (e.g., how
much of an item to stock). You need 3 pieces of information to make your decision of "how far
to go:" 1) A forecast of "how much is needed". 2) The cost-of-underage, meaning the negative
consequence of being one item short of what is ultimately needed. 3) The cost-of-overage,
meaning the negative consequence if you stock one item more than what is ultimately needed.
We will assume the forecast is normally distributed. The "forecast" should include ✔Correct
Answer-You need the expected value and the standard deviation
If the cost of underage is great than the cost of overage, you should: ✔Correct Answer-Stock
more than the expected value.
"Costs" are something we want to avoid. So if the cost of being under is high (relative to the
cost of being over), we want to avoid being under. If the cost of overage is high (relative to the
cost of underage), we want to avoid being over. What if the costs of underage and overage are
roughly the same? ✔Correct Answer-Stock close to the expected value.
In the picture below, what is the z-value associated with a cost of underage that is 8 times the
cost of underage? ✔Correct Answer-1.2
|Actual Complete Exam |Already Graded A+
Which of these will require the greatest increase in safety stock? ✔Correct Answer-Increasing
the service level from 98% to 99%
What is safety stock? ✔Correct Answer-Inventory you hold even though you don't think you
will need it
In Summer of 2021 many firms experienced shortages of the components used in making their
products - all the way from shortages of glass bottles used in packaging of salad dressing to
shortages of microprocessor chips used to make cars. Firms were chastised (by some) for not
holding enough safety stock to prevent such shortages. If firms had held more safety stock,
what would this have done to its service level? ✔Correct Answer-Increased its service level
In the picture below, we take the perspective that 1) jobs arrive at some rate; 2) jobs get
processed at this rate; and 3) jobs depart at the same rate. From the firm's "high-level
perspective," which of these answer choices best describes the rate at which jobs depart (where
the "number of jobs" is represented by their dollar value)? ✔Correct Answer-The COGS
number from the income statement.
In the picture below, we take the perspective that 1) jobs arrive at some rate; 2) jobs get
processed at this rate; and 3) jobs depart at this same rate. From the firm's "high-level
perspective," which of these answer choices is the formula for the "throughput time" (the time
between when the inputs arrive and when they depart as outputs)? ✔Correct Answer-T = I /
R, by Little's Law
In Summer of 2021 many firms experienced shortages of the components used in making their
products - all the way from shortages of glass bottles used in packaging of salad dressing to
shortages of microprocessor chips used to make cars. Firms were chastised (by some) for not
holding enough safety stock to prevent such shortages. If firms had held more safety stock,
what would this have done to its inventory turns? ✔Correct Answer-Reduced the inventory
turns
Cat's balance sheet shows inventory of $2.842 as of Dec. 31, '98. The value of inventory handled
is reflected by the COGS, given on their income statement as $15.031 (all values in billions).
What is the frequency at which it turns its inventory? ✔Correct Answer-Once per 69 days.
All the other answers are correct.
1.3 times/quarter
5.3 times per year
, In the picture below, we show a timeline for a firm. The Accounts Payable Ledger balance would
be plugged into Little's Law to help find which number? (Since the answer choices cannot
include subscripts or italics, we will denote the time in accounts receivable, TAR , by T-sub-AR).
✔Correct Answer-T-sub-AP
In the picture below, we show a timeline for a firm. The COGS number from the income
statement would be plugged into Little's Law to help find which number? (Since the answer
choices cannot include subscripts or italics, we will denote the time in accounts receivable, TAR ,
by T-sub-AR). ✔Correct Answer-T-sub-I
In the picture below, we show a timeline for a firm. The picture shows TAP < TAP. What is the
interpretation if we find by our calculations that the CCC is negative? ✔Correct Answer-It
means that, for this firm, "Get paid (for FG)" comes before "Pay (for RM)".
In Summer of 2021 many firms experienced shortages of the components used in making their
products - all the way from shortages of glass bottles used in packaging of salad dressing to
shortages of microprocessor chips used to make cars. Firms were chastised (by some) for not
holding enough safety stock to prevent such shortages. If firms had held more safety stock,
what would this have done to its cash conversion cycle? (Assume TAP and TAR are not impacted
by holding more safety stock). ✔Correct Answer-Lengthened it
How should a firm set its service levels? ✔Correct Answer-Set a higher service level for critical
items, and a lower service level for less-critical-items.
The over/under model applies in a setting where you are deciding "how far to go" (e.g., how
much of an item to stock). You need 3 pieces of information to make your decision of "how far
to go:" 1) A forecast of "how much is needed". 2) The cost-of-underage, meaning the negative
consequence of being one item short of what is ultimately needed. 3) The cost-of-overage,
meaning the negative consequence if you stock one item more than what is ultimately needed.
We will assume the forecast is normally distributed. The "forecast" should include ✔Correct
Answer-You need the expected value and the standard deviation
If the cost of underage is great than the cost of overage, you should: ✔Correct Answer-Stock
more than the expected value.
"Costs" are something we want to avoid. So if the cost of being under is high (relative to the
cost of being over), we want to avoid being under. If the cost of overage is high (relative to the
cost of underage), we want to avoid being over. What if the costs of underage and overage are
roughly the same? ✔Correct Answer-Stock close to the expected value.
In the picture below, what is the z-value associated with a cost of underage that is 8 times the
cost of underage? ✔Correct Answer-1.2
