Operations Management: Processes and Supply Chains, 10e
(Krajewski et al.)
Chapter 9 Supply Chain Inventory Management(part B)
Use the following to answer the questions below.
Shipments of Product A from a distribution center to a retailer are made in lots of 350. The
retailer's average demand for A is 75 units per week. Lead time from distributor to retailer is 3
weeks. The retailer pays for the shipments when they leave the distributor. The distributor has
agreed to reduce the lead time to 2 weeks if the retailer will purchase quantities of 400 per
shipment instead of 350.
a) Refer to the instruction above. With the change in purchased quantities, the average
cycle inventory will:
A) decrease by 75 units.
B) increase by 50 units.
C) decrease by 25 units.
D) increase by 25 units.
Reference: Inventory and Supply Chains
Difficulty: Moderate
Keywords: types of inventories, cycle inventory, pipeline inventory
AACSB: Analytic skills
b) Refer to the instruction above. With the change in lead times, the pipeline inventory will:
A) decrease by 75 units.
B) increase by 50 units.
C) decrease by 25 units.
D) increase by 25 units.
Reference: Inventory and Supply Chains
Difficulty: Moderate
Keywords: types of inventories, cycle inventory, pipeline inventory
AACSB: Analytic skills
c) Refer to the instruction above. The net impact on the retailer will be:
A) no net change in average cycle and pipeline inventories.
B) a net average increase in cycle and pipeline inventories of 50 units.
C) a net average decrease in cycle and pipeline inventories of 75 units.
D) a net average decrease in cycle and pipeline inventories of 50 units.
Reference: Inventory and Supply Chains
Difficulty: Moderate
Keywords: types of inventories, cycle inventory, pipeline inventory
AACSB: Analytic skills
Use the following to answer the questions below.
Shipments of Product X from a plant to a wholesaler are made in lots of 600. The wholesaler's
average demand for X is 100 units per week. Lead time from plant to wholesaler is 4 weeks. The
wholesaler pays for the shipments when they leave the plant.
a) Refer to the instruction above. What is the total of the wholesaler's current cycle plus pipeline
inventories?
A) 300 units
, B) 100 units
C) 700 units
D) 400 units
Reference: Inventory and Supply Chains
Difficulty: Moderate
Keywords: types of inventories, cycle inventory, pipeline inventory
AACSB: Analytic skills
b) Refer to the instruction above. If the plant reduces its lead time from 4 to 2 weeks and keeps
its 600 unit lot size, what is the wholesaler's new total cycle plus pipeline inventories?
A) 300 units
B) 500 units
C) 700 units
D) 200 units
Reference: Inventory and Supply Chains
Difficulty: Moderate
Keywords: types of inventories, cycle inventory, pipeline inventory
AACSB: Analytic skills
c) Refer to the instruction above. If the plant reduces its shipment lot size from 600 to 400 units
and keeps its 4 week lead time, what is the wholesaler's new total cycle plus pipeline
inventories?
A) 600 units
B) 300 units
C) 500 units
D) 400 units
Reference: Inventory and Supply Chains
Difficulty: Moderate
Keywords: types of inventories, cycle inventory, pipeline inventory
AACSB: Analytic skills
d) Refer to the instruction above. Which of the following situations results in the wholesaler's
total cycle plus pipeline inventories amounting to 550 units?
A) plant shipment lot size of 400 and plant-to-wholesaler lead time of 2 weeks
B) plant shipment lot size of 500 and plant-to-wholesaler lead time of 3 weeks
C) plant shipment lot size of 400 and plant-to-wholesaler lead time of 3 weeks
D) plant shipment lot size of 600 and plant-to-wholesaler lead time of 4 weeks
Reference: Inventory and Supply Chains
Difficulty: Moderate
Keywords: types of inventories, cycle inventory, pipeline inventory
AACSB: Analytic skills
e) Refer to the instruction above. Which of the following situations results in the wholesaler's
total cycle plus pipeline inventories amounting to 400 units?
A) plant shipment lot size of 500 and plant-to-wholesaler lead time of 3 weeks
B) plant shipment lot size of 400 and plant-to-wholesaler lead time of 3 weeks
C) plant shipment lot size of 600 and plant-to-wholesaler lead time of 4 weeks
D) plant shipment lot size of 400 and plant-to-wholesaler lead time of 2 weeks
Reference: Inventory and Supply Chains
Difficulty: Moderate
(Krajewski et al.)
Chapter 9 Supply Chain Inventory Management(part B)
Use the following to answer the questions below.
Shipments of Product A from a distribution center to a retailer are made in lots of 350. The
retailer's average demand for A is 75 units per week. Lead time from distributor to retailer is 3
weeks. The retailer pays for the shipments when they leave the distributor. The distributor has
agreed to reduce the lead time to 2 weeks if the retailer will purchase quantities of 400 per
shipment instead of 350.
a) Refer to the instruction above. With the change in purchased quantities, the average
cycle inventory will:
A) decrease by 75 units.
B) increase by 50 units.
C) decrease by 25 units.
D) increase by 25 units.
Reference: Inventory and Supply Chains
Difficulty: Moderate
Keywords: types of inventories, cycle inventory, pipeline inventory
AACSB: Analytic skills
b) Refer to the instruction above. With the change in lead times, the pipeline inventory will:
A) decrease by 75 units.
B) increase by 50 units.
C) decrease by 25 units.
D) increase by 25 units.
Reference: Inventory and Supply Chains
Difficulty: Moderate
Keywords: types of inventories, cycle inventory, pipeline inventory
AACSB: Analytic skills
c) Refer to the instruction above. The net impact on the retailer will be:
A) no net change in average cycle and pipeline inventories.
B) a net average increase in cycle and pipeline inventories of 50 units.
C) a net average decrease in cycle and pipeline inventories of 75 units.
D) a net average decrease in cycle and pipeline inventories of 50 units.
Reference: Inventory and Supply Chains
Difficulty: Moderate
Keywords: types of inventories, cycle inventory, pipeline inventory
AACSB: Analytic skills
Use the following to answer the questions below.
Shipments of Product X from a plant to a wholesaler are made in lots of 600. The wholesaler's
average demand for X is 100 units per week. Lead time from plant to wholesaler is 4 weeks. The
wholesaler pays for the shipments when they leave the plant.
a) Refer to the instruction above. What is the total of the wholesaler's current cycle plus pipeline
inventories?
A) 300 units
, B) 100 units
C) 700 units
D) 400 units
Reference: Inventory and Supply Chains
Difficulty: Moderate
Keywords: types of inventories, cycle inventory, pipeline inventory
AACSB: Analytic skills
b) Refer to the instruction above. If the plant reduces its lead time from 4 to 2 weeks and keeps
its 600 unit lot size, what is the wholesaler's new total cycle plus pipeline inventories?
A) 300 units
B) 500 units
C) 700 units
D) 200 units
Reference: Inventory and Supply Chains
Difficulty: Moderate
Keywords: types of inventories, cycle inventory, pipeline inventory
AACSB: Analytic skills
c) Refer to the instruction above. If the plant reduces its shipment lot size from 600 to 400 units
and keeps its 4 week lead time, what is the wholesaler's new total cycle plus pipeline
inventories?
A) 600 units
B) 300 units
C) 500 units
D) 400 units
Reference: Inventory and Supply Chains
Difficulty: Moderate
Keywords: types of inventories, cycle inventory, pipeline inventory
AACSB: Analytic skills
d) Refer to the instruction above. Which of the following situations results in the wholesaler's
total cycle plus pipeline inventories amounting to 550 units?
A) plant shipment lot size of 400 and plant-to-wholesaler lead time of 2 weeks
B) plant shipment lot size of 500 and plant-to-wholesaler lead time of 3 weeks
C) plant shipment lot size of 400 and plant-to-wholesaler lead time of 3 weeks
D) plant shipment lot size of 600 and plant-to-wholesaler lead time of 4 weeks
Reference: Inventory and Supply Chains
Difficulty: Moderate
Keywords: types of inventories, cycle inventory, pipeline inventory
AACSB: Analytic skills
e) Refer to the instruction above. Which of the following situations results in the wholesaler's
total cycle plus pipeline inventories amounting to 400 units?
A) plant shipment lot size of 500 and plant-to-wholesaler lead time of 3 weeks
B) plant shipment lot size of 400 and plant-to-wholesaler lead time of 3 weeks
C) plant shipment lot size of 600 and plant-to-wholesaler lead time of 4 weeks
D) plant shipment lot size of 400 and plant-to-wholesaler lead time of 2 weeks
Reference: Inventory and Supply Chains
Difficulty: Moderate
