1|Page
ISDS 3001 FINAL (ACTUAL 2025/206) EXAM
QUESTIONS &100% VERIFIED ANSWERS
Outsourcing is a form of specialization that allows the outsourcing firm to focus
on its key success factors. T/F - (answer)True
A fast-food retailer that acquired a spice manufacturer would be practicing
backward integration. T/F - (answer)True
What is the practice of keeping a product generic as long as possible before
customizing?
A.backward integration
B.vendor-managed inventory
C.forward integration
D.keiretsu
E.postponement - (answer)D. Postponement
A rice mill in south Louisiana purchases the trucking firm that transports packaged
rice to distributors. This is an example of which of the following?
A.horizontal integration
B.backward integration
C.keiretsu
D.forward integration
E.current transformation - (answer)D. Forward integration
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Local optimization is a supply-chain complication best described as:
A.optimizing one's local area without full knowledge of supply chain needs.
B.the opposite of the bullwhip effect.
C.obtaining very high production efficiency in a decentralized supply chain.
D.the prerequisite of global optimization.
E.the result of supply chains built on suppliers with compatible corporate
cultures. - (answer)A. Optimizing one's local area without full knowledge of
supply chain needs
Which of the following statements about ABC analysis is FALSE?
A.ABC analysis is based on the presumption that controlling the few most
important items produces the vast majority of inventory savings.
B.Criteria other than annual dollar volume, such as high holding cost or delivery
problems, can determine item classification in ABC analysis.
C.In ABC analysis, "A" items should have tighter physical inventory control than
"B" or "C" items have.
D.ABC analysis is based on the presumption that all items must be tightly
controlled to produce important cost savings.
E.In ABC analysis, forecasting methods for "C" items may be less sophisticated
than for "A" items. - (answer)D. ABC analysis is based on the presumption that all
items must be tightly controlled to produce important cost savings
ABC analysis divides on-hand inventory into three classes, generally based upon
which of the following?
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A.annual demand
B.unit price
C.item quality
D.the number of units on hand
E.annual dollar volume - (answer)E. Annual dollar volume
Which of these statements about the production order quantity model is FALSE?
A.All else equal, the smaller the ratio of demand rate to production rate, the
larger is the production order quantity.
B.Because receipt is noninstantaneous, some units are used immediately and not
stored in inventory.
C.Average inventory is less than one-half of the production order quantity.
D.The production order quantity model is appropriate when the assumptions of
the basic EOQ model are met, except that receipt is noninstantaneous.
E.None of the above is false. - (answer)A. All else equal, the smaller the ratio of
demand rate to production rate, the larger is the production order quantity
Which of the following statements about quantity discounts is FALSE?
A.The smaller the ordering cost, the less attractive a discount schedule will be.
B.In inventory management, item cost becomes relevant to order quantity
decisions when a quantity discount is available.
C.The larger the annual demand, the less attractive a discount schedule will be.
D.If carrying costs are expressed as a percentage of value, EOQ is larger at each
lower price in the discount schedule.
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E.The cost-minimizing solution may or may not be where annual holding costs
equal annual ordering costs. - (answer)C. The larger the annual demand, the less
attractive a discount schedule will be
Which of the following should be higher in P systems than Q systems?
A.order spacing
B.safety stock
C.demand
D.lead time
E.order size - (answer)B. Safety stock
The objective of aggregate planning is to meet forecast demand while ________
over the planning period.
A.maximizing service level
B.minimizing fixed cost
C.minimizing stock out
D.minimizing cost
E.all of the above - (answer)D. Minimizing cost
Which of these aggregate planning strategies is a capacity option?
A. counter seasonal product mixing
B.promotion
C.back ordering
ISDS 3001 FINAL (ACTUAL 2025/206) EXAM
QUESTIONS &100% VERIFIED ANSWERS
Outsourcing is a form of specialization that allows the outsourcing firm to focus
on its key success factors. T/F - (answer)True
A fast-food retailer that acquired a spice manufacturer would be practicing
backward integration. T/F - (answer)True
What is the practice of keeping a product generic as long as possible before
customizing?
A.backward integration
B.vendor-managed inventory
C.forward integration
D.keiretsu
E.postponement - (answer)D. Postponement
A rice mill in south Louisiana purchases the trucking firm that transports packaged
rice to distributors. This is an example of which of the following?
A.horizontal integration
B.backward integration
C.keiretsu
D.forward integration
E.current transformation - (answer)D. Forward integration
,2|Page
Local optimization is a supply-chain complication best described as:
A.optimizing one's local area without full knowledge of supply chain needs.
B.the opposite of the bullwhip effect.
C.obtaining very high production efficiency in a decentralized supply chain.
D.the prerequisite of global optimization.
E.the result of supply chains built on suppliers with compatible corporate
cultures. - (answer)A. Optimizing one's local area without full knowledge of
supply chain needs
Which of the following statements about ABC analysis is FALSE?
A.ABC analysis is based on the presumption that controlling the few most
important items produces the vast majority of inventory savings.
B.Criteria other than annual dollar volume, such as high holding cost or delivery
problems, can determine item classification in ABC analysis.
C.In ABC analysis, "A" items should have tighter physical inventory control than
"B" or "C" items have.
D.ABC analysis is based on the presumption that all items must be tightly
controlled to produce important cost savings.
E.In ABC analysis, forecasting methods for "C" items may be less sophisticated
than for "A" items. - (answer)D. ABC analysis is based on the presumption that all
items must be tightly controlled to produce important cost savings
ABC analysis divides on-hand inventory into three classes, generally based upon
which of the following?
,3|Page
A.annual demand
B.unit price
C.item quality
D.the number of units on hand
E.annual dollar volume - (answer)E. Annual dollar volume
Which of these statements about the production order quantity model is FALSE?
A.All else equal, the smaller the ratio of demand rate to production rate, the
larger is the production order quantity.
B.Because receipt is noninstantaneous, some units are used immediately and not
stored in inventory.
C.Average inventory is less than one-half of the production order quantity.
D.The production order quantity model is appropriate when the assumptions of
the basic EOQ model are met, except that receipt is noninstantaneous.
E.None of the above is false. - (answer)A. All else equal, the smaller the ratio of
demand rate to production rate, the larger is the production order quantity
Which of the following statements about quantity discounts is FALSE?
A.The smaller the ordering cost, the less attractive a discount schedule will be.
B.In inventory management, item cost becomes relevant to order quantity
decisions when a quantity discount is available.
C.The larger the annual demand, the less attractive a discount schedule will be.
D.If carrying costs are expressed as a percentage of value, EOQ is larger at each
lower price in the discount schedule.
, 4|Page
E.The cost-minimizing solution may or may not be where annual holding costs
equal annual ordering costs. - (answer)C. The larger the annual demand, the less
attractive a discount schedule will be
Which of the following should be higher in P systems than Q systems?
A.order spacing
B.safety stock
C.demand
D.lead time
E.order size - (answer)B. Safety stock
The objective of aggregate planning is to meet forecast demand while ________
over the planning period.
A.maximizing service level
B.minimizing fixed cost
C.minimizing stock out
D.minimizing cost
E.all of the above - (answer)D. Minimizing cost
Which of these aggregate planning strategies is a capacity option?
A. counter seasonal product mixing
B.promotion
C.back ordering
