OTM 300 Exam 2 QUESTIONS WITH CORRECT ANSWERS

OTM 300 Exam 2 QUESTIONS WITH
CORRECT ANSWERS


Stochastic - CORRECT ANSWERS ✔✔Unpredictable variation in demand
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You need to have safety stock inventory as a result to not lose out on stockouts
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often
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Days-of-supply - CORRECT ANSWERS ✔✔Average amount of time it takes a\/| \/| \/| \/| \/| \/| \/| \/| \/| \/|




unit to flow thru the system (flow time)
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Amount of time it takes inventory to flow thru a process
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Inventory turns - CORRECT ANSWERS ✔✔the number of times the average
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inventory flows through a process in a designated interval of time
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R/I


Flow rate /Average Inventory
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TUrnovers vary by industry, food has very high rates
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,Holding cost percentage - CORRECT ANSWERS ✔✔the ratio of the cost to hold
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an item in inventory during a designated time period relative to the cost to
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purchase the item
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cost to hold/cost of inventory
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Inventory holding costs as a % of COGS - CORRECT ANSWERS ✔✔Annual
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holding cost percentage/Annual Turns
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Supply Chain Tiers - CORRECT ANSWERS ✔✔Tier II supplier Design and
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manufacturing of specialized components
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Tier I supplier Design and assembly of component systems
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Original equipment manufacturer (OEM): Design and assembly of final
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products
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Boeing—aircraft


Distributor: Inventory storage, break-bulk, transportation \/| \/| \/| \/| \/|




Sysco—food


Retailer: Product assortment, consumer support and services
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Breaking Bulk - CORRECT ANSWERS ✔✔Distributors can purchase in large
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quantities from manufacturers but then allow their customers to purchase in
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smaller quantities
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,Distributors minimize the amount of space needed for inventory, LOWER\/| \/| \/| \/| \/| \/| \/| \/| \/|




INVENTORY
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INCREASES TRANSPORTATION COSTS/DISTANCE/FREQUENCY \/| \/|




extra handling of products
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Transportation - CORRECT ANSWERS ✔✔Ocean is slowest, cheapest \/| \/| \/| \/| \/| \/| \/|




Rail is lowish cost, inflexible/slow
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Truck is fastish, expensive over land
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Air is most expensive, fastest
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in-stock probability - CORRECT ANSWERS ✔✔the probability that all demand
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was able to purchase a unit
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Fill rate - CORRECT ANSWERS ✔✔fraction of demand satisfied
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need to know demand amount, which is difficult to discern
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, Functional products - CORRECT ANSWERS ✔✔Products that have predictable
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demand so primary focus is on minimizing physical costs. Qualities include:
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-Efficient Supply Chain \/| \/|




-Long life cycle \/| \/|




-Low margins \/|




-Low variety \/| \/|




-Low forecast error and stockout rate
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-Long lead times \/| \/|




Innovative products - CORRECT ANSWERS ✔✔characterized by short product
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life cycles, volatile demand, high profit margins, and relatively less
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competition
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very high margins, risky, later fire sales to cope with excess inventory
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Physically efficient - CORRECT ANSWERS ✔✔- high utilization
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- less focused on lead times
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- less focus on flexible product designs
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- more focus on low-cost suppliers
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low inventory
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Market-responsive - CORRECT ANSWERS ✔✔- low utilization \/| \/| \/| \/| \/| \/|




- more focused on lead times
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