Supply Chain Management Final Exam, Ch. 1-12 Exam Questions And Answers

The objective of Walmart's early network design strategy was to: a. Place stores in "high potential" markets b. Locate stores close to a Distribution Center c. Locate stores close to Bentonville d. Use supply chain savings to drive temporary price reductions - b. Locate stores close to a DC Which of the following is a theme throughout the course? a. Supply chain management is the same thing as logistics, just a newer term b. Logistics is just another term for transportation c. How logistics and supply chain management can be used to create a competitive advantage - Supply chain management and logistics are not the same or even similar - c. How logistics and SCM can be used to create a competitive advantage Supply chain management is the management of the __________ of business processes between functions in a firm and with suppliers and customers. a. Instrumentation b. Avoidance c. Institutionalization d. Integration - d. Integration Logistics costs include which of the following? a. Inventory holding costs b. Transportation costs c. Warehousing costs d. Material handling costs e. All of these and more - e. All of these and more Process improvement is concerned with increasing the speed of the process, reducing cost of the process, or increasing the reliability of the process, without changing _________________. a. The timing of the activities b. The order of the activities c. The cost of the activities d. None of these - b. The order of the activities The term _________ today refers to a firm that supplies logistics and possibly other supply chain management services. a. Outsourcing b. Just-in-time (JIT) c. Supply base rationalization d. Third-party logistics (3PL) providers - d. Third-party logistics (3PL) providers Suppose a company orders 10 pallets of bottled water, 14 oz. per bottle, and $0.05 per bottle. There are 2,000 bottles per pallet. Suppose they use a truckload carrier and it costs a flat rate of $1,000 for the transportation. So the purchase cost is $0.05 per bottle X 2,000 bottles per pallet X 10 pallets = $1,000. So the purchase cost plus the transportation cost is $2,000, hence, the total cost per bottle is $2,000 / 20,000 bottles = $0.10 per bottle. In this example, the company only ordered 10 pallets but a truck load has a capacity of about 20 pallets of bottled water. Instead, suppose they ordered 20 pallets of bottled water, the transportation cost will be the same but the purchase cost will now be $0.05 per bottle X 2,000 bottles per pallet X 20 pallets = $2,000. Hence the purchase cost plus the transportation cost is $3,000, so the total cost per bottle is $3,000 / 40,000 bottles ≈ $0.08 per bottle (rounded - a. Economies of scale Which of the following benefits did Walmart achieve from their early network design strategy? a. Reduction in safety stock at the stores b. Reduction in in-transit stock to the stores c. Lower cost per store for the DC's to serve the store d. Reduction in transportation costs from the DC to the store e. All of these were benefits - e. All of these were benefits Responsiveness in the 4 R's of supply chain competition is defined as being able to _________________. a. Acknowledge problems quickly b. Change logistics and supply chain management activities c. Deliver products to customers that are demanding it d. None of these - b. Change logistics and supply chain management activities Safety stock is _____________. a. The expected number of units on hand just before a replenishment is received and available for use or sale b. The standard deviation of the number of units on hand just before a replenishment is received and available for use c. The coefficient of variation of the number of units on hand just before a replenishment is received and available for use or sale d. None of these - a. The expected number of units on hand just before a replenishment is received and available for use or sale Which of the following products would you expect to require the most safety stock? a. Product A: Standard Deviation of Sales = 18, Standard Deviation of Lead Time = 23 b. Product B: SD of Sales = 20, SD of Lead Time = 20 c. Product C: SD of Sales = 30, SD of Lead Time = 31 d. Product D: SD of Sales = 29, SD of Lead Time = 15 e. Product B or D - c. Product C Which of the following are measures of reliability of a logistics process? a. Mean b. Standard deviation c. Coefficient of variation d. Standard deviation & Coefficient of variation e. Median - d. Standard deviation & Coefficient of variation Justin's Plumbing Supply operates 365 days a year. Annual inventory turns of faucets is 9. How many days of supply does that represent? a. 41 b. 37 c. 52 d. 46 e. 90 - a. 41 (365 / 9 = 40.56 = 41) Average inventory last year was $200,000 and turns were 6. What was the cost of goods sold last year? a. $1,200,000 b. $1,120,000 c. $11,200,000 d. $33,333 - a. $1,200,000 (200,000 x 6 = 1,200,000) A distribution center has 120,000 pounds of rock salt and the forecast is 1,400 pounds of rock salt per day. What is the estimate of the days of supply? a. 2,000 b. 86 c. 20,000 d. 96 - b. 86 (120,000 / 1,400 = 85.7 = 86) The inventory holding cost factor is 25% and the average inventory next year is expected to be $185,000. What is the expected inventory holding cost? a. $4,625,000 b. $740,000 c. $46,250 d. $7,400 e. Not enough information to determine - c. $46,250 (185,000 x 25% (0.25) = 46,250) Which of the following formulas calculate annual inventory turns? a. Units sold in a year / Average number of units in inventory b. Cost of goods sold x Value of inventory c. Units sold in a year / COGS d. None of these - a. Units sold in a year / Average number of units in inventory ROA (return on assets) is profit divided by __________. a. Revenue b. Other revenue c. Net worth d. Assets e. Liabilities - d. Assets The secondary effect of an increase in inventory may be an increase in ROA if the increase in inventory causes an increase in sales and profit. The increase in the sales and profit could be a result of which of the following? a. Fewer stock outs b. Fewer lost sales