Supply Chain Exam 1 Practice Questions And Answers

30 - ANS A company operates 365 days a year. Annual inventory turn is 12. How many days of supply does that represent? $1,120,000 - ANS Average inventory last year was $160,000 and turns were 7. What was cost of goods sold last year? 86 - ANS 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 $60,000 - ANS the inventory holding cost factor is 30% and the average inventory next year is expected to be $200,000. What is the expected inventory holding cost ? units sold in a year/average number of units in inventory - ANS Which of the following formulae calculate annual inventory turns? B.Locate stores close to a DC - ANS 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 E. All of the above C.How logistics and supply chain management can be used to create a competitive advantage - ANS Which of the following is a theme throughout the course? A. supply chain management and logistics are not the same and are not even similar. B. Logistics is just another term for transportation C.How logistics and supply chain management can be used to create a competitive advantage D. Supply chain management in the same thing as logistics, but just a new term Integration - ANS Supply chain management is the management of the ___ of business processes between functions a firm and with suppliers and customers All of these and more - ANS Logistics costs include which of the following? All of these and more - ANS Examples of business processes include which of the following? All of these - ANS Companies outsource for many reasons. Which of the following is typically a reason for outsourcing Economies of scale - ANS 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 $1,000for 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 oppressed 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 bottled = $0.08 per bottle (rounded up from $0.075 per bottle) This demonstrates which of the following concepts? All of these will benefits - ANS Which of the following benefits did Walmart achieve from their early network design strategy change logistics and supply chain management activities quickly - ANS Responsiveness in the 4 R's of supply chain competition is defined as being able to ... The expected number of units on hand just before a replenishment is received and available for use or sale - ANS Safety stock is ____ Product C - ANS Which of the following products would you expect to require the most safety stock? Product A: Standard Deviation of sales = 18 Standard deviation of lead time = 23 Product B: Standard Deviation of sales = 20 Standard deviation of lead time = 20 Product C: Standard Deviation of sales = 30 Standard deviation of lead time = 31 Product D: Standard Deviation of sales = 29 Standard deviation of lead time = 15 Standard deviation & coefficient of variation - ANS Which of the following are measures of reliability of a logistics process? The cost of ownership - ANS Is the idea that there are many other costs than just the acquisition cost that should be accounted for in a purchase. Transaction - ANS The ____ component of customer service includes common metrics of consumer service such as percentage of items in stock, percentage of time an item is in stock, fill rate, lead time, et cetera All of these - ANS A leveling of production costs between China, Mexico, and the United States means that U.S. firms will increasingly focus on ____ to be competitive The calculated percentage of items in stock is 70% (assuming perpetual inventory is accurate) - ANS If store perpetual inventory is greater than zero for 70 of the 100 SKUs in a category, then The calculated percentage of time in stock is 45% (assuming perpetual inventory is accurate) - ANS If store perpetual inventory is greater than zero for 45 days of the 100 days checked for a particular item in a category then, 40% - ANS Assume an item has a demand of 1 per day and a demand of 6 every 5th day. However, the item is out of stock every 5th day. What would be the item fill rate (IFR) Percentage of item in stock - ANS Perpetual inventory is one of the major ways that _____ and percentage of items in stock are measured All of these are options - ANS When a shopper in a retail store encounters an out-of-stock, there are a number of reactions that are possible. Which of the following are options discussed in this lesson? Expected value - ANS One approach to estimating the cost of a stockout per unit of lost sale is to calculate an estimate of the ____ $1.22 - ANS Imagine a customer is looking for a giant specialty candy bar in a store but it is not on the shelf. Suppose that the retail margin on the candy bar is $4.50 and that 27% of the customers forgo having the candy bar but the other 73% switch to another brand. Suppose that the margin the retailer makes on this brand is also $4.50 per unit. Then the cost of a stockout per unit of lost sale to the retailer is