1
OPMA 317 FINAL EXAM Questions with Answers
(100% Correct Answers)
During the SCM Exercise Graph Commonalities— Answer:
Fluctuations, amplification, and a time lag between the retailer to the
factory
Beer Game Average— Answer: Everyone averaged around the same
even though some came from different backgrounds yet the players
control the game, you can't blame customer demand
What caused people to act the way they did during the beer game?—
Answer: 1) Lack of communication/cooperation
- guessing of the customer demand-->arbitrary ordering
RESULT: BULLWHIP EFFECT
2) Long lead time: results in panic when inventory does not instantly
arrive and solve your growing backlog, you panic and order even
more
Bullwhip effect— Answer: information (orders) going back through
the supply chain is distorted and them amplified
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,2
What are the business implications of the supply chain structure?—
Answer: Stockouts at times -> loss of profit and potential lost goodwill
Excess inventory at times-> holding costs, risk of obsolence
Overtime costs-> increase in labour cost
Layoff/Rehiring costs->match staffing levels to fluctuating demand
Expediting-> rush transportation costs
How does the supply chain structure affect consumers?— Answer:
Leads to high costs throughout the supply chain, leading to a higher
end price for the consumer
How to improve the supply chain?— Answer: 1) Communication and
Cooperation
Determine actual consumer demand through technology
Forecasting (promotions, shutdowns, etc, share forecasts, schedules,
and decision making) (ex. Canadian Tire reduced lead time from 46
days to 15!)
2) Shorten Lead times (allows a faster response) - How?
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,3
Administration (ordering) lead time - Information Tech
Physical Manufacturing Lead time (just in time production systems)
Transportation lead time (have suppliers geographically close by)
How to encourage communication and cooperation?— Answer:
Incentives to share information (lower unit cost for actual data)
Vendor Managed Inventory
- lower admin costs for the retailer
- vendor sees actual consumer demand
What is on-shoring?— Answer: Ikea's furniture provider opened up
shop in the US which most people thought they were crazy to do so.
But the thing is it was very costly for IKEA to transport the furniture.
Having a plant in the US would reduce lead times, sourcing costs,
currency exposure, transportation concerns
What is next-shoring?— Answer: local production near demand "next
to"
Reduces logistics costs
© 2025 All rights reserved
, 4
- improves environmental performance
Reduces length of lead times
Reduces variability of lead times
Easier to identify local needs
Consumer perception: "jobs in home country"
--> It is a growing focus on countering traditional offshoring by
locating facilities closer to a company's home base
What if you cannot change the supply chain structure?— Answer: Try
to understand the structure and adapt to it and manage
Ex: "the aspirin rule" - 10 min after taking two aspirin, you likely still
have a headache- why don't you take 2 more right then? YOU ARE
AWARE OF THE LEAD TIME AND DONT PANIC
Adapting to the supply chain structure— Answer: Don't panic and
recognize delays
Systems thinking - before you do anything, analyze how it will impact
your supply chain
© 2025 All rights reserved
OPMA 317 FINAL EXAM Questions with Answers
(100% Correct Answers)
During the SCM Exercise Graph Commonalities— Answer:
Fluctuations, amplification, and a time lag between the retailer to the
factory
Beer Game Average— Answer: Everyone averaged around the same
even though some came from different backgrounds yet the players
control the game, you can't blame customer demand
What caused people to act the way they did during the beer game?—
Answer: 1) Lack of communication/cooperation
- guessing of the customer demand-->arbitrary ordering
RESULT: BULLWHIP EFFECT
2) Long lead time: results in panic when inventory does not instantly
arrive and solve your growing backlog, you panic and order even
more
Bullwhip effect— Answer: information (orders) going back through
the supply chain is distorted and them amplified
© 2025 All rights reserved
,2
What are the business implications of the supply chain structure?—
Answer: Stockouts at times -> loss of profit and potential lost goodwill
Excess inventory at times-> holding costs, risk of obsolence
Overtime costs-> increase in labour cost
Layoff/Rehiring costs->match staffing levels to fluctuating demand
Expediting-> rush transportation costs
How does the supply chain structure affect consumers?— Answer:
Leads to high costs throughout the supply chain, leading to a higher
end price for the consumer
How to improve the supply chain?— Answer: 1) Communication and
Cooperation
Determine actual consumer demand through technology
Forecasting (promotions, shutdowns, etc, share forecasts, schedules,
and decision making) (ex. Canadian Tire reduced lead time from 46
days to 15!)
2) Shorten Lead times (allows a faster response) - How?
© 2025 All rights reserved
,3
Administration (ordering) lead time - Information Tech
Physical Manufacturing Lead time (just in time production systems)
Transportation lead time (have suppliers geographically close by)
How to encourage communication and cooperation?— Answer:
Incentives to share information (lower unit cost for actual data)
Vendor Managed Inventory
- lower admin costs for the retailer
- vendor sees actual consumer demand
What is on-shoring?— Answer: Ikea's furniture provider opened up
shop in the US which most people thought they were crazy to do so.
But the thing is it was very costly for IKEA to transport the furniture.
Having a plant in the US would reduce lead times, sourcing costs,
currency exposure, transportation concerns
What is next-shoring?— Answer: local production near demand "next
to"
Reduces logistics costs
© 2025 All rights reserved
, 4
- improves environmental performance
Reduces length of lead times
Reduces variability of lead times
Easier to identify local needs
Consumer perception: "jobs in home country"
--> It is a growing focus on countering traditional offshoring by
locating facilities closer to a company's home base
What if you cannot change the supply chain structure?— Answer: Try
to understand the structure and adapt to it and manage
Ex: "the aspirin rule" - 10 min after taking two aspirin, you likely still
have a headache- why don't you take 2 more right then? YOU ARE
AWARE OF THE LEAD TIME AND DONT PANIC
Adapting to the supply chain structure— Answer: Don't panic and
recognize delays
Systems thinking - before you do anything, analyze how it will impact
your supply chain
© 2025 All rights reserved
