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WorksheetsSCMT 1-3
Total questions: 85
Worksheet time: 43mins
The objective of Walmart's early network design strategy was to:
Place stores in "high potential" markets
Locate stores close to a Distribution Center
Locate stores close to Bentonville
Use supply chain savings to drive temporary price reductions
All of the above
Which of the following is a theme throughout the course?
Supply chain management and logistics are not the same and are not even similar
Supply chain management is the same thing as logistics, but just a new term
How logistics and supply chain management can be used to create a competitive advantage
Logistics is just another term for transportation
Supply chain management is the management of the _______ of business processes between functions in a firm and with suppliers and customers.
Avoidance
Integration
Instrumentation
Institutionalization
Logistics is the management of the flow and storage of inventory such that total cost is minimized and ____________ are achieved.
Revenue Goals
Shipment goals
Competitive interactions
Customer service targets
Process improvement is concerned with increasing the speed of the process, reducing the cost of the process, or increasing the reliability of the process, without changing ____________.
the metrics used to measure the activity
the controls of the activity
the order of the activities
All of these
The term ____________________ today refers to a firm that supplies logistics and possibly other supply chain management services.
just-in-time (JIT)
supply base rationalization
third-party logistics (3PL) providers
outsourcing
Economies of scale is defined as a reduction in ________ when volumes are increased.
total cost
average market price per unit
average margin per unit
average cost per unit
Which of the following benefits did Walmart achieve from their early network design strategy?
Reduction in safety stock at the stores
Lower cost per store for the DCs to serve the stores
Reduction in in-transit stock to the stores
Reduction in transportation costs from the DCs to the stores
All of these were benefits
The management of the flow and storage of inventory, such that total costs are minimized and customer service targets are achieved is referred to as:
Supply Chain
Transportation
Logistics
None of these
Which of the following is a fundamental concept of logistics management?
Service levels and inventory investment are unrelated.
Tradeoffs should be ignored and the focus should be on "low hanging fruit".
If you manage transportation well, all of the other logistics costs are minimized.
There are tradeoffs among many of the logistics costs and customer service targets.
A process is an ordered set of _____.
Activities
Tasks
Silos
Functions
Companies outsource for many reasons. Which of the following is typically a reason for outsourcing?
Performance improvement
Cost reduction
Asset reduction
Risk mitigation
All of these
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 up from $0.075 per bottle). This demonstrates which of the following concepts?
The logistics concept
Economies of scale
The supply chain management concept
Economies of scope
Relationship in the 4 R's of supply chain competition is defined as being able to
deliver products to customers that are demanding them
change logistics and supply chain management activities quickly
consistently execute an activity or process at a target level of performance
manage the connections, the interactions, and communication, and maintain trust
Safety stock is _______________.
the coefficient of variation of the number of units on hand just before a replenishment is received and available for use or sale
the expected number of units on hand just before a replenishment is received and available for use or sale
the standard deviation of the number of units on hand just before a replenishment is received and available for use or sale
none of these
Which of the following products would you expect to require the most safety stock?
Product A: Standard Deviation of Sales = 25, Standard Deviation of Lead Time = 19
Product B: Standard Deviation of Sales = 29, Standard Deviation of Lead Time = 25
Product C: Standard Deviation of Sales = 15, Standard Deviation of Lead Time = 20
Product D: Standard Deviation of Sales = 25, Standard Deviation of Lead Time = 20
A
B
C
D
Which of the following are measures of reliability of a logistics process?
Coefficient of variation
Standard deviation
Median
Standard deviation & Coefficient of variation
Mean
Reliability in the 4 R's of supply chain competition is defined as being able to _________________.
consistently execute an activity or process at a target level of performance
address problems consistently in the same way every time
deal with unexpected disruptions in the supply chain
none of these
Which of the following products would you expect to require the most safety stock?
Product A: Standard Deviation of Sales = 30, Standard Deviation of Lead Time = 30
Product B: Standard Deviation of Sales = 25, Standard Deviation of Lead Time = 15
Product C: Standard Deviation of Sales = 20, Standard Deviation of Lead Time = 20
Product D: Standard Deviation of Sales = 20, Standard Deviation of Lead Time = 25
A
B
C
D
Which of the following products would you expect to require the most safety stock?
Product A: Standard Deviation of Sales = 10, Standard Deviation of Lead Time = 10
Product B: Standard Deviation of Sales = 20, Standard Deviation of Lead Time = 10
Product C: Standard Deviation of Sales = 10, Standard Deviation of Lead Time = 20
Product D: Standard Deviation of Sales = 20, Standard Deviation of Lead Time = 20
A
B
C
D
Ron's Sports operates 365 days a year. Annual inventory turns of basketballs is 10. How many days of supply does that represent?
370
10
100
52
37
Average inventory last year was $100,000 and turns were 10. What was cost of goods sold last year?
$1,000,000
$10,000
$10,000,000
$1,000,000
None of these
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?
86
2000
96
20,000
The inventory holding cost factor is 10% and the average inventory next year is expected to be $1.5 billion. What is the expected inventory holding cost?
Not enough information to determine
$150,000,000
$150,000,000,000
$15 billion
Which of the following formulae calculate annual inventory turns?
Units sold in a year / cost of goods sold
None of these
Cost of goods sold * value of inventory
Units sold in a year / average number of units in inventory
Justin's Plumbing Supply operates 365 days a year. Annual inventory turns of faucets is 9. How many days of supply does that represent?
41
52
90
46
37
A distribution center has 50,000 cases of ketchup and the forecast is 1,000 cases per day. What is the estimate of the days of supply?
5
50
100
10
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?
$7,400
$4,625,000
Not enough information to determine
$46,250
$740,000
Average inventory last year was $170,000 and turns were 9. What was cost of goods sold last year?
$11,200,000
$1,120,000
$1,530,000
$18,889
Resilience in the 4 R's of supply chain competition is defined as being able to _________________.
address problems consistently in the same way every time
None of these
deal with unexpected disruptions in the supply chain
deal with unexpected disruptions in the supply chain
Responsiveness in the 4 R's of supply chain competition is defined as being able to _________________.
acknowledge problems quickly
none of these
deliver products to customers that are demanding it
change logistics and supply chain management activities quickly
Which of the following are common elements of the total cost of ownership model:
Acquisition cost
Transportation cost
Operation cost
None of these is part of the TCO model
All of these are part of the TCO model
The ___________ component of customer service includes such factors as availability of spare parts, technical support, feedback and complaint processes, et cetera.
transaction
pre-transaction
mid-transaction
post-transaction
A leveling of production costs between China, Mexico, and the United States means that U.S. firms will increasingly focus on _____________ to be competitive.
agility
responsiveness
flexibility
none of these
all of these
_____________ is the idea that there are many other costs than just the acquisition cost that should be accounted for in a purchase.
Landed cost of logistics
Sum of irrelevant costs
Total cost of ownership
Supply chain optimal cost
The ___________ component of customer service includes common metrics of customer service such as percentage of items in stock, percentage of time an item is in stock, fill rate, lead time, et cetera.
mid-transaction
transaction
post-transaction
pre-transaction
Perpetual inventory is:
Initial inventory + Amount received - amount on shelf
Initial inventory + Amount purchased + amount on shelf
Initial inventory + Amount received - amount sold
Initial inventory + Amount received + amount sold
If store perpetual inventory is greater than zero for 70 of the 100 SKUs in a category, then
the calculated percentage of items in stock is 70% (assuming perpetual inventory is accurate)
the calculated item fill rate is 30% (assuming perpetual inventory is accurate)
the calculated percentage of items in stock is 30% (assuming perpetual inventory is accurate)
the calculated percentage of time in stock is 30% (assuming perpetual inventory is accurate)
the calculated item fill rate is 70% (assuming perpetual inventory is accurate)
If store perpetual inventory is greater than zero for 55 days of the 100 days checked for a particular item in a category, then
the calculated item fill rate is 55% (assuming perpetual inventory is accurate)
the calculated item fill rate is 45% (assuming perpetual inventory is accurate)
the calculated percentage of time in stock is 55% (assuming perpetual inventory is accurate)
the calculated percentage of items is 45% (assuming perpetual inventory is accurate)
Assume an item has a demand of 1 per day and a demand of 3 every 7th day. However, the item is out of stock every 7th day. What would be the item fill rate (IFR).
34
67
40
71
The amount received by a firm is 100 units and it sold 25 units. Assuming initial inventory is zero, what is the perpetual inventory?
4 units
25 units
75 units
125 units
______________ is when a retailer thinks there is more inventory than there actually is.
Inaccurate inventory
Phantom inventory
Item fill rate
Estimated inventory
If store perpetual inventory is greater than zero for 40 of the 100 SKUs in a category, then
the calculated item fill rate is 60% (assuming perpetual inventory is accurate)
the calculated percentage of items in stock is 40% (assuming perpetual inventory is accurate)
the calculated item fill rate is 60% (assuming perpetual inventory is accurate)
the calculated item fill rate is 40% (assuming perpetual inventory is accurate)
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).
60
40
50
25
The amount received by a firm is 240 units and it sold 75 units. Assuming initial inventory is zero, what is the perpetual inventory?
3 units
40 units
165 units
315 units
Which of the following is true of the item fill rate?
Item fill rate (IFR) is the percentage of demand fulfilled from on-hand inventory.
Two different SKUs can have the same IFRs and yet have different PTIS.
The item fill rate is the number of units of demand fulfilled from inventory divided by the total amount of demand.
Two different SKUs can have the same PTIS and yet have different IFRs.
All of these are true
If store perpetual inventory is greater than zero for 70 days of the 100 days checked for a particular item in a category, then
the calculated percentage of time in stock is 30% (assuming perpetual inventory is accurate)
the calculated item fill rate is 30% (assuming perpetual inventory is accurate)
the calculated item fill rate is 70% (assuming perpetual inventory is accurate)
the calculated item fill rate is 70% (assuming perpetual inventory is accurate)
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?
Switch to another category but same product type
Switch to another brand
Switch to another size, flavor, or type, within the same brand
None of these are options
All of these are options
One approach to estimating the cost of a stockout per unit of lost sale is to calculate an estimate of the ____________.
net present value
internal rate of return
probability
None of these
expected value
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 ____.
3
4.50
3.28
1.22
Retail shelf is very expensive because ___________:
the land is expensive
it takes lots of time to put products on the shelf.
the opportunity cost of alternate products
the shelf is expensive
Imagine you are a small format grocer and that on average you sell 30 squash per day. Some days you sell more and some days you sell less, but on average you sell 30. In fact, you have been doing this for a while and have calculated the probability of selling different quantities of squash, reproduced in the table of discrete probabilities below
Quantity Sold Probability
20 0.10
25 0.20
30 0.40
35 0.20
40 0.10
You have decided to stock fewer squash and instead stock more tomatoes. You decided to stock 35 squash each day. About how many sales of squash do you expect to lose each day as a result of this decision to stock more tomatoes?
.60
.40
2.00
.50
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 and that 35% of the customers forgo having the candy bar but the other 65% switch to another brand. Suppose that the margin the retailer makes on this brand is also $4 per unit. Then the cost of a stockout per unit of lost sale to the retailer is ____.
2.60
1.40
1.25
.35
Imagine you are a small format grocer and that on average you sell 50 pears per day. Some days you sell more and some days you sell less, but on average you sell 50. In fact, you have been doing this for a while and have calculated the probability of selling different quantities of pears, reproduced in the table of discrete probabilities below.
Quantity Sold Probability
38 0.10
44 0.20
50 0.40
56 0.20
62 0.10
You have decided to stock fewer pears and instead stock more apples. You decided to stock 56 pears each day. About how many sales of pears do you expect to lose each day as a result of this decision to stock more apples?
1.60
1.40
2.40
.60
Imagine you are a small format grocer and that on average you sell 30 carrots per day. Some days you sell more and some days you sell less, but on average you sell 30. In fact, you have been doing this for a while and have calculated the probability of selling different quantities of carrots, reproduced in the table of discrete probabilities below.
Quantity Sold Probability
24 0.10
27 0.20
30 0.40
33 0.20
36 0.10
You have decided to stock fewer carrots and instead stock more cucumbers. You decided to stock 33 carrots each day. About how many sales of carrots do you expect to lose each day as a result of this decision to stock more cucumbers?
1.20
.80
.30
1.80
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 $2 and that 25% of the customers forgo having the candy bar but the other 75% switch to another brand. Suppose that the margin the retailer makes on this brand is also $2 per unit. Then the cost of a stockout per unit of lost sale to the retailer is ____.
1.00
1.25
.50
.25
Imagine you are a small format grocer and that on average you sell 60 onions per day. Some days you sell more and some days you sell less, but on average you sell 60. In fact, you have been doing this for a while and have calculated the probability of selling different quantities of onions, reproduced in the table of discrete probabilities below.
Quantity Sold Probability
46 0.10
53 0.20
60 0.40
67 0.20
74 0.10
You have decided to stock fewer onions and instead stock more potatoes. You decided to stock 60 onions each day. About how many sales of onions do you expect to lose each day as a result of this decision to stock more potatoes?
1.20
1.60
2.80
1.40
You only need two parameters to define a normal distribution; the mean and_____________
mode
the standard deviation
the average
none of these
For the normal distribution, about 68% of the observations are within +/- 1 standard deviation of the mean, _______ within +/- 2 standard deviations, and about 99% within +/- 3 standard deviations.
85%
84%
83%
86%
None of these
You want to compute an optimal service level for stocking inventory. The correct formula is:
The cost of not having enough per unit, divided by the sum of the cost of having too much and the cost of not having enough.
The cost of having too much, divided by the sum of the cost of having too much and the cost of not having enough.
Either of these will do.
Neither of these are correct.
A store manager says: "I shoot for a 95% service level." What the manager means is that:
She wants 95% of customers to have a pleasant experience in the store.
She wants 95% of customers to have a pleasant experience in the store.
All of these are correct.
When the customer wants a product, she wants it to be there at least 95% of the time.
None of these are correct.
Victoria's Bakery bakes bagels for 250 local supermarkets and sells them through the supermarkets on a consignment basis, which means she only gets paid for the bagels that sell. She destroys bagels that don't sell. People in this city love her bagels. The total delivered cost of bagels is $ 1.25 per unit and she sells it to retailers for $8.00. Given this information, calculate the optimal service level.
87%
80%
82%
84%
Sarah's Bakery bakes donuts for 30 local supermarkets and sells them through the supermarkets on a consignment basis, which means she only gets paid for the donuts that sell. She destroys donuts that don't sell. People in this city love her donuts. She estimates a daily demand of 2,000 donuts with a standard deviation of 200 donuts. Suppose she wants to achieve a service level of 96%. How many donuts should she produce?
2350
2550
2750
2150
Michael's Bakery bakes brownies for 70 local supermarkets and sells them through the supermarkets on a consignment basis, which means he only gets paid for the brownies that sell. He destroys brownies that don't sell. People in this city love his brownies He estimates a daily demand of 6,000 brownies with a standard deviation of 600 brownies. Suppose he produces 6,505 brownies. Using the Excel formula NORMDIST (level of production, mean, standard deviation, 1), calculate the expected service level or percentage time in stock.
80%
85%
77%
75%
Victoria's Bakery bakes bagels for 250 local supermarkets and sells them through the supermarkets on a consignment basis, which means she only gets paid for the bagels that sell. She destroys bagels that don't sell. People in this city love her bagels. She estimates a daily demand of 24,000 bagels with a standard deviation of 1,700 bagels. Suppose she wants to achieve a service level of 94%. How many bagels should she produce?
26,443
26,843
27,043
26,643
John's Bakery bakes cakes for 50 local supermarkets and sells them through the supermarkets on a consignment basis, which means he only gets paid for the cakes that sell. He destroys cakes that don't sell. People in this city love his cakes He estimates a daily demand of 4,000 cakes with a standard deviation of 400 cakes. Suppose he produces 4,752 cakes.
94
92
102
97
Jose's Bakery bakes cake donuts for 130 local supermarkets and sells them through the supermarkets on a consignment basis, which means he only gets paid for the cake donuts that sell. He destroys cake donuts that don't sell. People in this city love his cake donuts. The total delivered cost of cake donuts is $ 0.65 per unit and he sells it to retailers for $6.00. Given this information, calculate the optimal service level.
89
85
92
87
Brian's Bakery bakes cinnamon rolls for 220 local supermarkets and sells them through the supermarkets on a consignment basis, which means he only gets paid for the cinnamon rolls that sell. He destroys cinnamon rolls that don't sell. People in this city love his cinnamon rolls. He estimates a daily demand of 21,000 cinnamon rolls with a standard deviation of 1,400 cinnamon rolls. Suppose he wants to achieve a service level of 95%. How many cinnamon rolls should he produce?
23,503
23,103
23,303
23,703
Victoria's Bakery bakes bagels for 250 local supermarkets and sells them through the supermarkets on a consignment basis, which means she only gets paid for the bagels that sell. She destroys bagels that don't sell. People in this city love her bagels She estimates a daily demand of 24,000 bagels with a standard deviation of 1,700 bagels. Suppose she produces 26,643 bagels.
89
91
94
99
Profit divided by assets is
GMROI
Fill rate
ROA
Inventory Turns
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?
Fewer stockouts
Fewer lost sales
Increase in sales of impulse items with inventory dependent demand
All of these
Fill rate is the % of __________ from on hand inventory.
stock outs
losses
demand fulfilled
Profit
One of the direct effects of an increase in transportation cost is to reduce _____.
GMROI
ROA
Fill Rate
Stock outs
One of the effects of adding distribution centers is reducing store lead time and inventory. If store inventory is reduced, the ROA will _______.
Increase
Not change
decrease
GMROI _________________________
none of these
includes gross margin in the calculation
measures the performance of inventory
is the Gross Margin Return on Inventory Investment
all of these
ROA will increase if we generate ________ profit with _____ assets.
more; fewer
less, more
less; fewer
more; more
An increase in transportation costs can have a secondary effect on ROA that actually increases ROA. This can happen if the additional spending on transportation ___________.
results in a shorter lead time that increases profit by enough to offset the increase in transportation costs
results in a shorter lead time that decreases inventory costs by enough to offset the reduction in profit as a result of more expensive transportation.
both of these
neither of these
As the number of distribution centers increases, inbound transportation costs ________ but outbound transportation costs ________.
increase; increase
decrease; decrease
increase; decrease
decrease; increase
When we generate more profit with fewer assets, ROA will be
Equal
About the same
Down
Up
The direct effect of a (an) __________ in the number of distribution centers is to increase assets which ___________ ROA.
increase; increases
increase; reduces
reduction; increases
reduction; decreases
The direct effect of an increase in inventory is reduction in __________.
profit
roa
Stockout
fill rate
One of the direct effects of investing in third party logistics provider is a reduction of _________ costs and an increase in ___________ costs.
variable; total landed
variable; fixed
fixed; variable
total landed; fixed
Inventory is a component of __________ on the balance sheet.
Assets
Profit
Loss
Stock outs
By spending more money on transportation, one can most likely
I: Increase the lead time
II: Decrease the lead time
III: Increase the variability of lead time
IV: Decrease the variability of lead time.
I only
II only
I & III
II & IV
The direct effect of an increase in the number of distribution centers is to ______ assets which reduces ROA.
stabilize
increase
minimize
decrease
