Question 1: The weeks of supply measure will improve if the weekly sales decrease.

True

False

Question 2: Henderson Corporation is a supplier of alloy ball bearings to auto manufacturers in Detroit. Because of the specialized manufacturing process employed, considerable work-in-process and raw material inventories are created. The average inventory levels are $1,152,000 and $2,725,000, respectively. In addition, finished goods inventory is $3,225,000, and sales (at cost) for the current year are expected to be about $24 million. The inventory turnover that Henderson Corporation is currently expecting is:

less than 2.0.

greater than 2.0 but less than 2.5.

greater than 2.5 but less than 3.0.

greater than 3.0.

Question 3: Maple Leaf, Inc., a television manufacturer, would like to reduce its inventory. To this end, you are asked by the operations manager to assess its inventory level. You have the following information on average inventories from last year's financial statement:

Raw material - $2,500,000

Work-in-process - $1,000,000

Finished goods - $800,000

In addition, the cost of goods sold last year was $15 million. What was the inventory turnover?

less than or equal to two

greater than two but less than three

greater than three but less than four

greater than four

Question 4: Some discount stores are able to sell items before they have to pay their suppliers, resulting in a negative:

net profit.

return on assets.

number of inventory turns.

cash-to-cash measure.

Question 5: One disadvantage of centralized placement is increased shipping costs from the distribution center to the customer.

True

False

Question 6: The purpose of supply chain design is to shape a firm's supply chain to meet the competitive priorities of its operations strategies.

True

False

Question 7: Supply chain management tries to match the flow of materials, services and information with demand.

True

False

Question 8: The best inventory level, when expressed as a turnover, is 52 per year.

True

False

Question 9: Responsive supply chains work best when firms offer a low variety of services or products and demand predictability is high.

True

False

Question 10: Padco averages $15 million worth of inventory in all of its worldwide locations. They operate 51 weeks a year and each week average $3 million in sales (at cost). Their inventory turnover is:

1.13 turns.

5 turns.

10.2 turns.

17 turns.

Question 11: Which one of the following is TRUE for supply chain management?

Supply chain applies to both manufacturing and service organizations.

Supply chain applies only to manufacturing because it deals with flow of materials.

Supply chain is about suppliers and does not include distributors or customers.

Supply chain includes any operation that deals with materials.

Question 12: Supply chain design for a service provider is driven primarily by the need to control the materials it consumes as it delivers its various services.

True

False

Question 13: The finished goods of one firm may actually be the raw materials for another firm.

True

False

Question 14: Efficient supply chains use low capacity cushions.

True

False

Question 15: Forward placement is a reduction in inventory and safety stock because of the merging of variable demands from customers.

True

False

Question 16: The bullwhip effect says that in any supply chain, the ordering patterns experience increasing variance as you move closer to the end customer.

True

False

Question 17: One source of disruption caused by the internal supply chain is:

forecast error.

underfilled shipments.

volume changes.

late deliveries.

Question 18: Possible causes of disruption due to internal supply chain problems are:

late deliveries.

machine breakdowns or inexperienced workers.

product and service mix changes.

underfilled shipments.

Question 19: One source of disruption caused by the external supply chain is:

product or sales promotions.

new product or service introduction.

late deliveries.

engineering changes.

Question 20: The bullwhip effect is characterized by:

ordering patterns that experience increasing variance as you proceed downstream in the chain.

ordering patterns that experience increasing variance as you proceed upstream in the chain.

purchasing patterns that experience increasing variance downstream in the chain.

purchasing patterns that experience decreasing variance as you proceed upstream in the chain.

Question 21: Why is it often more difficult to achieve merger related synergistic benefits within supply chain functions as opposed to other functions (accounting/finance/HR etc.)?