Archive for March 2018

Promoting during a peak demand month may decrease overall profitability if

Promoting during a peak demand month may decrease overall profitability if




A) a small fraction of the demand increase results from a forward buy.
B) any of the demand increase results from a forward buy.
C) a significant fraction of the demand increase results from a forward buy.
D) none of the above
E) all of the above




Answer: C

Average inventory

Average inventory



A) increases if a promotion is run during the peak period.
B) increases if a promotion is run during the off-peak period.
C) decreases if a promotion is run during the peak period.
D) decreases if a promotion is run during the off-peak period.
E) both A and D




Answer: B

Offering a promotion during a peak period that has significant forward buying

Offering a promotion during a peak period that has significant forward buying 



A) creates a desirable demand pattern.
B) creates a demand pattern less costly to serve.
C) creates a demand pattern even more costly to serve.
D) shifts demand from the peak period to the slow period.
E) shifts demand to a more desirable period.




Answer: C

One key to successful collaboration when the supply chain is performing aggregate planning is

One key to successful collaboration when the supply chain is performing aggregate planning is




A) determining how losses will be allocated to different members of the supply chain.
B) determining how profits will be allocated to different members of the supply chain.
C) determining how labor will be allocated to different members of the supply chain.
D) determining how customers will be allocated to different members of the supply chain.
E) none of the above



Answer: B

When planning, the goal of all firms in the supply chain should be to maximize supply chain profits because

When planning, the goal of all firms in the supply chain should be to maximize supply chain profits because




A) this leaves them less profit to divide among themselves.
B) this leaves them more profit to divide among themselves.
C) this outcome leaves them more profit to pay tax on.
D) this outcome will increase their charitable giving.
E) none of the above




Answer: B

Pricing decisions based only on revenue considerations often result in

Pricing decisions based only on revenue considerations often result in





A) a decrease in overall profitability.
B) an increase in overall profitability.
C) a decrease in overall revenue.
D) a decrease in supply chain revenue.
E) an increase in supply chain profitability.




Answer: A

The pricing and promotion decisions are often made by

The pricing and promotion decisions are often made by 



A) marketing and sales.
B) marketing and operations.
C) operations and sales.
D) marketing, operations, and sales.
E) marketing and operations without sales.



Answer: A

Supply chains can influence demand by using

Supply chains can influence demand by using



A) production capacity and inventory.
B) pricing and other promotions.
C) price promotions and inventory.
D) production capacity and inventory promotions.
E) production capacity and other promotions.



Answer: B

When most of the products a firm produces have the same peak demand season, in order to meet predictable variability with inventory, it must

When most of the products a firm produces have the same peak demand season, in order to meet predictable variability with inventory, it must



A) use common components across multiple products.
B) use a seasonal workforce.
C) build inventory of high demand or predictable demand products.
D) use subcontracting.
E) use dual facilities-dedicated and flexible.




Answer: C

Which approach to capacity management would only be effective if the overall demand across all the products is relatively constant?

Which approach to capacity management would only be effective if the overall demand across all the products is relatively constant?




A) Time flexibility from workforce
B) Use of seasonal workforce
C) Use of subcontracting
D) Use of dual facilities-dedicated and flexible
E) Designing product flexibility into the production processes



Answer: E

Which approach to capacity management would use production machinery that can be changed easily from producing one product to another?

Which approach to capacity management would use production machinery that can be changed easily from producing one product to another?




A) Time flexibility from workforce
B) Use of seasonal workforce
C) Use of subcontracting
D) Use of dual facilities-dedicated and flexible
E) Designing product flexibility into the production processes




Answer: E

Which approach to capacity management would require that the workforce be multi-skilled and easily adapt to being moved from line to line?

Which approach to capacity management would require that the workforce be multi-skilled and easily adapt to being moved from line to line?



A) Time flexibility from workforce
B) Use of seasonal workforce
C) Use of subcontracting
D) Use of dual facilities-dedicated and flexible
E) Designing product flexibility into the production processes




Answer: E

The key to which capacity management approach would involve having both volume (fluctuating demand from a manufacturer) and variety flexibility (demand from several manufacturers) to be sustainable?

The key to which capacity management approach would involve having both volume (fluctuating demand from a manufacturer) and variety flexibility (demand from several manufacturers) to be sustainable?




A) Time flexibility from workforce
B) Use of seasonal workforce
C) Use of subcontracting
D) Use of dual facilities-dedicated and flexible
E) Designing product flexibility into the production processes




Answer: C

Which approach to capacity management would use a part-time workforce to increase capacity flexibility by enabling the firm to have more people at work during peak periods?

Which approach to capacity management would use a part-time workforce to increase capacity flexibility by enabling the firm to have more people at work during peak periods?




A) Time flexibility from workforce
B) Use of seasonal workforce
C) Use of subcontracting
D) Use of dual facilities-dedicated and flexible
E) Designing product flexibility into the production processes




Answer: A

Which approach to capacity management makes use of spare plant capacity that exists in the form of hours when the plant is not operational?

Which approach to capacity management makes use of spare plant capacity that exists in the form of hours when the plant is not operational?




A) Time flexibility from workforce
B) Use of seasonal workforce
C) Use of subcontracting
D) Use of dual facilities-dedicated and flexible
E) Designing product flexibility into the production processes



Answer: A

The capacity management approach where a firm has production lines whose production rate can easily be varied to match demand is

The capacity management approach where a firm has production lines whose production rate can easily be varied to match demand is




A) time flexibility from workforce.
B) the use of seasonal workforce.
C) the use of subcontracting.
D) the use of dual facilities-dedicated and flexible.
E) designing product flexibility into the production processes.



Answer: E

The capacity management approach where a firm builds facilities to produce a relatively stable output of products over time in a very efficient manner and facilities to produce a widely varying volume and variety of products, but at a higher unit cost is

The capacity management approach where a firm builds facilities to produce a relatively stable output of products over time in a very efficient manner and facilities to produce a widely varying volume and variety of products, but at a higher unit cost is



A) time flexibility from workforce.
B) the use of seasonal workforce.
C) the use of subcontracting.
D) the use of dual facilities-dedicated and flexible.
E) designing product flexibility into the production processes.




Answer: D

The capacity management approach where a firm purchases peak production from another firm so that internal production remains level and can be done cheaply is

The capacity management approach where a firm purchases peak production from another firm so that internal production remains level and can be done cheaply is




A) time flexibility from workforce.
B) the use of seasonal workforce.
C) the use of subcontracting.
D) the use of dual facilities-dedicated and flexible.
E) designing product flexibility into the production processes.




Answer: C

The capacity management approach that uses a temporary workforce during the peak season to increase capacity to match demand is

The capacity management approach that uses a temporary workforce during the peak season to increase capacity to match demand is




A) time flexibility from workforce.
B) the use of seasonal workforce.
C) the use of subcontracting.
D) the use of dual facilities-dedicated and flexible.
E) designing product flexibility into the production processes.




Answer: B

The capacity management approach that uses flexible work hours from the workforce to manage capacity to better meet demand is

The capacity management approach that uses flexible work hours from the workforce to manage capacity to better meet demand is



A) time flexibility from workforce.
B) use of seasonal workforce.
C) use of subcontracting.
D) use of dual facilities-dedicated and flexible.
E) designing product flexibility into the production processes.




Answer: A

A firm can vary supply of product by controlling

A firm can vary supply of product by controlling




A) production capacity and inventory.
B) production capacity and price promotions.
C) price promotions and inventory.
D) production capacity and inventory promotions.
E) none of the above




Answer: A

With supply and demand management decisions being made independently,

With supply and demand management decisions being made independently, 



A) it is increasingly difficult to coordinate the supply chain, thereby increasing profit.
B) it is increasingly difficult to coordinate the supply chain, thereby decreasing profit.
C) it is easier to coordinate the supply chain, thereby decreasing profit.
D) it is easier to coordinate the supply chain, thereby increasing profit.
E) none of the above




Answer: B

Companies typically divide the task of supply and demand so that

Companies typically divide the task of supply and demand so that



A) Marketing manages demand and Operations manages supply.
B) Marketing manages supply and Operations manages demand.
C) Marketing manages demand and supply.
D) Operations manages demand and supply.
E) none of the above





Answer: A

The advantage of offering a price promotion during periods of low demand to shift some of the demand into a slow period is

The advantage of offering a price promotion during periods of low demand to shift some of the demand into a slow period is



A) a demand pattern that is less expensive to supply.
B) very high inventory costs because inventory needs to be carried from period to period.
C) in the fact that a firm could get by with a smaller, more expensive factory.
D) much of the expensive capacity would go unused during most months when demand was lower.
E) all of the above



Answer: A

The disadvantage of building up inventory during the off season to meet demand during peak seasons and keep production stable year round is

The disadvantage of building up inventory during the off season to meet demand during peak seasons and keep production stable year round is



A) very low inventory costs because no inventory needs to be carried from period to period.
B) very high inventory costs because inventory needs to be carried from period to period.
C) in the fact that a firm could get by with a smaller, less expensive factory.
D) in the fact that a firm could get by with a larger, more expensive factory.
E) None of the above are true.




Answer: B

The advantage of building up inventory during the off season to meet demand during peak seasons and keep production stable year round is

The advantage of building up inventory during the off season to meet demand during peak seasons and keep production stable year round is




A) very low inventory costs because no inventory needs to be carried from period to period.
B) much of the expensive capacity would go unused during most months when demand was lower.
C) in the fact that a firm could get by with a smaller, less expensive factory.
D) in the fact that a firm could get by with a larger, more expensive factory.
E) None of the above are true.



Answer: C

The disadvantage of maintaining enough manufacturing capacity to meet demand in any period is

The disadvantage of maintaining enough manufacturing capacity to meet demand in any period is




A) much of the expensive capacity would go unused during most months when demand was lower.
B) the expensive capacity would be used consistently throughout the year.
C) most of the expensive capacity would still be used during most months when demand was lower.
D) very low inventory costs because no inventory needs to be carried from period to period.
E) None of the above are true.




Answer: A

The advantage of maintaining enough manufacturing capacity to meet demand in any period is

The advantage of maintaining enough manufacturing capacity to meet demand in any period is




A) very low inventory costs because inventory needs to be carried from period to period.
B) very low inventory costs because no inventory needs to be carried from period to period.
C) very high inventory costs because no inventory needs to be carried from period to period.
D) very high inventory costs because expensive capacity would go unused during most months when demand was lower.
E) none of the above





Answer: B

Seasonal demand can be met by

Seasonal demand can be met by




A) maintaining enough manufacturing capacity to meet demand in any period.
B) building up inventory during the off season to meet demand during peak seasons.
C) offering a price promotion during periods of low demand to shift some of the demand into a slow period.
D) all of the above
E) A and B only




Answer: D

A firm can handle predictable variability by managing

A firm can handle predictable variability by managing



A) supply using capacity, inventory, trade promotions, and backlogs.
B) supply using capacity, inventory, subcontracting, and backlogs.
C) demand using short-term price discounts and trade promotions.
D) A and C only
E) B and C only





Answer: E

Which of the following is not a problem caused by products experiencing predictable variability of demand?

Which of the following is not a problem caused by products experiencing predictable variability of demand?




A) High levels of stockouts during peak demand
B) High levels of excess inventory during periods of low demand
C) Increased responsiveness of the supply chain
D) Increased costs in the supply chain
E) Decreased responsiveness of the supply chain




Answer: C

Predictable variability is

Predictable variability is



A) change in demand that can be forecasted.
B) change in demand that cannot be forecasted.
C) change in demand that has been planned.
D) change in demand that has been scheduled.
E) all of the above




Answer: A

An approach where a firm works with their retail partners in the supply chain to offer a price promotion during periods of low demand would shift some of the demand into a slow period, thereby spreading demand more evenly throughout the year and reducing the seasonal surge.

An approach where a firm works with their retail partners in the supply chain to offer a price promotion during periods of low demand would shift some of the demand into a slow period, thereby spreading demand more evenly throughout the year and reducing the seasonal surge.



Answer: True
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