Question 1

For the same safety inventory,an increase in lot size

Accepted Answer

A)   decreases the fill rate but not the cycle service level.
B)   increases the fill rate but not the cycle service level.
C)   decreases both the fill rate and the cycle service level.
D)   increases both the fill rate and the cycle service level.E) C) and D)
F) A) and B)

Question 2

Cycle inventory is inventory carried to satisfy demand that exceeds the amount forecasted for a given period.

Accepted Answer

A) True 
 B)False

Question 3

As the desired level of product availability increases,the required level of safety inventory decreases.

Accepted Answer

A) True 
 B)False

Question 4

As the uncertainty of supply or demand ________,the required level of safety inventories ________.

Accepted Answer

A)   grows, increases
B)   increases, decreases
C)   decreases, grows
D)   decreases, increasesE) A) and B)
F) A) and C)

Question 5

Which approach to aggregation requires an information system that allows access to current inventory records from each location?

Accepted Answer

A)   Information centralization
B)   Specialization
C)   Product substitution
D)   Component commonalityE) B) and D)
F) All of the above

Question 6

Safety inventory is inventory carried for the purpose of satisfying demand that exceeds the amount forecasted for a given period.

Accepted Answer

A) True 
 B)False

Question 7

Shortage occurs in a replenishment cycle only if the demand during the lead time exceeds the ROP.

Accepted Answer

A) True 
 B)False

Question 8

As the uncertainty of supply or demand grows,the required level of safety inventories increases.

Accepted Answer

A) True 
 B)False

Question 9

Given a lot size of Q (which is also the average demand in a replenishment cycle)

Accepted Answer

A)   the fraction of demand lost is thus ESC + Q.
B)   the fraction of demand lost is thus ESC - Q.
C)   the fraction of demand lost is thus ESC/Q.
D)   the fraction of demand lost is thus ESC × Q.E) B) and C)
F) A) and C)

Question 10

With periodic review,inventory status is checked at regular intervals and an order is placed to raise the inventory level to a specified threshold.

Accepted Answer

A) True 
 B)False

Question 11

Inventory carried for the purpose of satisfying demand that exceeds the amount forecasted for a given period is

Accepted Answer

A)   cycle inventory.
B)   demand inventory.
C)   safety inventory.
D)   security inventory.E) None of the above
F) C) and D)

Question 12

A replenishment policy

Accepted Answer

A)   consists of decisions regarding when to reorder and how much to reorder.
B)   determines the cycle and safety inventories along with the fr and the CSL.
C)   may take several forms.
D)   All of the above are true.E) A) and B)
F) A) and C)

Question 13

Which of the following is correct?

Accepted Answer

A)   Average inventory = cycle inventory + safety inventory
B)   Average inventory = cycle inventory - safety inventory
C)   Average inventory = cycle inventory × safety inventory
D)   Average inventory = cycle inventory / safety inventoryE) A) and D)
F) A) and B)

Question 14

Carrying excessive inventory can help counter demand volatility when new products come on the market.

Accepted Answer

A) True 
 B)False

Question 15

Lead time is the gap between when an order is placed and when it is received.

Accepted Answer

A) True 
 B)False

Question 16

The use of one product to satisfy demand for a different product is

Accepted Answer

A)   information centralization.
B)   specialization.
C)   product substitution.
D)   component commonality.E) C) and D)
F) A) and C)

Question 17

Which approach to aggregation has the goal of moving product differentiation as close to the pull phase of the supply chain as possible?

Accepted Answer

A)   Information centralization
B)   Specialization
C)   Product substitution
D)   PostponementE) B) and C)
F) A) and B)

Question 18

The coefficient of variation measures the size of the relative certainty of cycle inventory.

Accepted Answer

A) True 
 B)False

Question 19

The expected shortage per replenishment cycle (ESC) is

Accepted Answer

A)   the units of demand that are not satisfied from inventory in stock in a given replenishment cycle.
B)   the units of demand that are satisfied from inventory in stock in a given replenishment cycle.
C)   the average units of demand that are not satisfied from inventory in stock per replenishment cycle.
D)   the average units of demand that are satisfied from inventory in stock per replenishment cycle.E) All of the above
F) C) and D)

Question 20

The trade-off that a supply chain manager must consider when planning safety inventory is

Accepted Answer

A)   increasing product availability versus increasing inventory holding costs.
B)   decreasing product availability versus decreasing inventory holding costs.
C)   increasing product availability versus raising the level of safety inventory.
D)   decreasing product availability versus decreasing the level of safety inventory.E) None of the above
F) A) and D)

Exam 12: Managing Uncertainty in a Supply Chain: Safety Inventory

Given a lot size of Q (which is also the average demand in a replenishment cycle)

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Which approach to aggregation has the goal of moving product differentiation as close to the pull phase of the supply chain as possible?

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Inventory carried for the purpose of satisfying demand that exceeds the amount forecasted for a given period is

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With periodic review,inventory status is checked at regular intervals and an order is placed to raise the inventory level to a specified threshold.

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Lead time is the gap between when an order is placed and when it is received.

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The trade-off that a supply chain manager must consider when planning safety inventory is

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As the uncertainty of supply or demand grows,the required level of safety inventories increases.

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Safety inventory is inventory carried for the purpose of satisfying demand that exceeds the amount forecasted for a given period.

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Carrying excessive inventory can help counter demand volatility when new products come on the market.

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For the same safety inventory,an increase in lot size

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The coefficient of variation measures the size of the relative certainty of cycle inventory.

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Cycle inventory is inventory carried to satisfy demand that exceeds the amount forecasted for a given period.

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As the uncertainty of supply or demand ________,the required level of safety inventories ________.

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As the desired level of product availability increases,the required level of safety inventory decreases.

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The expected shortage per replenishment cycle (ESC) is

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The use of one product to satisfy demand for a different product is

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A replenishment policy

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Which of the following is correct?

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Which approach to aggregation requires an information system that allows access to current inventory records from each location?

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Shortage occurs in a replenishment cycle only if the demand during the lead time exceeds the ROP.

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As the uncertainty of supply or demand ,the required level of safety inventories .

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