Reference no: EM132202182
1. A firm is selling a fast moving SKU in four different stores. Which of the following statements is true?
A) Individual store-SKU sales forecasts will be more accurate than an aggregate sales forecast for the SKU.
B) Weekly sales forecasts will have a lower coefficient of variation than daily sales forecasts.
C) Historical sales data is unlikely to be of any use for forecasting demand in this case.
D) It is important to capture the error of the forecasts, to create inventory buffers.
E) Monthly sales forecasts will be more accurate than weekly sales forecasts.
F) None of the above.
2. The Economic Order Quantity model essentially makes a trade-off between ordering costs (fixed costs per order) and inventory holding costs (variable costs per item held).
Which of the following statements is true?
A) As the order quantity increases, the cycle stock increases too.
b) The point where the order quantity is an optimum occurs when inventory holding costs equal ordering costs.
c) As the order quantity increases, the ordering costs increase too.
d) As the order quantity increases, the inventory holding costs increase too.
e) As the order quantity increases, the pipeline inventory increases too.
f) None of the above.
3. XL - B, a Canadian fast-food restaurant specialized in exotic meat hamburgers, has a central regional kitchen in which: (1) the bread is baked, (2) the meat is minced, (3) the other ingredients are sliced, (4) the meat and potato chips are cooked and, finally, (5) the hamburger is assembled. Recently, XL - B has decided to move steps (4) and (5) (the cooking and final assembly) of their hamburgers away from the central regional kitchen to fast food outlets located in different neighbourhoods.
What will XL - B achieve with this new strategy?
A) Move the push-pull boundary upstream in the supply chain.
B) Make deliveries from suppliers more efficient.
C) Create an Engineer to Order system.
D) Generate greater economies of scale at the central regional kitchen.
E) Have a shorter order cycle time.
F) None of the above.
4. You are the owner of a small sand and gravel reselling business in Maine. One of the products you have is a special, high-quality gravel. You buy the gravel in larger orders. From the sales department you collect the yearly demand 3700 pounds. Your colleagues from procurement let you know that you pay $283 per order and that you have a yearly interest rate of 14.66 %. You pay $10 per pound of gravel. That is, your holding cost per pound and year are ‘interest rate x price per pound’.
In past years your order quantity differed from the one you calculated in Question 1 (1192.204). For example, in last year (in 2017) you chose a 30% higher order quantity than the one given in Question 1 (1192.204), and two years ago (in 2016) you chose a 30% lower order quantity than the one given in Question 1 (1192.204).
Which of the following statements are correct?
A) A 30% higher order quantity in 2017 can be optimal if the fixed cost was higher or the demand was lower in 2017.
B) Assume that in any given year you have the same parameters as in Question 1. A 30% higher order quantity results in higher total relevant cost (the sum of ordering and holding cost) than a 30% lower order quantity.
C) A 30% lower order quantity in 2016 can be optimal if demand and fixed cost were higher in 2016.
D) A 30% higher order quantity in 2017 can be optimal if the fixed cost was higher, the interest rate was lower, and the demand was higher in 2017.
E) Assuming that in any given year you have the same parameters as in Question 1, a 30% lower order quantity results in higher total relevant cost (the sum of order and holding cost) than a 30% higher order quantity.
F) None of the above.