1、Chapter 11 Managing Uncertainty in the Supply Chain: Safety InventoryTrue/False 1. 2. 3. 4. 5. 6. 7. 8. 9. Safety inventoryis inventory carried for the purpose of satisfying demand that exceeds the amount forecasted for a given period. Answer: True Difficulty: Moderate Safety inventory is carried be

2、cause demand forecasts are accurate and a product shortage may result if the forecast demand exceeds the actual demand. Answer: False Difficulty: Moderate Raising the level of safety inventory increases product availability and thus the margin captured from customer purchases. Answer: True Difficult

3、y: Moderate Raising the level of safety inventory increases inventory holding costs. Answer: True Difficulty: Easy Carrying excessive inventory can help counter demand volatility when new products come on the market. Answer: False Difficulty: Moderate The appropriate level of safety inventory is det

4、ermined by the uncertainty of both demand and supply and the desired level of cycle inventory. Answer: False Difficulty: Moderate As the uncertainty of supply or demand grows, the required level of safety inventories increases. Answer: True Difficulty: Moderate As the desired level of product availa

5、bility increases, the required level of safety inventory decreases. Answer: False Difficulty: Easy Lead time is the gap between when an order is placed and when it is received. Answer: True Difficulty: Easy 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. The coefficient of variation measures the size of the

6、 relative certainty of cycle inventory. Answer: False Difficulty: Easy Product availab ility reflects a firms ability to fill a customer order out of available inventory. Answer: True Difficulty: Moderate Order fill rateis the fraction of product demand that is satisfied from product in inventory. A

7、nswer: False Difficulty: Moderate Product fill rate is the fraction of product demand that is satisfied from product in inventory. Answer: True Difficulty: Moderate The distinction between product fill rate and order fill rate is significant in a single product situation. Answer: False Difficulty: H

8、ard Tracking order fill rates is important when customers place a high value on the entire order being filled simultaneously. Answer: True Difficulty: Easy With continuous review, inventory is continuously tracked and an order for a lot size Q is placed at regular intervals of time. Answer: False Di

9、fficulty: Hard With periodic review, inventory status is checked at regular intervals and an order is placed to raise the inventory level to a specified threshold. Answer: True Difficulty: Hard The expected shortage per replenishment cycle(ESC) is the average units of demand that are satisfied from

10、inventory in stock per replenishment cycle. Answer: False Difficulty: Hard A shortage occurs in a replenishment cycle only if the demand during the lead time exceeds the ROP. Answer: True Difficulty: Moderate 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. The fill rate increases and the cycle service level

11、 decreases as the safety inventory is increased. Answer: False Difficulty: Moderate For the same safety inventory, an increase in lot size increases the fill rate but not the cycle service level. Answer: True Difficulty: Hard The required safety inventory grows rapidly with a decrease in the desired

12、 product availability. Answer: False Difficulty: Easy The required safety inventory increases with an increase in the lead time and the standard deviation of periodic demand. Answer: True Difficulty: Easy A goal of any supply chain manager is to reduce the level of safety inventory required regardle

13、ss of the affect product availability. Answer: False Difficulty: Easy In most supply chains, the key to reducing the underlying forecast uncertainty is to link all forecasts throughout the supply chain to customer demand data. Answer: True Difficulty: Moderate A reduction in supply can help dramatic

14、ally reduce safety inventory required without hurting product availability. Answer: False Difficulty: Moderate Aggregation reduces the standard deviation of demand only if demand across the regions being aggregated is not perfectly positively correlated. Answer: True Difficulty: Moderate In case dem

15、and in different geographical regions is about the same size and independent, aggregation increases safety inventory by the square root of the number of areas aggregated. Answer: False Difficulty: Moderate If aggregation reduces the required safety inventory for a product by a small amount, it may b

16、e best to carry the product in multiple decentralized locations to reduce response time and transportation cost. Answer: True Difficulty: Moderate 30. 31. 32. 33. 34. The lower the coefficient of variation of an item, the greater the reduction in safety inventories as a result of centralization. Ans

17、wer: False Difficulty: Hard Manufacturer-driven substitution increases overall profitability for the manufacturer by allowing some aggregation of demand, which reduces the inventory requirements for the same level of availability. Answer: True Difficulty: Moderate Postponement allows the supply chai

18、n to delay product differentiation, which results in disaggregating most of the inventories in the supply chain. Answer: False Difficulty: Moderate Periodic review policies require more safety inventory than continuous review policies for the same level of product availability. Answer: True Difficul

19、ty: Easy When using a continuous review policy, a manager has to account for the uncertainty of demand during the lead time and the review interval. Answer: False Difficulty: Easy Multiple Choice 1. 2. Inventory carried for the purpose of satisfying demand that exceeds the amount forecasted for a gi

20、ven period is a. cycle inventory. b. demand inventory. c. safety inventory. d. security inventory. e. all of the above Answer: c Difficulty: Easy Safety inventory is carried because a. demand forecasts are accurate. b. demand forecasts are uncertain. c. adequate supplies are available. d. excess pro

21、duct was manufactured. e. forecast demand exceeds the actual demand. Answer: b Difficulty: Moderate 3. 4. 5. 6. 7. The trade-off that a supply chain manager must consider when planning safety inventory is a. increasing product availability versus increasing inventory holding costs. b. decreasing pro

22、duct 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 Answer: a Difficulty: Moderate The issue of product a

23、vailability and the level of safety inventory is particularly significant in industries where a. product life cycles are short and demand is stable. b. product life cycles are short and demand is very volatile. c. product life cycles are long and demand is stable. d. product life cycles are long and

24、 demand is very volatile. e. a and b only Answer: b Difficulty: Moderate A key to success at which company has been its ability to provide a high level of product availability to customers while carrying very low levels of safety inventory in its supply chain? a. Compaq b. Hewlett-Packard c. Dell d.

25、 Packard-Bell e. all of the above Answer: c Difficulty: Moderate What key question(s) need(s) to be considered when planning safety inventory for any supply chain? a. What is the appropriate lead time to establish? b. What is the appropriate level of safety inventory to carry? c. What actions can be

26、 taken to improve product availability while reducing safety inventory? d. a and b only e. b and c only Answer: e Difficulty: Moderate The appropriate level of safety inventory is determined by a. the uncertainty of both demand and supply. b. the desired level of product availability. c. the desired

27、 level of cycle inventory. 8. 9. 10. 11. 12. d. the processes in a supply chain are divided into 2 categories depending all of the above e. a and b only Answer: e Difficulty: Moderate As the uncertainty of supply or demand grows, the required level of safety inventories a. decreases. b. increases. c

28、. remains stable. d. e. both a and b none of the above Answer: b Difficulty: Moderate As the desired level of product availability increases, the required level of safety inventory a. decreases. b. increases. c. remains stable. d. both a and b e. none of the above Answer: e Difficulty: Moderate Lead

29、 time is the gap between a. when an order is placed and when it is received. b. when an order is received and when it is put away. c. when an order is received and when it is used. d. when an order is acknowledged and when it is received. e. none of the above Answer: a Difficulty: Easy The coefficie

30、nt of variation measures a. the accuracy of the demand forecast. b. the size of the uncertainty relative to demand. c. the relevance of cycle inventory to demand. d. the relative certainty of the forecast. e. none of the above Answer: b Difficulty: Moderate Which of the following is not a measure of

31、 product availability? a. customer fill rate b. product fill rate c. order fill rate d. cycle service level(CSL) e. none of the above Answer: a Difficulty: Moderate 13. 14. 15. 16. 17. 18. The fraction of orders that are filled from available inventory is the a. customer fill rate. b. product fill r

32、ate. c. order fill rate. d. cycle service level(CSL). e. none of the above Answer: c Difficulty: Easy The fraction of product demand that is satisfied from product in inventory is the a. customer fill rate. b. product fill rate. c. order fill rate. d. cycle service level(CSL). e. none of the above A

33、nswer: b Difficulty: Easy The fraction of replenishment cycles that end with all the customer demand being met is the a. customer fill rate. b. product fill rate. c. order fill rate. d. cycle service level(CSL). e. none of the above Answer: d Difficulty: Easy If a customer order arrives when product

34、 is not available a. a sale results. b. the retailer allocates product to the customer. c. a stockout results. d. the order is filled from safety inventory. e. none of the above Answer: c Difficulty: Moderate The distinction between product fill rate and order fill rate is a. not significant in a si

35、ngle product situation. b. significant in a single product situation. c. not significant when a firm is selling multiple products. d. significant when a firm is selling multiple products. e. both a and d Answer: a Difficulty: Moderate A replenishment policy a. consists of decisions regarding when to

36、 reorder and how much to reorder. 19. 20. 21. 22. 23. 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. None of the above are true. Answer: d Difficulty: Moderate A company that tracks inventory and places an ord

37、er for a lot size Q when the inventory declines to the reorder point (ROP) is using a. continuous review. b. daily review. c. d. occasional review. periodic review. e. none of the above Answer: a Difficulty: Easy A company that checks inventory status at regular periodic intervals and places an orde

38、r to raise the inventory level to a specified threshold is using a. continuous review. b. daily review. c. occasional review. d. periodic review. e. none of the above Answer: d Difficulty: Moderate Which of the following is correct? a. Average inventory = cycle inventory + safety inventory b. Averag

39、e inventory = cycle inventory - safety inventory c. Average inventory = cycle inventory x safety inventory d. Average inventory = cycle inventory / safety inventory e. none of the above Answer: a Difficulty: Easy The expected shortage per replenishment cycle(ESC) is a. the units of demand that are n

40、ot 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

41、 that are satisfied from inventory in stock per replenishment cycle. e. none of the above Answer: c Difficulty: Moderate The product fill rate (fr) is thus given by a. fr = 1 ESC/Q + (Q ES C)/Q. 24. 25. 26. 27. 28. b. fr = 1 ESC/Q (Q ESC)/ Q. c. fr = 1 + ESC/Q = (Q + ES C)/Q. d. fr = 1 ESC/Q = (Q ES

42、 C)/Q. e. none of the above Answer: d Difficulty: Hard Given a lot size of Q (which is also the average demand in a replenishment cycle) 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. e. the fraction of

43、demand lost is thus none of the above ESC x Q. Answer: c Difficulty: Hard A shortage occurs in a replenishment cycle a. only if the demand during the lead time exceeds the ROP. b. only if the demand during the lead time is less than the ROP. c. only if the demand during the lead time exceeds the ave

44、rage demand. d. only if the demand during the lead time is less than the average demand. e. none of the above Answer: a Difficulty: Moderate As the safety inventory is increased a. fill rate increases and cycle service level decreases. b. fill rate decreases and cycle service level increases. c. bot

45、h fill rate and cycle service level increase. d. both fill rate and cycle service level decrease. e. none of the above Answer: c Difficulty: Moderate For the same safety inventory, an increase in lot size a. decreases the fill rate but not the cycle service level. b. increases the fill rate but not

46、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. none of the above Answer: c Difficulty: Hard The expected shortage per replenishment cycle is shown as a. ESC = (1 + fr)Q. b. ESC = (1 fr)Q. c. ESC =

47、(1 + fr)/Q. d. ESC = (1 fr)/Q. e. none of the above Answer: b Difficulty: Hard 29. 30. 31. 32. 33. The required safety inventory a. grows rapidly with a decrease in the desired product availability. b. grows rapidly with an increase in the desired product availability. c. decreases with an increase

48、in the desired product availability. d. remains stable with an increase in the desired product availability. e. none of the above Answer: b Difficulty: Moderate The required safety inventory a. increases with an increase in the lead time and the standard deviation of periodic demand. b. decreases wi

49、th an increase in the lead time and the standard deviation of c. periodic demand. remains stable with an increase in the lead time and the standard deviation of periodic demand. d. increases with a decrease in the lead time and the standard deviation of periodic demand. e. none of the above Answer:

50、d Difficulty: Moderate A goal of any supply chain manager is to a. increase the level of safety inventory required in a way that does not adversely affect product availability. b. increase the level of safety inventory required regardless of the effect on product availability. c. reduce the level of

51、 safety inventory required regardless of the effect on product availability. d. reduce the level of safety inventory required in a way that does not adversely affect product availability. e. none of the above Answer: d Difficulty: Moderate Which of the following is not an approach to reduce the leve

52、l of safety inventory required in a way that does not adversely affect product availability? a. Reduce the supplier lead time. b. Reduce the underlying uncertainty of demand. c. Reduce the cost of material coming from suppliers. d. All of the above are approaches. e. None of the above are approaches

53、. Answer: c Difficulty: Hard Often, safety inventory calculations in practice a. do not include any measure of supply uncertainty, resulting in levels that may be higher than required. b. do not include any measure of supply uncertainty, resulting in levels that may be lower than required. 34. 35. 3

54、6. 37. c. include measures of supply uncertainty, resulting in levels that may be higher than required. d. include any measures of supply uncertainty, resulting in levels that may be lower than required. e. None of the above are accurate. Answer: b Difficulty: Hard Aggregation reduces the standard d

55、eviation of demand a. only if demand across the regions being aggregated is perfectly positively correlated. b. only if demand across the regions being aggregated is not perfectly positively correlated. c. even if demand across the regions being aggregated is not perfectly d. positively correlated.

56、whenever demand across the regions being aggregated is not perfectly positively correlated. e. All of the above are accurate. Answer: b Difficulty: Hard If the number of independent stocking locations decreases by a factor of n, the average safety inventory is expected to a. decrease by a factor of

57、n. b. decrease by a factor of n. c. increase by a factor of n. d. increase by a factor of n. e. None of the above are accurate. Answer: a Difficulty: Moderate Which of the following is not a major disadvantage of aggregating all inventory in one location? a. Increase in forecast accuracy of customer

58、 demand. b. Increase in response time to customer order. c. Increase in transportation cost to customer. d. All of the above are disadvantages. e. All of the above are advantages. Answer: a Difficulty: Easy Which of the following is not a method by which a supply chain can extract the benefits of ag

59、gregation without having to physically centralize all inventories in one location? a. information centralization b. specialization c. product substitution d. component differentiation e. postponement Answer: d Difficulty: Moderation 38. 39. 40. 41. 42. Which approach to aggregation requires an infor

60、mation system that allows access to current inventory records from each location? a. information centralization b. specialization c. product substitution d. component commonality e. postponement Answer: a Difficulty: Easy Which approach to aggregation would stock the fast-moving items at decentraliz