Question 1

In a complex decision tree there are

Accepted Answer

A)  only a few possible paths that may result from the first period to the last. 
B)  less than thirty possible paths that may result from the first period to the last. 
C)  thousands of possible paths that may result from the first period to the last. 
D)  an infinite number of possible paths that may result from the first period to the last. 
A)  only a few possible paths that may result from the first period to the last. 
B)  less than thirty possible paths that may result from the first period to the last. 
C)  thousands of possible paths that may result from the first period to the last. 
D)  an infinite number of possible paths that may result from the first period to the last.

Question 2

The present value of a stream of cash flows is what that stream is worth in today's dollars.

Accepted Answer

A) True 
 B)False

Question 3

Discuss the ideas that managers should consider to make better supply chain network design decisions under uncertainty.

Accepted Answer

Managers should consider the following i

Question 4

Among the sources of risk identified in global supply chains, the lowest among these four is

Accepted Answer

A)  shortage of skilled resources. 
B)  currency fluctuation. 
C)  inflexible supply chain technology. 
D)  terrorist infiltration of cargo. 
A)  shortage of skilled resources. 
B)  currency fluctuation. 
C)  inflexible supply chain technology. 
D)  terrorist infiltration of cargo.

Question 5

Scenario 6.1 - The Big Box
Bahouth Ltd. is planning for the next two years of production and debating whether to construct a large cross-dock facility with 40 truck bays or a smaller one with 20 truck bays. The cost to build the large facility is $2 million and the cost to build the small one is $1.2 million. If they construct a large facility and demand is as high as they hope, then operating costs are $450,000 annually. If they construct a large facility and demand is low, then operating costs are $300,000. If they construct a small facility and demand is low, the operating costs are $275,000 but if they experience high demand, the operating cost of a small facility increases to $600,000. After having conducted some market research, they feel that the likelihood of high demand is 0.7 and the likelihood of small demand is 0.3.
-Suppose the contractor has found some materials on Craigslist that can drop the construction cost of a large facility to $1,500,000. These materials cannot be used in the construction of the small facility, so its price remains as indicated in Scenario 6.1. Determine the likelihood of high demand that would make the decision maker indifferent between the two alternatives for a two year time period.

Accepted Answer

A)  1.0 
B)  0.72 
C)  0.92 
D)  0.86 
A)  1.0 
B)  0.72 
C)  0.92 
D)  0.86

Question 6

The XYZ Company has a choice between two warehouses. A lease at location A costs $1000 per month with a payment of $2000 up front to guarantee the 3 year lease. Location B would cost $1200 per month and would be leased from month to month. The anticipated revenue in either location is $1500 per month. The estimated rate of return is 10% per year. Using net present value, determine which location would be the better choice.

Accepted Answer

Location A
Expected annual profit = 12 ×

Question 7

Briefly describe the three primary risk mitigation strategies based on the idea of flexibility that supply chain managers can use.

Accepted Answer

Flexibility plays an important role in m

Question 8

The rate of return k is also referred to as the present value of capital.

Accepted Answer

A) True 
 B)False

Question 9

Short-term contracts for both warehousing and transportation requirements will be more effective

Accepted Answer

A)  if the demand and price of warehousing do not change in the future. 
B)  if the price of warehousing goes up in the future. 
C)  if either demand or the price of warehousing drops in the future. 
D)  only if demand drops in the future. 
A)  if the demand and price of warehousing do not change in the future. 
B)  if the price of warehousing goes up in the future. 
C)  if either demand or the price of warehousing drops in the future. 
D)  only if demand drops in the future.

Question 10

The NPV (net present value) of a cash stream that is equal to $75 per period for 5 periods with a rate of return of 15% per period would be

Accepted Answer

A)  $261.37. 
B)  $289.12. 
C)  $312.74. 
D)  $322.44. 
A)  $261.37. 
B)  $289.12. 
C)  $312.74. 
D)  $322.44.

Question 11

Uncertainty of demand and price

Accepted Answer

A)  drives the value of building flexible production capacity at a plant. 
B)  eliminates the value of building flexible production capacity at a plant. 
C)  facilitates the value of building flexible production capacity at a plant. 
D)  has no effect on the value of building flexible production capacity at a plant. 
A)  drives the value of building flexible production capacity at a plant. 
B)  eliminates the value of building flexible production capacity at a plant. 
C)  facilitates the value of building flexible production capacity at a plant. 
D)  has no effect on the value of building flexible production capacity at a plant.

Question 12

The evaluation of supply chain networks

Accepted Answer

A)  should use only one metric. 
B)  should use multiple metrics. 
C)  should not use more than one metric. 
D)  should be subjective. 
A)  should use only one metric. 
B)  should use multiple metrics. 
C)  should not use more than one metric. 
D)  should be subjective.

Question 13

The degree of demand and price uncertainty has

Accepted Answer

A)  no effect on the appropriate portfolio of long- and short-term warehousing space that a firm should carry. 
B)  a limited influence on the appropriate portfolio of long- and short-term warehousing space that a firm should carry. 
C)  a minor influence on the appropriate portfolio of long- and short-term warehousing space that a firm should carry. 
D)  a significant influence on the appropriate portfolio of long- and short-term warehousing space that a firm should carry. 
A)  no effect on the appropriate portfolio of long- and short-term warehousing space that a firm should carry. 
B)  a limited influence on the appropriate portfolio of long- and short-term warehousing space that a firm should carry. 
C)  a minor influence on the appropriate portfolio of long- and short-term warehousing space that a firm should carry. 
D)  a significant influence on the appropriate portfolio of long- and short-term warehousing space that a firm should carry.

Question 14

Scenario 6.1 - The Big Box
Bahouth Ltd. is planning for the next two years of production and debating whether to construct a large cross-dock facility with 40 truck bays or a smaller one with 20 truck bays. The cost to build the large facility is $2 million and the cost to build the small one is $1.2 million. If they construct a large facility and demand is as high as they hope, then operating costs are $450,000 annually. If they construct a large facility and demand is low, then operating costs are $300,000. If they construct a small facility and demand is low, the operating costs are $275,000 but if they experience high demand, the operating cost of a small facility increases to $600,000. After having conducted some market research, they feel that the likelihood of high demand is 0.7 and the likelihood of small demand is 0.3.
-Use the information from Scenario 6.1 to determine the cost of the best alternative for a two year period.

Accepted Answer

A)  $2,000,000 
B)  $1,200,000 
C)  $2,205,000 
D)  $2,810,000 
A)  $2,000,000 
B)  $1,200,000 
C)  $2,205,000 
D)  $2,810,000

Question 15

What rate of return results in a present value of $432 for $250 received one year from now and another $250 received two years from now?

Accepted Answer

A)  9.89% 
B)  10.32% 
C)  10.94% 
D)  11.37% 
A)  9.89% 
B)  10.32% 
C)  10.94% 
D)  11.37%

Question 16

During network design, managers need a methodology that allows them to estimate the certainty in their forecast of demand and price and then incorporate this certainty into the decision-making process.

Accepted Answer

A) True 
 B)False

Question 17

Simulation methods are very good at evaluating a decision where the path itself is decision dependent.

Accepted Answer

A) True 
 B)False

Question 18

The value of flexibility increases with an increase in uncertainty.

Accepted Answer

A) True 
 B)False

Question 19

A global supply chain with offshoring would tend to see which of these performance dimensions increase?

Accepted Answer

A)  Labor costs 
B)  On time delivery 
C)  Supply chain visibility 
D)  Minimum order quantity 
A)  Labor costs 
B)  On time delivery 
C)  Supply chain visibility 
D)  Minimum order quantity

Question 20

The process of evaluating the present value of any stream of future cash flows so that management can compare two streams of cash flows in terms of their financial value is

Accepted Answer

A)  annual cash flow (ACF) analysis. 
B)  discretionary cash flow (DCF) analysis. 
C)  discounted cash flow (DCF) analysis. 
D)  future cash flow (FCF) analysis. 
A)  annual cash flow (ACF) analysis. 
B)  discretionary cash flow (DCF) analysis. 
C)  discounted cash flow (DCF) analysis. 
D)  future cash flow (FCF) analysis.

In a complex decision tree there are

The present value of a stream of cash flows is what that stream is worth in today's dollars.

Discuss the ideas that managers should consider to make better supply chain network design decisions under uncertainty.

Among the sources of risk identified in global supply chains, the lowest among these four is

Briefly describe the three primary risk mitigation strategies based on the idea of flexibility that supply chain managers can use.

The rate of return k is also referred to as the present value of capital.

Short-term contracts for both warehousing and transportation requirements will be more effective

The NPV (net present value) of a cash stream that is equal to $75 per period for 5 periods with a rate of return of 15% per period would be

Uncertainty of demand and price

The evaluation of supply chain networks

The degree of demand and price uncertainty has

What rate of return results in a present value of $432 for $250 received one year from now and another $250 received two years from now?

During network design, managers need a methodology that allows them to estimate the certainty in their forecast of demand and price and then incorporate this certainty into the decision-making process.

Simulation methods are very good at evaluating a decision where the path itself is decision dependent.

The value of flexibility increases with an increase in uncertainty.

A global supply chain with offshoring would tend to see which of these performance dimensions increase?

The process of evaluating the present value of any stream of future cash flows so that management can compare two streams of cash flows in terms of their financial value is

Understanding the Supply Chain

Supply Chain Performance: Achieving Strategic Fit and Scope

Supply Chain Drivers and Metrics

Designing Distribution Networks and Applications to e-Business

Network Design in the Supply Chain

Demand Forecasting in a Supply Chain

Aggregate Planning in a Supply Chain

Sales and Operations Planning: Planning Supply and Demand in a Supply Chain

Coordination in a Supply Chain

Managing Economies of Scale in the Supply Chain: Cycle Inventory

Managing Uncertainty in a Supply Chain: Safety Inventory

Determining the Optimal Level of Product Availability

Transportation in a Supply Chain

Sourcing Decisions in a Supply Chain

Pricing and Revenue Management in a Supply Chain

Sustainability and the Supply Chain

Filters

Exam 6: Designing Global Supply Chain Networks

In a complex decision tree there are

The present value of a stream of cash flows is what that stream is worth in today's dollars.

Discuss the ideas that managers should consider to make better supply chain network design decisions under uncertainty.

Among the sources of risk identified in global supply chains, the lowest among these four is

Briefly describe the three primary risk mitigation strategies based on the idea of flexibility that supply chain managers can use.

The rate of return k is also referred to as the present value of capital.

Short-term contracts for both warehousing and transportation requirements will be more effective

The NPV (net present value) of a cash stream that is equal to $75 per period for 5 periods with a rate of return of 15% per period would be

Uncertainty of demand and price

The evaluation of supply chain networks

The degree of demand and price uncertainty has

What rate of return results in a present value of $432 for $250 received one year from now and another $250 received two years from now?

During network design, managers need a methodology that allows them to estimate the certainty in their forecast of demand and price and then incorporate this certainty into the decision-making process.

Simulation methods are very good at evaluating a decision where the path itself is decision dependent.

The value of flexibility increases with an increase in uncertainty.

A global supply chain with offshoring would tend to see which of these performance dimensions increase?

The process of evaluating the present value of any stream of future cash flows so that management can compare two streams of cash flows in terms of their financial value is

Understanding the Supply Chain

Supply Chain Performance: Achieving Strategic Fit and Scope

Supply Chain Drivers and Metrics

Designing Distribution Networks and Applications to e-Business

Network Design in the Supply Chain

Demand Forecasting in a Supply Chain

Aggregate Planning in a Supply Chain

Sales and Operations Planning: Planning Supply and Demand in a Supply Chain

Coordination in a Supply Chain

Managing Economies of Scale in the Supply Chain: Cycle Inventory

Managing Uncertainty in a Supply Chain: Safety Inventory

Determining the Optimal Level of Product Availability

Transportation in a Supply Chain

Sourcing Decisions in a Supply Chain

Pricing and Revenue Management in a Supply Chain

Sustainability and the Supply Chain

Filters