Question 1

What is the type of this network design?

Accepted Answer

A)  Dedicated network 
B)  Fully flexible network 
C)  Chained network with one long chain 
D)  Chained network with two long chains 
A)  Dedicated network 
B)  Fully flexible network 
C)  Chained network with one long chain 
D)  Chained network with two long chains

Question 2

The NPV (net present value) of a cash stream that is equal to $100 per period for 5 periods with a rate of return of 12% per period would be

Accepted Answer

A)  $360.48. 
B)  $382.98. 
C)  $403.73. 
D)  $416.51. 
A)  $360.48. 
B)  $382.98. 
C)  $403.73. 
D)  $416.51.

Question 3

Decisions made during the supply chain design phase regarding significant investments in the supply chain, such as the number and size of plants to build, the number of trucks to purchase or lease, and whether to build or lease warehouse space,

Accepted Answer

A)  can be altered in the short term. 
B)  cannot be altered in the short term. 
C)  cannot be altered in the long term. 
D)  can only be altered in the short term. 
A)  can be altered in the short term. 
B)  cannot be altered in the short term. 
C)  cannot be altered in the long term. 
D)  can only be altered in the short term.

Question 4

Uncertainty in demand and economic factors should be included in the financial evaluation of supply chain design decisions, because

Accepted Answer

A)  the exclusion of certainty may have a significant impact on this evaluation. 
B)  the exclusion of uncertainty may have a significant impact on this evaluation. 
C)  the inclusion of certainty may have a significant impact on this evaluation. 
D)  the inclusion of uncertainty may have a significant impact on this evaluation. 
A)  the exclusion of certainty may have a significant impact on this evaluation. 
B)  the exclusion of uncertainty may have a significant impact on this evaluation. 
C)  the inclusion of certainty may have a significant impact on this evaluation. 
D)  the inclusion of uncertainty may have a significant impact on this evaluation.

Question 5

A negative NPV for an option indicates that the option will lose money for the supply chain.

Accepted Answer

A) True 
 B)False

Question 6

A firm may choose to build a flexible global supply chain even in the presence of little demand or supply uncertainty if certainty exists in exchange rates or prices.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A)  Working capital 
B)  Hidden costs 
C)  Supply chain visibility 
D)  Product returns 
A)  Working capital 
B)  Hidden costs 
C)  Supply chain visibility 
D)  Product returns

Question 8

Financial analysis should be used as an input to decision making, not as the decision-making process.

Accepted Answer

A) True 
 B)False

Question 9

In reality, demand and prices are highly uncertain and are likely to fluctuate during the life of any supply chain decision.

Accepted Answer

A) True 
 B)False

Question 10

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 likelihood of high demand that would make the decision maker indifferent between the two alternatives for a two year operating time.

Accepted Answer

A)  0.86 
B)  0.72 
C)  0.28 
D)  0.14 
A)  0.86 
B)  0.72 
C)  0.28 
D)  0.14

Question 11

In reality, demand and prices are

Accepted Answer

A)  highly certain and not likely to fluctuate during the life of any supply chain decision. 
B)  highly certain and likely to fluctuate during the life of any supply chain decision. 
C)  highly uncertain and not likely to fluctuate during the life of any supply chain decision. 
D)  highly uncertain and likely to fluctuate during the life of any supply chain decision. 
A)  highly certain and not likely to fluctuate during the life of any supply chain decision. 
B)  highly certain and likely to fluctuate during the life of any supply chain decision. 
C)  highly uncertain and not likely to fluctuate during the life of any supply chain decision. 
D)  highly uncertain and likely to fluctuate during the life of any supply chain decision.

Question 12

The opportunities from globalization are often accompanied by

Accepted Answer

A)  a lack of domestic opportunities. 
B)  the need to eliminate the accounting function. 
C)  significant additional risk. 
D)  the need to eliminate the logistics function. 
A)  a lack of domestic opportunities. 
B)  the need to eliminate the accounting function. 
C)  significant additional risk. 
D)  the need to eliminate the logistics function.

Question 13

A labor dispute is a risk driver to be considered during network design. What category does a "labor dispute" belong to?

Accepted Answer

A)  Disruptions 
B)  Inventory risk 
C)  Systems risk 
D)  Capacity risk 
A)  Disruptions 
B)  Inventory risk 
C)  Systems risk 
D)  Capacity risk

Question 14

The present value of future cash flow is found by

Accepted Answer

A)  locating the correct factor on a z-table. 
B)  using a discount factor. 
C)  plotting the function on a graph. 
D)  adding the total of all future cash flows. 
A)  locating the correct factor on a z-table. 
B)  using a discount factor. 
C)  plotting the function on a graph. 
D)  adding the total of all future cash flows.

Question 15

When faced with uncertain conditions it is always best to sign long-term contracts (because they are typically cheaper) and avoid all flexible capacity (because it is more expensive).

Accepted Answer

A) True 
 B)False

Question 16

Strategic planning and financial planning should be combined during supply chain network design.

Accepted Answer

A) True 
 B)False

Question 17

Strategic planning and financial planning

Accepted Answer

A)  should be performed independently during supply chain network design. 
B)  should be performed sequentially during supply chain network design. 
C)  should be performed concurrently during supply chain network design. 
D)  should be combined during supply chain network design. 
A)  should be performed independently during supply chain network design. 
B)  should be performed sequentially during supply chain network design. 
C)  should be performed concurrently during supply chain network design. 
D)  should be combined during supply chain network design.

Question 18

If price and demand vary over time in a global network, flexible production capacity can be reconfigured to maximize profits in the new environment.

Accepted Answer

A) True 
 B)False

Question 19

The tailored strategy "Focus on low-cost, decentralized capacity for predictable demand" follows which risk mitigation strategy?

Accepted Answer

A)  Get redundant suppliers. 
B)  Increase capacity. 
C)  Increase responsiveness. 
D)  Increase inventory. 
A)  Get redundant suppliers. 
B)  Increase capacity. 
C)  Increase responsiveness. 
D)  Increase inventory.

Question 20

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 expected cost of operating a small facility for a period of two years.

Accepted Answer

A)  $1,102,500 
B)  $1,005,500 
C)  $502,500 
D)  $2,205,000 
A)  $1,102,500 
B)  $1,005,500 
C)  $502,500 
D)  $2,205,000

What is the type of this network design?

The NPV (net present value) of a cash stream that is equal to $100 per period for 5 periods with a rate of return of 12% per period would be

Decisions made during the supply chain design phase regarding significant investments in the supply chain, such as the number and size of plants to build, the number of trucks to purchase or lease, and whether to build or lease warehouse space,

Uncertainty in demand and economic factors should be included in the financial evaluation of supply chain design decisions, because

A negative NPV for an option indicates that the option will lose money for the supply chain.

A firm may choose to build a flexible global supply chain even in the presence of little demand or supply uncertainty if certainty exists in exchange rates or prices.

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

Financial analysis should be used as an input to decision making, not as the decision-making process.

In reality, demand and prices are highly uncertain and are likely to fluctuate during the life of any supply chain decision.

In reality, demand and prices are

The opportunities from globalization are often accompanied by

A labor dispute is a risk driver to be considered during network design. What category does a "labor dispute" belong to?

The present value of future cash flow is found by

When faced with uncertain conditions it is always best to sign long-term contracts (because they are typically cheaper) and avoid all flexible capacity (because it is more expensive).

Strategic planning and financial planning should be combined during supply chain network design.

Strategic planning and financial planning

If price and demand vary over time in a global network, flexible production capacity can be reconfigured to maximize profits in the new environment.

The tailored strategy "Focus on low-cost, decentralized capacity for predictable demand" follows which risk mitigation strategy?

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

What is the type of this network design?

The NPV (net present value) of a cash stream that is equal to $100 per period for 5 periods with a rate of return of 12% per period would be

Decisions made during the supply chain design phase regarding significant investments in the supply chain, such as the number and size of plants to build, the number of trucks to purchase or lease, and whether to build or lease warehouse space,

Uncertainty in demand and economic factors should be included in the financial evaluation of supply chain design decisions, because

A negative NPV for an option indicates that the option will lose money for the supply chain.

A firm may choose to build a flexible global supply chain even in the presence of little demand or supply uncertainty if certainty exists in exchange rates or prices.

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

Financial analysis should be used as an input to decision making, not as the decision-making process.

In reality, demand and prices are highly uncertain and are likely to fluctuate during the life of any supply chain decision.

In reality, demand and prices are

The opportunities from globalization are often accompanied by

A labor dispute is a risk driver to be considered during network design. What category does a "labor dispute" belong to?

The present value of future cash flow is found by

When faced with uncertain conditions it is always best to sign long-term contracts (because they are typically cheaper) and avoid all flexible capacity (because it is more expensive).

Strategic planning and financial planning should be combined during supply chain network design.

Strategic planning and financial planning

If price and demand vary over time in a global network, flexible production capacity can be reconfigured to maximize profits in the new environment.

The tailored strategy "Focus on low-cost, decentralized capacity for predictable demand" follows which risk mitigation strategy?

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