Question 1

Pricing can be used to

Accepted Answer

A) change available supply. 
B) reduce supply chain costs. 
C) influence demand if customers are price sensitive. 
D) all of the above 
A) change available supply. 
B) reduce supply chain costs. 
C) influence demand if customers are price sensitive. 
D) all of the above

Question 2

Scenario 16.3 - AITP's Revenge
The student chapter of the Association of Information Technology Professionals (AITP)notices the success that the APICS student chapter has with their traditional barbecue sauce fundraiser.Blinded by their jealousy,the club officers decide to sell a competing product,clocks made out of junk computer parts that the club sponsor whips up in his garage.Club officers set up a card table in the atrium of the business building and take turns staffing it for the duration of the computer clock season,which is four months.Twenty-five years of experience have revealed that demand varies depending on the month of the season.Customer demand in the first month can be described as 20-p1,in the second month as 20-1.4p2,in the third month 20-1.8p3,and in the fourth month 20-2.2p4.
-The components needed to produce a computer clock cost twenty-five cents.What is the expected profit if the AITP club sponsor produces the optimal number of clocks?

Accepted Answer

A) $263.72 
B) $262.54 
C) $260.97 
D) $269.41 
A) $263.72 
B) $262.54 
C) $260.97 
D) $269.41

Question 3

Ultimately,a proper understanding of customer preferences and a quantification of the impact of various tactics on consumer behavior are at the core of successful revenue management.

Accepted Answer

A) True 
 B)False

Question 4

The amount reserved for the spot market should be such that the expected marginal revenue from the spot market equals the current revenue from a bulk sale.

Accepted Answer

A) True 
 B)False

Question 5

Revenue management uses

Accepted Answer

A) the marketing mix to increase revenue. 
B) the supply chain mix to decrease expenses. 
C) static pricing to increase revenue. 
D) differential pricing to increase revenue. 
A) the marketing mix to increase revenue. 
B) the supply chain mix to decrease expenses. 
C) static pricing to increase revenue. 
D) differential pricing to increase revenue.

Question 6

The tactic of varying price over time is suitable for assets such as fashion apparel that have a clear date beyond which they lose a lot of their value.

Accepted Answer

A) True 
 B)False

Question 7

Scenario 16.1 - The Stone Lion
The Stone Lion,a bed and breakfast located in a sleepy town,caters to two groups of customers,young couples interested in something marginally more exotic than a staycation,and corporate clients interested in doing some team-building at a location with no cellular service.Corporations know they can get rooms with minimal notice,but young couples on tight budgets tend to plan well in advance of their planned stay at the property.The corporate rate for rooms is $250 per person and the demand pattern is normal with a mean of 20 and a standard deviation of 10.The proprietor of the Stone Lion takes pity on the young couples and charges them only $150 for identical accommodations.
-How many rooms should be reserved for corporate clients?

Accepted Answer

A) 17 
B) 14 
C) 13 
D) 10 
A) 17 
B) 14 
C) 13 
D) 10

Question 8

An effective revenue management tactic when faced with seasonal peaks is to charge a

Accepted Answer

A) high price during the peak period and a higher price during off-peak periods. 
B) higher price during the peak period and a lower price during off-peak periods. 
C) lower price during the peak period and a higher price during off-peak periods. 
D) low price during the peak period and a lower price during off-peak periods. 
A) high price during the peak period and a higher price during off-peak periods. 
B) higher price during the peak period and a lower price during off-peak periods. 
C) lower price during the peak period and a higher price during off-peak periods. 
D) low price during the peak period and a lower price during off-peak periods.

Question 9

Revenue management may be defined as

Accepted Answer

A) the use of differential costing based on product or capacity availability to decrease supply chain cost. 
B) the use of differential costing based on customer segment,time of use,and product or capacity availability to increase profitability. 
C) the use of differential pricing based on customer segment,time of use,and product or capacity availability to decrease supply chain surplus. 
D) the use of differential pricing based on customer segment,time of use,and product or capacity availability to increase supply chain surplus. 
A) the use of differential costing based on product or capacity availability to decrease supply chain cost. 
B) the use of differential costing based on customer segment,time of use,and product or capacity availability to increase profitability. 
C) the use of differential pricing based on customer segment,time of use,and product or capacity availability to decrease supply chain surplus. 
D) the use of differential pricing based on customer segment,time of use,and product or capacity availability to increase supply chain surplus.

Question 10

In most instances,owners of supply chain assets prefer

Accepted Answer

A) to fulfill all demand that arises from bulk sales and serve small customers only if assets are left over. 
B) to fulfill all demand that arises from small customers and serve bulks sales only if assets are left over. 
C) to fulfill the same percentage of demand generated by both bulk sales and small customers. 
D) to leave a small percentage of demand generated by bulk sales and small customers unfilled in case a new customers arises. 
A) to fulfill all demand that arises from bulk sales and serve small customers only if assets are left over. 
B) to fulfill all demand that arises from small customers and serve bulks sales only if assets are left over. 
C) to fulfill the same percentage of demand generated by both bulk sales and small customers. 
D) to leave a small percentage of demand generated by bulk sales and small customers unfilled in case a new customers arises.

Question 11

The fundamental trade-off between selling in bulk or on the spot market is

Accepted Answer

A) different from the situation where a firm serves two market segments. 
B) similar to the case when a firm serves two market segments. 
C) similar to the case where a firm must deal with seasonal demand. 
D) similar to the case where a firm has a perishable asset. 
A) different from the situation where a firm serves two market segments. 
B) similar to the case when a firm serves two market segments. 
C) similar to the case where a firm must deal with seasonal demand. 
D) similar to the case where a firm has a perishable asset.

Question 12

Scenario 16.5 - Sanitary Landfill
The sanitary landfill charges companies $150 per load and individuals $40 per load.On average,80 companies tip their trucks each day at the landfill with a standard deviation of 15.There is time only for 110 deliveries in any combination of companies and individuals throughout the course of an eight-hour day.Company dump trucks enter through Gate A and individuals enter through Gate B.Individual demand is plentiful - often there are individuals turned away due to lack of capacity.
-Refer to Scenario 16.5.It costs the landfill $10 to process a company dump truck and $5 to process an individual load.What is the expected profit for one day if the landfill allocates the optimal quantity of capacity to company trucks and individuals fill up the remainder of the capacity?

Accepted Answer

A) $13,000 
B) $13,300 
C) $13,600 
D) $13,900 
A) $13,000 
B) $13,300 
C) $13,600 
D) $13,900

Question 13

Scenario 16.2 - Card Table Vendor
The traditional fundraiser for the student chapter of APICS is pint mason jars filled with a tangy barbecue sauce that the club sponsor whips up in his kitchen.The sponsor is independently wealthy,so he donates his time and materials to the fundraising effort.Club officers set up a card table in the atrium of the business building and take turns staffing it for the duration of the barbecue season,which is four months.Eighteen sad years of experience have revealed that demand varies depending on the month of the season.Customer demand in the first month can be described as 400-p1,in the second month as 400-1.4p2,in the third month 400-1.8p3,and in the fourth month 400-2.2p4.The club sponsor has only 400 spare mason jars this year after a busy summer collecting specimens.
-Responding to customer complaints (primarily from period 1 purchasers)the student APICS chapter decides to use static pricing over the four month season.The club sponsor makes a deal with the local bootlegger to supply him with all the mason jars he will need for the barbecue season.What is the total revenue for the season's sales at the optimal price?

Accepted Answer

A) $89,490 
B) $94,747 
C) $100,000 
D) $90,247 
A) $89,490 
B) $94,747 
C) $100,000 
D) $90,247

Question 14

Scenario 16.5 - Sanitary Landfill
The sanitary landfill charges companies $150 per load and individuals $40 per load.On average,80 companies tip their trucks each day at the landfill with a standard deviation of 15.There is time only for 110 deliveries in any combination of companies and individuals throughout the course of an eight-hour day.Company dump trucks enter through Gate A and individuals enter through Gate B.Individual demand is plentiful - often there are individuals turned away due to lack of capacity.
-Refer to Scenario 16.5.How many individuals should be admitted each day?

Accepted Answer

A) 15 
B) 17 
C) 19 
D) 21 
A) 15 
B) 17 
C) 19 
D) 21

Question 15

The basic trade-off to consider during overbooking is between

Accepted Answer

A) having wasted capacity (or inventory)or a shortage of capacity (or inventory). 
B) having lost sales or a shortage of capacity (or inventory). 
C) having wasted capacity (or inventory)or excess capacity (or inventory). 
D) having high sales or a shortage of capacity (or inventory). 
A) having wasted capacity (or inventory)or a shortage of capacity (or inventory). 
B) having lost sales or a shortage of capacity (or inventory). 
C) having wasted capacity (or inventory)or excess capacity (or inventory). 
D) having high sales or a shortage of capacity (or inventory).

Question 16

Too low a level of overbooking will lead to unutilized assets and lost revenue.

Accepted Answer

A) True 
 B)False

Question 17

The goal when making the overbooking decision is to maximize supply chain profits by minimizing the cost of wasted capacity and the cost of capacity shortage.

Accepted Answer

A) True 
 B)False

Question 18

The forecasting function is not necessary for most revenue management systems.

Accepted Answer

A) True 
 B)False

Question 19

The amount reserved for the spot market should be

Accepted Answer

A) such that the expected marginal revenue from the spot market equals the current revenue from a bulk sale. 
B) such that the expected marginal revenue from the spot market exceeds the current revenue from a bulk sale. 
C) such that the expected marginal revenue from the spot market is less than the current revenue from a bulk sale. 
D) equal to the maximum revenue available from the spot. 
A) such that the expected marginal revenue from the spot market equals the current revenue from a bulk sale. 
B) such that the expected marginal revenue from the spot market exceeds the current revenue from a bulk sale. 
C) such that the expected marginal revenue from the spot market is less than the current revenue from a bulk sale. 
D) equal to the maximum revenue available from the spot.

Question 20

Scenario 16.5 - Sanitary Landfill
The sanitary landfill charges companies $150 per load and individuals $40 per load.On average,80 companies tip their trucks each day at the landfill with a standard deviation of 15.There is time only for 110 deliveries in any combination of companies and individuals throughout the course of an eight-hour day.Company dump trucks enter through Gate A and individuals enter through Gate B.Individual demand is plentiful - often there are individuals turned away due to lack of capacity.
-Refer to Scenario 16.5.It costs the landfill $10 to process a company dump truck and $5 to process an individual load.What is the difference in one day's expected profit between operating with revenue management and operating without using the technique?

Accepted Answer

A) $6,320 
B) $7,230 
C) $8,560 
D) $9,450 
A) $6,320 
B) $7,230 
C) $8,560 
D) $9,450

Pricing can be used to

Ultimately,a proper understanding of customer preferences and a quantification of the impact of various tactics on consumer behavior are at the core of successful revenue management.

The amount reserved for the spot market should be such that the expected marginal revenue from the spot market equals the current revenue from a bulk sale.

Revenue management uses

The tactic of varying price over time is suitable for assets such as fashion apparel that have a clear date beyond which they lose a lot of their value.

An effective revenue management tactic when faced with seasonal peaks is to charge a

Revenue management may be defined as

In most instances,owners of supply chain assets prefer

The fundamental trade-off between selling in bulk or on the spot market is

The basic trade-off to consider during overbooking is between

Too low a level of overbooking will lead to unutilized assets and lost revenue.

The goal when making the overbooking decision is to maximize supply chain profits by minimizing the cost of wasted capacity and the cost of capacity shortage.

The forecasting function is not necessary for most revenue management systems.

The amount reserved for the spot market should be

Understanding the Supply Chain

Achieving Strategic Fit in a Supply Chain

Supply Chain Drivers and Metrics

Designing Distribution Networks and Applications to E-Business

Network Design in the Supply Chain

Designing Global Supply Chain Networks

Demand Forecasting in a Supply Chain

Aggregate Planning in a Supply Chain

Sales and Operations Planning: Planning Supply and Demand

Coordination in a Supply Chain

Managing Economies of Scale in a Supply Chain: Cycle Inventory

Managing Uncertainty in a Supply Chain: Safety Inventory

Linking Product Availability to Profits

Transportation in a Supply Chain

Sourcing Decisions in a Supply Chain

Sustainability and the Supply Chain

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Exam 16: Pricing and Revenue Management in a Supply Chain

Pricing can be used to

Ultimately,a proper understanding of customer preferences and a quantification of the impact of various tactics on consumer behavior are at the core of successful revenue management.

The amount reserved for the spot market should be such that the expected marginal revenue from the spot market equals the current revenue from a bulk sale.

Revenue management uses

The tactic of varying price over time is suitable for assets such as fashion apparel that have a clear date beyond which they lose a lot of their value.

An effective revenue management tactic when faced with seasonal peaks is to charge a

Revenue management may be defined as

In most instances,owners of supply chain assets prefer

The fundamental trade-off between selling in bulk or on the spot market is

The basic trade-off to consider during overbooking is between

Too low a level of overbooking will lead to unutilized assets and lost revenue.

The goal when making the overbooking decision is to maximize supply chain profits by minimizing the cost of wasted capacity and the cost of capacity shortage.

The forecasting function is not necessary for most revenue management systems.

The amount reserved for the spot market should be

Understanding the Supply Chain

Achieving Strategic Fit in a Supply Chain

Supply Chain Drivers and Metrics

Designing Distribution Networks and Applications to E-Business

Network Design in the Supply Chain

Designing Global Supply Chain Networks

Demand Forecasting in a Supply Chain

Aggregate Planning in a Supply Chain

Sales and Operations Planning: Planning Supply and Demand

Coordination in a Supply Chain

Managing Economies of Scale in a Supply Chain: Cycle Inventory

Managing Uncertainty in a Supply Chain: Safety Inventory

Linking Product Availability to Profits

Transportation in a Supply Chain

Sourcing Decisions in a Supply Chain

Sustainability and the Supply Chain

Filters