A company's annual cost of goods sold is $350 million, and inventory carrying cost is 18%.
The company averages four inventory turns. The cost savings resulting from increasing
inventory turns from four to six would be:

A.

$29,000,000.

B.

$15,750,000.

C.

$10,500,000.

D.

$ 5,250,000.

A company that produces standardized products and sells them through retailers via a
responsive transportation system has decided to expand its sales with an online store for
customized products. Which of the following distribution strategies would be the most
appropriate for the business-strategy change?

A.

Local distribution centers serving retailers and online sales

B.

Centralized cross-docking facilities serving retailers and online sales

C.

A centralized distribution center serving retailers and direct shipment from the factory
serving online sales

D.

A centralized distribution center serving retailers with transshipment arrangements
serving online sales

In addition to sales history, current customer orders, and forecasted demand, which of the
following data sources should be used as part of a demand management process?

A.

Inventory levels

B.

Contractual obligations

C.

Customer profitability

D.

Scheduled marketing activities

A remanufacturer of equipment is most likely to have what type of supply chain?

A.

Modular logistics

B.

Reverse logistics

C.

Mixed model

D.

Lateral

Risk pooling enables a lower total inventory level without affecting service levels based on
which of the following assumptions?

A.

Inventory turnover ratio can be reduced.

B.

Aggregate demand is more accurate than disaggregate demand.

C.

The planning time fence can be adjusted as needed.

D.

The supplier shares some risk for holding inventory

Which of the following strategies is used primarily for demand planning?

A.

Build-to-order scheduling

B.

Push-pull replenishment

C.

Collaborative planning, forecasting, and replenishment

D.

Vendor-managed inventory

A media company offers a majority of its movies through a specific distributor. The media
company is beginning to produce content for a new foreign market to which the distributor
has exclusive access. To maximize savings and gain entry to this new market, the media
company should:

A.

create a contract for the new market.

B.

enter into a partnership.

C.

form a strategic alliance.

D.

acquire the distributor

When designing a supply chain for strategic advantage, a company first should consider:

A.

the impact on customers using Just-in-Time manufacturing.

B.

the financial stability of suppliers.

C.

matching the supply chain to product type.

D.

whether to use custom or standard parts.

Which of the following organizational design choices is an example of vertical integration?

A.

Contracting with a third-party logistics provider

B.

Producing components used internally

C.

Externally staffing a customer service center

D.

Awarding a one-time trade show contract

Which of the following situations is an example of postponement?

A.

Shipments are broken down into small groups for reshipment.

B.

Shipments are consolidated immediately for reshipment.

C.

Production begins after a customer order is received.

D.

Partially assembled goods are assembled at a later stage.