Integrated Logistics and Supply Chain
Textbook Exam Questions
Course Introduction
Integrated Logistics and Supply Chain examines the seamless coordination and optimization of activities involved in the movement, storage, and management of goods and services from suppliers to end customers. The course covers key concepts such as supply chain network design, inventory management, procurement, transportation, warehousing, and information systems. Emphasis is placed on the integration of these activities to improve efficiency, reduce costs, and enhance customer satisfaction. Students will analyze real-world case studies, explore best practices, and learn strategic approaches to designing responsive and resilient supply chains in a global context.
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Supply Chain Management Strategy Planning and Operation 6th Edition by Sunil Chopra
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Chapter 1: Understanding the Supply Chain
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Q1) The procurement cycle occurs at the
A) customer/retailer interface.
B) retailer/distributor interface.
C) distributor/manufacturer interface.
D) manufacturer/supplier interface.
Answer: D
Q2) The objective of every supply chain is to
A) minimize the overall cost generated.
B) maximize the overall value generated.
C) minimize the cost to the manufacturer.
D) maximize the profit of the manufacturer.
Answer: B
Q3) The decision phases in a supply chain include
A) production scheduling.
B) customer relationship management.
C) supply chain operation.
D) supply chain orientation.
Answer: C
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Chapter 2: Supply Chain Performance: Achieving Strategic
Fit and Scope
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Q1) The degree of supply chain responsiveness should be consistent with the implied uncertainty.
A)True
B)False
Answer: True
Q2) The final step in achieving strategic fit between competitive and supply chain strategies is to
A) understand the supply chain and map it on the responsiveness spectrum.
B) understand customers and supply chain uncertainty.
C) match supply chain responsiveness with the implied uncertainty of demand.
D) combine customer and supply chain uncertainty and map it on the implied uncertainty spectrum.
Answer: C
Q3) The curve that shows the lowest possible cost for a given level of responsiveness is referred to as the
A) supply chain responsiveness curve.
B) supply chain efficiency curve.
C) cost-responsiveness efficient frontier.
D) responsiveness spectrum.
Answer: C
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Chapter 3: Supply Chain Drivers and Metrics
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Q1) Stock keeping unit (SKU) storage is the warehousing methodology that uses a traditional warehouse to store all of one type of product together.
A)True
B)False
Answer: True
Q2) The set of business processes required to purchase goods and services is known as
A) cycle inventory.
B) safety inventory.
C) seasonal inventory.
D) sourcing.
Answer: D
Q3) The ________ strategy results in a peak during the discount week, often followed by a steep drop in demand during the following weeks.
A) Everyday low pricing
B) High-low pricing
C) Fixed price
D) Menu pricing
Answer: B
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Chapter 4: Designing Distribution Networks and Applications to e-Business
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Sample Questions
Q1) Total logistics costs for a supply chain network are a sum of
A) inventory and facility costs.
B) inventory, facility, and distributor costs.
C) facility, transportation, and distributor costs.
D) inventory, transportation, and facility costs.
Q2) To extract the maximum benefit from the online channel for physical goods, firms should keep it separate from their existing supply chain networks.
A)True
B)False
Q3) It is much easier to return a product to an online retailer than to a traditional bricks and mortar seller.
A)True
B)False
Q4) In general, traditional brick and mortar retail sales outperform online sales along the dimension of
A) product variety.
B) efficient funds transfer.
C) product returns.
D) order status tracking.
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Chapter 5: Network Design in the Supply Chain
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Q1) Firms focusing on cost leadership tend to find the lowest cost location for their manufacturing facilities, but only if that means locating very far from the markets they serve.
A)True
B)False
Q2) Managers making facility location decisions should carefully consider tariffs and tax incentives, because
A) network designers can use this fact to influence the role of the new facility and the focus of people working there.
B) facilities last a long time and have an enduring impact on a firm's performance.
C) it is astounding how often tax incentives drive the choice of location.
D) the location of a facility has a significant impact on the extent and form of communication that develops in the supply chain network.
Q3) Allocating too much capacity to a location results in
A) poor utilization, and as a result, higher costs.
B) high utilization, and as a result, higher costs.
C) poor utilization, and as a result, lower costs.
D) high utilization, and as a result, lower costs.
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Chapter 6: Designing Global Supply Chain Networks
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Q1) Uncertainty in demand and economic factors should be included in the financial evaluation of supply chain design decisions, because
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.
Q2) Use the information from Scenario 6.1 to determine the cost of the best alternative for a two year period.
A) $2,000,000
B) $1,200,000
C) $2,205,000
D) $2,810,000
Q3) A negative NPV (net present value) for an option indicates that the option will
A) gain money for the supply chain.
B) lose money for the supply chain.
C) maximize profit for the supply chain.
D) minimize profit for the supply chain.
Q4) Summarize the steps in the decision tree analysis methodology.
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Page 8
Chapter 7: Demand Forecasting in a Supply Chain
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Q1) Personnel can utilize forecasts to make decisions concerning A) scheduling.
B) promotions.
C) plant/equipment investment.
D) purchasing.
Q2) The measure of whether a forecast method consistently over- or underestimates demand is
A) mean absolute deviation (MAD).
B) mean absolute percentage error (MAPE).
C) bias.
D) the tracking signal.
Q3) Use a simple moving average of three periods to forecast the demand for July. What is the forecast?
A) 67
B) 58
C) 48.5
D) 45.3
Q4) Explain the basic, six-step approach to help an organization perform effective forecasting.
Q5) Discuss key issues of forecasting in practice.
Page 9
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Chapter 8: Aggregate Planning in a Supply Chain
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Q1) The goal of aggregate planning is to build a plan that satisfies demand while minimizing downtime.
A)True
B)False
Q2) The process by which a company determines levels of capacity, production, subcontracting, inventory, stockouts, and even pricing over a specified time horizon is
A) aggregate planning.
B) detail planning.
C) inventory planning.
D) sales planning.
Q3) Demand is forecast for the next five months as 200, 300, 500, 300, 200. The production planner decides to adopt a chase strategy, so over the next five months they should produce
A) 200, 300, 500, 300, 200.
B) 500, 400, 300, 200, 100.
C) 100, 200, 300, 400, 500.
D) 300, 300, 300, 300, 300.
Q4) Discuss key issues to be considered when implementing aggregate planning.
Q5) Discuss the information required for aggregate planning.
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Chapter 9: Sales and Operations Planning: Planning Supply and Demand in
a Supply
Chain
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Q1) Discuss how a firm can respond to predictable variability of demand in the supply chain.
Q2) A firm can vary supply of product by controlling A) inventory.
B) pricing.
C) demand.
D) revenue.
Q3) In this approach to managing capacity, a firm uses a temporary workforce during the peak season to increase capacity to match demand.
A) Time flexibility from workforce
B) Use of subcontracting
C) Use of dual facilities-specialized and flexible
D) Use of seasonal workforce
Q4) Which approach to capacity management would schedule the workforce so that the available capacity better matches demand?
A) Time flexibility from workforce
B) Use of seasonal workforce
C) Use of subcontracting
D) Use of dual facilities-dedicated and flexible
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Chapter 10: Coordination in a Supply Chain
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Q1) The local hominy man is anticipating a bumper crop this year, so he arranges with a chain of grocery stores to stock up on his hominy as part of a Homina Homina Hominy campaign to lure customers in to the stores during September for cans of the divinely salty, yet nutritious vegetable. This approach is an example of
A) DC replenishment collaboration.
B) store replenishment collaboration.
C) retail event collaboration.
D) assortment planning collaboration.
Q2) If retailers sell products from competing manufacturers in a VMI system,
A) inventory at the manufacturer will be lower than optimal.
B) inventory at the manufacturer will be higher than optimal.
C) sales at the retailer will be lower than optimal.
D) inventory at the retailer will be higher than optimal.
Q3) Trading partners collaborate on store-level POS forecasts in
A) store replenishment collaboration.
B) DC replenishment collaboration.
C) retail event collaboration.
D) collaborative assortment planning.
Q4) How does cooperation and trust improve performance in a supply chain partnership?
Page 12
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Chapter 11: Managing Economies of Scale in the Supply
Chain: Cycle Inventory
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Q1) A price discount where the discount is based on the total quantity purchased over a given period, regardless of the number of lots purchased over that period, is
A) customer based.
B) lot size based.
C) supplier based.
D) volume based.
Q2) Trade promotions lead to a significant ________ in lot size and cycle inventory because of forward buying by the ________.
A) decrease, retailer
B) increase, retailer
C) decrease, supplier
D) increase, supplier
Q3) The quantity of inventory that a stage of the supply chain either produces or purchases at a given time is
A) an order.
B) a job.
C) a shipment.
D) a lot or batch.
Q4) Discuss the role of cycle inventory in the supply chain.
Page 13
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Chapter 12: Managing Uncertainty in a Supply Chain: Safety Inventory
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Q1) The expected shortage per replenishment cycle (ESC) is
A) the units of demand that are not 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 that are satisfied from inventory in stock per replenishment cycle.
Q2) 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 in the desired product availability.
D) remains stable with an increase in the desired product availability.
Q3) Cycle inventory is inventory carried to satisfy demand that exceeds the amount forecasted for a given period.
A)True
B)False
Q4) Explain the impact of supplier lead time on safety inventory.
Page 14
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Chapter 13: Determining the Optimal Level of Product Availability
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Q1) In volume-based tailored sourcing, the predictable part of a product's demand is produced at a flexible facility, whereas the uncertain portion is produced at an efficient facility.
A)True
B)False
Q2) In product-based tailored sourcing, low-volume products with uncertain demand are obtained from a flexible source, while high-volume products with less demand uncertainty are obtained from an efficient source.
A)True
B)False
Q3) Explain the relationship between product availability and supply chain profitability.
Q4) Discuss the advantages and disadvantages of quick response.
Q5) ________ may reduce overall profits for a firm if a single product contributes the majority of the demand.
A) Shortened forecasting window
B) Quick response
C) Postponement
D) Tailored sourcing
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Chapter 14: Transportation in a Supply Chain
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Q1) Suppose that a highway is governed by a use fee charged to motorists that is based on congestion, operation and maintenance. The total traffic t is used to determine the cost of 5t². What is the marginal cost?
A) 5
B) 5t
C) 10
D) 10t
Q2) Serving a low density of customers at a long distance is best done using A) an LTL carrier.
B) a cross dock distribution center with milk runs.
C) a package carrier.
D) a private fleet with milk runs.
Q3) Discuss the two key players involved in any transportation in the supply chain.
Q4) The ________ is the party that requires the movement of the product between two points in the supply chain.
A) carrier
B) producer
C) shipper
D) consumer
Q5) Discuss the importance of designing flexibility into the transportation network.
Page 16
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Chapter 15: Sourcing Decisions in a Supply Chain
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Sample Questions
Q1) An intermediary can increase the supply chain surplus by decreasing the number of relationships required between multiple buyers and sellers. This is called
A) capacity aggregation.
B) inventory aggregation.
C) warehouse aggregation.
D) relationship aggregation.
Q2) Supplier performance must be rated on many different factors because
A) the factors impact the total supply chain cost.
B) the factors minimize the supply chain involvement.
C) the factors reduce the impact of price.
D) the factors maximize the supply chain price.
Q3) Which of the following is a traditional logistics driver of sourcing?
A) Pricing
B) Inventory
C) Sourcing
D) Information
Q4) Why should design collaboration capability be considered in supplier selection decisions?
Q5) What are some of the benefits of effective sourcing decisions?
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Chapter 16: Pricing and Revenue Management in a Supply Chain
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Q1) The use of differential pricing should A) decrease total profits for a firm.
B) increase total profits for a firm.
C) increase capacity for a firm.
D) decrease capacity utilization for a firm.
Q2) The forecasting function is not necessary for most revenue management systems.
A)True
B)False
Q3) An order from a lower price buyer should be accepted if the expected revenue from a higher price buyer is lower than the current revenue from the lower price buyer.
A)True
B)False
Q4) Describe the role of revenue management.
Q5) If the corporate demand and standard deviation both decrease by 50%, how many rooms should be reserved for corporate clients?
A) 7
B) 8
C) 9
D) 10
Page 18
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Chapter 17: Sustainability and the Supply Chain
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Q1) An example of a relative measure of emission output is pounds of CO<sub>2</sub> per gallon of diesel fuel.
A)True
B)False
Q2) A focus on sustainability allows a supply chain to better serve more environmentally conscious customers while often improving supply chain performance.
A)True
B)False
Q3) Most concrete action has been observed primarily when a focus on sustainability
A) increases revenue for sustainability initiatives.
B) makes the world more sustainable.
C) attracts customers who value sustainability.
D) reduces risk and improving the financial performance of the supply chain.
Q4) ________ can be used to assess the environmental impacts associated with a product's life from cradle to grave.
A) CRM
B) SRM
C) LCA
D) MRP
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