Supply Chain Management Exam Review
Course Introduction
Supply Chain Management explores the end-to-end processes involved in producing and delivering goods and services to consumers. The course covers the strategic design, planning, and operation of supply chains, focusing on the integration of suppliers, manufacturers, warehouses, retailers, and customers. Topics include procurement, inventory management, logistics, demand forecasting, and the use of information technology in optimizing supply chain performance. Case studies and real-world examples are employed to illustrate challenges such as globalization, risk management, sustainability, and collaboration among partners, equipping students with the skills needed to make informed decisions in dynamic business environments.
Recommended Textbook
Practical Management Science 5th Edition by Wayne L. Winston
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421 Verified Questions
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Chapter 1: Introduction to Modeling
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Sample Questions
Q1) Which of the following type of model is used when an appropriate equation or system of equations can be developed to represent the system?
A)Simulation model
B)Analytical model
C)Heuristic model
D)Spreadsheet model
Answer: B
Q2) Which of the following is a type of model that is key to virtually every management science application?
A)Heuristic model
B)Queuing model
C)Mathematical model
D)Regression model
Answer: C
Q3) Data are often not in the required form, in which case it is the analysts' job to gather the right data and put it into an appropriate format.
A)True
B)False
Answer: True
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Chapter 2: Introduction to Spreadsheet Modeling
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Q1) Which of the following is not one of the components of a mathematical model?
A)Inputs
B)Outputs
C)Decision variables
D)None of these options
Answer: D
Q2) Which of the following is a useful tool for understanding and troubleshooting a spreadsheet model?
A)Data tables
B)VLOOKUP function
C)Formula auditing
D)SUMPRODUCT function
Answer: C
Q3) Much of the power of spreadsheet models derives from their flexibility.
A)True
B)False
Answer: True
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Chapter 3: Introduction to Optimization Modeling
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Sample Questions
Q1) Refer to Exhibit 3-2. What is the value of additional capacity on the polisher? How much increase and decrease in this capacity is possible before a change occurs in the optimal production schedule?
Answer: The value of additional capacity on the polisher is zero, since it is not binding. The allowable increase is unbounded, and the allowable decrease is 1000.
Q2) The feasible region in a graphical solution of a linear programming problem will appear as some type of polygon, with lines forming all sides.
A)True
B)False
Answer: True
Q3) Suppose the allowable increase and decrease for an objective coefficient of a decision variable that has a current value of $50 are $25 (increase) and $10 (decrease). If the coefficient were to change from $50 to $65, the optimal value of the objective function would not change.
A)True
B)False
Answer: False
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Chapter 4: Linear Programming Models
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Sample Questions
Q1) In aggregate planning models, we can model backlogging of demand by allowing a month's inventory to be negative.
A)True
B)False
Q2) Refer to Exhibit 4-2. The project manager is evaluating options to complete the project early so that the company can earn a bonus. He has determined that the project schedule can be compressed into a six-month schedule, with the same total number of worker-months. In that case, the staffing requirements are as shown below.Develop an optimal staffing plan for the project under the accelerated schedule.
\[\begin{array} { c c c c c c c }
& { \text { Month of Project } } \\
& 1 & 2 & 3 & 4 & 5 & 6 \\
\text { Required } & 26 & 38 & 84 & 105 & 101 & 84
\end{array}\]
Q3) Integer programming (IP) models are optimization models in which all of the variables must be integers.
A)True
B)False
Q4) Refer to Exhibit 4-2. Determine the optimal staffing plan for the project.
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Chapter 5: Network Models
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Sample Questions
Q1) Refer to Exhibit 5-1. Suppose the shipping capacity between any two plants was limited to 2500 tons per month. Design and implement a network flow version of this model in Solver and obtain the optimal shipping plan. How much more would the shipping plan cost Sinclair in that case?
Q2) Refer to Exhibit 5-2. Based on their salaries, the engineer, tech 1, tech 2, and intern earn $90, $65, $65, and $45 per hourly, respectively. Change the firm's objective function to minimize staff costs and find the optimal assignment plan. Does it change from the base case?
Q3) Problems which deal with the direct distribution of products from supply locations to demand locations are called:
A)transportation problems
B)assignment problems
C)network problems
D)transshipment problems
Q4) The flow balance constraint for each transshipment node in a network flow model has the form Flow in = Flow out.
A)True
B)False
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Chapter 6: Optimization Models With Integer Variables
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Q1) Refer to Exhibit 6-3. This problem is an example of what type of integer programming model?
Q2) The branch and bound algorithm uses:
A)lower bounds
B)upper bounds
C)both upper and lower bounds
D)neither upper or lower bounds
Q3) Fixed costs imply that the divisibility assumption of linear models no longer holds.
A)True
B)False
Q4) If Solver fails to find an optimal solution to an integer programming problem, we might be able to find a near optimal solution by specifying a smaller number for the integer optimality setting.
A)True
B)False
Q5) Refer to Exhibit 6-3. Suppose PharmaCo wants to have a backup for each city. What is the minimum number of representatives that can cover this region in that case? What are their home cities?
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Chapter 7: Nonlinear Optimization Models
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Q1) Which of the following is not one of the conditions for maximization in a nonlinear problem?
A)The objective function is concave
B)The logarithm of the objective function is concave
C)The starting values are bounded
D)The constraints are linear
Q2) Which of the following is not one of the reasons an optimization model can become nonlinear?
A)Nonconstant returns to scale.
B)The model objective is to minimize the sum of squared differences.
C)The model objective is a function of a variable times multiplied by a function of that same variable
D)The model objective is to minimize the sum of absolute errors.
Q3) Solver is guaranteed to find the global minimum (if it exists) if the objective function is concave and the constraints are linear.
A)True
B)False
Q4) Refer to Exhibit 7-1. How many units of each product should the company produce? What prices should it charge, to maximize profit?
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Chapter 8: Evolutionary Solver: An Alternative Optimization
Procedure
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Sample Questions
Q1) The number of possible paths in a shortest path problem with n locations is:
A)n
B)n 1
C)n2
D)n!
Q2) The Evolutionary Solver setting that helps the algorithm explore a completely different area of the feasible region is:
A)convergence
B)mutation rate
C)population size
D)random seed
Q3) Evolutionary Solver works best when constraints are applied as:
A)penalties
B)shortages
C)capacities
D)targets
Q4) Refer to Exhibit 8-3. Write out your model and interpret your results. Do the results make sense?
Page 10
Q5) Refer to Exhibit 8-1. This is an example of what type of optimization problem?
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Chapter 9: Decision Making Under Uncertainty
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Q1) Refer to Exhibit 9-1. Suppose the farmer is not risk-neutral, but instead his behavior can be modeled using an exponential utility function with a risk tolerance parameter of 100,000. What is the most he would be willing to pay for insulation in that case?
Q2) The denominator of Bayes' rule:
A)is the same as the simple probability of an outcome O.
B)decomposes the probability of the new information I into all possibilities.
C)is sometimes called the law of complementary probabilities. D)is unique for each possible outcome.
Q3) Which of the following statements is true concerning decision tree conventions?
A)Time proceeds from right to left.
B)The trees are composed of circles, triangles and ovals.
C)The nodes represent points in time.
D)Probabilities of outcomes are shown to the right of the end nodes.
Q4) Refer to Exhibit 9-1. Construct a decision tree to help the farmer make his decision. What should he do? Explain your answer.
Q5) Refer to Exhibit 9-1. Find the highest cost of insulating the grapefruits for which the farmer prefers to insulate his crop.
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Chapter 10: Introduction to Simulation Modeling
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Sample Questions
Q1) Which of the following is not one of the important distinctions of probability distributions?
A)Discrete versus continuous
B)Symmetric versus skewed
C)Bounded versus unbounded
D)Positive versus negative
Q2) Refer to Exhibit 10-2. What is the probability that the apparel company will exceed a profit at least $0.5M from the jacket line?
Q3) Refer to Exhibit 10-2. Finally, suppose the apparel company receives an uncertain fraction of the total retail revenue from its retailers, modeled as a Triangular(0.70,0.75,0.80) distribution, and then must subtract production and operations costs, which are modeled as a Lognormal distribution with mean of $1,000,000 and standard deviation of $300,000. In that case, what is the expected net profit from the jacket line?
Q4) A common guideline for constructing a 95% confidence interval is to place upper and lower bounds one standard error on either side of the mean.
A)True
B)False
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Chapter 11: Simulation Models
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Q1) [Part 1] Refer to Exhibit 11-1. What is the deterministic next present value (NPV) of the project, including the required investment, assuming a 10% discount rate?
Q2) The value at risk (VAR) is typically defined as the:
A)5th percentile of NPV distribution
B)10th percentile of NPV distribution
C)90th percentile of NPV distribution
D)95th percentile of NPV distribution
Q3) [Part 3] Refer to Exhibit 11-2. Briefly explain why designing the plant for the expected capacity is clearly not the optimal solution.
Q4) RISKTARGET is a function that allows us to determine the cumulative probability of a particular value in an output distribution, such as the probability of meeting a due date in manufacturing.
A)True
B)False
Q5) The RISKSIMTABLE function is used to summarize the results of a single simulation of product lifetime.
A)True B)False
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Chapter 12: Inventory and Supply Chain Models
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Q1) An order cycle begins each time an order arrives and ends just before the next order arrives.
A)True B)False
Q2) The annual shortage cost in an economic order quantity (EOQ) model with shortages allowed is pb2/Q.
A)True B)False
Q3) Refer to Exhibit 12-1. Assuming there are no storage costs, formulate a Solver model and find the optimal order quantity.
Q4) Refer to Exhibit 12-3. Suppose the annual demand for the sweaters is not known with certainty, but rather is estimated to be normally distributed with mean 26,000 and standard deviation 2,000. Formulate a Solver model to find the optimal (R,Q) policy by minimizing the North Slope's expected annual cost. What is the policy, and what is the total annual cost?
Q5) The only real cost benefit from synchronizing orders for several products is reduced setup costs.
A)True B)False
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Chapter 13: Queuing Models
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Sample Questions
Q1) Which of the following is not one of the types of service disciplines?
A)Longest-processing-time
B)First-come-first-served
C)Service-in-random-order
D)Last-come-first-served
Q2) As the traffic intensity approaches 1:
A)there is no waiting
B)waiting lines stabilize
C)waiting lines grow extremely rapidly
D)at least one server will be idle
Q3) Refer to Exhibit 13-2. What is the server utilization?
Q4) Refer to Exhibit 13-3. What is the average length of time (in hours) spent waiting in line?
Q5) Almost all queuing systems are alike in that customers enter a system, possibly wait in one or more queues, get served, and then depart.
A)True
B)False
Q6) Refer to Exhibit 13-3. What percentage of all customers have to spend at least some small amount of time waiting in line?
Page 15
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Chapter 14: Regression and Forecasting Models
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Q1) A "fan" shape in a scatterplot indicates:
A)nonconstant error variance
B)a nonlinear relationship
C)the absence of outliers
D)sampling error
Q2) Which of the following is not one of the commonly used summary measures for forecast errors?
A)MAE (mean absolute error)
B)MFE (mean forecast error)
C)RMSE (root mean square error)
D)MAPE (mean absolute percentage error)
Q3) The residual is defined as the difference between the actual and predicted, or fitted values of the response variable.
A)True
B)False
Q4) The smoothing constant used in simple exponential smoothing is analogous to the span in moving averages.
A)True
B)False
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