1. The cost of long term lease for a facility is cheaper as compared to spot market rates.

2. The basis for all planning decision is a supply chain is forecasting.

3. Following are the ways to calculate the systematic component in time series forecast except
(Note multiplicative, additive and mixed MAM are the ways to calculate systematic component
in time series forecast)
4. Typically aggregate planning time horizon is 3 to 18 months.
5. All of the following are forms of safety capacity except (note overtime, extra workforce,
subcontractors, build and carry extra inventories, Purchase capacity or product from an open or
spot market are forms of safety capacity)
6. The change in demand that can be forecasted is called Predictable variability.
7. Promotion is more effective during which period? Low demand
8. Carrying low levels of inventory requires capacity to vary with seasonal variation in demand or
enough capacity to cover peak demand during season.
9. The phenomenon resulted by lack of coordination in supply chain is called bullwhip effect.
10. To improve information accuracy, all of the following are helpful except (Note information
accuracy is improved by sharing point of sale data, inventory info, etc. Collaborative forecasting
and planning, Single stage control of replenishment, Vendor managed inventory (VMI) Mcq)
11. Trust in the supply chain could be improved by all of the following except (Note Trust in a supply
chain is improved by Information sharing, Aligning incentives, Operational improvements,
Stabilization of prices)
12. Store replenishment collaboration is applied to Direct store delivery or retail DC-to-store
delivery in supply chain, Mass merchants, club stores in industries
13. Which of the following is an inappropriate cycle time in supply chain

14. A customer orders 5 products one each from 5 product lines. The manufacturer dispatches 4
products from 4 product lines. In this case, the line fill rate is 80 percent.

15. What happens to supply chain profit if each stage if each stage of the supply chain makes its
pricing decision independently with the objective of maximizing its own profit? diminish total
supply chain profits
16. A third approach would be for a firm to work with their retail partners in the supply chain to
offer a price promotion during periods of low demand.
17. Following are the objectives of deciding the lot size except (Note lot sizes minimize the sum of
the material, ordering, and holding cost.)
18. Random component of demand uncertainty is usually estimated by the standard deviation of
demand
19. Inventory between a stage of supply chain and final customer is called echelon inventory.
20. The cumulative normal distribution function is denoted by F(x, f.L, a) and is the
probability that a normally distributed random variable with mean f.L and standard
deviation a takes on a value less than or equal to x.
21. The expected total quantity ordered during the season with two orders is less than that with a
single order for the same cycle service level.
22. If the cost of product is 100 Rs . price is Rs 250 and salvage value is 80, then what is the cost of
understocking? 150
23. In product-based tailored sourcing, low-volume products with uncertain demand are obtained
from a flexible source
24. The cost of overstocking by one unit and the lost current and future margin from
understocking by one unit are the two major factors that affect the optimal level of
product availability.
25. Which of the following is not a mode of transportation? (note mode of transportation are
rail, pipeline, ropeways, air, water and truck, intermodal and package carrier)
26. Following are the characteristic of ropeways for transportation except :( Environment
friendly, Shortest route possible through inaccessible terrain, Considerably fast movement over
short distance, Most economical, The obvious disadvantage being safety issues on poor
maintenance and upkeep of the ropeway)
27. Which of the following is simplest transportation network in terms of coordination?
direct shipment transportation network
28. Which of the following network structure has the least inventory requirement? All
shipments via central DC with cross-dock
29. Which of the following factors should be considered when making sourcing decisions?
(Note following factors should be considered when making sourcing decisions
Replenishment lead time, On-time performance, Supply flexibility, Delivery frequency/minimum
lot size, Supply quality, Inbound transportation cost, Pricing terms )
30. In product categorization, bulk purchase items are low critical and high value.
31. Which of the following is not a type of auction ? (Note these are the type of auctions
Sealed-bid first-price auctions, English auctions, Dutch auctions, Second-price (Vickery) auctions

32. Revenue management is the use of pricing to increase the profit generated from a limited
supply of supply chain assets.

33. Revenue management has a significant impact on supply chain profitability when one or more of
the following four conditions exist:

1. The value of the product varies in different market segments.

2. The product is highly perishable or product wastage occurs.

3. Demand has seasonal and other peaks.

4. The product is sold both in bulk and the spot market.

34. The basic trade-off to consider during overbooking is between having wasted capacity (or
inventory) because of excessive cancellations and having a shortage of capacity (or inventory)
because of few cancellations, in which case an expensive backup needs to be arranged.
35. Shifting demand from peak to off peak season is done by: an effective revenue management
tactic is to charge a higher price during the peak period and a lower price during off -peak periods.
36. Which of the following is not an emerging trend in IT(Information technology) for the supply
chain? (Note there are Three important trends: The growth in software as a service (SaaS),
Increased availability of real-time data, Increased use of mobile technology)
 37. Which of the following is included in metrics for sustainability?(Note Energy consumption,
Water consumption, Greenhouse gas emissions, Waste generation are key metrics for
sustainability )
38. Dell outsources design and production of the processors in its PCs to Intel because of capacity
aggregation.
39. All of the following are factors that drive focus on sustainability except: (Note Factors driving
focus on sustainability Reducing risk and improving the financial performance of the supply
chain, Attracting customers who value sustainability, Making the world more sustainable)
40. Compare long term forecast with short term forecast in terms of procedure and accuracy?

Long-term forecasts are usually less accurate than short-term forecasts; that is, long-term
forecasts have a larger standard deviation of error relative to the mean than short-term forecasts.

Briefly discuss the role of IT in aggregate planning?

• The ability to handle large problems

• The ability to handle complex problems (through either nonlinear optimization or linear
approximations)

• The ability to interact with other core IT systems such as inventory management and sourcing

Briefly discuss the role of IT in supply chain coordination.

– Information availability

– Use of information available to make decisions

– Facilitate sharing of forecasts and historical information, and enable revisions

– Enterprise systems that record all the supply-chain transactions

Explain the impact of increasing the number of order cycles per season on the unsold inventory at
the end of season at a retail store.
Which factors drive an organization to focus on sustainability in the supply chain?
Reducing risk and improving the financial performance of the supply chain

Attracting customers who value sustainability

Making the world more sustainable

XYZ company requires warehouse space for expected demand of 100,000 units for next 3
years. 500 sq ft are needed to store 1000 units and expected revenue is Rs. 15 per unit. The
company has two options.
Three years lease cost = rs 10 per square feet
On the spot market cost = rs 12 per sq feet
Which option should the company go for. If the discount factor is 10 % to maximize the
profit perform a discounted cash flow analysis to reach the decision.
50,000 sq feet are needed to store 100,000 units

Three years lease cost = rs 10 per square feet

Revenue Rs 15= Total revenue 15X100,000= 1500,000
Total 3 year lease cost 10X50,000=500,000
 Profit = 1500,000-500,000= 1000,000
C0 + C1/1+k + C2/(1+k)2
1000,000 + 1000,000/1+.1 +1000,000/(1+.1)2
=2735537.19
Total on spot market rate = 12 X 50000= 600000
Total profit = 1500000-600000= 900000
900000 + 900000/1.1 + 900000/(1.1)2
=2461983.471
What is the impact of bullwhip effect on following supply chain performance measures?
Performance measure Impact of bullwhip effect
Manufacturing cost increases
Inventory cost increases
Replenishment lead time increases
Transportation cost increases
Shipping and receiving cost increases
Level of product availability Decreases
profitability Decreases

What are the different collaborative, planning, forecasting, replenishment , scenarios? How do
they benefit supply chain partners?
Common CPFR Scenarios

CPFR Scenario Where Applied in Supply Industries Where Applied

Chain
Retail event collaboration Highly promoted channels All industries other than
or categories those that practice EDLP
DC replenishment Retail DC or distributor DC Drugstores, hardware,
collaboration grocery
Store replenishment Direct store delivery or retail Mass merchants, club stores
collaboration DC-to-store delivery
Collaborative assortment Apparel and seasonal goods Department stores, specialty
planning retail

Why do companies go for sourcing? Discuss the benefits.

• Sourcing is the set of business processes required to purchase goods and services.

• Outsourcing

• Offshoring

• Outsourcing questions

Benefits of Effective Sourcing Decisions

• Better economies of scale through aggregated

• More efficient procurement transactions

 • Design collaboration can result in products that are easier to manufacture and distribute

• Good procurement processes can facilitate coordination with suppliers

• Appropriate supplier contracts can allow for the sharing of risk

• Firms can achieve a lower purchase price by increasing competition through the use of auctions

Briefly discuss the role of revenue management in supply chain?

• Revenue management is the use of pricing to increase the profit generated from a limited supply
of supply chain assets.

• Supply chain assets exist in two forms—capacity and inventory.

• Capacity assets in the supply chain exist for production, transportation, and storage.

To increase the total margin, managers must use all available levers, including price
• This is the primary role of revenue management. Traditionally, firms have often invested in or
eliminated assets to reduce the imbalance between supply and demand.

The average inventory remaining when the replenishment lot

Arrives is called Safety inventory:

All of the following approaches can be used to manage capacity to meet predictable variability of
demand
1. Time flexibility from workforce

2. Use of seasonal workforce

3. Use of subcontracting

4. Use of dual facilities—dedicated and flexible:

5. Designing product flexibility into the production processes

Which of the following is inappropriate to use in linear programming for aggregate planning?
In aggregate planning, decisions are made at which level?
Holt’s model of forecasting is used when there are
You have to decide a warehouse space for your organizational needs in upcoming periods use
following information of period 0 and prepare a decision tree for period 1.
Demand (D)=50(+-20% units)
Price p= rs 80 (+- 5%)
• Supply chain lacks coordination if each stage optimizes only its local objective

• Reduces total profits

How can managers improve coordination in supply chain . Discuss any three.

Managerial Levers to Achieve Coordination

 u 1. Aligning Goals and Incentives

u 2. Improving Information Accuracy

u 3. Improving Operational Performance

u 4. Designing Pricing Strategies to Stabilize Orders

u 5. Building Strategic Partnerships and Trust

What are the disadvantages of aggregation of inventories?

• Two possible disadvantages to aggregation:

1. Increase in response time to customer order.

2. Increase in transportation cost to customer.

Explain the impact of increasing the number of order cycles per season on the unsold
inventory at the end of season at a retail store
Briefly describe at least three types of auctions.
Sealed-bid first-price auctions, English auctions, Dutch auctions, Second-price (Vickery) auctions
Which operational parameters are specified by aggregate planning? Enlist and briefly explain.
operational parameter

Production rate

Workforce

Overtime:

Machine capacity level

Subcontracting:

Backlog:

Inventory on hand:

Being a supply chain manager how can you implement aggregate planning successfully in
your organization.
How can a manager determine appropriate level of safety inventory? Explain by discussing
the factors involved in this decision.
What is tailored transportation network? What factors affect tailoring?
• The use of different transportation networks and modes based on customer and product
characteristics.

• Factors affecting tailoring:

Customer density and distance

Customer size
 Product demand and value

Elaborate the essential components of internal supply chain management

• Strategic planning

• Demand planning

• Supply planning

• Fulfillment

• Field service

• There must be strong integration between the ISCM and CRM macro processes.