Question 1

A company finds that tracking demand for products sold at its retail outlets makes forecasting a challenge. Which of the following would be MOST useful in providing rapid updates when dealing with suppliers?

Options :

A : Regression analysis of future sales

B : Safety stock review

C : Safety stock review

D : Probability modeling

Answer: C

Question 2

A firm hires a new staff member in its warehousing department. As a FIRST step in the training of this employee, the warehouse manager should

Options :

A : verify that the employee knows how to operate the warehouse equipment and tools correctly

B :

demonstrate how to package products in the correct manner, so that the employee can begin with packaging assignments

C :

explain the company-s safety policy and verify that the employee understands all safety-related requirements

D :

show the employee how to separate disposable vs recyclable packaging, to ensure the employee understands environmental compliance requirements

Answer: C

Question 3

A firm sells an average of 2,000 units of snacks from its existing stock while it waits for orders to be delivered. Demand during lead time varies in accordance with a normal distribution. The firm's supply manager prepares a presentation to explain the concept of customer service and safety stock levels using the following figure:

What does the shaded area D (in red) represent?

Options :

A : Average demand during lead-time

B : Service level

C : Stock-out risk

D : Re-order point

Answer: C

Question 4

A graph of a firm’s inventory replenishment system reveals the following

Which of the following is TRUE’

Options :

A : The order cycle is two and a half days.

B : The average inventory is 1,850 units.

C : There is a fixed order quantity of 500 units.

D : There is a fixed order quantity of 500 units.

Answer: D

Question 5

A manufacturing firm's facility operates a level production strategy. The initial demand plan is as follows:

MonthJanFebMarAprMayJunJulAug

Unit Sales12,00026,00026,00021,00020,00020,00015,00020,000

Production20,00020,00020,00020,00020,00020,00020,00020,000

The supply management department learns that one of its retailers is planning a promotional event on August

1st that it expects will require an additional 19,000 units. There are 5,000 units in stock for the beginning of

January, and maximum inventory holding is 15,000 units.

How many units per month should production increase in order to meet the requirements of its retailer and

minimize overall inventory levels?

Options :

A : 2,000

B : 2,500

C : 14,000

D : 2,715

Answer: A

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