What is supply chain profitability?
Ans Difference between the revenue generated from the customer and the overall cost across
the supply chain
Which of the following type of flow does not exist in a typical supply chain-
Ans Infrastructure
Which of the following characteristics would you most likely associate with the ‘Toyota Supply
Chain’?
Ans Lean and Six Sigma Techniques
The main aim of Supply Chain Analytics is to-
Ans Improve operational efficiency by enabling data-driven decisions.
What level(s) of decision making is supported by supply chain analytics the most?
i. Operation Level
ii. Strategic Level
iii. Tactical Level
:
Ans Both (i) and (iii)
Customer cycle usually occurs between the interface of which two successive stages of SC?
Ans Customer-Retailer
Which of the following is not among the challenges faced in a typical supply chain?
Ans Regular review of safety stock levels
Which of the following statement is correct?
Ans Push Processes are executed in anticipation of customer orders.
Which of the following strategy defines the set of customer needs that a firm seeks to satisfy
through its products and services?
Ans:Competitive Strategy
The correct sequence of a typical manufacturing supply chain is-
Ans Supplier- Manufacturer-Distributor-Wholesaler-Retailer-Customer
Facility (Location of Plant) should be closer to customer for__________type of Supply Chain.
Ans:Responsive
Which of the following Supply Chain Driver can achieve responsiveness and efficiency
simultaneously?
Ans Information
________________is tradeoff between service level and cost of holding the inventory.
Ans Inventory
Which of the following is not included while expressing systematic component of observed
demand?
Ans Causality
Which of the following customer need does not lead to increase in demand uncertainty-
Ans Less product variety
Average stockout rate is high in-
Ans Products with high implied uncertainty
Which of the following characteristics is correct with respect to efficient supply chain?
Ans High utilization of capacity in manufacturing
Which of the following is correct? -
Ans At cross docking facilities, inbound trucks from suppliers are unloaded; the product is
broken into smaller lots, and is quickly loaded onto store-bound trucks
The objective of customer order fulfilment is to -
Ans Get the correct orders to customers by the promised due date at the lowest possible cost
What is the meaning of “Achieving Strategic Fit” in the context of Supply Chain Management?
Ans Supply chain operations are consistent with customer’s need
An electric car manufacturer underestimated the January sales by 20 units, while the actual
sales was 120 units. If the manufacturer uses exponential smoothing method with a smoothing
constant of 0.2, then the sales forecast for the month of February of the same year is-
Ans 104 units
The sales data of a product for 5 years are given below in the table. Assume the forecast for
the year 2014 as 260 units. Using a smoothing constant of 0.5, what is the sales forecast
(units) for the year 2019?
Year 2014 2015 2016 2017 2018
Sales (Units) 280 268 259 270 287
Ans 277
With respect to forecasting, which of the following is not an example of a time series model?
:
Ans None of the above
The demand for a product in each of the last five months is shown below. Using a two-month
moving average the value of forecasted demand for month 6 is-
Month 1 2 3 4 5
Demand 13 17 19 23 24
:
Ans 23.5
If demand of a product for five periods is as follows:
Period 1 2 3 4 5
Demand
30 35 40 42 45
(Units)
What is the forecast for the 6th period using a three-period moving average (use weights as
0.5, 0.3 and 0.2)?
Ans 43
Causal method of demand forecasting is___________in nature-
Ans:Quantitative
Refer following data:
Period 1 2 3 4 5 6 7 8
Actual sales 217 213 216 210 213 219 216 212
Forecast 215 216 215 214 211 214 217 216
What is the value of tracking signal at the end of 4th period?
Ans -1.6
In ‘exponential smoothing with trend’ forecasting method which constant is used for
smoothening of trend?
Ans Beta (β)
Which of the following cannot be a property for a time series analysis plot?
Ans Circularity
Which of the following is correct?
Ans In Bullwhip effect, maximum inventory accumulates at the farthest end from the customer
in a typical supply chain.
Refer to below shown multi-echelon supply chain with 4 installations, the ordering cost (per
order) and holding costs (per unit per annum) is provided. Considering separate optimization
of only installation 3 and 4, what should be the value of n3?
Ans 2
Refer to below shown multi-echelon supply chain with 4 installations, the ordering cost (per
order) and holding costs (per unit per annum) is provided. Considering simultaneous
optimization of only installation 3 and 4, what should be the value of n3?
Ans 3
Refer to below shown multi-echelon supply chain with 4 installations, the ordering cost (per
order) and holding costs (per unit per annum) is provided. For simultaneous optimization of
installation 2 and 3 what should be the value of n2?
Ans 1
Considering all the 4 installations for simultaneously optimizing the entire supply chain, which
installations will be theoretically merged for calculating the optimum order quantity?
Ans 3 and 4
A building material shop owner in Roorkee is going through the last year’s inventory cost of
cement sacks, a sack of cement costs 500 Rs. The average monthly demand last year was
1250 units, the cost per order, including the transport was 1200 Rs and annual unit holding
cost was 20% of material cost. Last year he ordered the lots of 500 sacks per order. What was
the total ordering cost for the last year?
:
Ans 36000
A building material shop owner in Roorkee is going through the last year’s inventory cost of
cement sacks, a sack of cement costs 500 Rs. The average monthly demand last year was
1250 units, the cost per order, including the transport was 1200 Rs and annual unit holding
cost was 20% of material cost. Last year he ordered the lots of 500 sacks per order. What was
the total inventory cost last year?
Ans 61000
A building material shop owner in Roorkee is going through the last year’s inventory cost of
cement sacks, a sack of cement costs 500 Rs. The average monthly demand last year was
1250 units, the cost per order, including the transport was 1200 Rs and annual unit holding
cost was 20% of material cost. Last year he ordered the lots of 500 sacks per order. This year a
student of Supply Chain Analytics course suggested him that the total inventory cost will be
minimum if total holding and ordering costs are equal, for the same parameters he suggested
to change the lot size. Considering what the student suggested how much the shop owner will
save in total inventory cost (in Rs.) in the coming year?
Ans 1000 Rs
A In a supply chain as shown in following figure, set up cost at installation 1 is Rs. 17000 and
holding cost is Rs. 4.5, setup cost at installation 2 is Rs. 2300 and holding cost is Rs. 7.5. The
annual requirement of the given product is 330 units at installation 2. If Q1 = n Q2, what can be
the possible value of n? (Q1 is quantity ordered at installation 1 while Q2 is quantity ordered at
installation 2.)
Consider a three installation supply chain with following set up and holding costs.
Installation Setup Cost Holding Cost Order Quantity
1 Rs 1000 Rs 2 per unit Q1
2 Rs500 Rs11 per unit Q2
3 Rs50 Rs27 per unit Q3
Which of the following statement is true?
Ans Q1 is more than Q2 and Q2 is more than Q3.
Please refer following table where setup cost and holding costs are given for a supply chain
having four stations.:
Ki hi
1 Rs300 Rs3.00
2 Rs20 Rs4.00
3 Rs60 Rs7.00
4 Rs150 Rs17.00
In this case, when simultaneously inventory management is done, which of the following
relation will be correct?
Ans Q1>Q2 = Q3 >Q4
Statement I: Network design decisions have a significant impact on performance because
they determine the supply chain configuration and set constraints within which the other
supply chain drivers can be used either to decrease supply chain cost or to increase
responsiveness.
Statement II: Amazon has become more responsive to its customers by increasing the number
of facilities.
Ans Both the statements are correct
Supply chain network design decisions classified as market and supply allocation are
concerned with-
Ans what markets each facility should serve and which supply sources should feed each
facility
Which of the following statements is correct?
Ans Facility location decisions are crucial because it is expensive to shut down a facility or
move it to a different location
Company like Amazon chooses to locate its facilities in sub-urban areas:
Ans To achieve higher efficiency
Which of the following is not one of the factors influencing network design decisions?
Ans Political, Infrastructure, Microeconomic
Match the following:
List I List II
(a) Supply chain strategy (i) Exchange rate and demand risk
(b) Regional facility configuration (ii) Production methods
(c) Desirable sites (iii) Logistics costs
(d) Location choices (iv) Competitive strategy
Ans:a-iv, b-i, c-ii, d-iii
Why does the transportation cost start increasing after increasing the number of facilities
beyond a point (assuming a constant market size):
Ans The economies of scale in inbound transportation are lost
Match the following:
List I List II
(a) Direct distribution (i) Newspaper
(b) One level distribution (ii) Shampoo
(c) Two level distribution (iii) Hair salon
(d) Three level distribution (iv) iPhone
Ans a-iii, b-iv, c-ii, d-i
Which of the following statements is/are correct with respect to a distribution network?
Ans All of the above
The gravity model identifies the geographic location that:
Ans Minimizes the total transportation cost
Which of the following is/are constraints in Demand Allocation model where,
n= number of factory locations
m= number of markets
Dj= annual demand from market j
Ki= capacity of factory i
Xij= quantity shipped from factory i to market j
Ans Both (A) & (B)
In case of supply chain network optimization, what is the objective function?
Ans To minimize total transportation cost
Which of the following are the decision variables in a network optimization model?
Ans All of the above
Which of the following information is not available while making the design decisions?
Ans Number of units shipped from source location to market location
Read the information below carefully to answer the subsequent questions (Use of MS
Excel Solver Permitted)-
A company has 4 plants and 4 distribution centers (DCs). The production and transportation
costs per shipment (in thousands of Rupees) from each plant to each distribution center is
given in the below-
Demand Source
Production and Transportation cost per 1000 units
Hyderaba
Supply Source Delhi Pune Kolkata Fixed Cost Capacity
d
Delhi 211 232 238 299 7650 18
Pune 232 212 217 225 3500 24
Hyderabad 240 230 215 305 5000 27
Kolkata 300 280 270 255 2200 22
Demand 10 8 14 6
What would be the minimum total cost for the given problem?
:
Ans 14708
(Q5-Q7) Read the information below carefully to answer the subsequent questions (Use of MS
Excel Solver Permitted)-
A company has 4 plants and 4 distribution centers (DCs). The production and transportation
costs per shipment (in thousands of Rupees) from each plant to each distribution center is
given in the below-
Demand Source
Production and Transportation cost per 1000 units
Hyderaba
Supply Source Delhi Pune Kolkata Fixed Cost Capacity
d
Delhi 211 232 238 299 7650 18
Pune 232 212 217 225 3500 24
Hyderabad 240 230 215 305 5000 27
Kolkata 300 280 270 255 2200 22
Demand 10 8 14 6
Amongst all the supply locations, which ones should open a plant?
Ans Both
(Q5-Q7) Read the information below carefully to answer the subsequent questions (Use of MS
Excel Solver Permitted)-
A company has 4 plants and 4 distribution centers (DCs). The production and transportation
costs per shipment (in thousands of Rupees) from each plant to each distribution center is
given in the below-
Demand Source
Production and Transportation cost per 1000 units
Hyderaba
Supply Source Delhi Pune Kolkata Fixed Cost Capacity
d
Delhi 211 232 238 299 7650 18
Pune 232 212 217 225 3500 24
Hyderabad 240 230 215 305 5000 27
Kolkata 300 280 270 255 2200 22
Demand 10 8 14 6
What would be the optimal quantity to be sent to Hyderabad location from Kolkata location?
Ans:8
For flexibility in a supply chain network, which of the following dimensions are important?
Ans Agility
Statement I: Decisions associated with network design have a long-term perspective and
cannot be easily changed in short-term.
Statement II: Therefore, it is important to bring flexibility in supply chain networks to handle
uncertainty in the environment.
Ans Both the statements are correct
Which of the following is correct about discounted cash flow approach?
Ans Supply chain decisions should be evaluated as a sequence of cash flows over a duration
of time the decisions will be in place.
Which of the following statements is/are correct?
Ans The capability of fulfilling customer demand from available inventory is one of the primary
measures of supply chain’s responsiveness.
Statement I: A supply chain must achieve a balance between the level of availability and the
cost of inventory.
Statement II: The optimal level of product availability is one that maximizes supply chain
profits.
Ans Both the statements are correct.
Consider the following table:
Demand (in units) 15 16 17 18 19 20 21 22 23 24
25 26 27 28 29
Probability 0.01 0.02 0.03 0.05 0.07 0.1 0.12 0.12 0.11
0.09 0.09 0.08 0.06 0.04 0.01
Cost per unit: 25
Selling price per unit: 75
Scrap value per unit: 12
Handling cost of handling scrap: 5
What is the expected profit if the stock is 20 units, considering the costs of understocking and
overstocking?
Ans 973.48
XYZ Corporation is contemplating investing in a new warehouse automation system to
streamline its supply chain operations. The initial cost of the automation system is $300,000.
The system is projected to generate annual savings of 80,000 for the next 7 years. Given a
discount rate of 10%, which of the following is the net present value (NPV) (nearest value) to
make the decision:
Ans 90,000
Match the following type of analytics to the suitable example
Type Example
a. Descriptive i. Demand Forecasting
b. Predictive ii. Supply Chain Optimization
c. Prescriptive iii. Inventory Reports
Ans a-(iii), b-(i), c-(ii)
Statement I: Prescriptive analytics uses statistical models and forecasts to ask: “What could
happen?”
Statement II: Predictive analytics uses optimization and embedded decision rules and
simulation to ask: “What should we do?”
Ans Both the statements are incorrect.
Which of the following statements is correct regarding predictive analytics?
Ans All of the above
Which of the following is not one of the common uses of predictive analytics?
Ans Defining consumer characteristics
Which of the following is the correct sequence on how to start using predictive analytics?
Ans problem identification-> data collection and preparation-> model building-> team
approach
In a multiplicative binomial representation of uncertainty, the probability of an increase in
demand D by a factor of ‘u’ (u>1) is ‘p’ (p<1), and the decrease in demand by a factor of ‘d’
(d<1) is ‘1-p’ after each period. Which of the following is true about the maximum possible
demand after 3 periods?
Ans The probability for maximum possible demand will be less than p
Statement I: Decision trees incorporating Discounted Cash Flows (DCFs) can be utilized for
assessing supply chain design choices amidst uncertainties in pricing, demand, currency
fluctuations, and inflation.
Statement II: In case of fixed long-term decisions, a company is unable to react to market
conditions, therefore, rigid contracts are less attractive in the presence of uncertainty.
Ans Both the statements are correct.
A manufacturing company is considering whether to establish a new distribution center (DC)
in a particular region. The initial investment for setting up the new DC is Rs. 10,00,000. If the
new DC is successful, it is expected to generate annual savings of Rs. 3,00,000 due to reduced
transportation costs and improved efficiency. However, there's uncertainty about market
demand in that region, with a 70% chance of high demand and a 30% chance of low demand.
What would be the expected annual savings in case of successful setting up of new DC with
0.2 discount rate?
Ans 1,75,000
A major factor that makes the decision tree methodology quite powerful is-
Ans Choice of discount rate
A factory is facing production backlog, and the firm's management is considering three
courses of action: a) Subcontracting, b) Construct new facilities and C) No change. Meanwhile
demand for the product can be low, medium, or high with respective probabilities as .10, .50,
and .40. Profits from the three alternatives (a, b, and c) under the differing probable levels of
demand in thousands of dollars are presented in the table below:
Probabilities Low Medium High
0.1 0.5 0.4
Subcontracting 10 50 90
New Facility -120 25 200
No change 20 40 60
What would be the present value of the expected profit if the firm chooses to subcontract,
given discounted rate to be 0.1?
Ans 56,363
A factory is facing production backlog, and the firm's management is considering three
courses of action: a) Subcontracting, b) Construct new facilities and C) No change. Meanwhile
demand for the product can be low, medium, or high with respective probabilities as .10, .50,
and .40. Profits from the three alternatives (a, b, and c) under the differing probable levels of
demand in thousands of dollars are presented in the table below:
Probabilities Low Medium High
0.1 0.5 0.4
Subcontracting 10 50 90
New Facility -120 25 200
No change 20 40 60
What would be the expected profit if the firm decides to make no changes to their production?
Ans 46,000
A factory is facing production backlog, and the firm's management is considering three
courses of action: a) Subcontracting, b) Construct new facilities and C) No change. Meanwhile
demand for the product can be low, medium, or high with respective probabilities as .10, .50,
and .40. Profits from the three alternatives (a, b, and c) under the differing probable levels of
demand in thousands of dollars are presented in the table below:
Probabilities Low Medium High
0.1 0.5 0.4
Subcontracting 10 50 90
New Facility -120 25 200
No change 20 40 60
To solve the problem of backlog, which alternative the firm should choose?
Ans Constructing new facility
Which of the following is not the reason for considering multiplicative uncertainty over
additive uncertainty?
Ans Ease of calculation
Which of the following is/are issues related to supply chain to addressed in future?
Ans All of the above
In case of binary uncertainty in two factors (for example, space requirement and spot price in
the market), after 2nd iteration of the model, what is the maximum probability associated with
any combination of space requirement and price.
Ans 25%
Identify the correct sequence-
(i) Identify factors such as demand, price, and exchange rate, whose fluctuation will be
considered over the next T periods.
(ii) Determine what distribution to use to model the uncertainty.
(iii) Identify the duration of each period (month, quarter, etc.) and the number of periods T over
the which the decision is to be evaluated.
(iv) Identify the periodic discount rate k for each period.
(v) Represent the decision tree with defined states in each period, as well as the transition
probabilities between states in successive periods.
(vi) Working back to period 0, identifying the optimal decision and the expected cash flows
(discounted at rate k) at each step.
Ans (iii), (i), (ii), (iv), (v), (vi)