9

UNIVERSITY OF TECHNOLOGY,
COLLEGE: Business and Management
SCHOOL: Business Administration
Semester 3, AY 2023/24
Merged test 1 and test 2

TEST 1

DURATION :30 MINS

SECTION A – (30 marks)

INSTRUCTION: Answer all questions (1 – 30) in this Section on the SCANTRON SHEET provided.
Shade the chosen letter with a soft lead pencil.

1. Which of the following is not a forecasting method?

a. qualitative
b. time series
c. causal
d. simulation
e. All of the above are forecasting methods.
Answer: e

2 Forecasting methods that are primarily subjective and rely on human judgment are
known as

a. qualitative forecasting methods.

b. time series forecasting methods.
c. causal forecasting methods.
d. simulation forecasting methods.
e. none of the above
Answer: a
3. Forecasting methods that use historical demand to make a forecast are known as
a. qualitative forecasting methods.
b. time series forecasting methods.
c. causal forecasting methods.
d. simulation forecasting methods.
e. none of the above.
Answer: b

4 The push/pull view of a supply chain holds that

a. the processes in a supply chain are divided into a series of activities performed at the
interface between successive stages.
b. all processes in a supply chain are initiated in response to a customer order.
c. all responses in a supply chain are performed in anticipation of customer orders.
d. the processes in a supply chain are divided into 2 categories depending on whether
they are initiated in response to or in anticipation of customer orders.
e. None of the above are true.
Answer: d

5 Which of the following is not a process in the customer order cycle?

a. Customer arrival
b. Customer order entry
c. Customer order fulfillment
d. Customer order receiving
e. All are processes in the customer order cycle
Answer: e

6 When all stages of a supply chain produce a collaborative forecast, it tends to be

a. much more detailed.

b. much more complex.
c. much more accurate.
d. much more flexible.
e. all of the above
Answer: c

7. The result of each stage in the supply chain making its own separate forecast is

a. an accurate forecast.
b. a more accurate forecast.
 c. a match between supply and demand.
d. a mismatch between supply and demand.
e. none of the above
Answer: d

8. Marketing can utilize forecasts to make decisions concerning

a. scheduling.
b. promotions.
c. inventory control.
d. aggregate planning.
e. purchasing.
Answer: b
9 The replenishment cycle occurs at the

a. customer/retailer interface.
b. retailer/distributor interface.
c. distributor/manufacturer interface.
d. manufacturer/supplier interface.
e. none of the above
Answer: b

10 A poor aggregate plan can result in

a. appropriate inventory levels.
b. efficient use of capacity.
c. better sales and lost profits.
d. lost sales and lost profits.
e. lost sales and better profits.
Answer: d
11 Cycle inventory exists because producing or purchasing in large lots allows a stage
of the supply chain to

a. exploit economies of scale and raise cost.

b. exploit economies of scale and lower cost.
c. exploit customers and lower cost.
d. exploit customers and raise cost.
e. none of the above
Answer: b

12 The average inventory in the supply chain due to either production or purchases in lot
sizes that are larger than those demanded by the customer is

a. annual inventory.
b. distribution inventory.
c. cycle inventory.
d. physical inventory.
 e. b and c only
Answer: c

13 Which of the following is not a cost that must be considered in any lot sizing
decision?

a. Average price per unit purchased, $C/unit

b. Fixed ordering cost incurred per lot, $S/lot
c. Holding cost incurred per unit per year, $H/unit/year = hC
d. Manufacturing cost per unit, $M/unit
e. All of the above are costs to be considered.
Answer: d

14 The relationship between the manufacturer and supplier during the procurement cycle is very
similar to the relationship between

a. customer and retailer.

b. retailer and distributor.
c. distributor and manufacturer.
d. manufacturer and customer.
Answer: c

15 The basis for all strategic and planning decisions in a supply chain comes from

a. the forecast of demand.

b. sales targets.
c. profitability projections.
d. production efficiency goals.
e. all of the above
Answer: a

16. One of the characteristics of forecasts is

a. forecasts are always right.

b. forecasts are always wrong.
c. short-term forecasts are usually less accurate than long-term forecasts.
d. long-term forecasts are usually more accurate than short-term forecasts.
e. none of the above
Answer: b

17 In general, the further up the supply chain a company is (or the further they are from the
consumer),
a. the greater the distortion of information they receive.
 b. the smaller the distortion of information they receive.
c. the information they receive is more accurate.
d. the information they receive is more useful.
e. none of the above
Answer: a

18 Forecasting methods that assume that the demand forecast is highly correlated with
certain factors in the environment (e.g., the state of the economy, interest rates, etc.) to make a
forecast are known as

a. qualitative forecasting methods.

b. time series forecasting methods.
c. causal forecasting methods.
d. simulation forecasting methods.
e. none of the above
Answer: c

19 Assume that you have tried three different forecasting models. For the first, the MAD =
2.5, for the second, the MSE = 10.5, and for the third, the MAPE = 2.7. We can then say:

a. the third method is the best.

b. the second method is the best.
c. methods one and three are preferable to method two.
d. method two is least preferred.
e. none of the above

20. 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.
e. all of the above
Answer: a

21 Aggregate planning solves problems involving

a. aggregate decisions and stock keeping unit (SKU) level decisions.
b. aggregate decisions or stock keeping unit (SKU) level decisions.
c. aggregate decisions rather than stock keeping unit (SKU) level decisions.
d. stock keeping unit (SKU) level decisions rather than aggregate decisions.
e. b and c only
 Answer: c

22. The operational parameter concerned with the number of units completed per unit time
(such as per week or per month) is
a. production rate.
b. workforce.
c. overtime.
d. backlog.
e. inventory on hand.
Answer: a

23. The planning horizon is

a. the time period over which the aggregate plan is to produce a solution.
b. the duration of each time period in the aggregate plan.
c. the length of time required to produce the aggregate plan.
d. the solution to the aggregate plan.
e. none of the above
Answer: a

24 Transportation plays a key role in every supply chain because

a. products are normally produced and consumed in the same location.

b. products are rarely produced and consumed in the same location.
c. the cost of transportation is inconsequential.
d. transportation is not a factor in determining profitability.
e. none of the above
Answer: b

25 The party that requires the movement of the product between two points in the

supply chain is
a. the shipper.
b. the supplier.
c. the manufacturer.
d. the carrier.
e. the receiver.
Answer: a

26. The cost of various facilities in the shipper’s supply chain network is

a. transportation cost.
b. inventory cost.
c. facility cost.
d. processing cost.
e. service level cost.
 Answer: c

27 Which transportation network design option has the elimination of intermediate

warehouses and its simplicity of operation and coordination as its major advantage?

a. direct shipping network

b. direct shipping with milk runs
c. all shipments via central DC
d. shipping via DC using milk runs
e. tailored network
Answer: a

28 Supply chain profitability is

a. not correlated to the value generated by the various stages of the supply chain.
b. the total profit to be shared across all supply chain stages.
c. the difference between the revenue generated from the customer and the overall cost
across the supply chain.
d. the total revenue generated by the distributor stage of the supply chain.
e. b and c only
Answer: e

29 Successful supply chain management requires which of the following decision phases?

a. supply chain strategy/design

b. supply chain planning
c. supply chain operation
d. all of the above
e. a and b only
Answer: d

30 The cycle view of a supply chain holds that

a. the processes in a supply chain are divided into 2 categories.

b. the processes in a supply chain are divided into a series of activities performed at the
interface between successive stages.
c. all processes in a supply chain are initiated in response to a customer order.
d. all processes in a supply chain are performed in anticipation of customer orders.
e. None of the above are true.
Answer: b
TEST 2
MODULE NAME: SUPPLY CHAIN MANAGEMENT
MODULE CODE: POM 4010
DATE: Thursday 5th July 2023
DURATION: 1hr
STUDENTS NAME and ID NUMBER:………………………………………………………
STUDENT’S TUTORIAL TIMES:…………………………………………………………….
INSTRUCTION: Answer all three questions in the answer space shown beginning on page 3.
Please show all workings.
Students are not allowed to communicate with each other or with other individuals or sites
during the examination hours, using any type of device, media or platform. Any such
communications will result in the student/s answer script being voided/disregarded by the
examiner.

QUESTION 1 (6 marks)

State the key issues to be considered when implementing aggregate planning

Answer: 1. Think beyond the enterprise to the entire supply chain. Most aggregate planning done
today takes only the enterprise as its breadth of scope. However, there are many factors outside
the enterprise throughout the supply chain that can dramatically impact the optimal aggregate
plan. Therefore, avoid the trap of only thinking about your enterprise when aggregate planning.
Work with partners downstream to produce forecasts, with upstream partners to determine
constraints, and with any other supply chain entities that can improve the quality of the inputs
into the aggregate plan. As the plan is only as good as the quality of the inputs, using the supply
chain to increase the quality of the inputs will greatly improve the quality of the aggregate plan.
Also make sure to communicate the aggregate plan to all supply chain partners who will be
affected by it.
2. Make plans flexible because forecasts are always wrong. Aggregate plans are based on
forecasts of future demand. Given that these forecasts are always wrong to some degree, the
aggregate plan needs to have some flexibility built into it if it is to be useful. By building
flexibility into the plan, when future demand changes, or other changes occur, such as increases
in costs, the plan can appropriately adjust to handle the new situation. A manager should perform
sensitivity analysis on the inputs into an aggregate plan. Using sensitivity analysis on the inputs
into the aggregate plan will enable the planner to choose the best solution for the range of
possibilities that could occur.
3. Rerun the aggregate plan as new data emerges. Aggregate plans provide a map for the next
three to eighteen months. This does not mean that a firm should only run aggregate plans once
every three to eighteen months. As inputs into the aggregate plan change, managers should use
the latest values of these inputs and rerun the aggregate plan. By using the latest inputs, the plan
will avoid suboptimization based on old data and will produce a better solution. For instance, as
new demand forecasts become available, aggregate plans should be reevaluated.
 4. Use aggregate planning as capacity utilization increases. Surprisingly, many companies do not
create aggregate plans and instead rely solely on orders from their distributors or warehouses to
determine their production schedules. These orders are driven either by actual demand or through
inventory management algorithms. If a company has no trouble efficiently meeting demand this
way, then one could claim the lack of aggregate planning may not significantly harm the
company. However, when utilization becomes high and capacity is an issue, relying on orders to
set the production schedule can lead to capacity problems. When utilization is high, the likelihood
of producing for all the orders as they arrive is very low. Planning needs to be done to best utilize
the capacity to meet the forecasted demand. Therefore, as capacity utilization increases, it
becomes more important to perform aggregate planning.
Difficulty: Moderate

QUESTION 2

a) State the goals of trade promotions from a manufacturer’s perspective. (6 marks)

Answer: Manufacturers use trade promotions to offer a discounted price and a time period over
which the discount is effective. The goal of trade promotions is to influence retailers to act in a
way that helps the manufacturer achieve its objectives. A few of the key goals (from the
manufacturer’s perspective) of a trade promotion are as follows:
1. Induce retailers to use price discounts, displays, or advertising to spur sales.
2. Shift inventory from the manufacturer to the retailer and the customer.
3. Defend a brand against competition.

b) The Bern Hard Company has an assembly plant in Kingston and its parts plant in Montego Bay.
Parts are transported from Montego Bay to Kingston using trucks. Each shipment costs $150. The
Kingston plant assembles and sells 400 finished products each day and operates 50 weeks a year,
5 days per week. Part #BH costs $60 and Bern Hard Company incurs a holding cost of 15 percent
per year. (6 marks)

i) How many of part #BH should Bern Hard Company put in each shipment?
ii) What is the cycle inventory of part #BH at Bern Hard Company?
iii) Determine the total cost of the inventory.