chapter 7

1. Outbound-to-customer logistics systems are also referred to as physical distribution.

2. Materials management and physical supply are terms that cannot be used interchangeably.

3. Demand management might be defined as focused efforts to estimate and manage customers’ demand, with the intention of using this information to shape operating decisions.

4. Phantom demand is created by over-ordering during peak demand.

5. The essence of demand management is to estimate and manage customer demand so that demand and supply are balanced to the point where there are zero stockouts and zero safety stocks.

6. External balancing methods involve managing production and inventory flexibility to help offset the imbalance of supply and demand.

7. Forecasting has become extremely accurate, especially since the development of the S&OP process.

8. Dependent demand is directly influenced by independent demand.

9. A weighted moving average assigns higher weights to more recent periods.

10. Exponential smoothing can use constants higher than 1, but not more than 5.

11. Adjusting a forecast for seasons basically uses a combination of seasonal factors and average demand to arrive at an adjusted forecast.

12. While there are four types of forecast error measures that can be used, none are foolproof.

13. A sales and operations planning process (S&OP) can produce a forecast internally that all functional areas agree upon and can execute.

14. Collaborative planning, forecasting, and replenishment (CPFR) has not been considered to be a good process, as it excludes transportation.

15. A channel of distribution is controlled by the marketing department, which selects the physical structures and intermediaries through which the product(s) flow.

16. An important observation to note about channel structure is that it involves the elements of fixed costs versus variable costs.

17. Integrated fulfillment is preferred to dedicated fulfillment.

18. An outbound-to-customer logistics system is also referred to as
a. integrated fulfillment.
b. dedicated fulfillment.
c. store fulfillment.
d. physical distribution.

19. An inbound-to-operations logistics system is also referred to as
a. physical distribution.
b. physical supply.
c. dedicated fulfillment.
d. demand management.

20. Demand management includes
a. Flows of products.
b. Flows of services.
c. Flows of capital.
d. All of the these answers

21. The term functional silos refers to:
a. product storage for physical supply.
b. the non communication between customers and vendors.
c. a technique to secure corporate marketing strategies.
d. lack of coordination between departments.

22. Oversupply is created by
a. phantom demand.
b. returns and cancellations.
c. forecasting failures.
d. poor channel selection.

23. The essence of demand management is to estimate and manage ___________ and use this information to make operating decisions.
a. channel orders
b. vendors and suppliers
c. customer demand
d. SO&P processes

24. The internal balancing method deals with
a. price and lead time.
b. inventory and production flexibility.
c. functional silos.
d. channel selection.

25. One type of demand fluctuation is caused by random variation. What is random variation?
a. errors in inventory management
b. errors not caught by using exponential smoothing
c. a development that cannot normally be anticipated
d. failure to properly execute the SO&P process plan

26. The weighted moving average method assigns
a. a value in each period being averaged.
b. a weight greater than 1.
c. information based on a simple average.
d. a weight to each previous period.

27. Exponential smoothing
a. is one of the most commonly used techniques.
b. uses primarily weighted averages to compensate for errors.
c. is used to determine random variations.
d. is used to reduce channel fluctuations.

28. Four types of forecast error measures can be used. Which one of the following is not one of the four types?
a. cumulative sum of forecast errors
b. exponential smoothing for trends
c. mean squared error
d. mean absolute deviation

29. Many industry initiatives have attempted to create efficiency and effectiveness through the integration of supply chain activities and processes. Among the various initiatives is/are
a. quick response (QR)
b. vendor-managed inventory (VMI)
c. efficient consumer response (ECR)
d. all of these answers