Question 1

The degree of demand and price uncertainty has

Accepted Answer

The degree of demand and price uncertainty has a significant influence on the appropriate portfolio of long- and short-term warehousing space that a firm should carry. When there is high demand uncertainty, firms may require more short-term warehousing space to respond quickly to changes in demand. On the other hand, when there is high price uncertainty, firms may require more long-term warehousing space to take advantage of price fluctuations. Therefore, it is important to consider the level of uncertainty when deciding on the appropriate mix of long- and short-term warehousing space.

Question 2

Simulation methods are very good at evaluating a decision where the path itself is decision dependent.

Accepted Answer

The answer of Simulation methods are very good at evaluating...

Question 3

When faced with uncertain conditions it is always best to sign long-term contracts (because they are typically cheaper)and avoid all flexible capacity (because it is more expensive).

Accepted Answer

When faced with uncertain conditions, it is actually best to have a mix of both long-term contracts and flexible capacity. Long-term contracts may be cheaper, but they also lock you into a set amount of capacity or service for an extended period of time. Flexible capacity, on the other hand, allows for more adaptability and the ability to adjust to changing conditions. It may be more expensive in the short term, but can ultimately save money in the long run by avoiding the cost of unused capacity or being caught off guard by unexpected changes.

Question 4

The main advantage of simulation models is that they can provide low-cost evaluations of complex situations.

Accepted Answer

The answer of The main advantage of simulation models is...

Question 5

Discounted cash flow (DCF)analysis evaluates the present value of any stream of future cash flows and allows management to compare two streams of cash flows in terms of their financial value.

Accepted Answer

DCF analysis does indeed evaluate the present value of future cash flows and enables the comparison of two streams of cash flows.

Question 6

One of the best ways to speed up the process of financial analysis and arrive at a good decision is to use estimates,except when it appears that finding a very accurate input would take an inordinate amount of time.

Accepted Answer

The answer of One of the best ways to speed...

Question 7

Long-term contracts for both warehousing and transportation requirements will be more effective if

Accepted Answer

Long-term contracts are more effective when the demand and price of warehousing are stable or increasing.

Question 8

Strategic planning and financial planning should be combined during supply chain network design.

Accepted Answer

Strategic planning and financial planning are both important aspects to consider during supply chain network design. Strategic planning focuses on long-term goals and objectives, while financial planning focuses on the costs and budget for implementing those goals. By combining these two types of planning, organizations can ensure that the supply chain network is not only strategically sound but also financially feasible.

Question 9

Decisions made during the supply chain design phase regarding significant investments in the supply chain,such as the number and size of plants to build,the number of trucks to purchase or lease,and whether to build or lease warehouse space,

Accepted Answer

Decisions made during the supply chain design phase regarding significant investments in the supply chain, such as the number and size of plants to build, the number of trucks to purchase or lease, and whether to build or lease warehouse space, define the boundaries within which the supply chain must compete. These decisions have a significant impact on the overall structure and capabilities of the supply chain, which in turn influence how the supply chain will compete in the market. Therefore, these decisions play a crucial role in defining the strategic direction and competitiveness of the supply chain.

Question 10

The evaluation of supply chain networks should not use multiple metrics.

Accepted Answer

The evaluation of supply chain networks should use multiple metrics since supply chain performance cannot be accurately measured by a single metric. It is important to consider various aspects such as cost, time, quality, and customer satisfaction to assess the effectiveness of a supply chain network. Using multiple metrics can provide a more comprehensive and accurate evaluation of the supply chain network.

Question 11

Decisions made during the supply chain design phase regarding significant investments in the supply chain,such as the number and size of plants to build,the number of trucks to purchase or lease,and whether to build or lease warehouse space,

Accepted Answer

Decisions made during the supply chain design phase regarding significant investments in the supply chain, such as the number and size of plants to build, the number of trucks to purchase or lease, and whether to build or lease warehouse space cannot be altered in the short term as they involve significant investments and require a long-term perspective. Changing these decisions could have significant financial and operational implications.

Question 12

The value of flexibility increases with an increase in uncertainty.

Accepted Answer

When there is more uncertainty, there is a higher chance that unexpected changes may occur. Flexibility allows for adaptation to these changes, making it more valuable in uncertain situations.

Question 13

The inclusion of uncertainty typically increases the value of rigidity and decreases the value of flexibility.

Accepted Answer

The inclusion of uncertainty typically increases the value of flexibility and decreases the value of rigidity. When faced with uncertainty, flexible approaches allow for adaptation and adjustment to changing circumstances, while rigid approaches may lead to failure or suboptimal outcomes.

Question 14

Offshoring typically lowers labor,working capital and fixed costs but increases risk and freight costs.

Accepted Answer

The answer of Offshoring typically lowers labor,working capital and fixed...

Question 15

Short-term contracts for both warehousing and transportation requirements will be more effective

Accepted Answer

Short-term contracts for both warehousing and transportation requirements will be more effective if either demand or the price of warehousing drops in the future. This is because short-term contracts provide flexibility in adjusting to changes in demand and prices. If demand drops, the company can reduce their warehousing and transportation requirements. If the price of warehousing drops, the company can renegotiate their contract to get a better deal. Therefore, option C is the best choice.

Question 16

Decisions made during the supply chain design phase regarding significant investments in the supply chain,such as the number and size of plants to build,the number of trucks to purchase or lease,and whether to build or lease warehouse space,

Accepted Answer

Decisions made during the supply chain design phase regarding significant investments in the supply chain often remain in place for several years. These decisions involve substantial investments, and it is not feasible to change them frequently. They have a long-term impact on the efficiency and effectiveness of the supply chain. Therefore, businesses carefully evaluate and plan their supply chain design, taking into account long-term factors, such as growth projections, economic outlook, and market trends.

Question 17

Simulation models require a higher setup cost to start and operate compared to decision tree tools.

Accepted Answer

Simulation models typically require more time and effort to set up and operate compared to decision tree tools, which are relatively easy to use and implement. The complexity and level of detail involved in creating a simulation model can increase the setup cost significantly, especially if more advanced features or specialized software is needed. However, simulation models can provide more accurate and realistic results, making them a valuable tool for decision-making in many fields.

Question 18

Financial analysis should be used as an input to decision making,not as the decision-making process.

Accepted Answer

Financial analysis provides important information and insights that can help inform decision-making, but it should not be the sole basis for making decisions. Other factors such as strategic goals, market conditions, and non-financial considerations should also be taken into account.

Question 19

Globalization has offered tremendous opportunity as well as decreased risk in the development of supply chains due to improved information flow.

Accepted Answer

Globalization has increased opportunities but also increased risks in supply chains, such as exposure to geopolitical tensions, natural disasters, and pandemics, despite improved information flow.

Question 20

Appropriate flexibility is an effective approach for a global supply chain to deal with a variety of risks and uncertainties.Extra flexibility is always worth the cost.

Accepted Answer

While flexibility can help a global supply chain cope with risks and uncertainties, it may not always be worth the cost. A balance must be struck between flexibility and cost-effectiveness, and the optimal level of flexibility may vary depending on the specific situation and needs of the supply chain.

Quiz 6: Designing Global Supply Chain Networks

The degree of demand and price uncertainty has

Simulation methods are very good at evaluating a decision where the path itself is decision dependent.

When faced with uncertain conditions it is always best to sign long-term contracts (because they are typically cheaper)and avoid all flexible capacity (because it is more expensive).

The main advantage of simulation models is that they can provide low-cost evaluations of complex situations.

Discounted cash flow (DCF)analysis evaluates the present value of any stream of future cash flows and allows management to compare two streams of cash flows in terms of their financial value.

One of the best ways to speed up the process of financial analysis and arrive at a good decision is to use estimates,except when it appears that finding a very accurate input would take an inordinate amount of time.

Long-term contracts for both warehousing and transportation requirements will be more effective if

Strategic planning and financial planning should be combined during supply chain network design.

Decisions made during the supply chain design phase regarding significant investments in the supply chain,such as the number and size of plants to build,the number of trucks to purchase or lease,and whether to build or lease warehouse space,

The evaluation of supply chain networks should not use multiple metrics.

Decisions made during the supply chain design phase regarding significant investments in the supply chain,such as the number and size of plants to build,the number of trucks to purchase or lease,and whether to build or lease warehouse space,

The value of flexibility increases with an increase in uncertainty.

The inclusion of uncertainty typically increases the value of rigidity and decreases the value of flexibility.

Offshoring typically lowers labor,working capital and fixed costs but increases risk and freight costs.

Short-term contracts for both warehousing and transportation requirements will be more effective

Decisions made during the supply chain design phase regarding significant investments in the supply chain,such as the number and size of plants to build,the number of trucks to purchase or lease,and whether to build or lease warehouse space,

Simulation models require a higher setup cost to start and operate compared to decision tree tools.

Financial analysis should be used as an input to decision making,not as the decision-making process.

Globalization has offered tremendous opportunity as well as decreased risk in the development of supply chains due to improved information flow.

Appropriate flexibility is an effective approach for a global supply chain to deal with a variety of risks and uncertainties.Extra flexibility is always worth the cost.