BSE Bachelor of Science in Engineering Management: Operations and Supply Chain 2

Question 1

A manufacturer uses the Economic Order Quantity (EOQ) model. If annual demand doubles while holding cost remains the same, the optimal order quantity changes by a factor of:

Accepted Answer

√2 (increases by about 41%)

Answer

EOQ = √(2DS/H), so doubling D multiplies EOQ by √2 ≈ 1.414.

Question 2

Which supply chain risk mitigation strategy involves holding extra inventory beyond average demand to buffer against uncertainty?

Accepted Answer

Safety stock

Answer

Safety stock is buffer inventory held to protect against demand variability and supply lead-time uncertainty.

Question 3

In a pull-based supply chain system, production is triggered by:

Accepted Answer

Actual customer demand or downstream consumption

Answer

Pull systems (e.g., Kanban) initiate production only when real demand signals arrive from downstream stages.

Question 4

The bullwhip effect in supply chains describes:

Accepted Answer

The amplification of demand variability as orders move upstream

Answer

Small fluctuations in end-customer demand get progressively amplified at each upstream supply chain tier, resembling a bullwhip's motion.

Question 5

A company's Days Sales of Inventory (DSI) is 45 days. This metric primarily indicates:

Accepted Answer

How many days of inventory the company carries on average

Answer

DSI = (Inventory / COGS) × 365, measuring how many days on average inventory is held before being sold.

BSE - Mgt Bachelor of Science in Engineering Management Practice Test

BSE - Mgt Bachelor of Science in Engineering Management Practice Test

BSE Bachelor of Science in Engineering Management: Operations and Supply Chain 2