BSIE Supply Chain Management & Logistics 1

Question 1

What is the 'bullwhip effect' in supply chain management?

Accepted Answer

Demand amplification as orders move upstream from retailer to manufacturer

Answer

The bullwhip effect describes how small variations in downstream consumer demand get increasingly amplified as orders are placed upstream through the supply chain.

Question 2

What does 'vendor-managed inventory' (VMI) mean?

Accepted Answer

The supplier monitors and replenishes the buyer's inventory based on agreed levels

Answer

In VMI, the supplier takes responsibility for monitoring the customer's inventory and triggering replenishments when stock falls below agreed-upon thresholds.

Question 3

Which inventory classification method categorizes items into A, B, and C groups based on annual dollar usage?

Accepted Answer

ABC analysis

Answer

ABC analysis ranks inventory items by annual consumption value: A items (top ~20%) represent ~80% of value and receive the tightest control.

Question 4

What is the primary purpose of a distribution requirements planning (DRP) system?

Accepted Answer

To coordinate replenishment of inventory across distribution network locations

Answer

DRP extends MRP logic into the distribution network, calculating time-phased replenishment orders for warehouses and distribution centers.

Question 5

In supply chain terms, what is 'lead time'?

Accepted Answer

The total elapsed time from order placement to receipt of goods

Answer

Lead time encompasses all elapsed time from when an order is placed until the ordered goods are received and available for use.

BSIE - Bachelor of Science in Industrial Engineering Practice Test

BSIE - Bachelor of Science in Industrial Engineering Practice Test

BSIE Supply Chain Management & Logistics 1