1. A retailer operates a distribution center (DC) that serves 250 retail stores. The retail stores sell individual units but shipments from the DC to the stores are done in case quantities (i.e., each store orders from the DC an integer number of cases). Orders submitted to suppliers for delivery to the DC are done in pallet quantities. Each pallet holds multiple cases, with the actual number of cases depending on the size and weight of the product. Which of the following statements is true?

a. The bullwhip effect is likely to be present in this supply chain because there is evidence of forward buying.

b. The bullwhip effect is not likely to be present in this supply chain because the same firm operates both the DC and the retail stores and can, therefore, better coordinate ordering.

c. The bullwhip effect is likely to be present in this supply chain because there is evidence of order batching effects.

d. The bullwhip effect is not likely to be present in this supply chain because the retailer is consistent in the order multiples used (i.e., always ordering in a case or pallet quantities).

2. Amazon sells devices such as Echo for the residential market. The salespersons work for a monthly salary that is supplemented by a monetary incentive if their store location meets monthly sales targets. Each location has the ability, within a given range, to offer sale prices and discounts to customers. Approximately halfway through a sales month, decisions are made regarding what sales and discounts to offer customers in order to make sure that the monthly sales target is met. Which of the following is FALSE about the likely impact of the sales incentives, sale prices, and discounts offered by Amazon store locations?

a. Variability in sales may make it harder to fulfill demand, causing stock-outs and uncertainty in the supply chain.

b. Demand for Amazon products increases toward the end of the month.

c. Price discounts help stabilize the supply chain and reduce costs along the manufacturing and supply chain function.

d. Sales tactics introduce variability into the monthly demand, leading to the hockey-stick effect.

3. Which of the following statements regarding the bullwhip effect is FALSE?

a. Downstream members of the supply chain are likely to bear the greatest costs of the bullwhip effect.

b. Time-series forecasting of demand and manager recency bias may contribute to the bullwhip effect.

c. The revenue and costs of each firm in the supply chain are adversely affected by the bullwhip effect.

d. Demand forecasts grow progressively more inaccurate as they move up the supply chain because of varying lead times.

4. In general, which of the following attribute combinations makes a product the most difficult to manage from a supply chain perspective?

a. Short lead time and unpredictable demand

b. Long lead time and unpredictable demand

c. Long lead time and constant, predictable demand

d. Short lead time and constant, predictable demand

5. Best Buy, an electronics big-box store, supports free recycling of the type of electronic products it sells by placing recycling drop-off locations at the entrance of its stores. What kind of supply chain is Best Buy advocating with this service?

a. Upstream flow

b. Closed-loop

c. Hub-and-spoke

d. Fragmented

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