6. Business and Production

Supply Chain Basics — Quiz

Test your understanding of supply chain basics with 5 practice questions.

Practice Questions

Question 1

What is the Economic Order Quantity (EOQ) for an item with annual demand $D=5000$ units, ordering cost $S=\\$100 per order, and annual holding cost $H=\\$2 per unit?

Question 2

A manufacturer evaluates suppliers using a weighted scorecard: cost weight 0.5 (score 7), delivery weight 0.3 (score 8), quality weight 0.2 (score 6). What is the total weighted score?

Question 3

Under the Incoterm DAP (Delivered at Place), which responsibility does the seller assume?

Question 4

If average daily demand is 80 units, lead time is 10 days, daily demand standard deviation $\sigma_d=10$ units, lead time standard deviation $\sigma_L=4$ days, and service level $95\\%$ ($z=1.645$), what safety stock should be maintained?

Question 5

Why does risk pooling across multiple geographic locations generally reduce the total safety stock required in a supply chain?