167. The correct answer is B.

A major contributor to the bullwhip effect is inaccuracy in demand forecasting, which can lead to ordering too much
or too little stock, thus contributing to the effect's exaggerated peaks and valleys of demand.

Which one of the following conditions contributes to the supply chain phenomenon known as the bullwhip effect?

A. JIT production strategies

B. Inaccurate demand forecasting

C. Shortened lead times

D. Insufficient batch sizes

168. The correct answer is C.

Air transport is especially appropriate for high-value items because it is relatively secure, smooth, and rapid.

Which of the following modes of transportation is most appropriate for carrying small, highly valuable, fragile or
perishable cargo?

A. Water

B. Road

C. Air

D. Rail

169. The correct answer is B.

Sales and operations planning (S&OP) is a monthly process.

How often, under normal circumstances, does a pre-S&OP meeting take place?

A. Weekly

B. Monthly

C. Quarterly

D. Annually

170. The correct answer is B.

In a lot-for-lot schedule, the planned order release is equal to net requirements (gross requirement reduced by any
inventory on hand). There is unlikely to be inventory on hand except at the beginning of an order period.
If you are making up a production schedule using the lot-for-lot sizing method, which of the following equations
would you use to determine the planned order receipt (assuming you know the gross amount required)?

A. Gross requirement alone

B. Gross requirement minus projected amounts on hand

C. Gross requirement minus scheduled receipts

D. Gross requirement minus projected on hand minus scheduled receipts

171. The correct answer is C.

Shipping associations are groups of smaller exporters seeking to negotiate favorable rates with carriers. Since
deregulation, carriers and larger shippers have been able to negotiate private rate agreements that are not
disclosed for other exporters' information. Smaller shippers want to benefit from the same discounts but lack the
size to negotiate successfully on their own.

Which one of the following correctly identifies the membership of shipping associations?

A. Small ship owners seeking to compete with larger carriers

B. Ship brokers banded together to hire lobbyists to seek regulatory relief from governments around the world

C. Smaller export firms seeking discounted rates

D. Ocean carriers of all sizes seeking benefits from membership in an industry association

172. The correct answer is C.

The "bandwagon effect" (also called "groupthink") can distort the conclusions of a panel if a strong leader emerges
with a convincing but wrong-headed view, or if all participants reinforce one another in reaching an exaggerated
conclusion. An entire sales force acting in concert may, however, benefit from experience, collective knowledge of
the broad market served by the organization, and even intuition.

A demand forecast determined by a panel of all the salespeople in an organization may reach an exaggerated, false
conclusion by relying on which of the following?

A. Collective view of their markets

B. Personal experience

C. Bandwagon effect

D. Intuition

173. The correct answer is A.

Transportation expenses make up the largest portion of the logistics budget, so taking the discount on
transportation costs would give you the largest cost reduction. (Of course, you would have to consider possible
tradeoffs if discounting transportation caused cost increases elsewhere in the system.)

If you were able to get a 20 percent discount on any of the following logistics expenses, which would you choose to
receive the maximum cost savings?

A. Transportation

B. Compliance

C. Materials handling

D. Warehousing

174. The correct answer is A.

The forecast is 10,100 if you use the exponential smoothing equation as follows: Forecast = Previous Forecast + α
(Demand - Forecast), where α is the smoothing constant, or, in this instance, the forecast = 10,150 + .20 (9,900 -
10,150) = 10,100. (Demand for February is 9,900, or sales minus refunds.)

Which of the following numbers gives the correct March forecast using the data below and the exponential
smoothing approach?

A. 10,100

B. 10,110

C. 10,120

D. 10,150

175. The correct answer is C.

Including more periods in the calculation (six or 12 months instead of three, for example) further reduces the effects
of random variation. This is the only benefit. Otherwise, the data gathering and calculations become more difficult
and the forecasts lag farther behind changes in demand, making the forecasts less sensitive to trends and cycles.

Which one of the following statements identifies a beneficial result of including more periods in a moving average?

A. Forecasting becomes more sensitive to cyclical changes.

B. Forecasts don't lag so far behind sales data.

 C. The impact of random variations is reduced.

D. Forecasts are more sensitive to trends in demand.

176. The correct answer is A.

Product design should take reverse logistics into account by considering use of resources, potential for reuse,
recycling, etc.

To be most effective, design of a reverse logistics chain should begin during which of the following phases of the
product life cycle?

A. Product design

B. Introduction

C. Maturity

D. Decline

177. The correct answer is B.

The automated storage and retrieval system (AS/RS) moves both horizontally and vertically, and it can make the
maximum use of floor space by lifting items into (and out of) very high storage racks.

Which one of the following material-handling devices would you purchase to get the maximum storage density per
square foot of warehouse space?

A. Forklift

B. Automated storage and retrieval system (AS/RS)

C. Bridge crane

D. Automated guided vehicle system (AGVS)

178. The correct answer is C.

The efficiency of a work center is the ratio of actual output to standard expected output; in other words, it's a
measure of how well the work center is producing in relation to what it can reasonably be expected to produce.

If you know the actual output of a work center and want to calculate its efficiency, you also need to know which of
the following?

A. Available time

B. Number of workers or machines

 C. Standard expected hours of output

D. Utilization

179. The correct answer is C.

Railroad and barges both specialize in carrying very heavy, dense, low-value cargo over long distances. A rail line
laid along a waterway would make a potent rival for the water carrier.

Considering the types of cargo typically carried over long distances by inland water carrier and the rates per ton-
mile, which of the following modes of transportation is the barge's closest competitor?

A. Piggyback

B. Pipeline

C. Rail

D. Trucking

180. The correct answer is C.

Backflushing is the use of the bill of materials to eliminate a component from inventory as soon as the parent unit
has been manufactured. Backflushing is used in connection with JIT, and it does assume the reduction or
elimination of time buckets in scheduling.

Using the bill of materials to deduct component quantities from inventory as soon as a unit has been manufactured
is called which of the following?

A. Offsetting

B. Pegging

C. Backflushing

D. Bucket reduction

181. The correct answer is C.

The price paid (or scheduled to be paid) by the importer is the right amount to use when declaring the value of an
import. The WTO does permit other "reasonable" methods of valuation if circumstances warrant.

According to the World Trade Organization, which of the following is the right amount to use when declaring the
value of imported goods?

A. Amount stated in the harmonized code for the goods in the cargo

B. Calculated market value

 C. Actual price to the importer

D. Exporter's cost plus transaction expenses

182. The correct answer is A.

A weighted moving average puts more emphasis than a simple moving average does on the most recent demand
numbers. Because of the weighting, it doesn't lag as far behind demand data as a simple moving average. Its focus,
therefore, is on recent trends, not the long term. It isn't simpler.

Which of the following statements correctly identifies the purpose of the weights in a weighted moving average?

A. To be more sensitive to recent trends in demand

B. To put more emphasis on long-term influences on demand

C. To make data gathering and forecasting calculations simpler

D. To take account of mean average deviation

183. The correct answer is A.

The Delphi method uses information from a panel of experts who respond anonymously to questionnaires. After
several rounds of responses and critiques, a moderator produces a report expressing the collective opinion of the
group.

Which of the following forecast techniques relies upon an expert panel that responds to questionnaires and never
meets face to face?

A. Delphi method

B. Historical analogy

C. Pyramid forecasting

D. Sales force consensus forecasting

184. The correct answer is C.

Data are updated as quickly as possible after the end of the month as part of the regular S&OP process.

How frequently does a firm update S&OP data?

A. Continuously

B. Daily
 C. Monthly

D. Quarterly

185.. The correct answer is A.

A pro forma commercial invoice, constituting a price quote, may be filled out and sent before a deal has been struck
between an exporter and a potential buyer. The buyer (importer) can use the pro forma commercial invoice when
securing a letter of credit with its banker.

Which of the following documents constitutes a price quote in export-import trade?

A. Pro forma commercial invoice

B. Consular invoice

C. Dock receipt

D. Commercial invoice

186. The correct answer is A.

The assemble-to-order strategy incorporates some of the benefits of mass production and some of the benefits of
true customization by mass-producing components that can be assembled into one of several different versions of a
product after receipt of an order.

Which of the following production strategies is sometimes called mass customization?

A. Assemble-to-order

B. Make-to-order

C. Make-to-stock

D. Lean production

187. The correct answer is A.

Fixed quantity ordering is generally used to fill containers, qualify for quantity discounts, or both. The model works
best when demand is known and stable with predictable lead times.

Use of a fixed order quantity model is most likely to be effective in which of the following cases?

A. Shipper is looking for quantity discounts.

B. Lead time is highly variable.

 C. Production is run on lean assumptions.

D. Demand is highly unpredictable and light.

188. The correct answer is B.

The Carnet, or ATA Carnet, was originally intended for goods en route to events like tradeshows, where they would
be used for demonstration rather than for sale. The "ATA" indicates that the goods are not imports but will be
admitted only temporarily.

Which of the following often accompanies goods that are intended to travel in sealed containers across borders,
including goods intended only to be admitted temporarily for use in events such as tradeshows?

A. Bill of lading

B. ATA Carnet

C. Consular invoice

D. Order waybill

189. The correct answer is C.

While it's not necessary to memorize the meanings of Incoterms, the important point to recall is that they exist to
clarify the responsibilities of exporter and importer in a carriage contract. Of the four groups of terms, the E group
(comprising only the single term EXW) puts the most responsibility on the importer, while the D group assigns
almost all responsibility to the exporter. DDP, for example, means "Delivered Duty Paid" (that is, paid by the
exporter).

Which one of the following Incoterms indicates that the exporter has the most responsibility for transporting a
shipment of cargo from the exporter's dock to the importer's dock?

A. FOB

B. EXW

C. DDP

D. CIP

190. The correct answer is D.

In many chains, variance in order quantity tends to increase as you move upstream away from the end customer.
This is the bullwhip effect.

In a multiple-echelon distribution network where each warehouse orders independently based on local demand,
where in the chain do you find the most variance in order quantity?
 A. Variability tends to remain constant along the chain.

B. Variability tends to increase toward the customer end of the chain.

C. Variability tend to be greatest in the middle of the chain, diminishing toward either end.

D. Variability tends to increase toward the raw materials end of the chain.

191. The correct answer is B.

Reducing storage time by cross-docking can reduce delivery lead times, thus removing one of the factors that lead
to forecast error and excess safety stock. The other options listed are likely to increase variability rather than reduce
it.

Which one of the following actions is most likely to mitigate the negative consequences of the bullwhip effect?

A. Rationing

B. Cross-docking to reduce inventory storage time

C. Increasing sales and special offers

D. Multiple demand forecasts along the chain

192. The correct answer is A.

Design for reverse logistics looks for ways to make products that can be easily reused, returned, or recycled.
(Whether the beer bottles can be reused or not has no effect upon logistics in the forward chain, only in the reverse
chain that brings the product back at the end of its life cycle.)

Which of the following approaches to product design is compatible with the requirement that German brewers use
refillable bottles?

A. Design for reverse logistics

B. Over-the-wall design

C. Design for production

D. Design for logistics

193. The correct answer is D.

Marketing can play a useful role in planning, tracking, and managing demand from the beginning to the end of the
life cycle.

The marketing department's involvement with product management includes which of the following phases of the
product's life cycle?
 A. Development through introduction

B. Introduction only

C. Conception through maturity

D. All phases, from conception through withdrawal

194. The correct answer is C.

The MRP schedules delivery of dependent demand items (which are in turn based upon independent demand
forecasts). The other processes work with independent demand or product families.

Which one of the following processes results in production numbers driven by dependent demand?

A. Master production scheduling process

B. Sales and operations planning process

C. Material requirements planning process

D. Market planning process

195. The correct answer is B.

The deseasonalized demand is the sum of the seasonal averages divided by the number of "seasons" (or months)
listed: (100 + 102 + 105 + 106 + 107 + 110) / 6 = 630 / 6 = 105.

Which of the following correctly identifies the deseasonalized monthly demand (to the nearest whole number) for
the first half of the calendar year in the example shown in the table below?

A. 100

B. 105
 C. 186

D. 630

196. The correct answer is B.

NAFTA eliminated many tariffs on imports originating from within the region and scheduled elimination of the rest.
Other barriers, such as access to roads on either side of the U.S.-Mexican border, remain troublesome. Imports
originating from countries within the region are granted favorable duties compared to goods from outside, but
documenting country of origin can be troublesome.

Which one of the following benefits has been realized under the North American Free Trade Agreement (NAFTA)?

A. Elimination of barriers to transportation across the U.S.-Mexican border

B. Elimination of many regional tariffs

C. Easier access to competitively priced goods from outside the region

D. Simplified documentation to qualify for lower tariffs on regional goods

197. The correct answer is A.

The commercial invoice is the document that states the value of commodities in a shipment. (It does not include
other amounts, such as freight.)

Which of the following documents would a banker consult for information about the value of export-import cargo in
connection with a letter of credit?

A. Commercial invoice

B. Dock receipt

C. Ship's manifest

D. Order bill of lading

198. The correct answer is A.

An export management company (EMC) may actually engage in trade but generally as a long-term consultant to a
shipper. The shipper benefits from the EMC's special knowledge of a foreign country's regulations, customs, and
politics.

Which of the following firms generally acts as a shipper's long-term consulting partner, smoothing the way through
foreign customs and politics but not buying or selling cargo?

A. Export management company

B. Freight forwarder
 C. Export trading company

D. Customs house broker

199. The correct answer is C.

As much as 70 percent of a product's delivery cost is attributable to its design.

In general, the largest portion of a product's delivery cost can be attributed to which of the following?

A. Handling

B. Production/assembly

C. Product design

D. Transportation

200. The correct answer is D.

To calculate rated capacity, you multiply the number of available hours by the efficiency and utilization. Essentially,
that tells you how much of the available time is being used and how efficiently it's being used.

If you know the available time at a work center and want to calculate its rated capacity, you also need to know which
of the following?

A. Utilization and number of workers/machines

B. Efficiency and number of workers/machines

C. Efficiency and manufacturing lead time

D. Efficiency and utilization

201. The correct answer is A.

The Carnet, or ATA Carnet, was originally intended for goods en route to events like tradeshows, where they would
be used for demonstration rather than for sale. The "ATA" indicates that the goods are not imports but will be
admitted only temporarily.

Which of the following often accompanies goods that are intended to travel in sealed containers across borders,
including goods intended only to be admitted temporarily for use in events such as tradeshows?

A. ATA Carnet

B. Order waybill
 C. Bill of lading

D. Consular invoice

202. The correct answer is C.

Common carriers are subject to the most regulation, including the requirement to serve all customers within the
scope of their license, practice nondiscrimination, and charge rates that are neither too high nor too low as to distort
the market (reasonable rates). They also bear considerable responsibility for protecting the cargo that they carry.

Which of the following types of carriers is required to serve the public, practice nondiscrimination, charge
reasonable rates, and assume many of the risks of transport?

A. Contract carrier

B. Private carrier

C. Common carrier

D. All of the above