1.With regard to safety stock, briefly explain/define both the "probability of stockout" criterion and the "service level" criterion.

2.Based upon the desired service level, the standard deviation of demand, and a planned order quantity, the resulting value of E(V) is 0.75. This means that 0.75 is "what" (i.e.; unit of measure)?

3.An order for 600 units comes in on Wednesday, Oct. 30, with the expectation of immediate shipment. For this particular product, the order size and shipment expectation is quite normal for orders of this product; in other words, there is nothing unusual about this order. You are able to ship 300 units immediately, but the remaining units will not ship until next month (specifically, Friday, Nov. 1, which is when the next delivery from your supplier will arrive). You maintain demand history and forecasts on a monthly basis. In which month would you want this order to appear in your demand history? Briefly explain your reasoning.

4.You are operating a distribution center utilizing the reorder point/ safety stock approach to manage item inventories. You have passed an item's reorder point; before the new order arrives, is it possible to run out of safety stock (yes or no)? Briefly explain your reasoning.

5.Continuing as a distribution center manager, for any one SKU, if you decide to permanently double the order quantity for future orders of an item, but all other factors (lead time, forecast, standard deviation of demand, and probability of not stocking out) remain the same, would you expect the customer service level to increase or decrease? (HINT: Look at the service level formula.)

6.Through your SOP process, your company has decided upon an average inventory of 1,000,000 units. You have 5,000 SKUs. For each SKU, you have established an order quantity and a desired service level/probability of not stocking out. How could you determine if the 1,000,000 unit planned total inventory is sufficient given your SKU level decision?

7.What is the single, most important factor that will spell success or failure in a company's attempt to implement an effective Sales and Operations Planning process? (HINT: This same factor spells success or failure for any major policy initiative in OSCM or any other functional area.)

8.Resource Planning is conducted in conjunction with the development of the SOP. What is its purpose? (Be fairly specific about this.)

9.At the customer order decoupling point (aka order penetration point), demand shifts between ________ and ________.

10.SOP and Master Production Scheduling are used to manage the mix of products to be made and total production volume. Which manages mix and which volume?

11.In a highly disciplined execution of SOP, what is manufacturing's responsibility with regard to execution of the production plan? (HINT: you can answer this with one sentence.)

12.What is the purpose of the "force-down" part of the pyramid forecasting method?