3 point QUESTION 17 Buying a suit off the rack at TJMaxx would be a form of and
ID: 366867 • Letter: 3
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3 point QUESTION 17 Buying a suit off the rack at TJMaxx would be a form of and having a tailored suit made at a boutique Shoppe in NYC would be a form of O A. Postponement / Speculation 3 points QUESTION 18 The only way to remain profitable long term is to eliminate waste feom your value stream, thereby reducing costs. This is referred to as the O A Cost reduction principle B Income Optiniz ation principle C. McBride Theory of management D Inventory Reduction System E. Optimal Manufacturing principleExplanation / Answer
17.
In supply chain, when value added activities are conducted well in advance of demand, it is known as speculation of demand. The product is shipped early to the destination in the anticipation of demand. The products are customized prior to receiving orders. In case of buying suit in shop, the product is already present before the demand is generated. Thus, it is a fom of speculation.
Whereas, postponement is a policy of delaying the value added activities until the order is received, to avoid differentiation of raw materials into finished goods. This saves company from carrying large and varied amount finished goods inventory in advance. In case of tailored suit service, the value added activities will be commencing only after receiving orders. Thus, the service of tailored suit made at boutique shoppe is form of postponement.
ANS: B. Speculation/Postponement
18.
Cost reduction principle focuses on reducing the waste or non-value adding activities along the value stream. Waste includes overproduction, inventory, over-processing, waiting, transportation, rework and scrap along the value stream. If all these wastes are reduced, the cost will also reduce, due to which marginal profit will increase.
ANS: a. Cost reduction principle
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