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Supply Chain Management, 5e (Chopra/Meindl)
Chapter 13 Determining the Optimal Level of Product Availability
13.1 True/False Questions
1) The level of product availability is also referred to as the customer service level.
Answer: TRUE
Diff: 1
Topic: 13.1 The Importance of the Level of Product Availability
AACSB: Analytic Skills
Learning Outcome: Compare common approaches to supply chain design
2) A supply chain can use a high level of product availability to improve its responsiveness and
attract customers.
Answer: TRUE
Diff: 2
Topic: 13.1 The Importance of the Level of Product Availability
Learning Outcome: Compare common approaches to supply chain design
3) A high level of product availability requires less inventory, which will keep costs down for the
supply chain.
Answer: FALSE
Diff: 2
Topic: 13.1 The Importance of the Level of Product Availability
AACSB: Analytic Skills
Learning Outcome: Compare common approaches to supply chain design
4) A supply chain needs to achieve a balance between the level of availability and the cost of
inventory that maximizes supply chain revenues.
Answer: FALSE
Diff: 3
Topic: 13.1 The Importance of the Level of Product Availability
AACSB: Analytic Skills
Learning Outcome: Compare common approaches to supply chain design
5) Whether the optimal level of availability is high or low depends on where a particular
company believes they can maximize profits.
Answer: TRUE
Diff: 2
Topic: 13.1 The Importance of the Level of Product Availability
Learning Outcome: Compare common approaches to supply chain design
13-1
Copyright ? 2013 Pearson Education, Inc. publishing as Prentice Hall
6) The cost of overselling is denoted byCo and is the loss incurred by a firm for each unsold unit
at the end of the selling season.
Answer: FA
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