CPIM 8.0 exam review

The S&OP focus is on which material level A. End item B. Raw materials C. Subcomponents D. Product family

D. Product family

Which type of demand requires forecasting? A. Independent B. Dependent

A. Independent

Load smoothing at the production planning level to resolve an overload condition identified by resource planning is an example of: A. a level production strategy. B. a chase production strategy. C. supply planning. D. demand planning.

A. a level production strategy Load leveling is an attempt to balance demand from period to period within supply constraints.

A company with a product differentiation strategy is focused on: A. customer-valued product features. B. mass customization. C. high productivity. D. low cost of quality.

A. customer-valued product features. Product differentiation is a strategy of making a product distinct from the competition on a non-price basis such as availability, durability, quality, or reliability.

A presentation of the flow of materials that shows equipment and inventories in a process industry is a A. process layout. B. process train. C. process sheet. D. process organization structure.

B. process train. A process train is the presentation of the flow of materials through a process industry manufacturing system that shows equipment and inventories.

Which of the following identifies common cause variation? A. Operator assessment B. Sampling inspection C. Cause-and-effect diagram D. Mistake-proofing

C. Cause-and-effect diagram The cause-and-effect diagram is a tool for analyzing the main causes and subcauses leading to an effect. It is also referred to as the Ishikawa diagram.

In a job shop environment, which lead time element is typically the longest? A. Wait B. Run C. Queue D. Setup

C. Queue Queue time is typically over 90% of the manufacturing lead time in a job shop.

Which of the following is the process of identifying a company that provides a needed good or service? A. Buying B. Surveying C. Sourcing D. Purchasing

C. Sourcing Sourcing is the process of identifying a company that provides a needed good or service.

A product can be produced at a rate of two per minute. This is known as: A. delivery time. B. lead time. C. cycle time. D. cumulative lead time.

C. cycle time. Cycle time is the time between completion of two units.

Risk Pooling works best when: A. Demand patterns among markets is similar B. Customer lead times are acceptable C. Inbound/outbound transportaion cost is lower D. All of the above

D. All of the above

Which of the following are components of demand A. Seasonal B. Trend C. Cyclical D. Bias

A. Seasonal B. Trend C. Cyclical

What is the capacity validation tool for S&OP A. Resource planning (RP) B. Rough cut capacity planning (RCCP) C. Capacity requirement plan (CRP) D. HR staffing analysis (HSA)

A. Resource planning (RP)

The creation of a high-volume product with large variety so that a customer may specify an exact model is: A. mass customization. B. design-to-order. C. make-to-order. D. mass production.

A. mass customization. Mass customization is the creation of a high-volume product with large variety so that a customer may specify an exact model out of a large volume of possible end items.

The capacity planning technique used at the S&OP planning level is: A. resource planning. B. rough-cut capacity planning. C. input/output control. D. detailed capacity requirements planning.

A. resource planning. S&OP planning uses resource planning to check key resource availability.

Which of the following departments is likely least affected by frequently overloaded work centers that lead to unrealistic master schedules? A. Sales B. Finance C. Production D. Purchasing

B. Finance Finance is more concerned with mid- to long-term financial issues.

From a master scheduling perspective, what is mass customization most similar to? A. Make-to-stock B. Make-to-order C. Assemble-to-order D. Engineer-to-order

C. Assemble-to-order Many end items are made as easily as producing a single or few high-volume items at the end of the process.

The manufacturing lead time activities in there proper sequence are... A. Setup, run, wait, queue, move B. Queue, setup, wait, run, move C. Move, queue, setup, run, wait D. Queue, setup, run, wait, move

D. Queue, setup, run, wait, move

The simple average of a group of values is the: A. mode. B. middle. C. median. D. mean.

D. mean.

What process generally has the longest lead time

Engineer to Order

EDU provides consumers the ability to track the status of there order shipments- True or False

False

What is the term for the volume/mix of throughput on which overhead absorption rates are established? A. Budgeted capacity B. Cost pool C. Overhead capacity D. Cost center

A. Budgeted capacity Budgeted capacity is the volume/mix of throughput on which financial budgets were set and overhead/burden absorption rates established.

What is the formula for Lead Time Interval and what is the application

Square Root Of: √New Lead Time Existing Lead Time X Existing Safety Stock Application- When Supplier or Production Lead Times Change

True or false, Tracking signal: acts as a numerical alarm, which goes off if outside an acceptable range, the forecast is unreliable.

True

Which are two primary inputs to the S & OP process A. Business plan B. Material requirements plan C. Cash flow statement D. Demand management

A. Business plan D. Demand management

Good Inventory management processes and control will have a direct impact on which 3 of these positive outcomes. 1. Greater market share 2. Minimal customer returns 3. Customer service 4. Improved bottom line 5. Uninterrupted manufacturing 6. Reduced manufacturing scrap

3. Customer service 4. Improved bottom line 5. Uninterrupted manufacturing

The term "non-value-added" describes which of the following? A. Rework B. Safety stock C. Pull system D. Training

A. Rework Rework indicates poor control over processes and quality. By eliminating process errors, the amount of product rework will decline.

The S&OP process occurs at which of the following levels? A. Product families B. Individual item C. Subcomponent line items D. Service parts

A. Product families Individual and subcomponent items are also not addressed at the S&OP level, which specifically addresses planning at the product family level. While service parts may be a product family, this is an individual category of production items, which may or may not be planned at the S&OP level.

Which of the following is true of the sales and operations planning (S&OP) process? A. The production plan is the agreed-upon plan. B. Consensus by management is not necessary. C. Forecasts of future demand are best expressed in units. D. The supply plan does not include inventory.

A. The production plan is the agreed-upon plan. The production plan must be agreed to by all members of the S&OP team.

At one time, a high-end automobile subcomponent had 97 components. After an out-of-the-box evaluation, the number has been reduced to 30 parts. This part reduction is a key goal of: A. design for manufacturability. B. benchmarking. C. supplier rationalization. D. concurrent engineering.

A. design for manufacturability. Simplification of parts, products, and processes to improve quality and reduce manufacturing costs is known as design for manufacturability.

Which Metrics should be monitored to evaluate production execution and capacity performance. Stockouts Decreasing customer service ratings Exceptions to MPC plans Excessive expediting Quality problems Unbudgeted cost increases

All of them Stockouts Decreasing customer service ratings Exceptions to MPC plans Excessive expediting Quality problems Unbudgeted cost increases

Which of the following techniques encourages suppliers to adopt lean principles? A. Point-of-use B. Kanban C. Dedicated storage D. Random storage

B. Kanban Kanban is the only response that would impact suppliers; the others would be in-house.

A company offers a complex MTO product with relatively long lead time. The market is stable, sparse, with little competition. A key component is an expensive control unit imported from overseas. The supplier offers a 10 % discount if 3 or more units are purchased. Which lot-size method is most appropriate for the scenario shown A. Order n B. L4L C. POQ D. EOQ

B. L4L

Responsibility for TQM lies with the Quality Assurance staff and senior management- True or False

False

The contribution margin must cover the fixed costs as a starting point for profitability the CM formula is? A. Sales - Fixed Costs B. Variable Costs - Fixed Costs C. Sales - Variable Costs D. Sales - Payroll

C. Sales - Variable Costs

In manufacturing what is FAS? A. The last inspection and packaging steps in MTS B. Final Approved Specification in ETO C. Scheduling the final assembly of customized options in MTO and ATO D. Free Alongside Ship (Incoterm)

C. Scheduling the final assembly of customized options in MTO and ATO

Within the planning hierarchy, the S&OP focus is on A. Product mix B. Plant & supplier scheduling C. Volume D. Creating the Business Plan

C. Volume

After moving a low-margin product line to an outside supplier, the manufacturing group wants to add production hours to the facility. They could possibly work with marketing to find new products to fill the production-hour gaps, but a more short-term solution would be to: A. lay off workers by attrition. B. integrate backward. C. find currently outsourced high-margin items and insource them. D. purchase a competitor and manufacture its items.

C. find currently outsourced high-margin items and insource them. Insourcing is a make-or-buy decision that uses internal resources to provide goods and services.

Formula for Inventory Turnover and when do you apply it

Cost of Goods Sold Average Aggregate Inventory $ Application- Management or Asset Performance

Order Point- Demand is 60 items per week, lead time is 3 weeks, safety stock is 20 units, What is the order point. A. 0 B. 60 C. 180 D. 200

D. 200

Which manufacturing environment is most likely to face uncertainty in quantity, product mix and order timing? A. ETO B. MTS C. MTO D. ATO

D. ATO

Inventory traceability is critical for A. Proving only BOM-stated parts were used in assembly B. Verify supplier invoice costs match the purchase order cost C. Ensuring a component meets necessary strength requirements D. FDA product recalls

D. FDA product recalls

An oil refinery is an example of which product flow type A. V B. A C. T D. I

D. I

A manufacturer looks to differentiate itself from competitors by filling custom orders quickly. As a result, it places orders on shorter notice than many competitors. Given that, what is the best way to segment its suppliers? A. Supplier capabilities B. Level of innovation C. Customization versus standardization D. Lead times

D. Lead times Given the short notice for orders, the best segmentation method would be based on lead times.

What is the primary output from the Master Scheduling process? A. Sales plan B. Material requirements plan C. Cash flow statement D. Master production schedule

D. Master production schedule

Which of the following is the best performance measurement to use to obtain higher profitability? A. Utilization B. Volume production C. Productivity D. On-time completion to schedule

D. On-time completion to schedule On-time completion to schedule means that what is scheduled is available when it is required, at a quality acceptable to the customer.

Which of the following is the least important objective of preventive and predictive maintenance? A. Quality B. On-time delivery C. Clean workplace D. Preventing conflict with production for access to tools and equipment

D. Preventing conflict with production for access to tools and equipment Preventive and predictive maintenance will create some contention for access to tools and equipment. Quality, on-time delivery, and a clean workplace are important benefits of preventive and predictive maintenance.

Which technique facilitates scheduling equipment in economic run lengths and the use of low-cost production sequences? A. Material-dominated scheduling B. Mixed-flow scheduling C. Mixed-model scheduling D. Processor-dominated scheduling

D. Processor-dominated scheduling Processor-dominated scheduling is a technique that schedules equipment (processor) before materials.

What is a key benefit of using certified suppliers? A. Purchasing lead times are reduced. B. The need for price negotiation is eliminated. C. The firm will receive the best possible price for the goods. D. The need for incoming inspection is eliminated.

D. The need for incoming inspection is eliminated. Parts coming from certified suppliers do not require incoming inspection.

Which of the following statements about planning functions is true? A. Material requirements planning is a direct input to the strategic plan. B. The business plan is a direct input to the master schedule. C. The production plan is a direct input to the material requirements plan. D. The production plan is a direct input to the master schedule.

D. The production plan is a direct input to the master schedule. The planning hierarchy starts with the business plan, which inputs to the sales and operations plan, which inputs to the production plan, which inputs to the master production schedule, which inputs to the material requirements plan.

What is the responsibility of the leader of a small group improvement activity? A. To make decisions when there is no consensus B. To facilitate the group's activities C. To report the team's decisions to management D. To give the team a project name

B. To facilitate the group's activities The leader is the group facilitator and should not be called on to make final decisions. His or her job is to facilitate the group process.

When would the buyer consider the use of blanket orders? A. When dealing with short-term commitments B. To minimize clerical work C. For large orders D. When a known quantity of components is required

B. To minimize clerical work Blanket orders are an effective means to minimize many frequent and low-volume orders over time. The other answers deal with unique purchases.

Multiple functional groups work on a new product design at the same time, as opposed to working in sequence, which reduces cycle time. This is referred to as: A. project engineering. B. concurrent engineering. C. collaborative engineering. D. process engineering.

B. concurrent engineering. With concurrent engineering (also called participative design/engineering), multiple functional groups work on a new product design at the same time. This reduces cycle time.

A company's suppliers are set up with specific delivery windows of days, weeks, or months within which they must deliver parts. The most likely information the supplier needs for each release is the: A. delivery window. B. required quantity. C. delivery timing. D. required date.

B. required quantity. If the delivery window is set, the window, date, and timing are known. The quantity will likely have some variation window to window.

Prior to constructing industrial power lines in a wilderness area, a company seeks input from various public groups. This company is exhibiting its: A. product positioning. B. social responsibility. C. public relations. D. pro forma fiduciary responsibility.

B. social responsibility. Social responsibility is a commitment by management to behave ethically and to contribute to community development.

Which technology can assist a company in detecting and identifying potential fraud across the supply chain? A.Internet of Things B. Cloud computing C. Artificial intelligence and machine learning D. Blockchain

C. Artificial intelligence and machine learning Artificial intelligence and machine learning are useful at detecting patterns that may indicate fraud and that may otherwise go unnoticed within a supply chain.

Which of the following refers to a production environment where a product can be assembled from common subassemblies after receipt of a customer's order? A. Make-to-order B. Make-to-stock C. Assemble-to-order D. Engineer-to-order

C. Assemble-to-order In an assemble-to-order environment, products are assembled from common subassemblies based on the specifications in a customer order.

What is the name of the technique that can be used when demand for an item is affected by two or more patterns? A. Deregulation B. Delta C. Decomposition D. Depression

C. Decomposition

Managing consignment inventory is an essential function in which of the following processes? A. Capacity management B. Forecasting C. Demand management D. Sales and operations planning (S&OP)

C. Demand management Demand management is the function of recognizing and managing all demands for products, including managing consigned inventory in customers' locations.

Workloads between work centers might be redistributed by: A. a substitution. B. a temporary routing. C. subcontracting. D. an alternate routing.

D. an alternate routing. An alternate routing is usually less preferred than the primary routing but results in an identical item.

Which of the following may cause errors in a sales forecast based solely on shipment history? A. Changes in the demand time fence B. Exponential smoothing C. Machine downtime D. Changes in customer demand

C. Machine downtime Machine downtime may cause shipments to be missed even though they were part of customer demand.

Increasing the yield of a product reduces: A. finished goods inventory. B. kanban size. C. queue time. D. product cost.

D. product cost. If yield is increased, fewer materials and less operation time are necessary, which reduces the cost of the product.

In which environment is the demand management function least likely to provide customers with promise dates? A. Assemble-to-order B. Engineer-to-order C. Make-to-stock D. Make-to-order

C. Make-to-stock In a make-to-stock environment, customers buy directly from the available inventory, so customer service is determined by whether the item is in stock or not.

Arrange these sustainability maturity stages in there natural evolutionary sequence in a company. Managerial: exploit cost benefits in sustainable activities Defensive: act when necessary to defend company reputation Strategic: integrate sustainability throughout, proactively max TBL impact Compliance: minimize fines, establish sustainability risk plan & responses

1. Defensive: act when necessary to defend company reputation 2. Compliance: minimize fines, establish sustainability risk plan & responses 3. Managerial: exploit cost benefits in sustainable activities 4. Strategic: integrate sustainability throughout, proactively max TBL impact

In reverse logistics supply chain partners might play which roles (select multiple) 1. The retailer, as direct customer contact, must handle all reverse logistics 2. Typically, the producer "owns" the reverse logistics chain 3. Per contract, forward logistics partners must also perform the reverse flow 4. The producer contracts all or parts to a reverse 3PL/4PL provider

2. Typically, the producer "owns" the reverse logistics chain 4. The producer contracts all or parts to a reverse 3PL/4PL provider

What does mixed-flow scheduling mean? A. An intermediate stage is scheduled first when the main bottleneck moves to a processor in that stage. B. Each stage may use either processor or material-dominated scheduling. C. The last stage is scheduled first when the first stage is constrained by material supply only. D. The first stage is scheduled first when demand is low.

A. An intermediate stage is scheduled first when the main bottleneck moves to a processor in that stage. Flow scheduling is an intermediate stage is scheduled first when the main bottleneck moves to a processor in that stage. Low demand does not require the first stage to be scheduled first, whereas constrained supply probably would. While it is true that each stage may use either processor or material-dominated scheduling, it is not directly related to mixed-flow scheduling.

Which of the following types of processes best supports the widest range of production volume and permits a company to most easily adjust its capacity to match demand? A. Batch B. Continuous C. Jobbing D. Line

A. Batch Batch production is a manufacturing technique in which parts are accumulated and processed together in a lot. Batch processes also enable companies to easily adjust resources to produce different products.

How can distribution management improve inventory accuracy? A. By clearly defining transaction points as inventory flows through the distribution channel B. By making sure that all inventory is secured in the warehouse C. By allowing data entry only by qualified individuals D. By weighing every box that arrives and comparing the total to the planned weight

A. By clearly defining transaction points as inventory flows through the distribution channel Determining where transactions take place during the flow keeps records up-to-date and accurate.

How can a digital supply network help boost profitability? A. By increasing top and bottom lines B. By lowering security costs C. By providing too much performance information D. By enhancing risk

A. By increasing top and bottom lines Digital supply networks can boost profitability by increasing top and bottom lines. They tend to reduce, not enhance, risk, and too much performance information can lead to slowed decision making and missed opportunities. Security costs may increase due to the need to invest in technological security measures in addition to traditional physical security.

What is the difference between a co-product and a byproduct? A. Byproducts are incidental to the production process while co-products are central to it. B. Byproducts have no value while co-products are materials of value. C. Co-products are beneficial while by-products are toxic. D. There is no difference; these terms are synonyms.

A. Byproducts are incidental to the production process while co-products are central to it. As defined in the APICS Dictionary, a byproduct is "a material of value produced as a residual of or incidental to the production process. The ratio of by-product to primary product is usually predictable. By-products may be recycled, sold as-is, or used for other purposes."

What is a likely role for a planning and inventory management professional during the order processing stage of the order cycle? A. Check inventory levels and planned production schedules to determine availability and location. B. Administratively process the order. C. Assess whether the most efficient equipment is being used to assemble the order. D. Validate that the customer performed the order processing correctly.

A. Check inventory levels and planned production schedules to determine availability and location. Other functional areas will perform the administrative functions of processing an order. Planning and inventory management professionals can be involved in a support function by checking inventory levels and planned production schedules to determine availability and location.

Which technology would best assist an organization that needed to inspect pipelines to monitor for leakage? A. Drones B. Autonomous vehicles C. Robotic process automation D. Blockchain

A. Drones Drones can be used to inspect pipelines and other difficult-to-access areas.

Demand for an item unrelated to the demand for other items is known as: A. Independent Demand B. Dependent Demand C. Calculated Demand D. Abnormal Demand

A. Independent Demand

Which scheduling technique assumes that there will always be sufficient capacity and computes the schedule starting with the due date for the order? A. Infinite backward scheduling B. Infinite forward scheduling C. Finite backward scheduling D. Finite forward scheduling

A. Infinite backward scheduling Most systems attempt to backward schedule first, using infinite planning.

Which of the following is true of the ultimate effect of a change in strategy? A. It is rarely known for sure. B. It is typically instantaneous. C. It must be highly predictable. D. It is relatively straightforward.

A. It is rarely known for sure. The ultimate effect of a change in strategy is rarely known for sure.

Which of the following is a three-pronged approach to managing quality? A. Juran trilogy B. Continuous improvement trilogy C. Triple bottom line D. A3 problem-solving technique

A. Juran trilogy The quality trilogy, or Juran trilogy, is a three-pronged approach to managing quality proposed by Joseph Juran.

Which of the following key resources is most likely to be used to validate the production plan in a high-volume company that produces a number of families of windows, including standard and custom sizes and unique designs? A. Labor hours B. Production rate C. Housing starts D. Plate glass

A. Labor hours Hours is the common denominator given the variety of product families.

Which of the following may prevent effective shop floor control? A. Lack of valid due dates B. Lack of frequent rescheduling C. Lack common exceptions D. Lack of rarely needed tooling

A. Lack of valid due dates Lack of valid due dates can inhibit control of the shop floor.

What are service parts? A. Modules, components, and elements that are planned to be used without modification to replace an original part B. Items that are not planned for and are pulled from manufacturing stock when required C. Items stored in maintenance to repair manufacturing equipment on the shop floor D. Expensed items that are used in manufacturing but are included in the structure of the product

A. Modules, components, and elements that are planned to be used without modification to replace an original part Service parts are modules, components, and elements that are planned to be used without modification to replace an original part.

For S&OP, product families group items based on similar A. Production & capacity planning factors B. Sales, advertising, & promotion to the marketplace C. Customer groups D. Country of origin

A. Production & capacity planning factors

Which of the following reporting points is of most use when determining run times? A. Production order complete B. Setup complete C. Move complete D. Partial quantity complete

A. Production order complete Run time is calculated by multiplying the run time per piece by the size of the order. Knowing when the order is completed can provide the run time per piece.

A company has developed a new, innovative product that is taking over the market. Early sales consume everything the company can produce, but things have started to slow down. Both production and sales continue to grow. What are the typical challenges that would be expected in this growth phase of the product's life? A. Quality and delivery B. Design and quality C. Design and availability D. Price and delivery

A. Quality and delivery In the growth phase of a product, rapid expansion and increased production often lead to degradation in quality and delivery.

Which of the following measurements is typically calculated for each production order? A. Run time B. Efficiency C. Internal setup D. Utilization

A. Run time Run time is the only one dependent on the lot quantity.

Which manufacturer would be most likely to use a chase strategy? A. Seasonal ice cream candy bar manufacturer. B. Seasonal glassware manufacturer. C. Compression socks manufacturer. D. Paint manufacturer.

A. Seasonal ice cream candy bar manufacturer. The seasonal ice cream candy bar manufacturer sells perishable products that also have distinct seasonality. Because perishable products cannot be produced long in advance of need, they cannot use a level strategy and may need to use a chase strategy.

Which of the following sets the pace of production to match the rate of customer demand and becomes the heartbeat of any lean production system? A. Takt time B. Buffer C. Drum D. Sensei

A. Takt time Takt time sets the pace of production to match the rate of customer demand and becomes the heartbeat of any lean production system.

Operations strategy formulation should be: A. a relatively infrequent event. B. a five-year rolling activity updated biannually. C. a monthly seven-step process involving top management. D. an annual process with quarterly adjustments.

A. a relatively infrequent event. The process of formulating an entirely new operations strategy should be a relatively infrequent event.

To detect when a work center's output might vary from the plan, the planner should compare: A. actual input to planned input. B. actual output to planned output. C. actual input to actual output. D. planned output to planned input.

A. actual input to planned input. Actual input is compared to planned input to identify when a work center's output might vary from the plan.

The five forces model: A. considers the impact of buyers on competition. B. identifies market trends. C. determines what market positions rivals occupy. D. is used to determine the economic features of a market.

A. considers the impact of buyers on competition. The five forces model consists of the following elements: rivalry among competitive sellers, buyer bargaining power, substitute products, supplier power, and new entrants into the marketplace.

The following are valid activities of the plan step in PDCA except for A. determining the use of level flow and standardized work. B. defining the gap between the current and future states. C. developing a measurement plan with SMART goals. D. analyzing main and root causes of process and product variations.

A. determining the use of level flow and standardized work. Determining the use of level flow and standardized work procedures is usually one of the activities of grasping the situation, which thinks critically about the big picture.

Increases in which metrics might indicate that the master scheduling process needs improvement A. excess inventory B. lead times reductions C. % perfect orders D. management interventions E. time fence violations F. % orders past due

A. excess inventory D. management interventions E. time fence violations F. % orders past due

As a product or service matures, the organization's collective knowledge of risk prevention and mitigation will: A. facilitate reduction in errors of both commission and omission. B. cause the complete elimination of all risks for all products and services. C. prevent all intrusions to the facility from any regulatory agency. D. successfully eliminate all existing risks associated with the product or service.

A. facilitate reduction in errors of both commission and omission. As errors of commission and omission are reduced due to increased experience in the organization, the implementation of operational strategy needs to address learning, capturing and reporting the value of the buildup of operations knowledge, the momentum of foundational knowledge, and resource and process change.

Loss caused by scrap, theft, deterioration, or evaporation is known as: A. shrinkage. B. yield. C. attrition. D. waste.

A. shrinkage. Shrinkage is the reduction of actual quantities of items in stock, in process, or in transit.

What is true about APS systems Like MRP, APS runs in a background "batch" mode Like its predecessor RCCP, APS does not evaluate distribution & logistics Able to plan demand/supply across multiple sites Extends planning capabilities beyond ATP and CTP

Able to plan demand/supply across multiple sites Extends planning capabilities beyond ATP and CTP

A work center actually produces 320, 325, 330, and 322 standard hours per week for 4 weeks. What is the demonstrated capacity? A. 320 standard hours B. 324 standard hours C. 332 standard hours D. 330 standard hour

B. 324 standard hours Demonstrated Capacity = Sum of Standard Hours per Time Bucket/Number of Time Buckets = (320 hours + 325 hours + 330 hours + 322 hours)/4 = 1,297 hours/4 = 324.25 standard hours, rounded to 324 standard hours.

Which Financial statement can be used to determine a company's average inventory A. Income statement B. Balance sheet C. Cash flow statement D. P&L statement

B. Balance sheet

Which is not a benefit of Total Productive Maintenance (TPM) A. Equipment life B. Lowest possible maintenance cost C. Worker safety D. Resilience

B. Lowest possible maintenance cost

A custom- built furniture company would employ which combination of environment process and layout A. MTS, Product-based, Continuous B. MTO, Functional, Workcenter C. ATO, Cellular, Line D. ETO, Fixed, Project

B. MTO, Functional, Workcenter

An organization is trying to forecast how many units of replacement part XYZ to produce in the upcoming period. The part is in fairly high demand and requires a long lead time to produce. What information could help the most with this forecast? A. Mean absolute deviation (MAD) B. Mean time between failures (MTBF) C. Mean time to repair (MTTR) D. Mean time to failure (MTTF)

B. Mean time between failures (MTBF) The APICS Dictionary, 16th edition, defines MTBF as "the average time interval between failures for repairable product for a defined unit of measure (e.g., operating hours, cycles, miles)." MTBF can be used to generate repair part forecasts for items with sufficient demand and long lead times.

A make-to-stock company produces 15 product families of small appliances and fulfills orders from both stock and production. Each product family has a large number of configurations to accommodate multiple uses, features, and options. What is the most difficult to plan in this environment? A. Backlog B. Mix C. Capacity D. Volume

B. Mix Product mix will be the most difficult to plan, due to the large variety.

Processes are complex, with expensive setups and subject to bottlenecks. Which scheduling model is appropriate A. MDS - Material dominated scheduling B. PDS - Processor dominated scheduling

B. PDS - Processor dominated scheduling

Forecasting techniques that rely on expert judgement, intuition, market experience, and management insights are. A. Quantitative B. Qualitative

B. Qualitative

In service industries, managing the conflict between customer service and efficiency is difficult because. A. Since it's invisible, it's impossible to forecast service demand B. Service capacity is inherently perishable C. There are no materials to manage D. Employee turnover is historically high

B. Service capacity is inherently perishable

Which level of technology systems requirements stem from choices made for the production process? A. Analytical B. Tactical C. Operational D. Strategic

B. Tactical Tactical requirements in manufacturing stem from choices made for the production process.

A company using a pull environment is creating a flow line to improve throughput to meet customer demand. Which of the following data needs to be calculated to design the line? A. Efficiency B. Takt time C. Utilization D. Cycle time

B. Takt time Takt time would determine how many units need to be produced to meet the demand, which will determine the time for each operation in order to produce the flow.

Which of the following functions is responsible for paying an invoice once it is approved? A. Cost accounting department B. Warehouse C. Accounts payable department D. Accounts receivable department

C. Accounts payable department The accounts payable department is responsible for processing the payment once an invoice is approved.

What should the length of the master scheduling planning horizon be for a make-to-stock product? A. At least as long as the manufacturing lead time B. Equal to the sales and operations planning horizon C. At least as long as the cumulative lead time D. Equal to the delivery lead time

C. At least as long as the cumulative lead time If the planning horizon is shorter than the longest cumulative lead time, there will not be enough time to order components.

Delivery lead time in an engineer-to-order environment includes which of the following elements? A. Purchase, manufacture, assemble, ship B. Manufacture, assemble, ship C. Design, purchase, manufacture, assemble, ship D. Assemble, ship

C. Design, purchase, manufacture, assemble, ship Delivery lead time is the time from the receipt of a customer order to the delivery of the product. Since this is engineer-to-order, the receipt of the order would initiate the design phase.

Exponential smoothing techniques are desirable for which of the following reasons? A. Low cost B. Long-range accuracy C. Low cost and flexibility of application D. Low cost, long-range accuracy, and flexibility of application

C. Low cost and flexibility of application The low cost to assemble data and calculate a forecast and the flexibility of exponential smoothing are two important attributes of the technique.

Which of the following lean manufacturing environments is most likely to have the smallest number of subassemblies or semi-finished goods in stock to support ongoing operations and customer service levels? A. Engineer-to-order B. Assemble-to-order C. Make-to-stock D. Mass customization

C. Make-to-stock Make-to-stock goods should flow from raw materials to finished goods directly within a lean manufacturing environment.

Open shop orders and purchase orders are primary inputs to which of the following activities? A. Master production scheduling B. Resource requirements planning C. Material requirements planning D. Production activity control

C. Material requirements planning Open shop orders and purchase orders are prime inputs into material requirements planning (MRP). They tell MRP what items are coming in, the quantities, and when they are expected to arrive. They form part of the supply along with beginning inventory and planned orders used by MRP.

By approving projects that improve performance with its order qualifiers, a company is: A. likely selecting improvement projects based on the theory of constraints. B. spending its money wisely. C. Not going to achieve high levels of competitive benefits. D. likely using the 80-20 rule for project prioritization.

C. Not going to achieve high levels of competitive benefits. No matter how well the company performs at its qualifiers, it is not going to achieve high levels of competitive benefits.

What is slack time? A. Order process time when progress was not made (e.g., waiting on parts) B. Future time when production won't be active (e.g., scheduled maintenance) C. Order time remaining minus the sum of remaining setup and run times D. Shortest process time among all open orders

C. Order time remaining minus the sum of remaining setup and run times

What is a benefit of a focused factory? A. Increased supervisory involvement B. Reduced functional departments C. Reduced production lead time D. Increased machine utilization

C. Reduced production lead time Repetition of and concentration on a very limited product usually increases efficiency, which impacts lead time.

Which is the best way listed to improve quality at the source for manufactured parts? A. Applying as much automation as possible. B. Improving customer warranty coverage C. Reducing the variation in manufacturing process D. Inspecting all parts for known defectives

C. Reducing the variation in manufacturing process Reducing variation in the manufacturing processes improves quality. The other answers are incorrect because automation does not necessarily improve quality; inspecting all parts is costly and does not improve quality at the source—it only catches defects that have occurred; and improving customer warranty coverage does nothing to ensure quality.

Which of the following is an activity included in the manufacturing planning and control hierarchy in the priority planning area rather than being considered an input or later step? A. Production activity control B. Business planning C. Sales and operations planning D. Strategic planning

C. Sales and operations planning Sales and operations planning (S&OP), master scheduling, and material requirements planning (MRP) are priority planning activities included in the manufacturing planning and control (MPC) hierarchy. Business and strategic planning are incorrect because they are considered inputs to MPC. Production activity control is incorrect because it is an execution rather than a planning step and so it is performed at a lower level.

What is the primary purpose of the bill of material in material requirements planning (MRP)? A. To outline the production process in detail B. To generate a where-used list for all components C. To provide a structure for the explosion process D. To provide costing information

C. To provide a structure for the explosion process MRP uses the bill of material to multiply the requirements by the usage requirements throughout the product structure.

What do companies often use to sustain financial objectives matched with strategic objectives? A. Balance sheet B. Ratio of earnings per share and stock price C. Total market capitalization value of the company D. Balanced scorecard

D. Balanced scorecard The most widely used framework for keeping financial objectives matched with strategic objectives is the balanced scorecard.

Trend extrapolation is used in forecasting in which of the following ways? A. For identifying the presence of seasonality in product demand B. For easier graphing of the forecast C. For identifying cyclical patterns D. For projecting long-range movement

D. For projecting long-range movement Extrapolation refers to the process of extending a forecast out a certain number of periods into the future.

Continuous production processes would be most appropriate for which of the following? A. Restoring furniture B. Mining of semiprecious gem stones C. Assembly of low-cost consumer electronics D. Generation of electric power

D. Generation of electric power Continuous production is a type of flow manufacturing, used for the production of high-volume standard products made in a continuous flow (such as gasoline) rather than as discrete units (such as cars and appliances).

What formula is used to calculate the cash-to-cash cycle time? A. Inventory Days + Accounts Payable Days - Accounts Receivable Days B. Average Accounts Payable Days C. Accounts Receivable - Accounts Payable D. Inventory Days + Accounts Receivable Days - Accounts Payable Days

D. Inventory Days + Accounts Receivable Days - Accounts Payable Days

Which of the following is a type of flow manufacturing? A. Intermittent B. Balancing operations C. Line balancing D. Mass/continuous

D. Mass/continuous Flow manufacturing processes include repetitive, batch flow, and mass/continuous types. In flow manufacturing, material flow usually is uninterrupted.

What is the role of top management in the sales and operations planning (S&OP) process? A. To make the final decisions after the meeting B. To develop the production plan C. To provide the information used in the process D. To commit to the process and the results

D. To commit to the process and the results Top management's role is to support the S&OP process and agree to the results.

For the purpose of material requirements planning, it is most important for the bill of material to: A. be linked to the operation routings. B. calculate product cost. C. be able to balance capacity and load. D. accurately define part dependencies.

D. accurately define part dependencies. Without accurate items and use in the bill of material, the entire explosion and netting process is invalid.

Manufacturing lead time represents the: A. time from the receipt of a customer order to the delivery of the product. B. longest planned length of time to accomplish the activity in question. C. total lead time required to obtain a purchased item. D. total time required to manufacture an item, exclusive of lower-level purchasing lead time.

D. total time required to manufacture an item, exclusive of lower-level purchasing lead time. Manufacturing lead time represents the total time required to manufacture an item, exclusive of lower-level purchasing lead time. For make-to-order products, it is the length of time between the release of an order to the production process and shipment to the final customer. For make-to-stock products, it is the length of time between the release of an order to the production process and receipt into inventory. Included are order preparation time, queue time, setup time, run time, move time, inspection time, and put-away time.

True or False- The Demand Time Fence marks the frozen zone in which changes can be made only with executive approval

True

Is it ethical to influence upstream suppliers and downstream customers to follow the company's sustainability initiatives, Yes or No

Yes

Holding Anticipation Inventory is riskier than hedge inventory- True or False

False

True or False Fixed costs refers to all costs incurred to make a single unit of the product.

False

True or False- A company's sustainability strategy can have an outward impact on society, but society rarely has an inward impact on the company.

False

True or False- Keeping logistics inhouse provides better profitability, competitive advantage, flexibility, and expansion opportunities.

False

What are components of Distribution planning

Planning transportation Inventory levels Orders Communication

In a fixed order quantity model, the order quantity is fixed but the timing may vary- True or False

True

True or false- Affinity diagram: a brainstorming tool using anonymous ideas to assess problem severity and inspire subsequent evalution

True

When market demand is increasing competition from other sellers will also increase significantly True or False

True

What are true regarding the cause and effect diagram 1. Also known as the fishbone or Ishikawa diagram 2. Process is done anonymously 3. Starts with the observed problem, then identifies all potential causes 4. After stating the problem, the first step is to list all possible solutions 5. Applies only to tangible products, not for services 6. Ask "why" five times for each potential cause

1. Also known as the fishbone or Ishikawa diagram 3. Starts with the observed problem, then identifies all potential causes 6. Ask "why" five times for each potential cause

Q1- Actual demand- 240, Forecast- 200 Q2- Actual demand- 220, Forecast- 200 Q3- Actual demand- 180, Forecast- 200 Q4- Actual demand- 200, Forecast- 200 What is the mean absolute deviation

20

What is the formula for Paretos Law 80/20 Rule and what is the application

20% of Line Items = 80% Annual Spend; 30% of Line Items = 15% Annual Spend; 50% of Line Items = 5% Annual Spend Application- ABC Analysis

Demand for a item has been 310, 305, & 315 over the past three months. What is the moving average forecast for month 4?

310

What is the formula for Periodic Review (Two Steps), and what is the application

#1: Target = Demand (Review+Leadtime) + Safety Stock #2: Target - Available Inventory = Buy Quantity Application- How Much to Replenish

Formula for Break-Even Point (Two Steps) and when do you apply it

#1: Unit Contribution Margin = Revenue - Variable Costs #2: Break-Even = Fixed Costs/Unit Contribution Margin Application- Determines profitability points to determine selling prices

A company makes barbeque grills. Using the values below, how many units must be sold to make a profit Fixed Costs- $1,500,000 Selling price- $1,400 per unit Variable Costs- $900 per unit A. 3,001 B. 1,667 C. 1,071 D. 653

A. 3,001

A work center has available time of 500 hours per week. It actually produces units for 400 hours per week. Its efficiency is 90 percent. What is the work center's utilization? A. 80 percent B. 72 percent C. 90 percent D. 125 percent

A. 80 percent Utilization = Hours Actually Worked/Available Time = 400 hours/500 hours = 0.8 = 80 percent. Efficiency is not needed to answer this question.

What term is used to show the result of calculating available time × utilization × efficiency? A. Rated capacity B. Efficiency C. Standard hours D. Demonstrated capacity

A. Rated capacity Rated Capacity = Available Time × Utilization × Efficiency.

What is the relationship between rated and demonstrated capacities (select multiple) A. Rated capacity is calculated and used for future planning B. Neither are reliable enough to use for quality planning purposes C. Demonstrated capacity must be adjusted with the efficiency factor D. Demonstrated capacity is historical, but is used to validate rated capacity

A. Rated capacity is calculated and used for future planning D. Demonstrated capacity is historical, but is used to validate rated capacity

Material requirements planning has identified 20 C-item purchase orders that should be de-expedited by two weeks. Each order averages a two-month supply. Which of the following actions is most appropriate for the planner to take? A. Receive the materials on the original due date. B. Release the de-expedite message to the buyer. C. Release the de-expedite message to the buyer and the supplier. D. Release change orders to the buyer and the supplier.

A. Receive the materials on the original due date. These are C items and of low value. It will cost more to de-expedite 20 purchase orders than to simply receive them, as there will be little impact on carrying cost.

What is the capacity validation tool for MRP A. CRP B. Resource planning C. RCCP D. HR staffing analysis

A. CRP

FAS offers advantages in lead time and inventory reductions, but also introduces potential complications including: (select multiple) A. Capacity imbalances B. Time fence incursions C. Invalidating the entire PAC schedule D. Adjusting incoming supply schedules

A. Capacity imbalances B. Time fence incursions D. Adjusting incoming supply schedules

Items in which ABC classification are counted most frequently

A items

Natural conflicts may exist among departments, with opposing goals. Which paid has conflicting objectives? A. Operations and Finance B. Operations and Sales

A. Operations and Finance

Formula for Rated Capacity in Standard Hours and when do you apply it

Available Clock or Calendar Time x Utilization x Efficiency Application- Available Capacity in Standard Hours

Sales and operations planning (S&OP) typically includes which of the following functions? A. Sales, marketing, finance, and operations B. Design, distribution, marketing, and quality C. Quality, planning, sales, and production D. Operations, purchasing, quality, and design

A. Sales, marketing, finance, and operations Sales, marketing, finance, operations, and engineering are all possible contributors to the S&OP process and are able to make decisions on how best to service customers in the future. Quality, design, and distribution do not typically participate in S&OP meetings.

Which of the following quality aspects is a function of incoming inspection? A. Sampling a part's dimensions and rejecting the lot B. Performing 100% inspection to ensure outgoing quality C. Confirming that the supplier's process produces acceptable quality D. Comparing incoming receipts to previously received material

A. Sampling a part's dimensions and rejecting the lot Sampling is a part of incoming inspection.

An error in the demand forecast trend over several years will have the greatest impact on which of the following processes? A. Branch warehouse replenishment B. Business planning C. Master production scheduling D. Capacity requirements planning

B. Business planning An error in recognizing a forecast trend can impact planning on all levels. The key here is that the trend is occurring over several years. It would therefore most affect business planning, which looks at the long term.

A company performs the final assembly and packaging stage of the product at the distribution center. What is this process known as? A. Terminal handling B. Postponement C. Consolidation D. Break-bulk

B. Postponement Postponement is a product design strategy that shifts product differentiation closer to the consumer by postponing identity changes, such as assembly or packaging, to the last possible supply chain location.

The actual queue time of a job at a work center is most impacted by the: A. priority of the job. B. lot size of the job. C. utilization of the work center. D. efficiency of the work center.

A. priority of the job. If dispatching rules push a job to the end of the sequence, the queue time will possibly be longer than planned. The inverse is true if an order is moved up in the sequence.

A written inquiry sent to suppliers to obtain competitive and reliable pricing is known as a: A. request for quotation. B. purchase order. C. bid proposal. D. sales order.

A. request for quotation The request for quotation (RFQ) asks suppliers for information on price, compliance with specifications, terms and conditions of sale, delivery, and payment terms. An RFQ is an inquiry, not an order.

Overlapping is used to compress lead time by: A. starting the second operation before the first has completed the full quantity. B. choosing alternate routings so that orders can run concurrently. C. consolidating setups. D. grouping operations to run concurrently.

A. starting the second operation before the first has completed the full quantity. Operation overlapping may be used to reduce manufacturing lead time by moving pieces to the second work center before the first operation has completed the entire quantity on the order.

An artificial grouping of items or events in a bill-of-material format used to facilitate production planning is known as A. a pick list. B. a planning bill of material. C. an item master. D. a routing.

B. a planning bill of material. A planning bill of material is an artificial grouping of items or events used to facilitate production planning. Routing describes the method for manufacturing an item. Item master refers to the database repository where information about an item is kept. A pick list references finished goods, materials, and components to be withdrawn from stock for shipment or production purposes.

Using the information provided below, what is the forecast error for the previous week? 12 tubes per case 50 cases per pallet Current mean absolute deviation (MAD) = 100 Previous week: Forecast = 5,000 cases Sales = 100 pallets Scrap loss = 500 A. -500 B. 0 C. 5 D. 500

B. 0 100 pallets x 50 cases = 5,000, so the error is 0.

What is a benefit of supplier involvement early in the product development phase? A. Increase in the product life cycle B. Decreased purchasing lead time C. Reduction in process design time D. Higher profitability for the supplier

C. Reduction in process design time Having the supplier involved during the development phase shortens the time it takes to validate that the supplier will be able to manufacture the design.

Which of the following actions should a design engineering staff take to improve product performance and quality for a company adding new options for a product line? A. Implement leading-edge manufacturing process technology. B. Move the product to a transfer line. C. Standardize major component parts for the new options. D. Purchase the new options as complete modules.

C. Standardize major component parts for the new options. Part standardization assists in cutting costs and removing unnecessary complexity.

The purpose of first-article inspection is to verify the product's: A. functionality. B. process variability. C. manufacturability. D. sustainability.

C. manufacturability. Auditing the first lot of products manufactured is the first time the quality of the design and process can be reviewed to ensure that the product meets the requirements.

Distribution requirements planning (DRP) is used for: A. transportation planning. B. sales and operations planning. C. manufacturing planning. D. purchasing planning.

C. manufacturing planning. Ultimately, planned orders from a warehouse become gross requirements in the master production schedule of either external or internal manufacturing during DRP.

A group of products with similar characteristics, often used in production planning, is known as a: A. product portfolio. B. phantom bill of material. C. product family. D. planning bill of material.

C. product family. A product family is a group of products with similar characteristics, often used in production planning (or sales and operations planning).

The basic requirement of the design of a manufacturing process is to meet: A. line balancing standards. B. production schedules. C. product specifications. D. management cost objectives.

C. product specifications Producing the product or service to the specifications is the goal of the process design.

A make-to-order company believes that reducing customer lead time will result in a competitive advantage and increased sales. The sales and operations planning process should authorize an increase in: A. work in process. B. the sales forecast. C. production. D. finished product inventory levels.

C. production. Increasing sales will require production to produce more.

In an assemble-to-order environment, the number of assemblies is most influenced by: A. the manufacturing lead time. B. the master production schedule. C. the structure of the bill of material. D. the final assembly combinations.

C. the structure of the bill of material. The bill of material would determine at what point subassemblies are produced.

In a product-based layout, A. workflow is lumpy. B. a wide variety of different products can be produced. C. there is little build-up of work-in-process (WIP) inventory. D. work centers are located according to equipment type.

C. there is little build-up of work-in-process (WIP) inventory. There is little build-up of WIP inventory in a product layout. The other answers are incorrect because workstations are located in a line formation for a product layout; work tends to flow at a regular rate in a product layout; and product layouts are not flexible enough to handle more than a limited variety of products.

A focused factory is usually characterized by A. restricted product variety and layout by function. B. restricted product variety and process flows restricted to narrow product line C. decreased attention to detail and layout by function D. decreased attention to detail and process flows restricted to narrow product line

B. restricted product variety and process flows restricted to narrow product line A focused factory is defined as a plant established to focus the entire manufacturing system on a limited, concise, manageable set of products, technologies, volumes, and markets. As such, the product variety will be limited and process flows will be restricted to producing the narrow product line only.

What source of inventory loss results from material outside of specifications that makes rework impractical? A. Shelf life B. Shrinkage C. Obsolescence D. Scrap

D. Scrap Scrap is defined in the APICS Dictionary, 16th edition, as "material outside of specifications and possessing characteristics that make rework impractical."

Long-term agreements with suppliers may include which of the following? A. Tactical buying B. Required cost of goods sold C. Supplier-held inventory that the buyer owns D. Ownership exchange points

D. Ownership exchange points Ownership exchange points may be specified in long-term agreements with suppliers. Suppliers may be required to hold inventory but the supplier would own that inventory until it is needed. A supplier's prices might be specified but not their costs. Tactical buying is for commodities and is the opposite of a long-term relationship.

Good measures of material requirements planning performance include evaluations of which of the following factors? A. Percentage of orders with overloaded schedules B. Percentage of assembly orders with no scrap C. Percentage of MRP components showing bias D. Percentage of orders started on time

D. Percentage of orders started on time Percentage of orders started on time is a valid measurement of how well material requirements planning has started orders on time to meet the schedule. Other metrics include the number of orders that were delivered to manufacturing without shortages, and the percentage or order due dates met.

Production is about to start manufacturing a new product. In order to begin, they will need to have specific information and instructions. In which of the following will this information be contained? A. Manufacturing calendar B. Open order C. Shop file D. Product's routing

D. Product's routing A routing is information detailing the method of manufacture of a particular item. It includes the operations to be performed, their sequence, the various work centers involved, and the standard for setup and run. In some companies, it will also include information on tooling, operator skill levels, inspection operations, and testing requirements.

What is the term for a system where each distribution center orders from a central supply as needed? A. Pipeline B. Push C. Perpetual D. Pull

D. Pull In a pull system, each distribution center orders independently based on its own needs.

A company that makes decisions at and fulfills its distribution network from a central location uses which of the following systems? A. Pull B. Pipeline C. Perpetual D. Push

D. Push Stocking decisions are made centrally and then pushed to the warehouse.

The primary reason that statistical process control (SPC) is preferable to product inspection is because. A. Inspectors, being human, can overlook product defaults B. SPC utilizes modern technology C. Product inspection requires additional production staffing D. SPC detects deviations in realtime, so corrective action can be taken

D. SPC detects deviations in realtime, so corrective action can be taken

An HVAC company might use this tool to determine if installation failures occur more frequently on particular weekdays? A. Pareto diagram B. Ishikawa diagram C. Histogram D. Scatter diagram

D. Scatter diagram

Which of the following is true of a make-to-order manufacturing environment? A. The standard cost method is probably the best approach for order analysis. B. The typical approach is to use the total cost method for order analysis. C. The best cost accumulation system to use is time and materials with contract costing. D. The most appropriate costing method is job order costing.

D. The most appropriate costing method is job order costing. When the products are manufactured in identifiable lots or batches or to customer specifications, the most appropriate costing method to use is job order costing.

In which of the following production environments is it most unlikely that planning bills are used for master scheduling? A. Assemble-to-order B. Make-to-order C. Engineer-to-order D. Make-to-stock

C. Engineer-to-order Engineer-to-order environments will have least consistency from one order to another, making it difficult to use planning bills.

How far into the future should the planning horizon extend for Master scheduling A. Time to procure all materials B. Time to perform all manufacturing after the materials arrive C. Enough time to procure all materials then perform the manufacturing D. It's arbitrary; the Master Scheduler can choose any convenient amount

C. Enough time to procure all materials then perform the manufacturing

When planning the number and location of distribution centers which strategy would be the most appropriate. A. Use a single distribution center, to maximize safety stock "risk pooling" B. Place at least one warehouse in every city, near customer locations C. Minimize transportation & storage costs, maximize customer service D. Avoid costly warehouses; ship directly to distant customers.

C. Minimize transportation & storage costs, maximize customer service

Forecasting- select all statements which are true A. With practice, forecasts are usually very accurate B. More accurate when forecasting individual items (rather than groups) C. More accurate in the short term, than in the long term future D. Should be accompanied with a statement of error (e.g., +/- %)

C. More accurate in the short term, than in the long term future D. Should be accompanied with a statement of error (e.g., +/- %)

Controlling the bullwhip effect is crucial. Which of these is not a viable solution. A. Shared data among partners B. VMI C. More frequent forecasting D. Advance agreement on promotions

C. More frequent forecasting

A company sells a broad range of herbs and spices for health and cooking. The weekly order to the distribution center replenishes the individual items sold each week due to lack of storage capacity. The order may be modified by the store based on upcoming sales promotions or seasonality. Which of the following measures of customer service is of most value to the store? A. On-time shipment B. Correct items shipped C. Line items shipped complete D. Order cycle time

C. Line items shipped complete While the correct items are shipped, the quantities may be incomplete. The order may arrive on time but not have the proper items or quantities.

Which type of metrics should be tracked in real time whenever possible? A. Tactical B. Strategic C. Operational D. Financial

C. Operational Operational metrics measure the immediate short term on an hourly or daily basis and should be monitored in real time whenever possible to determine operational issues that are having the most impact on the business.

Which of the following tools would most likely be used to identify negative variances that must be reviewed by senior management? A. Force-field analysis of negative variance B. Histogram showing changes over time C. Pareto analysis of the top 5% variance D. Any negative variance must be reviewed.

C. Pareto analysis of the top 5% variance Management would review the significant few.

In a job shop with intermittent production, which of the following elements of lead time usually consumes the most time? A. Run B. Move C. Queue D. Setup

C. Queue Queue time in job shops is frequently estimated at 90 percent or more of total job time. There can be exceptions; however, this estimate is the most general case. You could contrast this with repetitive or process flow production where there might be very little queue time.

What is the primary focus of Material Requirements planning. A. Product Family B. End Items C. Raw materials and components D. Money

C. Raw materials and components

True or False- Distribution is subject to expense cutting because it is a cost center and does not offer value add to the supply chain

False

True or False- If the load exceeds the available capacity, the first priority should be to reduce the load by delaying customer orders

False

True or False- If the number of distribution centers is raised from 1 to 4 the overall safety stock level will also quadruple

False

True or False- In a mature organization, Marketing, Operations, and Finance, departments will naturally agree on desired inventory levels.

False

True or False- In the rivalry between competitive sellers, rivalry is stronger when demand is increasing.

False

True or False- Is it more profitable to increase sales by 20% than to achieve an equivalent reduction in costs

False

True or False- LTL shipping over long distance is always preferable because it is less expensive and you can mix destinations

False

True or False- Once CRP generates the PO and production orders, MRP and CRP and PAC can operate independently

False

True or False- Order Point relies on the on-hand quantity; allocation quantities are ignored?

False

True or False- Outsourcing is the best choice when the component is a critical one, has high profit impact, and involves trade secrets

False

True or False- Promoting VMI might help customers, but usually. causes risk, inventory, & cost problems for the manufacturer

False

True or False- Regardless of the likelihood or impact factors, all risks should be evaluated and acted upon with equal priority

False

True or False- Risk pooling minimizes stockouts when a central warehouse is replaced with many stock depots located near customers

False

There are two generally recognized types of errors that can occur when responding to risk. In the first, the organization takes action, but it is an incorrect action. What is the second? A. The organization continues to support an incorrect action when evidence suggests that it should not. B. The organization postpones a decision while operations deteriorate. C. The organization halts all operations to gather more data. D. The organization does not take action when it should have.

D. The organization does not take action when it should have. Two basic types of errors an organization can make when responding to risk are: Taking an action that is incorrect. Not taking action when they should have.

The marketing "Four Ps" are?

Place Price Promotion Product

True or false Pyramid Forecasting includes a management forecast

True

Which are acceptable functions for carrying inventory Decoupling buffers Transportation inventory Scrap parts damaged during production Competitor products for reverse engineering Safety stock Lot-size inventory

Decoupling buffers Transportation inventory Safety stock Lot-size inventory

What costs are incurred when managing quality?

Internal failure Appraisal External failure Prevention

What is a reorder point?

Order placed when actual inventory reaches a predesignated level

Which of the following is the primary goal of distribution requirements planning (DRP)? A. Maintaining a well-balanced inventory at all appropriate locations within the network B. Decoupling the distribution plan from the production plan C. Delivering products on schedule in the quantities requested by the customer D. Accurately feeding the gross requirements into the master production schedule

A. Maintaining a well-balanced inventory at all appropriate locations within the network The primary goal of DRP is to ensure that inventory is available in the right quantities and in the right places in the distribution channel.

Select all the attributes for a Kanban inventory system. A. Uses visual signals, rather than computers or paperwork B. Invokes a demand "pull" when the item is needed C. Like other inventory systems, requires accurate data to work properly D. Supports a just-in-time production model

A. Uses visual signals, rather than computers or paperwork B. Invokes a demand "pull" when the item is needed D. Supports a just-in-time production model

First come, first served and shortest process time are examples of which of the following techniques? A. Bottleneck management B. Dispatching rules C. Input/output rules D. Operation splitting

B. Dispatching rules Both are methods of sequencing work within a work center.

What are the four stages of the product life cycle

1. Introduction 2. Growth 3. Maturity 4. Decline

What does scheduling a constraint involve? A. Finding methods to maximize utilization of the constraint B. Allowing the process to stabilize after optimization C. Subordinating the constraint to the other processes D. Getting rid of the bottleneck

A. Finding methods to maximize utilization of the constraint The second of the five focusing steps in the theory of constraints, deciding how to exploit the constraint to the system, is key. The other answers are not directly related to scheduling a constraint.

Which is not an explicit element in the Toyota house of quality Standardization Just in time Continuous improvement Customer focus Replace workforce with automation Empowering employees

Replace workforce with automation

The MS detail planning focus depends on the manufacturing environment. For ATO the detail is A. Product family B. Subassembly C. End item D. Raw material

B. Subassembly

What is the difference between an FAS and a MPS? A. The FAS addresses a longer-term planning period than the MPS and looks at forecasted orders rather than customer orders. B. The FAS addresses a shorter-term planning period than the MPS and looks at customer orders rather than forecasted demand. C. The FAS addresses a shorter-term planning period than the MPS and looks at forecasted demand rather than customer orders. D. The FAS addresses a longer-term planning period than the MPS and looks at customer orders rather than forecasted demand.

B. The FAS addresses a shorter-term planning period than the MPS and looks at customer orders rather than forecasted demand.

Which is not a primary activity in the value chain A. Purchasing B. Operations C. Logistics D. Information Technology

D. Information Technology

The current ratio is used to appraise the ability of a company to: A. attain its current year-end earnings-per-share goal. B. sustain its current rate of sales. C. satisfy its current debt out of current assets. D. issue more founders' stock

C. satisfy its current debt out of current assets. The current ratio, used to appraise the ability of the company to satisfy its current debt out of current assets, is calculated as follows: (Current Assets/Current Liabilities)

True or False- An easy and accurate way to forecast demand is to start with your delivery orders from last year.

False

What competitive strategy applies to Dollar Tree Low-cost Focused low-cost Differentiation Focused differentiation Best-cost

Low Cost

What process is used with the highest volume

Made to Stock

What is Time- Phased Order point

Orders placed based on the projected available balance and replenishment lead time

What is sole sourcing

There is only one possible source for an item/service with no alternatives

Which of the following terms pertains to the design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally? A. Strategic planning B. Supplier partnership C. Supplier relationship management D. Supply chain management

D. Supply chain management Supply chain management is the management process that oversees all of the stated activities related to the supply chain.

Which of the following statements about the final assembly schedule (FAS) is true? A. The FAS is the same as the production plan. B. The FAS is the same as the master production schedule. C. The FAS includes only final operations. D. The FAS is separate from the master production schedule and serves a completely different purpose.

D. The FAS is separate from the master production schedule and serves a completely different purpose. The FAS plans and controls final assembly, which is different from the master production schedule. It is typically driven by customer demand, not the forecast, and is for end items.

Reducing setup time to enable quick changeovers of products on a manufacturing line is an example of: A. continuous replenishment. B. continuous production. C. continuous exchange of products. D. continuous process improvement.

D. continuous process improvement. Continuous process improvement is a never-ending effort to expose and eliminate the root causes of problems, focusing on small-step improvement as opposed to big-step improvement.

Using simulation in manufacturing is most beneficial for: A. improving data collection. B. training new employees. C. prototyping new technology. D. identifying potential continuous improvement areas.

D. identifying potential continuous improvement areas. Simulating alternate processes can identify areas where improvements can be made.

Having suppliers that are certified via ISO 9000 or some other quality standard means that: A. suppliers fully understand customer needs. B. product quality is assured. C. single-source relationships can be established. D. processes are defined and followed.

D. processes are defined and followed. Under ISO 9000, processes are defined and followed.

The forecast technique for a particular product has recently changed to second order smoothing. Which of the following product life cycle stages is the product most likely entering? A. Growth B. Introduction C. Maturity D. Saturation

A. Growth Second order smoothing accounts for trends, which would be applicable during a growth phase.

What is EOQ

Theoretical quantity where ordering cost equals carrying cost

The three elements of the Triple Bottom Line are

1. Environmental 2. Social 3. Economic

Which manufacturing environment requires forecasting engineering capacity and long lead time components? A. ETO B. MTS C. MTO D. ATO

A. ETO

A company is presently ordering a stock-keeping unit four times per year. It decides to change this policy and establish an EOQ. Annual demand is 100,000 units. Each unit costs $8. Ordering costs are $32 per order. Inventory carrying costs are 20 percent. What is the EOQ? A. 1,789 B. 4,000 C. 1,000 D. 2,000

D. 2,000 To calculate EOQ: Step 1: 2 x Annual Demand (100,000) x Order cost (32) = 6,400,000 Step 2: Cost per unit (8) x Carrying cost rate (0.2) = 1.6 Step 3: 6,400,000 / 1.6 = 4,000,000 Step 4: √4,000,000 = 2000

The primary focus and frequency of Master Scheduling is (pick 2) 1. Product family 2. Quarterly 3. End item 4. Monthly 5. Components & raw materials 6. Weekly

End item Weekly

A pull system operates by matching production to carefully prepared demand forecasts True or False

False

True or False- A safety stock quantity applies to all items in a product family, a tradeoff between operating & financial objectives

False

True or False- All budgeting methods must consider the time value of money using the estimated life and an interest/return rate

False

What is the formula for Owners Equity

Owners' Equity = Assets - Liabilities

Company XYZ Warehouse needs, - Optimal utilization of limited space - Enforce FIFO inventory usage - Large fluctuations in item quantities - Items of all sizes and weights Which warehouse layout would be best

Random Location

Which of the following is not a consideration when evaluating and selecting a transportation mode and carrier Speed Dependability Quality & safety Cost Safety stock Distance

Safety stock

To Prevent Confusion item numbering best practices include Uniformity across the organization Expandable Never be used Free of confusion

Uniformity across the organization Expandable Free of confusion

Product positioning refers to a product's relationship: A. to other products based on total sales. B. in the production facility based on similar products. C. in the marketplace based on its features. D. in the distribution network based on its customer base.

C. in the marketplace based on its features. Product positioning is the marketing effort involved in placing a product in a market to serve a particular niche or function.

SCOR-DS provides a framework to evaluate A. how your product offerings "score" against your competitors B. and define how the source, make, & deliver processes SHOULD be performed C. processes, people, & skills of your company & upstream/downstream partners D. compliance with ISO and governmental standards

C. processes, people, & skills of your company & upstream/downstream partners

A satisfactory quality average used during sampling inspection is called the: A. first article inspection. B. first pass yield. C. perceived quality. D. acceptable quality level (AQL).

D. acceptable quality level (AQL). For the purposes of sampling inspection, an acceptable quality level is the limit of a satisfactory process average.

The material requirements planning (MRP) logic will plan a receipt for an item with safety stock and a fixed order quantity when the projected available balance is less than: A. zero. B. the gross requirement quantity. C. the lot size quantity. D. the safety stock quantity.

D. the safety stock quantity. Safety stock is the additional inventory planned as protection against fluctuations in demand. The planned order logic will schedule a planned order release to prevent the projected available balance from going below the safety stock level.

What manufacturing environment requires a unique specialized raw material

Engineer to Order

In a Fixed Location System, Cube Utilization is optimized- True or False

False

Once deployed, a new technology will always be appreciated by the workforce and become routine and self sustaining- True or False

False

Arrange these 4 of the six waste hierarchy options with the most sustainable one first- Reuse, Reduce, Recycle, Avoid

1. Avoid 2. Reduce 3. Reuse 4. Recycle

In a make-to-stock strategy, when are orders for products typically received? A. After the product is in inventory and available for sale B. Before the product is produced, placed in inventory, and made available for sale C. Before the product can be engineered, produced, and made available for sale D. After the product can be assembled and made available for sale

A. After the product is in inventory and available for sale In a make-to-stock environment, orders are expected to be filled from existing inventory and immediately available for shipment.

To maximize throughput of a facility, the goal is to increase all of these metrics except.. A. Cycle time B. Efficiency C. Productivity D. Utilization

A. Cycle time

Aspects of low cost providers include, choose all that apply A. Easily imitated by rivals B. Exploit economies of scale C. Price wars can generate high revenues and profits D. Including all features that customers might want

A. Easily imitated by rivals B. Exploit economies of scale

What is the rule for using net present value for project justification? A. If the net present value is positive, accept the project. Otherwise, reject it. B. If the net present value is negative, accept the project. Otherwise, reject it. C. If the net present value is greater than the calculated internal rate of return, then accept the project. Otherwise, reject it. D. If the net present value is greater than the current rate of return available through normal investment institutions, then accept the project. Otherwise, reject it.

A. If the net present value is positive, accept the project. Otherwise, reject it. The rule for using net present value (NPV) for project justification is that if the NPV is positive, the project should be accepted.

Which of the following criteria would management be most likely to ignore when establishing performance measures for master scheduling? A. Impact of forecast accuracy on the ability to match the master schedule with the production plan B. Orders shipped on time and complete to customers per the master production schedule C. Necessity of a feasible production plan since it is only an approximation of production D. Necessity that product resource profiles used in rough-cut capacity planning be accurate

A. Impact of forecast accuracy on the ability to match the master schedule with the production plan Regardless of the source of demand, the master schedule must aggregate to the production plan. This is part of the MPS process and does not need to be measured.

What must operations do when the overall strategy is to compete with low-cost, no-frills products? A. Leverage low labor costs in countries with low labor rates without the assistance of sophisticated technology. B. Compromise from time to time with low-cost/low-quality component suppliers. C. Use outsourcing as much as possible regardless of supply chain complexity. D. Use technology. Robots that replace people don't look for breaks, vacations, or raises.

A. Leverage low labor costs in countries with low labor rates without the assistance of sophisticated technology. When a European car manufacturer acquired an existing automobile facility in an emerging nation just moving from central planning to market-driven planning, its hope was to build low-cost, no-frills cars. Leveraging existing platforms and a low cost design imperative, they succeeded. The facility was bare-bones with no robot technology, leveraging low labor rates.

Who is responsible for disaggregating the production plan into the master production schedule? A. Master scheduler B. Sales manager C. Production manager D. Materials manager

A. Master scheduler The master scheduler is responsible for disaggregating the production plan into the master production schedule.

Which are components of product cost? A. Overhead, labor, and material costs B. Transportation and labor costs C. Standard costs D. Ordering and material costs

A. Overhead, labor, and material costs Product costing consists of adding up the costs of material, labor, and overhead for all components to determine the standard cost of the final product.

After reviewing production for a particular product family over the past six months, the master scheduler is recommending that the demand time fence be moved out one period. Which of the following sales and operations planning team members could be excused from the discussion and decision making? A. Purchasing B. Production C. Senior management D. Sales

A. Purchasing Changing the demand time fence does not impact purchasing lead times or purchase orders.

Which of the following is not an advantage of multifunctional design teams? A. Rapid problem solving B. Iterative process of product improvement C. Structured communication D. Improved manufacturability

A. Rapid problem solving Multifunctional design teams are an approach of participative design/engineering. They require much discussion and input as decisions on product design and rollout are made. However, the result should be a product that is easier to manufacture.

What is a key rule for operations performance measures? A. They must align with the company's overall goals. B. They must focus on a department's positive performance. C. They must be easily viewed on charts. D. They must be consistent year after year.

A. They must align with the company's overall goals. Measurements must align with the company's goals; they must change as the needs of the organization change.

What manufacturing environment is most associated with the decoupling point

Assemble to order

If a company is familiar with high-volume manufacturing, what is the caution when introducing a new low-volume product line? A. The low-volume products will require separate forecast planning horizons. B. Different process technologies, labor skills, and planning/control systems will be required with low-volume operations. C. The low-volume products will require separate focused facilities. D. The high-volume products will have higher margins than new products with lower volumes.

B. Different process technologies, labor skills, and planning/control systems will be required with low-volume operations. Since high-volume operations concentrate on standardization and repetition, they are likely to need different process technologies, labor skills, and planning/control systems than those needed for low-volume operations.

What is not a generic performance objective A. Speed - time to market, lead times, delivery B. Functionality - ability to meet all reasonable customer needs C. Cost - goods at low price compared to competition D. Dependability - promise fulfillment, on-time delivery, product durability

B. Functionality - ability to meet all reasonable customer needs

Which of the following types of manufacturing processes would most likely be characterized by a narrow range of standard products, low direct labor costs, and a high level of technical support for manufacturing? A. Jobbing B. Line C. Project D. Batch

B. Line Line is a type of manufacturing process used to produce a narrow range of standard items with identical or highly similar designs. Production volumes are high, production and material-handling equipment is specialized, and all products typically pass through the same sequence of operations.

A fashion house has forecasted the next season's colors and styles. Distribution plans have been drawn up that will send the majority of heavier items (e.g., sweaters) to distributors in colder regions, while a larger quantity of t-shirts and lighter fabric garments will be distributed in warmer regions. This is an example of what kind of manufacturing environment? A. Assemble-to-order B. Make-to-stock C. Engineer-to-order D. Make-to-order

B. Make-to-stock A make-to-stock environment relies on forecasting not only for supply and production but also for distribution, ensuring that appropriate products are distributed to the right locations. An assemble-to-order environment relies on forecasting for supply and component production, but from that point it uses actual orders for assembly and distribution. The point where push becomes pull is then wherever actual orders dictate activity rather than relying on forecasts.

The result of single exponential smoothing is most like which of the following? A. Data decomposition B. Moving average C. Linear programming D. Seasonal index technique

B. Moving average Exponential smoothing is a type of weighted moving average forecasting. The heaviest weight is assigned to the most recent data. The technique makes use of a smoothing constant to apply to the difference between the most recent forecast and the critical sales data, thus avoiding the necessity of carrying historical sales data.

Which of the following is a typical measure for the SCOR metric reliability? A. Time to increase activity rate B. Perfect order fulfillment C. Average lateness of orders D. Actual versus theoretical throughput time

B. Perfect order fulfillment Perfect order fulfillment is a typical measure for the SCOR metric reliability.

What term is used in industry and management to denote the function of and responsibility for procuring materials, supplies, and services? A. Acquiring B. Purchasing C. Sourcing D. Buying

B. Purchasing

Which of the following benefits of setup reduction is most immediate? A. Reduced work in process B. Reduced product cost C. Improved quality D. Reduced queue time

B. Reduced product cost When the setup time is reduced, it will immediately reduce the overall cost of the product.

Which choice can conflict with a desire to minimize transportation costs? A. Ensuring on-time delivery B. Reducing in-transit time C. Using a consolidation center D. Shipping in full truckloads

B. Reducing in-transit time Reducing in-transit time typically requires using faster modes of transport, which will raise transportation cost.

Which of the following would have the most impact on reducing manufacturing lead time? A. Increasing component availability B. Reducing setup times C. Increasing work center capacity D. Implementing input/output control

B. Reducing setup times Reducing the time required for setup reduces the total lead time.

The quick asset ratio is a financial calculation best used to: A. measure a firm's equity valuation. B. measure a firm's financial stability. C. learn if a company is top-heavy with regard to capital equipment. D. assist with cash flow rate planning.

B. measure a firm's financial stability. The quick asset ratio, a measure of a firm's financial stability, is calculated as follows: (Current Assets - Inventory)/Current Liabilities

Time fences should be viewed as a way to: A. maximize production. B. measure the likely impact of changing the master production schedule. C. evaluate production effectiveness. D. avoid changing the master production schedule.

B. measure the likely impact of changing the master production schedule. The time fence is not a barrier to change, merely an indicator of the point at which effort, time, and cost will start to becoming significant if making a change.

In ABC classification, an item with the least complex controls and record keeping and high levels of safety stock would receive which classification? A. A B. B C. C D. D

C. Category C items have the least complex controls and record keeping, for example, nuts and bolts. They will have a low inventory carrying cost, so plentiful days of supply make sense. They are ordered far less frequently but in much larger quantities.

Due to the 40-day lead time for container ship as opposed to a 2-day lead time for air, the much higher carrying cost for the water option for a given material makes air only slightly more expensive. What else might be considered that could further promote use of the air option? A. Ability to base more production on forecasts than actual orders B. Ability to ship more units per load C. Ability to reduce safety stock levels D. Ability to increase product quality

C. Ability to reduce safety stock levels Drastically reducing lead times also allows organizations to reduce safety stocks because the lead time is shorter and therefore the demand during the lead time is less. Air transport also allows more production to be based on actual orders rather than forecasts and can enhance customer service.

Which of the following elements related to closing the demand/supply loop is most likely to be included within rough-cut capacity planning? A. Final assembly B. Theoretical capacity C. Bottleneck work centers D. Constraining operations

C. Bottleneck work centers Rough-cut capacity planning is at the key or bottleneck work center level.

Rough-cut capacity planning (RCCP) checks which of the following data? A. Materials and labor B. Resources for a family of products C. Critical resources D. Inventory

C. Critical resources In order to validate the feasibility of the master production schedule, RCCP uses a bill of resources to check critical resources.

Which of the following techniques is best suited to forecasting demand when the demand pattern shows seasonal and trend components? A. Causal B. Historical analogy C. Decomposition D. Time series analysis

C. Decomposition Decomposition is the best answer. Time series analysis is incorrect because decomposition is a time series technique specifically suited to forecasting when demand shows seasonal and trend characteristics. Historical analogy and causal are not well suited to the type of time series analysis required.

What sources of demand are considered when performing demand planning? A. Demand from internal customer orders only B. Demand from external customer orders only C. Demand from all sources D. Demand from the sales forecast only

C. Demand from all sources Demand planning is the recognition of demand from all sources, including forecasted demand and actual orders from internal and external customers.

A supplier delivers books to electronic readers using 3G technology, eliminating distributors. What is this an example of? A. Extensible markup language (XML) B. Large area networking (LAN) C. Disintermediation D. Advances in Wi-Fi

C. Disintermediation Disintermediation is the process of eliminating an intermediate stage in a supply chain.

Why is the cash flow important A. It serves the same purpose as a checkbook B. Cash flow is required to produce the income statement C. Enables meeting existing financial obligations & planning for the future D. Provides the ACH account number so customers can make payment transfers

C. Enables meeting existing financial obligations & planning for the future

In which manufacturing environment is product volume low and product variety high for a given item? A. Make-to-stock B. Assemble-to-order C. Engineer-to-order D. Make-to-order

C. Engineer-to-order Because customer product specifications require a unique design, product volume in engineer-to-order environments is low. Generally no two products are alike; therefore, product variety is high. There can be many variations of the product.

Sales for a concrete block manufacturer correlate directly with new home starts. The company would likely use which forecasting method? A. Seasonality B. Moving average C. Extrinsic D. Trend

C. Extrinsic Extrinsic forecasting correlates with indicators external to an organization that may influence demand.

What is the most likely reason for schedules determined in material requirements planning (MRP) to be changed in production? A. Lead times are based on standards and not actuals. B. Schedules are based on often incorrect forecasts. C. Infinite loading does not account for sequencing. D. Work center capacity has changed since planning began.

C. Infinite loading does not account for sequencing. MRP does not account for sequencing at a work center but goes by due dates only.

Variations in product design, process requirements, or order quantities require which of the following manufacturing processes? A. Level B. Project C. Intermittent D. Flow

C. Intermittent Intermittent processes work for those products that have variation in design, quantities, requirements, etc.

Which of the following is a required input of the material requirements plan (MRP)? A. Delivery orders B. Capacity constraints C. Inventory data D. Backlog

C. Inventory data Inventory data is an input to the MRP netting logic. The other responses are not used by MRP.

The ten key principles of the UN Global Compact fall into 4 categories All of the following are categories except. A. Human Rights B. Labour C. Lawful D. Anti-Corruption

C. Lawful

Which of the following provides detailed supply and demand information for individual items and supports both purchased and manufactured products in all manufacturing strategies? A. Marketing planning B. S&OP C. MPS D. Capacity planning

C. MPS The MPS provides detailed supply and demand information for individual items and supports both purchased and manufactured products in all manufacturing environments.

A manufacturer's decision to extend the degree of forward integration should be influenced by its desire to do which of the following? A. Reduce the uncertainty of demand. B. Reduce the number of processes to be controlled. C. Reduce the uncertainty of demand and erect barriers to potential competitors. D. Reduce the uncertainty of demand, erect barriers to potential competitors, and reduce the number of processes to be controlled.

C. Reduce the uncertainty of demand and erect barriers to potential competitors. Forward integration provides a greater level of control of forward supply channel processes.

There are no planned order releases in week 1, but there is a planned order release for 50 As in week 2. The As have a one-week lead time. After advancing forward one week in time, what action will be recommended in the action time bucket? A. Receive planned order receipt of 50 As. B. No action. C. Release planned order release of 50 As. D. Not enough information was provided to answer the question.

C. Release planned order release of 50 As. The action time bucket is the current period 1. Right now there is nothing in the action time bucket. However, next week, the current week 2 will become week 1 and will become the action time bucket. Therefore, the planned order release for 50 As will be recommended for release.

Which tool is best suited to tracking the business activities associated with satisfying a customer's demand, from a supply chain management perspective? A. UNGC B. Performance Standards C. SCOR D. United Nations Global Compact Management Model

C. SCOR The SCOR model describes the business activities associated with satisfying a customer's demand, which include plan, source, make, deliver, return, and enable.

Which of the following documents or verbiage must accompany a purchase order to confirm how the contract is to be executed? A. Supply agreement B. Purchase requisition C. Terms and conditions D. Quality agreement

C. Terms and conditions The terms and conditions specify all the provisions and agreements of a contract.

What is the primary goal of a distribution requirements planning (DRP) implementation for a multiple-level distribution network? A. To minimize the inventory at the central warehouse B. To balance transportation and warehousing costs C. To maintain a balanced inventory in the distribution system D. To increase production efficiencies

C. To maintain a balanced inventory in the distribution system The primary goal of DRP is to maintain a well-balanced inventory across the distribution network.

When evaluating potential customer/supplier partnerships, the supplier should consider which of the following questions? A. Is the customer able to make unplanned changes to capacity fast and cheap enough? B. Does the customer have the exact same ERP system? C. Will the customer share cost savings? D. Is the customer active in preventive maintenance?

C. Will the customer share cost savings? When deciding on the viability of a supplier/customer relationship, the supplier should ask: Is the customer creditworthy? Does the customer practice lean/total quality management? Will the customer share cost savings?

The portion of setup that is charged to the order includes: A. verifying information. B. storing tools from the previous job. C. installing tooling. D. obtaining tools.

C. installing tooling. Tool installation is performed when the equipment is not operating and is costed as internal setup time.

"Getting the right goods or services to the right place at the right time and in the desired condition" best defines: A. operations management. B. supply chain management. C. logistics. D. procurement.

C. logistics. Logistics is the process of obtaining, producing, and distributing material and product in the proper place and the proper quantities.

Balanced scorecard: should include Financial, Business Process, Innovation/Learning and all-important ... perspectives

Customer

Which is an example of how customer participation can be used to reduce customer-introduced variability for a service? A. Extending service hours B. Adding better scheduling tools and practices C. Adding ability for the customer to customize the service D. Adding automated kiosks

D. Adding automated kiosks Customer participation is when a customer participates in some part of the service or sales process by helping themselves. This often takes the form of automated kiosks for self-help. It reduces the load on the service staff.

Distribution Requirements planning (FRP) utilizes A. Neither PUSH nor PULL B. PUSH C. PULL D. Both PUSH and PULL

D. Both PUSH and PULL

A company has a mandate to meet schedule dates. Capacity requirements planning has identified a capacity overload, and it appears that the product will be shipped late. Which of the following actions should be done first? A. Checking with the customer to select a different date B. Rescheduling the due date to resolve the overload C. Checking with purchasing to see if materials can be expedited D. Checking with production to see if the date can be met

D. Checking with production to see if the date can be met The first action should be checking with production to see if overtime or other work priorities can be changed to meet the date.

All are true of Outsourcing except? A. Good when work could be performed cheaper, quicker, & with equal quality B. Risk may increase because of loss of control C. Good choice if internal resources are already running at full capacity D. Core competencies should be contracted to acknowledged outside experts

D. Core competencies should be contracted to acknowledged outside experts

Which term refers to the securing of sensitive data and ensuring that access is restricted to role-appropriate views? A. EDI B. ERP C. Master data D. Data governance

D. Data governance Data governance refers to the overall management of data's accessibility, usability, reliability, and security, which also includes securing sensitive data and ensuring that access is restricted to role-appropriate views.

An engineer-to-order environment produces large cabinets. One of the bulk items is used in all end items and has a limited point-of-use storage area. Which of the following ordering techniques is most likely to be used? A. Period B. Reorder point C. Economic D. Fixed

D. Fixed Since the item is used in all end items, the fixed order quantity would be used.

In which of the following types of environments is capacity control likely to be of more importance than material control? A. Repetitive manufacturing B. Assembly line C. Flow shop D. Job shop

D. Job shop Capacity control is more likely to be necessary where jobs take different routes through production but compete for the same resources.

The four products in a product family of commercial doors differ in two dimensions: graffiti resistance and break-in resistance. What is a good way to visually show how all of the products line up along these dimensions? A. Matrix diagram B. Relationship diagram C. Tree diagram D. Matrix data analysis chart

D. Matrix data analysis chart A matrix data analysis chart is one of the seven new tools of quality. It can be used to show the relationships between groups of information. The chart has vertical and horizontal axes, and each can be mapped to the dimensions of the product. A matrix diagram could also be used, but it is not a visual tool.

Which of the following is the easiest way to become familiar with the characteristics of the data to be used in a forecast? A. Correlating the data with some other data B. Knowing the products being forecast C. Running a simulation D. Plotting the data on a graph

D. Plotting the data on a graph A good way to become familiar with the characteristics of the data to be used in a forecast is to plot the data on a graph.

Which of the following production layouts will most likely contain dedicated lines? A. Functional B. Cellular C. Fixed position D. Product

D. Product A product layout is typically used for only one product or similar products.

According to the APICS Dictionary, which technique is most directly associated with single-minute exchange of die (SMED)? A. Internal setup activities moved to external setup B. Internal setups performed in one minute or less C. Single-minute exchange of tooling in assembly D. Scheduling the process to be down for less than ten minutes during setup

D. Scheduling the process to be down for less than ten minutes during setup The APICS Dictionary defines SMED as "the concept of setup times of less than 10 minutes, developed by Shigeo Shingo in 1970 at Toyota." While moving internal setup activities to external setup activities is frequently associated with SMED, it is not directly in the dictionary definition.

Which of the following is an example of an internal failure cost of quality? A. Providing warranty field repair B. Testing products before shipment to customers C. Processing customer complaints D. Scrapping products that do not meet specifications

D. Scrapping products that do not meet specifications Scrapping products that do not meet specifications represents an internal failure cost of quality.

Which of the following goals of cycle counting is a benefit for production? A. The material count is accurate within a tolerance. B. Material value overages are offset by shortages. C. Material count overages are offset by shortages. D. The material count is accurate by location.

D. The material count is accurate by location. Cycle counting breaks down counts by item and location and tracks accuracy by location. This reduces downtime due to missing inventory. The other answers refer to disadvantages of periodic physical inventory.

What is the term for the processes of creating, producing, and delivering a good or service to the market? A. Business-to-business commerce B. Logistics C. Cumulative lead time D. Value stream

D. Value stream The APICS Dictionary defines the value stream as "the processes of creating, producing, and delivering a good or service to the market."

Which are true for worker self control Workers... Require no supervisor Perform their own performance reviews Know what to accomplish Have means of regulating performance

Know what to accomplish Have means of regulating performance

All are methods that can be used as order point triggers except Visual review Two-bin systems Kanban systems Mean Absolute Deviation

Mean Absolute Deviation

Goal of knowledge management: transfer "what we know" into "what we can show" leading to organizational improvements- True or False

True

Implementing a new technology should include a risk assessment and identification of potential treatment options- True or False

True

True or False- In a robust DRP network, existing inventory can be relocated to other areas when needed

True

True or False- In comparison to operating a private fleet, public carriers provide comparable services.. but at less cost and less risk

True

What are the primary characteristics of competitive advantage? A. Able to withstand competitive assaults B. Sustainable and hard to imitate C. Conveying largest market share D. Offering best-value products and services

B. Sustainable and hard to imitate Competitive advantage is defined as a significant, sustained, and hard-to-imitate advantage over competition. It is not necessarily the largest market share, and it does not protect the organization from competition. Best value is a form of business strategy.

Once the company's value chain has been documented and internal consensus has been gained, the next step in using value chain analysis is: A. isolating core activities from non-core activities with the goal of outsourcing the non-core activities. B. finding overlapping activities and consolidating whenever possible. C. completing a value chain analysis for the company's most significant competitors. D. identifying key functions and people in each step to facilitate duplication and fail-safe processes.

C. completing a value chain analysis for the company's most significant competitors. The primary purpose of value chain analysis is to facilitate an activity-by-activity comparison of how effective a company is relative to its competitors.

What does an effective strategy require? A. Specific time frame of at least three years B. Detailed steps for the implementation of strategic initiatives C. Long and challenging list of initiatives to implement D. Flexibility to adapt to changing conditions

D. Flexibility to adapt to changing conditions Strategies are both deliberate (planned) and emergent (adaptive). The length of their time frames may vary but is usually longer than one business planning period. They are general rather than specific and focus on key opportunities rather than laundry lists of actions.

What is the order of these strategy components in the sequence they should be developed (first to last) 1. Functional Area Strategies 2. Operation Strategies 3. Corporate Strategies 4. Business Strategies

1. Corporate Strategies 2. Business Strategies 3. Functional Area Strategies 4. Operation Strategies

Outsourcing: select one legitimate advantage and one possible disadvantage A. Advantage - reduce lead times, improve delivery speed B. Disadvantage - quality from supplier could never be as good as internal C. Advantage - simpler scheduling with combined internal and external teams D. Disadvantage - expose proprietary secrets to external party

A. Advantage - reduce lead times, improve delivery speed D. Disadvantage - expose proprietary secrets to external party

What is the most sustainiable approach to managing an organization use of material A. Avoid B. Reuse C. Recycle D. Dispose

A. Avoid

A fairly new organization has no subsidiaries. It is considering creating two product lines, one that is the cheapest option on the market and another that is a premium line with high cost but innovative differentiating features. What is an issue with this strategy? A. Both employees and customers will be confused by the conflicting brand identities. B. The organization will need to become a best-cost provider. C. The organization will need to develop a "dual operating system" for its functional areas to function effectively. D. The manufacturing functional area will need to generate synergy from the twin focus on cost control and quality.

A. Both employees and customers will be confused by the conflicting brand identities. It is very challenging for one business unit to implement multiple strategies simultaneously. The brand identity will be difficult to overcome. Multiple marketing messages will confuse customers; different production and marketing goals will confuse employees

How can management show their support for small group improvement activities? A. By encouraging ownership of the task by empowering the group with authority B. By rewarding individual results C. By providing management intervention when needed D. By highlighting the group's success in the annual report

A. By encouraging ownership of the task by empowering the group with authority Encouraging ownership and providing decision-making authority shows management's trust and respect for the group's accomplishments.

When a service element is perceived as poor but also unimportant by customers, what is the most that should be done? A. Changes that are inexpensive to make B. Whatever is required to raise the service element to the level of a "slight irritation" C. Nothing D. Whatever is required for the service element to be considered value-added

A. Changes that are inexpensive to make Per the service gap analysis matrix, a service that is perceived as low quality but is also relatively unimportant to customers falls into the "slight irritations" category. Slight irritations could be addressed, but only if the response is inexpensive to implement.

Which of the following techniques best shows the measure of variability within boundaries? A. Control chart B. Run chart C. Scatter diagram D. Check sheet

A. Control chart Control charts provide limits for checking that a process is within a tolerance or boundary.

Which factor favors use of the road mode of transport over other modes? A. Dispersed market B. Low variable costs C. High capital cost D. Lowest carrying cost

A. Dispersed market Road is best suited for moving goods to a dispersed market because they can provide door-to-door service so long as there is a suitable road.

Which of the following is a type of manufacturing environment used for large, often unique items or structures that require a custom design capability? A. Engineer-to-order B. Discrete manufacturing C. Custom manufacturing D. Project manufacturing

A. Engineer-to-order Large, often unique items or structures that require a custom design capability are generally manufactured in an engineer-to-order environment. Project manufacturing is the process that may be used in this environment.

In which of the following stages of a product's life cycle is a product-focused manufacturing organization most appropriate? A. Introduction and decline B. Growth and maturity C. Maturity and decline D. Introduction and maturity

A. Introduction and decline A product-focused approach occurs mostly at the introduction and decline stages of the product life cycle. In the introduction stage, the product is new and will often require fixes as well as the addition of new features and options overlooked during product design. In the decline stage, the company will often try to revive sales by revamping the product or adding new features and options. In contrast, products in the growth and maturity stages have minimal, if any, changes to product structures. The focus is squarely on marketing and sales issues.

At a technology manufacturer, a replenishment order is submitted at the end of the day when inventory of a particular type of tablet drops below 50 units. The replenishment order is always calculated to ensure that inventory is brought back up to 100 units. What is the name for this type of order replenishment system? A. Min-max system B. Period order quantity C. Fixed order quantity D. Lot-for-lot

A. Min-max system A min-max system is a type of order point replenishment system where the minimum is the order point and the maximum is the "order up to" inventory level. An order is recommended when the sum of the available and on-order inventory is at or below the minimum.

The far apart, customers demand short lead time. Cost control is not as important as customer service. Sites will be A. More and smaller B. Fewer and larger

A. More and smaller

Which information could be evaluated prior to the end of the month in order to streamline the sales and operations planning process? A. New product review B. Forecast accuracy C. On-time performance D. Finished goods levels

A. New product review No history exists for new products, so the information can be reviewed any time. The other information is all dependent on end-of-period figures.

Which of the following key performance indicators is the master scheduler most likely to monitor to determine if the master schedule is imbalanced? A. Percentage of on-time order completeness B. Number of schedule date changes C. Need for frequent planned overtime D. Frequency of master scheduling

A. Percentage of on-time order completeness On-time completions indicate that there is a demand/supply balance.

What is a benefit of an effective work cell layout? A. Simplified materials handling B. Increased utilization C. Reduced process variability D. Reduced setup time

A. Simplified materials handling Benefits of the use of work cells (also called cellular layout) include that it minimizes material-handling distances and factory floor space requirements. Other benefits include reduced queue times, simplified control needs, and immediate feedback.

Increased output is best achieved by doing which of the following? A. Simplifying design B. Using computer-aided design C. Implementing flexible manufacturing systems D. Using expert systems

A. Simplifying design Making the production process easier, more visible, and foolproof enables operators and production equipment to effectively increase output and quality and reduce wastes.

Tactical buying typically would be the most appropriate approach for which of the following types of items? A. Standard low-cost hardware B. Precision machined parts C. Expensive raw materials D. Critical subassemblies

A. Standard low-cost hardware Tactical buying is a purchasing process focusing on products with stable, defined specifications that are not critical to production and have no delivery issues.

The IT function develops a strategy that calls for increasing use of cloud services. When this comes to the attention of the CEO, the CEO is unhappy. What is the most likely source of the problem? A. The functional strategy is not aligned with the business strategy. B. There is no robust test plan. C. No proven project management tactics are used during implementation. D. Top management is not directly involved and is not monitoring progress.

A. The functional strategy is not aligned with the business strategy. Some report that the typical IT project failure rate is between 35% and 75%. Often reasons cited are connected to managerial, implementation, or organizational factors. One of the main strategic issues is the degree of alignment and integration between IT strategy and the general strategy of the firm.

Which type of capacity is the best indicator that the material plan is infeasible if it equals the required capacity at a particular work center? A. Theoretical B. Rated C. Bottleneck D. Demonstrated

A. Theoretical Theoretical capacity is an ideal and is usually not attainable. If it is equal to the required capacity, the work center is overloaded.

For the Risk vs profit matrix strategic items category, select the attributes that apply A. There are one or few suppliers B. Items have high cost & are critical to customer satisfaction C. Supplier relative bargaining power is low D. Uses "spot purchasing"

A. There are one or few suppliers B. Items have high cost & are critical to customer satisfaction

Which of the following is a reason for evaluating multiple sales and operations plans during the pre-S&OP meeting? A. To assess their financial implications B. Because the forecast provided may not be accurate C. Because they are theoretical plans only and so can be changed at any time D. Because the S&OP plan cannot be finalized until delivered to top management

A. To assess their financial implications The S&OP process requires thorough analysis of alternative sales and operations scenarios to assess their financial implications.

What is a primary reason for using an alternative means of transportation when a part is late? A. To meet the promised date B. To ensure part delivery C. To save shipping expense D. To meet the due date

A. To meet the promised date The promise date may or may not be the actual due date, but it is the one that was communicated.

Authorizing work in a push system in a make-to-order environment assumes which of the following available items? A. Tooling B. Capacity C. Material D. Information

A. Tooling Equipment tooling is assumed.

What term is used for a distribution network that deals with change of ownership of goods and services including the activities of negotiation, selling, and contracting? A. Transaction channel B. Marketing channel C. Sales channel D. Distribution channel

A. Transaction channel A transaction channel is a distribution network that deals with change of ownership of goods and services including the activities of negotiation, selling, and contracting.

In a traditional supply chain cash most likely flows in what direction? A. Upstream B. Downstream C. In both directions D. In neither direction

A. Upstream

Copper is purified and then extruded into various sizes of copper tubing. Using a VATI analysis, what product flow best matches this type of production? A. V B. T C. A D. I

A. V One product (copper) is split off into various types of end products, forming a V shape with the start of the process at the bottom of the V and the end products at the top of the V.

A backlog in a make-to-order company contains a large number of orders of many unique items. In which of the following situations would selection of a random storage location most likely reduce overall efficiency? A. When materials are for the same order B. When zoning is not a consideration C. When load size prevents consolidation D. When two loads can be consolidated into one

A. When materials are for the same order Storing materials together for the same order increases picking efficiency while having little effect on storage.

Collaborative planning, forecasting, and replenishment (CPFR) is typically most effective when: A. a few trading partners are involved in the supply chain. B. many trading partners are involved in the supply chain. C. a firm has few significant competitors. D. there are many echelons in the supply chain.

A. a few trading partners are involved in the supply chain. CPFR is a collaboration process whereby supply chain trading partners can jointly plan key supply chain activities. CPFR is more powerful when a few customers, rather than many, represent a large portion of a supplier's business. The number of a firm's competitors is not an important criterion for how effective CPFR will be.

Sales are linked to the distribution network by: A. demand forecasts. B. transportation costs. C. warehouse management systems. D. rough-cut capacity planning.

A. demand forecasts. Sales data is converted into demand forecasts, which are then fed to the distribution network for planning inventory levels.

The carrying cost rate used in the economic order quantity is: A. determined by management policy. B. a percentage of the ordering cost. C. based on the unit cost. D. calculated by the master scheduler.

A. determined by management policy. Carrying costs include the cost of capital, risk costs, storage costs, etc. Management determines how much of the cost to apply to inventory based on a percentage of the financial value of inventory.

By implementing a supplier certification program, a company should be able to eliminate: A. incoming inspection for parts from the supplier. B. quality audits of the supplier. C. receiving paperwork. D. safety stock.

A. incoming inspection for parts from the supplier. Certifying a supplier means that parts would not have to be inspected.

Component lead time inaccuracies are causing an increase in customer backorders. This will most likely impact the: A. master schedule. B. perpetual inventory. C. bill of material. D. work center.

A. master schedule. Shortages and customer backorders will cause master production schedule dates to be re-prioritized.

When analyzing the external environment, which factors should be included? (Select multiple answers) A. Strategic benchmarking B. Competitive Analysis C. Trends Shaping the industry D. Key Success factors in strong competitors

All of the answers are correct A. Strategic benchmarking B. Competitive Analysis C. Trends Shaping the industry D. Key Success factors in strong competitors

A new printing press costs $50,000 today and will bring in net cash inflows of $10,000 the first year, $15,000 the second year, $20,000 the third year, and $25,000 the fourth year. Assuming a 6% cost of capital, the present value (PV) of these cash inflows is $9,433.96 the first year, $13,349.95 the second year, $16,792.39 the third year, and $19,802.34 the fourth year. What is the net present value (NPV)? A. $7,356.34 B. $9,378.64 C. $20,000.00 D. $57,356.34

B. $9,378.64 Since the present values of the future cash inflows are already calculated, add these PVs together to find their sum and then subtract the initial investment of $50,000: $59,378.64 - $50,000.00 = $9,378.64

Within a given period: Opening balance = 350 Gross requirements = 50 Scheduled receipts = 75 Gross requirements in the next period = 500 What quantity should the planned order release be in this period? A. 25 B. 125 C. 175 D. 275

B. 125 Net Requirements = Gross Requirements - Scheduled Receipts - Available Inventory

A company is determining how much floor space will be required for a new distribution warehouse. The plan is to store 15,000 cartons stacked on pallets three high. Each pallet will contain approximately 40 cartons. How many pallet positions will be required for the warehouse? A. 120 positions B. 125 positions C. 375 positions D. 5,000 positions

B. 125 positions 15,000 cartons divided by 40 per pallet divided by 3 high equals 125 positions.

What is the carrying cost for the current year in $M Carrying Cost Factors Storage Cost- 9% Risk Costs- 6% Capital Costs- 10% Year- End Inventory in $M) Last Year- $15 Current Year- $17 A. 3.75 B. 4 C. 4.25 D. 8

B. 4 Million

A manufacturing company implementing a focused factory strategy has likely come to what conclusion? A. A focused factory will gain significantly from bill-of-material modularization. B. A focused factory will outperform a plant attempting a broader set of objectives. C. A focused factory is more likely to recover from a market downturn. D. A focused factory will likely suffer higher costs due to under-capacity utilization if more diversified.

B. A focused factory will outperform a plant attempting a broader set of objectives. The focused factory idea holds that a plant focusing on a narrow range of products aimed at a particular market will outperform a plant attempting a broader set of objectives.

The flow of received purchased parts is from receipt at the dock to receiving/inspection and then to receipt at the stores, at which time the quantity received is entered in the enterprise resources planning (ERP) system. Which of the following statements about this situation are true? A. A supplier delivery performance measurement should be based on actual receipts at the dock, and purchase orders should be manually updated when parts are received at the stores. B. A supplier delivery performance measurement should be based on actual receipts at the dock, and a resource constraint could cause parts to be received at the dock but not into the stores on schedule. C. Purchase orders should be manually updated when parts are received at the stores, and a resource constraint could cause parts to be received at the dock but not into the stores on schedule. D. A supplier delivery performance measurement should be based on actual receipts at the dock, purchase orders should be manually updated when parts are received at the stores, and a resource constraint could cause parts to be received at the dock but not into the stores on schedule.

B. A supplier delivery performance measurement should be based on actual receipts at the dock, and a resource constraint could cause parts to be received at the dock but not into the stores on schedule. A supplier delivery performance measurement should be based on actual receipts at the dock, and a resource constraint could cause parts to be received at the dock but not into the stores on schedule.

What is the term for inventory that is on hand but is reserved for a specific purpose? A. Buffer stock B. Allocated stock C. Anticipation stock D. Reserve stock

B. Allocated stock Allocated stock is reserved for a specific use. Reserve and buffer stock are synonymous with safety stock. Safety stock is reserved but used for an unanticipated need, not reserved for some specific use. Anticipation stock is reserved in an inventory build up to meet a future bulge in demand.

Which of the following types of quality costs includes inspecting materials? A. External failure B. Appraisal C. Prevention D. Internal failure

B. Appraisal Typical appraisal costs include inspection, quality audits, testing, calibration, and checking time.

A company has a number of products that are similar but are subject to unstable demand patterns. The company wants to implement a program to reduce inventory investment while providing a maximum three-day customer order turnaround. Which of the following manufacturing environments will most likely meet that goal? A. Make-to-stock B. Assemble-to-order C. Make-to-order D. Engineer-to-order

B. Assemble-to-order Since the products are similar, assemblies and options could be produced to a forecast and then assembled to a customer order.

Which of the following sales and operations planning results is most likely to be used to measure sales department performance in an engineer-to-order environment? A. Capacity plan B. Backlog plan C. Inventory plan D. Financial plan

B. Backlog plan Backlog in money or months of work is an indicator of the health of the company.

Which of the following approaches will have the least effect in reducing the cost of transactions? A. Backflushing to floor stock balances B. Blanket purchase order with multiple receipts C. Vendor scheduling D. Kanban system

B. Blanket purchase order with multiple receipts Blanket order receipts still require transactions.

What is a distributed ledger system in which it is nearly impossible to alter information once it has been recorded A. Internet of Things B. Blockchain C. Robotic Process Automation D. Cloud Computing

B. Blockchain

Which of the following is useful for businesses in becoming virtual supply chains in order to reduce costs and improve due-date performance? A. Business continuation plan (BCP) B. Business-to-business commerce (B2B) C. Business-to-consumer commerce (B2C) D. Business process reengineering (BPR)

B. Business-to-business commerce (B2B) Business-to-business commerce (B2B) is business between companies conducted over the internet.

A company uses a level production strategy to build inventory prior to a peak season. Which of the following inventory turns should be expected? A. Decreasing prior to peak season, stable during peak season B. Decreasing prior to peak season, increasing during peak season C. Increasing prior to peak season, decreasing during peak season D. Stable prior to peak season, increasing during peak season

B. Decreasing prior to peak season, increasing during peak season Sales are low prior to the peak season, and finished goods inventory is building. During the peak season, sales increase and finished goods decrease. Note: The question is asking about inventory turns, not inventory levels. When building inventory in advance of a peak season, the turns would be decreasing; then, when the peak season hits, sales are strong and inventory turns increase.

In which qualitative forecasting technique are the opinions of experts combined in a series of iterations? A. Taguchi method B. Delphi method C. Deming method D. Shewhart method

B. Delphi method The Delphi method is a qualitative forecasting technique where the opinions of experts are combined in a series of iterations.

If you manufacture bicycles, tires represent which type of demand A. Independent B. Dependent

B. Dependent

Which of the following actions is taken first to ensure the validity of the material plan in a make-to-stock company? A. Development of the material requirements plan B. Development of the master production schedule C. Development of the capacity requirements plan D. Development of the operations plan

B. Development of the master production schedule The master production schedule is the first time in the planning hierarchy that individual products are defined by date and quantity.

What is a challenge associated with the process of implementing collaborative planning, forecasting, and replenishment (CPFR)? A. Decreased levels of customer service B. Discontinuation of business practices that may be seen as successful C. Decreased sales revenue D. Supply chain fragmentation across organizational boundaries

B. Discontinuation of business practices that may be seen as successful One of the challenges is the discontinuation of businesses practices that may be seen as successful. CPFR typically results in increased sales revenue, supply chain integration across organizational boundaries, and improved customer service levels.

The primary purpose of value stream mapping is A. Serve as required documentation for ISO 9000 certification B. Documents as-is processes & exposes potential areas for improvement C. Establish a value-add financial amount for each operational task D. Contributes content for advertising materials

B. Documents as-is processes & exposes potential areas for improvement

What is a characteristic of a centralized organizational structure? A. Development of functional silos poor at collaboration B. Dominance of headquarters in decision making and planning C. Empowering of low-level employees to make decisions about their work D. Poorly defined reporting lines and decision-making authority

B. Dominance of headquarters in decision making and planning In centralized structures, decision making and planning occurs at the top. Employee empowerment and poorly defined reporting lines are more characteristic of decentralized structures. Functional structure is a type of organizational structure.

A forecasting system is required for which of the following elements of total demand of an item? A. Dependent demand B. End-item demand and replacement part demand C. Dependent demand and replacement part demand D. End-item demand, dependent demand, and replacement part demand

B. End-item demand and replacement part demand End items and replacement parts are normally forecasted.

An item is being replaced on a BOM. The effectivity of the original item ends when the new item's effectivity date begins. What does this action illustrate? A. Parent-child relationship B. Engineering change process C. Phantom bill of material D. Horizontal dependence

B. Engineering change process A parent-child relationship exists between items at different levels on the BOM, making this answer incorrect. Horizontal dependency exists between two items on the same level in the BOM; thus, this answer is incorrect. A phantom BOM rarely is stocked and has a lead time of zero; its parent consumes it during manufacture, and is therefore also an incorrect answer.

Which generic strategy has two subsets? A. Low-cost provider B. Focus C. Differentiation D. Best-cost provider

B. Focus The focus strategy has two subsets: a low-cost focus and a differentiation focus.

Which is not a generic performance objective? A. Speed - time to market, lead times, delivery B. Functionality - ability to meet all customer needs C. Cost - goods at low price compared to competition D. Dependability - promise fulfillment, on-time delivery, product durability

B. Functionality - ability to meet all customer needs

Many organizations use a balanced scorecard to create key performance indicators for their strategies. What feature of the balanced scorecard approach makes it attractive for this purpose? A. More valid from the perspectives of external stakeholders B. Helps define multiple perspectives on the organization's strategic goals C. Demonstrates compliance with general accounting principles D. Provides detailed performance objectives down to the operations unit level

B. Helps define multiple perspectives on the organization's strategic goals A balanced scorecard represents external stakeholders' needs, financial objectives, operational or process needs, and future development needs.

Which of the following qualitative methods of forecasting should a company consider for a product that is replacing another? A. Focus Groups B. Historical analogy C. Expert opinion D. Panel consensus

B. Historical analogy Use the history from the older product. Expert opinion, focus groups, and panel consensus are incorrect because none of these methods provides any greater knowledge of the future of a new product than any other method.

If an organization has implemented a sustainability initiative but it has not produced the desired results, what step should the organization take next? A. Revise the plan's objectives. B. Implement an audit. C. Educate the organization about the goals of the plan. D. Prepare a business case for the plan.

B. Implement an audit. The next step the organization takes should be to implement an audit. All of the other options should have preceded implementation of the sustainability initiative.

Visual management supports continuous improvement in which of the following ways? A. It supports formal systems to identify opportunities. B. It supports group understanding of goals. C. It simplifies the steps in process improvement. D. It ensures supervisory control of information.

B. It supports group understanding of goals. Visual management is a method of group communication where items such as the status of production, inventory levels, improvement activities, goals, schedules, etc., are visually displayed and support the group's understanding.

RCCP takes place at which of the following planning levels? A. Strategic planning B. Master scheduling C. MRP D. Business planning

B. Master scheduling RCCP is used to determine if sufficient capacity is available for the MPS. Strategic and business planning are incorrect because resource planning is used for strategic and business planning. MRP is incorrect because CRP is used for material requirements planning.

New competitors might enter the market when these factors prevail (choose all that apply A. Customer loyalty is strong B. New technology exists that suppliers are not exploiting C. Industry growth is strong D. Capital costs are high for new entrants

B. New technology exists that suppliers are not exploiting C. Industry growth is strong

A company successfully meets a 98% customer service level. Inventory storage utilization is only 75% is that a problem? A. Yes, utilization should be increased B. No

B. No

A company produces make-to-stock products that are stocked and shipped from distribution centers, to which deliveries are made weekly. No safety stock is carried, and inventory shows available when it is placed into stock at the distribution center. Which of the following statements is most true of a performance measure based on units completed within the master-scheduled weekly period? A. Performance is more accurate if products are aggregated into families. B. On-time completion is measured relative to the day of shipment to distribution. C. Master scheduling performance is secondary to distribution customer service. D. Any order completed is considered on time any day of the week.

B. On-time completion is measured relative to the day of shipment to distribution. Completion must be on time to meet the weekly shipments since no safety stock is carried.

Which of the following is most appropriate as a key performance indicator from the customer's perspective in a balanced scorecard for an enterprise? A. Scrap cost for the period B. On-time delivery performance C. Total revenue growth D. Average product manufacturing time

B. On-time delivery performance The customer perspective in a balanced scorecard helps managers evaluate how customers see the company. Customers are typically most concerned with a product's price, quality, sales service quality, and delivery time.

Most organizations build a scorecard using key performance indicators (KPIs) to track and share information on transportation performance. What are some of these KPIs? A. Delivery consistency, cost of service, units per transaction B. On-time delivery, delivery consistency, cost of service C. On-time delivery, delivery consistency, backorder rate D. Inventory turnover, delivery consistency, backorder rate

B. On-time delivery, delivery consistency, cost of service KPIs that are often used to measure transportation performance include on-time delivery, quality of service, cost of service, on-time loading, delivery consistency, claims for loss and damage, and freight bill accuracy. The backorder rate, units per transaction, and inventory turnover are not transportation metrics.

Which of the following is an advantage of overforecasting a new assemble-to-order product during the growth phase as it relates to raw material inventory? A. Raw materials are purchased only when actual customer orders offset forecasts. B. Overforecasting improves customer service by increasing part availability. C. There is no relationship between forecasting at the sales and operations level and raw materials. D. The planner is assured that any raw material excess will be used eventually.

B. Overforecasting improves customer service by increasing part availability. The growth phase may result in levels that are too low, so excess raw material buffers against that.

What conditions are most favorable to a best-cost provider strategy? A. Periods of economic energy and expansion of wealth B. Period of economic recession and declining household income C. Intense price-cutting tactics among category leaders D. General increase in quality levels in category due to new technology

B. Period of economic recession and declining household income Periods of limited wealth create greater sensitivity to cost while customers still want some level of quality.

Which of the following situations is most likely to require a forecast of future demand? A. Introduction of a new manufacturing technology B. Phase-in of a new product family and options C. Change from functional to flow manufacturing D. Sole-source supplier using allocations by customer

B. Phase-in of a new product family and options A new product family has no history, so forecasts are used to prepare for expected market demand.

The Triple Bottom Line (TBL) includes all of these perspectives except... A. Social B. Political C. Environmental D. Economic

B. Political

In a push system, assemblies are released and pushed through production based on which of the following? A. Capacity requirements B. Production schedule C. Material availability D. Kanban

B. Production schedule In a push system, production is usually determined by a planning system, such as material requirements planning, that seeks to maintain the priority due dates on demand orders.

Network Design Principles include all of these except A. Global B. Regional C. Network D. Local

B. Regional

A new product is being introduced to the company's product mix, which will have an effect on the current period material plan due to the cumulative lead time of the purchased parts. Which of the following actions would be of immediate value to the material planner? A. Modeling the key work center capacities B. Simulating the revised material plan C. Analyzing the product's cumulative lead time D. Analyzing orders that are likely to be late

B. Simulating the revised material plan Simulating the new material plan will identify those items that will be out of balance, without disrupting the already balanced plan.

Considering sustainability as a strategic initiative offers which of the following advantages? A. Investments in sustainable initiatives can be decentralized and unique. B. Some larger initiatives can be planned in addition to addressing "low-hanging fruit." C. The organization can avoid having to make sustainability policies. D. Senior management can delegate the process to an "army of volunteers."

B. Some larger initiatives can be planned in addition to addressing "low-hanging fruit." Taking a strategic approach to sustainability promotes a more proactive perspective such as attention to future problems and opportunities. This can help avoid a problem in corporate sustainability programs: restricting the organization's attention to "low-hanging fruit" that offers quick, but in the long term, small results.

Mcdonalds offering beer in Germany and wine in France would be an example of A. Global strategy B. Transnational strategy C. Multidomestic strategy D. Horizontal integration

B. Transnational strategy

How is a business plan different from a strategic plan? A. A business plan is a near-term projection of a company's financials. B. A business plan is tactical in nature. C. A business plan focuses on the long-range financial objectives of a company. D. A business plan receives input from the sales and operations plan.

C. A business plan focuses on the long-range financial objectives of a company. A business plan is a statement of long-range strategy and revenue, cost, and profit objectives usually accompanied by budgets, a projected balance sheet, and a cash flow. A strategic plan contains the company's vision, mission statement, goals, and objectives.

What forms a bridge between the organization's strategic plan and the tactical decisions that occur during a 15-month horizon or a similar time frame? A. Sales plan B. Production plan C. Business plan D. Resource plan

C. Business plan The business plan forms a bridge between the strategic and tactical levels. It translates the strategic business objectives into specific business objectives for the next two to three years. The objectives that relate to the first 15 months or so of these plans are used to guide tactical decisions at the S&OP level. These drivers set the direction and goals that manufacturing must meet.

Which of the following statements is true of forecast demand in the master production schedule as it relates to material requirements planning? A. Forecast demand is ignored within the cumulative lead time. B. Forecast demand is ignored beyond the cumulative lead time. C. Forecast demand is treated like any other gross demand. D. Forecast demand is treated like safety stock replenishment.

C. Forecast demand is treated like any other gross demand. Demand is demand, no matter what the source.

A plant refines a raw material into a bulk liquid chemical using a highly automated production process. Which of the following would be the most appropriate operational unit of measure for capacity and load in this situation? A. Standard labor hours B. Plant operating hours C. Gallons of the bulk chemical D. Monetary units of the chemical

C. Gallons of the bulk chemical The volume of the liquid chemical is the most appropriate operational unit of measure. Although monetary units can be used in such a case, volume is a more typical unit of measure.

To determine sources for inventory inconsistencies, the first action should be? A. Retrain all users on all transaction entry procedures B. Identify the most likely person making errors and take corrective action C. Identify all points where errors could occur, for further analysis D. Report a trouble ticket to your software vendor

C. Identify all points where errors could occur, for further analysis

What is the focus of the sales and operations planning meeting? A. Planned vs. actual numbers B. Previous month's numbers C. Plan for future months D. Plan for the next few weeks

C. Plan for future months The focus of the sales and operations planning meeting is the future months' forecast, sales, production, and inventory levels. The plan for the next few weeks is the master schedule.

Which of the following is the most appropriate response when a significant increase in production volume is anticipated? A. Obtaining a flexible manufacturing system B. Implementing a focused factory concept C. Realigning the process to match the new volume D. Increasing the degree of vertical integration

C. Realigning the process to match the new volume If demand requires an increase in production volume for a product, the first step is to investigate whether or not the process can support the anticipated volume.

When using an order point system for inventory that is planned to have a 95 percent customer service level, what will happen first if demand during the lead time is higher than average? A. There will be an overstock. B. The order point will be reached sooner. C. Safety stock will be sold. D. There will be a stockout.

C. Safety stock will be sold. Since the inventory has a high customer service level, this is likely supplied by holding safety stock. When demand during the lead time is higher than average, this means that cycle stock will be depleted and the first thing that will happen is that safety stock will be accessed. If sales are high enough (a 5 percent chance), the safety stock will then be depleted and a stockout will occur.

A company producing lawn mowers, with peak selling periods during the year, would likely use which of the following forecast methods? A. Moving average B. Extrinsic C. Seasonality D. Trend

C. Seasonality Seasonality is a repetitive pattern of demand from year to year (or other repeating time interval) with some periods considerably higher than others. Items such as lawn mowers and snow blowers are subject to seasonal demand.

What type of inventory loss is most likely to impact a commercial bakery? A. Shrinkage B. Obsolescence C. Shelf life D. Scrap

C. Shelf life Due to the short period of time that fresh-baked bread remains edible, a commercial bakery is likely to see significant inventory losses associated with shelf life.

Objectives are SMART if they are? A. Simple, Meaningful, Achievable, Realistic, Time-Bound B. Specific, Meaningful, Achievable, Realistic, Technology-Driven C. Specific, Measurable, Achievable, Relevant, Time-Bound D. Structured, Measurable, Accurate, Reasonable, Timely

C. Specific, Measurable, Achievable, Relevant, Time-Bound

A component stockout has occurred, and production has substituted a higher-priced alternate. What is the effect on cost variance? A. The alternate is charged at standard cost, so there is no variance. B. There is no cost variance due to the second part being a valid alternate. C. The alternate is charged at standard cost, so there is a total cost variance. D. The alternate is charged at the original part's standard cost, so there is no variance.

C. The alternate is charged at standard cost, so there is a total cost variance. Expected cost is based on the original lower-cost component.

Simultaneous product design participation by all functional areas, including suppliers and customers is called what?

Concurrent or participative engineering

What process is used to make components after order

Configure to Order

Which feature improves supply chain visibility by providing an early notification to a buyer of delivery contents A. Routing report B. BOM C. EDI order D. ASN

D. ASN

Which of the following are basic warehouse layouts A. Random location B. Fixed location C. Zoned Storage D. All of the above

D. All of the above

Which of the following types of demand should be input to the master schedule? A. Orders for end items B. Forecast for service parts C. Forecast for end items D. All of the above

D. All of the above All sources of demand, including service parts, forecasts, and actual customer orders, constitute demand in the master schedule.

Which of the following describes a workforce whose members are cross-trained and who can be assigned to different tasks? A. Allocated B. Modular C. Floating D. Flexible

D. Flexible Members of a flexible workforce are cross-trained, and work rules permit assignment of individual workers to different tasks.

A job shop environment includes which of the following? A. Variable routings, dedicated machines, job costing B. Functional layout, variable routings, dedicated machines C. Functional layout, variable routings, dedicated machines, job costing D. Functional layout, variable routings, job costing

D. Functional layout, variable routings, job costing Dedicated machines are typically found in a flow ship, while multi-purpose machines are found in a job shop.

Which of the forces in the 5 forces framework is the most intense A. Substitute products B. Power of customers C. Power of Suppliers D. Level of competitive rivalry E. New entrants

D. Level of competitive rivalry

A work order for an operation is divided into two lots and runs concurrently on two machines. Which of the following techniques is being used? A. Lot overlapping B. Lot sequencing C. Lot sizing D. Lot splitting

D. Lot splitting Lot splitting divides a work order into two lots and runs it concurrently on two machines, which reduces manufacturing lead time.

The development of the sales and operations plan (S&OP) involves which of the following? A. Marketing develops the plan prior to others getting involved. B. Manufacturing develops the plan prior to others getting involved. C. Finance develops the plan prior to others getting involved. D. Marketing, manufacturing, and finance all jointly develop the plan.

D. Marketing, manufacturing, and finance all jointly develop the plan. All three of these business functions are very closely involved in the S&OP process.

What is the significance of a higher inventory turn rate for finished goods? A. Lower customer service B. Lower cost of goods sold C. Higher warehouse cost D. Smaller risk of obsolescence

D. Smaller risk of obsolescence Higher warehouse costs is incorrect because higher turns means goods move quicker through the warehouse. Lower customer service is incorrect because the opposite is likely to occur. Lower cost of goods sold is also incorrect because for higher inventory turns you would expect a higher ratio of cost of goods sold to average inventory value.

True or False- Engineering Changes must be deployed only when all current inventory has been depleted

False

True or False- Finite loading guarantees all production orders in all periods can be scheduled within existing resource capacities.

False

True or False- Great way to segment customers: ensure that each company sales rep has a equal number of clients to manage

False

True or False- Ideal Suppliers independently create designs, approve test procedures, assess performance, without bothering the buyers.

False

True or False- In a pull manufacturing environment, activity begins with a forecast

False

Unexpected or unexplained forecast errors is caused by what type of variation

Random variation

Arrange the MPC Capacity steps in increasing level of detail

Resource planning Rough-cut capacity planning Capacity requirements planning

Which 2 returned product dispositions are the most preferable

Return to Stock and Return to Manufacturer

One advantage of Capacity requirements planning is Reveals potential load imbalances Subject to changes in MPS Assumes infinite loading Requires extensive data

Reveals potential load imbalances

What is the logistics supply chain for the upstream flow of products and materials for return, repair, remanufacture, and recycling

Reverse Logistics

Decision Support systems (DSS) filter through massive data, identify patterns, and synthesize actionable alternatives. True or False

True

What is the formula for average inventory, there are two Methods and when do you apply them

#1: Aggregate Avg $: (Beginning + Ending Inv $) / 2 #2: Item Inventory Qty: (Lot Size / 2) + Safety Stock Application- Inv Turns Ratio & Item Inventory Value

What are the CRP steps in proper order

1. Calculate load on resources over a period of time 2. Simulate scheduling load at work centers by period 3. Create work center load reports 4. Resolve load/capacity imbalances

Arrange these S&OP steps in proper sequence Financial review Demand planning Pre-executive & Executive meetings Supply planning

1. Demand planning 2. Supply planning 3. Financial review 4. Pre-executive & Executive meetings

What are the 4 United Nations Global Compact Principles

1. Human Rights 2. Labour 3. Environment 4. Anti- Corruption

List all the ISO certifications

1. ISO 9000- Quality 2. ISO 14000- Environments 3. ISO 26000- Social Sustainability 4. ISO 28000- Security and Resilience 5. ISO 31000- Risk Management

Name the Product life cycle in chronological order

1. Introduction 2. Growth 3. Maturity 4. Decline

Objectives of lean manufacturing include? Strive for the highest work center utilizations Keep everything in motion Eliminate all waste Produce with perfect quality Make products only to customer order Maximize product features, to appeal to all customers

1. Keep everything in motion 2. Eliminate all waste 3. Produce with perfect quality 4. Make products only to customer order

Inaccurate inventory records could result in

1. Lost sales 2. Excessive expediting 3. High levels of obsolescence 4. Late deliveries 5. Excessive inventory 6. Inventory shortages

Arrange these procurement alternatives in increasing risk to the buyer 1. Single Sourcing 2. Multi Sourcing 3, Sole Sourcing

1. Multi-sourcing 2. Single sourcing 3. Sole sourcing

The reliability metric for order delivery refers to (select all that apply): 1. Perfect order fulfillment 2. Delivered on time 3. Delivered in full 4. Correct condition 5. Correct place 6. No delivery charge

1. Perfect order fulfillment 2. Delivered on time 3. Delivered in full 4. Correct condition 5. Correct place

Two Benefits or QR codes over UPC codes are 1. QR codes can read by automated equipment more easily 2. QR codes are more error prone 3. QR codes can't be scanned into inventory systems easily 4. QR codes contain significantly more data capacity

1. QR codes can read by automated equipment more easily 2. QR codes contain significantly more data capacity

What are the stages of continuous improvement that lead to competitive advantage, in order

1. Reactive - correcting problems 2. Standardize - utilize industry best practices 3. Integrate - align operations with organizational strategy, eliminate gaps 4. Lead - improve best practices beyond competitor capabilities

Arrange the priority planning stages in chronological order S&OP Material Requirements Planning Master Scheduling Strategic & Business Planning

1. Strategic & Business Planning 2. S&OP 3. Master Scheduling 4. Material Requirements Planning

In Project Management results will be optimal when which factors are present (select all that apply) 1. Written project charter and committed management champion 2. RACI diagram with two or more Accountable responsibilities for each task 3. Project schedule developed at outset, approved, & left untouched throughout 4. Designated project manager 5. Stakeholders encouraged to submit enhancement ideas until the ½ way point 6. All team members work full time on the project

1. Written project charter and committed management champion 4. Designated project manager

What are the six transportation modes

1. water 2. air 3. rail 4. pipeline 5. intermodal 6. road

A company's standard for a project is 80 hours, but the actual time worked was 92 hours, what was the efficiency%

87%

Based on the information below, what would the rated capacity available be closest to? Available Time (Hours)-40 Utilization-94.4% Efficiency- 90.0% A. 34 hours B. 36 hours C. 38 hours D. 40 hours

A. 34 hours Rated capacity is the expected output capability of a resource. It is equal to the hours available (40 hours) times efficiency (0.90) times utilization (0.944); 40 x 0.90 x 0.944 = 34 hours.

An MTO company would like to cut a product's backlog from six to four months. If annual demand is 360 units, the production plan for this year should be how many units? A. 420 units B. 360 units C. 300 units D. 480 units

A. 420 units In an MTO environment, reducing the backlog by two months requires producing and shipping two additional months worth of units. The annual demand of 360 units equals a monthly average of 30 units, so 60 additional units would be required. The annual demand of 360 plus the 60 additional units to reduce the backlog would equal 420 units.

A chase production plan is based on inventory days of supply. Days of supply at the end of Q1 are 600 units and this value is used in Q2, which as a forecast of 300 units. Quarter 3 has a forecast of 700 units. The Q2 300 units of expected demand divided by the average of 61 working days per quarter is 5 units per day. The minimum inventory is 60 days of supply. What does the Q2 chance production level need to be? A. 0 units B. 100 units C. 300 units D. 400 units

A. 0 units The 600 units in days of supply will be sufficient for the Q2 forecast: 600 units - 300 units - 300 units (if nothing new is produced). However there is a minimum inventory. The minimum inventory level is 60 days of supply x 5 units per day = 300 units. They are at the minimum level already and so nothing needs to be produced in this quarter

Annual demand for an item that costs $9 is 14,000 units, and it has a lot size of 800 units. If the cost per order is $30 and the carrying cost is 20 percent, what is the annual inventory carrying cost? A. $525 B. $720 C. $375 D. $1,440

B. $720 Annual Inventory Carrying Cost = Quantity/2 × Carrying Cost Rate × Unit Cost = Q/2 × i × c = 800/2 × 0.2 × $9 = $720.

Measuring the order fill rate enables a company to determine: A. forecast accuracy. B. customer service levels. C. throughput time. D. backorder allocations.

B. customer service levels. The fill rate measures delivery performance of finished goods.

A critical manufacturing device begins to show excessive wear. Which risk response plan is most appropriate? A.Accept B. Avoid C. Mitigate D. Transfer

C. Mitigate

What forecast technique uses average demand for a certain number of periods prior to the month being forecasted? A. Historical demand B. Average C. Moving average D. Exponential smoothing

C. Moving average The moving average is an average of a certain number of the most recent observations.

A vehicle assembly plant would be classified as which type of manufacturing process? A. Continuous B. Job C. Repetitive D. Batch

C. Repetitive Repetitive manufacturing is dedicated to a single product or a small range of products, where products are passed through the same sequence of operations.

What competitive strategy applies to a Ferrari Car Low-cost Focused low-cost Differentiation Focused differentiation Best-cost

Focused Differentiation

True or False- The MRP plan consists of a time-phased priority plan (item, quantities, dates) for purchased and manufactured items.

True

True or False- The Planning time fence is the slushy zone. Any additions or changes must be coordinated with the master scheduler.

True

What is included in planning factors used in MRP (Check all that apply) Lot size Lead Time Safety stock Work center capacity

Lot size Lead Time Safety stock

True or False- The key concept behind CPFR is more collaboration between the retailer and the manufacturer.

True

Which is not considered a potential source of waste Planning Movement Defects Waiting Excessive inventory Unused people skills

Planning

True or False- The master scheduler disaggregates the production plan families into end items and production quantities for each period

True

The Kobe 3R Action plan for a circular economy includes which 3 sustainable actions

Recycle, Reuse, Reduce

Name all the R words associated with Waste Hierarchy

Reduce Reuse Recycle Recover

True or False- The ultimate disposition of returned products is complex perhaps even more so than QA inspections when it was new?

True

True or False- When calculating production load, CRP includes MRP planned orders that have not yet been released

True

What are the goals of inventory management

Support Customer Servcie Meet profitability goals Support sustainabilty goals Optimize inventory investment

A company produces and distributes three families of basic materials that are sold directly to manufacturers. The industry is very competitive, and the growth rate is low. Which of the following would be the most appropriate focus for the operations strategy in this situation? A. Increasing speed of production B. Reducing lead time variability C. Increasing operating flexibility D. Reducing waste in operations

The performance objectives for a company differ depending on the type of business. In this situation, with a business that produces standard, basic products in a competitive environment, the focus of the operations strategy will likely be cost reduction and efficiencies, which can be achieved by reducing waste in operations. D. Reducing waste in operations

Which of the following processes sets the projected backlog level at the product family level? a) Master Scheduling b) S&OP c) Business Planning d) Demand management

b) S&OP It is during S&OP that the overall supply levels are set, the inventory level is planned, and the projected backlog level is planned at the product family level within defined supply constraints. Master scheduling, business planning, and demand management are incorrect because S&OP takes place before master scheduling, after business planning, and after demand management provides input.

Across the product life cycle, sales and profits will generally be the greatest in which stage? (first to last) A. Introduction B. Growth C. Maturity D. Decline

C. Maturity

A shop order packet contains the authorization for a particular item or number of items to be made. Which of the following authorizations may also need to be issued as part of the order packet? A. Maintenance schedule B. Shop calendar C. Pick lists D. Inventory list

C. Pick lists The shop order packet will include what the shop floor needs to successfully produce the items.

Increasing planned lead times will result in which of the following outcomes? A. Actual lead times will decrease. B. Load will be decreased. C. Planned order release dates will be earlier. D. Work center capacity will increase.

C. Planned order release dates will be earlier. Increasing lead times will cause material requirements planning to call for the release of the order earlier. This in turn will increase the actual lead time as the order becomes work in process.

Which of the seven new tools of quality would be best for mapping out a plan to improve compliance with waste hierarchy policies while helping to ensure that the process avoids known common pitfalls? A. Relationship diagram B. Matrix data analysis chart C. Process decision program chart D. Matrix diagram

C. Process decision program chart A process decision program chart visually captures things that might possibly go wrong in a plan being developed. The chart can identify measures that should be taken in order to avoid undesirable consequences.

Which functional area would best be able to help engineers determine whether a material can be used in amounts sufficient for total demand within constraints on the final product cost? A. Finance B. Manufacturing C. Purchasing D. Sales and marketing

C. Purchasing While all of the functional areas can provide some information to engineers, purchasing has knowledge of suppliers and the prices they charge and can help them determine whether the materials can be found in the right quantity and price.

Which of the following approaches to forecasting is based on intuitive or judgmental evaluation? A. Seasonality B. Moving average C. Qualitative D. Trend

C. Qualitative Qualitative forecasting is based on intuitive or judgmental evaluation. It is generally used when data are scarce, not available, or no longer relevant.

Perfect order fulfillment is used to measure which of the following categories? A. Responsiveness B. Flexibility C. Reliability D. Cost

C. Reliability Perfect order fulfillment is the metric used to measure the reliability, or dependability and quality, category. Cost is incorrect because it is measured by total supply chain management cost. Responsiveness is incorrect because it is measured by order fulfillment cycle time. Flexibility is incorrect because it is measured by upside supply chain flexibility.

What is the first step in planning the scheduling of goods and services? A. Master production scheduling B. Production planning C. Sales and operations planning D. Forecasting

C. Sales and operations planning The first step in determining what will actually be produced is sales and operations planning.

What is the relationship between the number of weeks in the backlog and the number of weeks in the master scheduling demand time fence? A. They are equal. B. Backlog weeks are greater. C. There is no correlation. D. There is a direct correlation

C. There is no correlation. The demand time fence indicates when production schedules should be firmed, so there is no correlation with backlog.

Additional materials in excess of what is needed to satisfy gross requirements is known as: A. pipeline inventory. B. forward scheduling. C. safety stock. D. independent demand.

C. safety stock. Safety stock is additional materials in excess of what is needed to satisfy gross requirements.

For the purposes of production planning, product families can be established on the basis of A. the availability of materials. B. the availability of equipment. C. similarities in manufacturing process. D. new product introductions.

C. similarities in manufacturing process. Manufacturing needs to know what products share the same manufacturing processes. The availability of materials and machinery, affect production capacity but are not the basis for establishing product families. New product introductions could fit best in an existing product family or be in a new one, but each new product would not necessarily be in a new family.

Key performance indicators (KPIS) should include which factors 1. Strategic measures (profitability, market share, growth, ...) 2. Employee performance measures (education, experience, evaluations, ...) 3. Tactical measures (on-time delivery, inventory turns, plan adherence, ...) 4. All performance metrics for all departments (IT costs, headcounts, ...) 5. Operational measures (WC cycle times, utilization, efficiency, ...) 6. Metric data: ∎ criterion, ∎ target standard, ∎ actual measurement

1. Strategic measures (profitability, market share, growth, ...) 3. Tactical measures (on-time delivery, inventory turns, plan adherence, ...) 5. Operational measures (WC cycle times, utilization, efficiency. 6. Metric data: ∎ criterion, ∎ target standard, ∎ actual measurement

Which attributes apply to the design of reverse logistics (select multiple) 1. An expense that the producer must absorb 2. Can generate customer satisfaction and a revenue stream 3. Uses identical transportation/storage parts of the forward logistics chain 4. Includes unpackaging, disassembly, remanufacturing, recycling activities

2. Can generate customer satisfaction and a revenue stream 4. Includes unpackaging, disassembly, remanufacturing, recycling activities

A press is used to stamp left- and right-hand door panels simultaneously from a roll of sheet metal. What is the relationship between the two parts? A. Co-product B. Co-stamped C. Co-produced D. By-product

A. Co-product According to the APICS Dictionary, co-products are those that are "usually manufactured together or sequentially because of product or process similarities."

What ratio can be used to determine a company's ability to pay its liabilities by converting assets in the near term? A. Current ratio B. Debt ratio C. Accounts receivable turnover D. Inventory turnover

A. Current ratio The current ratio reflects the ability to pay debts from assets that can be quickly converted to cash, unlike long-term assets or inventory, which is reflected in the debt ratio. Accounts receivable indicates the organization's ability to collect payments from customers, and inventory turnover indicates the speed with which assets are converted into revenue.

In determining a forecast for a distribution center, which of the following dates should be used? A. Customer-requested dates B. Order promise dates C. Order receipt dates D. Month-end dates

A. Customer-requested dates The customer requested date is the date when the actual demand occurs. The shipping, delivery, or promise dates may be different.

What is the purpose of the project scope statement? A. Define the deliverables B. Create a high-level schedule for project completion C. Describe a change control process D. Assign roles to team members

A. Define the deliverables The project scope statement defines what the project's deliverables are and will do and what they are not and will not do. The other answers are incorrect because the change control process is used in part to track and control changes to the scope; "assign roles to team members" describes the responsibility matrix; and a definition of the deliverables is created based on the work required to create the deliverables.

Which of the following statements is a reason to simplify documentation in a pull system? A. Detailed routing information is not necessary. B. The system automatically reacts to mix considerations. C. Material and tooling availability are not visible. D. Production information is maintained at an inaccessible location.

A. Detailed routing information is not necessary. Pull systems simplify order release and documentation because, among other reasons, detailed routing information is not necessary. None of the other answers is a reason to simplify documentation in a pull system.

Which of the following elements is used to reduce system nervousness? A. Firm planned orders B. Safety stock C. Planned orders D. Economic order quantity

A. Firm planned orders Firming planned orders allows the planner to make decisions on whether small changes are important enough to react to as well as locking in order quantities and dates for various reasons.

What should a planner use to override the material requirements planning (MRP) logic for the quantity or date of a planned order? A. Firm planned orders B. Planned order releases C. Scheduled receipts D. Demand time fences

A. Firm planned orders MRP automatically recalculates planned orders as requirements change. A firm planned order allows the planner to maintain a certain quantity and date to prevent MRP from recalculating.

What kind of manufacturing environment do hospitals utilize A. Functional B. Cellular C. Fixed D. Product-based

A. Functional

Which of the following is an international standard that assists organizations in contributing to sustainable development through an understanding of social responsibility? A. ISO 26000 B. ISO 9000 C. GRI D. GAMP

A. ISO 26000 ISO 26000 is an international standard adopted by the International Standards Organization to assist organizations in contributing to sustainable development beyond legal compliance through a common understanding of social responsibility.

What is the most appropriate way to increase the capacity available for one day on a production line? A. Increase the hours worked. B. Change the manufacturing layout. C. Increase the speed of the line. D. Reduce setup time.

A. Increase the hours worked. Capacity available is the product of available time, utilization, and efficiency. Increasing the hours worked directly increases the available time and increases capacity.

The order point and periodic review techniques are used for which of the following? A. Independent demand B. Consolidated demand C. Fixed demand D. Forecast demand

A. Independent demand Both are ordering techniques for independent demand that must be determined based on information on the item itself rather than calculated based on a dependency.

What is needed to determine the gap between customer expectations and customer perceptions of a product-service package the organization sells? A. Market research B. Market penetration C. Market development D. Marketing

A. Market research Performed properly, market research provides background information on the gap between customer expectations and customer perceptions of a product or service.

How is in-transit time accounted for in distribution requirements planning (DRP)? A. Offset in gross requirements B. Built into delivery time C. As safety stock D. As safety capacity

A. Offset in gross requirements Just as material requirements planning offsets the lead time from the planned order release by the lead time, DRP offsets the in-transit time. The planned shipment to the receiving warehouse is the gross requirement for the supply warehouse.

A resource plan is based on which of the following components? A. One unit of a typical product B. One unit of each product C. One lot size of each product D. One lot size of a typical product

A. One unit of a typical product A bill of resources lists the required capacity and key resources needed to manufacture one unit of a selected item or family.

A synchronous pull system controls the velocity of flow through processes by using takt time. What does this result in? A. Overall reduction of lead time B. Overall increase of lead time C. No change to lead time D. Volatile changes to lead time

A. Overall reduction of lead time A synchronous pull system controls the velocity of flow through processes by using takt time, which results in an overall reduction of lead time.

Which of the following statements is true about the material requirements planning process? A. Planned orders create gross requirements for components. B. Net requirements create gross requirements for components. C. Gross requirements create net requirements for components. D. Planned orders create net requirements for components.

A. Planned orders create gross requirements for components. Planned orders for a parent become the gross requirements for the component. Net requirements do not necessarily equal planned orders due to lot sizing.

Significant reductions in which of the following lead times has the most positive impact on material planning? A. Production lead time B. Supplier lead time C. Cumulative lead time D. Cycle lead time

A. Production lead time Significant reductions in production lead time indicate that the company is implementing improvements in several areas. This simplifies material planning.

A make-to-stock company is considering improving its customer service level through a combination of shipping from finished goods and shipping from final assembly. Which of the following inventory management considerations is most important to this new strategy? A. Production responsiveness B. Customer service level C. Manufacturing environment D. End items

A. Production responsiveness The key is whether production can receive and ship an order in the lead time quoted to customers.

Buyers have greater power than sellers when (choose all that apply): A. Products are commodities B. Demand is Weak and Plentiful C. There are few acceptable substitutes D. Switching to another product is difficult or expensive

A. Products are commodities B. Demand is Weak and Plentiful

A stated goal of a continuous improvement project related to the order cycle is to significantly reduce the number of customers who are lost due to unacceptably long lead times. Which improvement would help most with this? A. Reducing the maximum duration of the order cycle B. Eliminating the order processing step C. Reducing the average duration of the order cycle D. Regularly expediting orders with a chance of being late

A. Reducing the maximum duration of the order cycle While reducing the average duration of the order cycle is also a useful improvement, it is the lead times that miss the target by the largest number of days that have the most chance of being significant to these customers.

A company produces a high-volume electronic assembly using a series of dedicated production lines. This is an example of which process environment? A. Repetitive B. Continuous C. Job shop D. Batch

A. Repetitive The use of dedicated production lines for high-volume demand occurs in repetitive manufacturing.

Which is the best way listed for supply to influence the accuracy and reliability of forecasts? A. Shorten supply and manufacturing lead times. B. Influence marketing to reduce forecast error by sharing stories of consequences. C. Use error metrics for forecasts and review forecast methods whenever error thresholds are exceeded. D. Supply has no control over forecasting error and reliability.

A. Shorten supply and manufacturing lead times. Forecasting is primarily the responsibility of demand management (e.g., sales and marketing). This includes setting and monitoring error metrics. However, improving forecast accuracy is not just a responsibility of demand management. Supply can also influence forecast accuracy. Finding ways to shorten supply and manufacturing lead times enables forecasts to be for shorter periods, which improves accuracy.

What is the risk posed to an organization by measuring too many key performance indicators (KPIs)? A. Slowed decision making B. Goals not being tracked C. Oversimplification of performance D. Slower production times

A. Slowed decision making Tracking too many KPIs can complicate tracking and slow decision making down. Measuring KPIs should not affect production times. Goals not being tracked and or oversimplification of performance are risks of tracking too few KPIs.

What attributes apply to tactical buying A. Standard products, comparable costs, reliable quality B. Stable usage & schedules C. High risk D. Numerous competing supplier alternatives

A. Standard products, comparable costs, reliable quality B. Stable usage & schedules D. Numerous competing supplier alternatives

A calculated value that can signal the quality or validity of a forecast when it is in doubt is known as: A. a tracking signal. B. mean absolute deviation. C. bias. D. a smoothing factor.

A. a tracking signal. A tracking signal is the ratio of the cumulative algebraic sum of the deviations between the forecasts and the actual values to the mean absolute deviation. It is used to signal when the validity of the forecasting model might be in doubt.

Material consumed in a pull environment is determined by: A. number of units completed. B. actual yield percentage. C. scheduled rate of production. D. number of customer orders.

A. number of units completed. Units complete determines the material used in a pull environment.

When companies diversify by moving into related markets and leverage similarities while avoiding the expense of maintaining duplicate resources, what will be the likely result for the diversified company? A. It will be spun off as a separate entity. B. It will perform better financially. C. It will backward-integrate with its key suppliers. D. It will be completely assimilated into the acquiring company.

B. It will perform better financially. Diversifying into related businesses where competitively valuable strategic-fit benefits can be captured puts a company's business in a position to perform better financially due to economies of scale gained from various shared services.

Select all attributes for a periodic review system A. Safety stock is not required in a periodic review system B. Item quantities are reviewed on a regular interval C. The quantity ordered will restore inventory to a target maximum level D. Reorder quantities are always for the same amount

B. Item quantities are reviewed on a regular interval C. The quantity ordered will restore inventory to a target maximum level

What technique aims to increase employee engagement by varying a worker's tasks and giving the worker more control over those tasks? A. Job enlargement B. Job enrichment C. Job commitment D. Job rotation

B. Job enrichment Job enlargement provides challenge by assigning additional tasks. Job rotation periodically changes a worker's assignment to expand the worker's perspective of the work. Job commitment is the expected outcome of these employee management techniques.

Distribution requirements planning (DRP) is most beneficial in environments that possess which of the following product and distribution network characteristics? A. Make-to-stock product; single-level distribution network B. Make-to-stock product; multilevel distribution network C. Make-to-order product; single-level distribution network D. Make-to-order product; multilevel distribution network

B. Make-to-stock product; multilevel distribution network DRP is most beneficial in a make-to-stock environment and where the distribution network is more complex.

A company is implementing lean principles, including reducing its supplier base. What is a key element for the supplier rating system? A. Delivery lead time B. On-time delivery C. Kanban cycle time D. Lowest cost

B. On-time delivery On-time delivery reliability will be a key performance measure.

A company uses a chase production strategy to schedule production. A product family consists of ten end items, produced every month. Four high-volume units comprise 70% of total production. The two lowest-volume units comprise only a very small percentage. How would sales and operations planning plan the items in this product family? A. One line for the highest-volume units and one for the remaining six products B. One line for the total number of units with no consideration for mix C. Separate line for each type of unit D. Four lines for the highest-volume units, one for the two lowest, and one for the balance

B. One line for the total number of units with no consideration for mix Regardless of the number of end items, they are all one product family, so they are planned as one line, with consideration for volume.

What are the critical ratio and the queue ratio used for? A. Capacity planning B. Priority planning C. Financial evaluation D. Master scheduling

B. Priority planning The critical ratio is a dispatching rule that calculates a priority index number by dividing the time remaining to the due date by the expected time to finish the job. The queue ratio is the ratio of the hours of slack within the job to the queue originally scheduled.

When measuring shop floor performance, which method will encourage not producing unwanted product? A. Efficiency B. Schedule completion C. Utilization D. Productivity

B. Schedule completion Schedule completion encourages performance to plan.

Which of the following most likely indicates that there are two packing slip errors? A. The quantity does not match the actual quantity received. B. The part number does not match the actual material received. C. The unit of measure does not match the inventory unit of measure. D. The unit price does not match the standard cost on file.

B. The part number does not match the actual material received. The incorrect part is received and the correct part is not received, constituting two errors.

On a matrix that has service production volume on one axis and service variety on the other, which is the best example of a low-variety, high-volume service? A. Phone calls to sales prospects B. Vehicle oil change service C. Online photo printing service D. Standard dental cleaning visit

B. Vehicle oil change service The oil change service has the lowest variety. Photo printing, for example, typically has many options. Oil change services are also high-volume services compared to other automotive maintenance options.

Starting with the due date for the order is an example of: A. forward scheduling. B. backward scheduling. C. process scheduling. D. finite scheduling.

B. backward scheduling. Backward scheduling starts with the due date for the order and works backward from the last operation to determine the required start date and/or due dates for each operation.

During a discussion centered on lead and lag, a CEO approves a capital equipment expansion. This is an example of the CEO implementing the firm's: A. business acumen. B. capacity strategy. C. approved budget. D. continuous improvement strategy.

B. capacity strategy. One of the strategic choices that a firm must make as part of its manufacturing strategy is the capacity strategy, such as lead, lag, and tracking.

Total productive maintenance (TPM) focuses on preventive maintenance plus: A. increasing direct labor efficiencies along with continuous education on rapid changeovers and total quality. B. continuing efforts to adapt, modify, and refine equipment to increase flexibility, reduce material handling, and promote continuous flows. C. driving down costs on service parts while focusing on manufacturing setups to be product-specific. D. releasing orders to the machine shop for tool manufacture or equipment maintenance.

B. continuing efforts to adapt, modify, and refine equipment to increase flexibility, reduce material handling, and promote continuous flows. TPM is a system of maintaining and improving the integrity of production and quality systems through the machines, equipment, processes, and employees that add business value to the organization.

Early due diligence concerning a backward integration initiative includes an analysis of both companies': A. cash flows. B. corporate cultures. C. balance sheets. D. supplier relationships.

B. corporate cultures. A corporate culture includes a set of assumptions and values that members of the company share. These common assumptions influence the way the company operates.

The ability of manufacturing to respond quickly to external or internal changes is: A. adaptability. B. flexibility. C. agility. D. configurability.

B. flexibility. Flexibility is the ability of the manufacturing system to respond quickly, in terms of range and time, to external or internal changes.

Identifying sources for procurement regardless of location is an example of: A. outsourcing. B. global sourcing. C. multisourcing. D. offshore sourcing.

B. global sourcing. Global sourcing is the function of selecting international suppliers rather than simply local or domestic suppliers.

Using reusable packaging, such as bins or racks, rather than corrugated containers is an example of: A. design for service. B. green reverse logistics. C. kanban. D. recycling.

B. green reverse logistics. A key element in green reverse logistics is the reduction in the amount of packaging.

Collaborating with customers to provide forecast information results in: A. elimination of safety stock. B. improved forecast accuracy. C. shorter lead times. D. higher customer ratings.

B. improved forecast accuracy. Collaborating with customers to get their schedules eliminates the need for some of the forecast, which in turn improves accuracy.

Forecasts are usually: A. based on historical data. B. incorrect. C. overstated. D. within a reasonable percentage.

B. incorrect. Forecasts attempt to look into the unknown future and, except by sheer luck, will be wrong to some degree. Errors are inevitable and must be expected and planned for.

If suppliers and customers seek to reduce inventories and retain service, they will likely find success with: A. statistically calculating product lead time. B. increased customer involvement in the supplier's day-to-day planning and control. C. the use of open bid auctions. D. long-term purchase agreements.

B. increased customer involvement in the supplier's day-to-day planning and control. Inventories may be reduced in a supplier/customer partnership by increased customer involvement in the supplier's day-to-day planning and control.

Queue, setup, run, wait, and move times are components of: A. delivery lead time. B. manufacturing lead time. C. replenishment lead time. D. demand lead time.

B. manufacturing lead time. These are the elements that make up the manufacturing portion of the lead time.

A master production schedule should be loaded to a level that is: A. equal to sales orders. B. no greater than can be realistically produced. C. equal to the sales forecast. D. capable of fully utilizing available capacity.

B. no greater than can be realistically produced. The master schedule is the translation of the forecast into a statement of manufacturing output. It is a statement of production and not of demand. A critical role of master scheduling is initiating action to adjust or increase the capacity of critical resources.

A distribution channel is defined as: A. the path a product travels through the distribution center from receipt to shipment. B. the distribution route, from raw materials through consumption, that a product travels. C. the distribution route from the production facility to the consumer. D. the routes between the production facility and the distribution centers.

B. the distribution route, from raw materials through consumption, that a product travels. A distribution channel is the distribution route, from raw materials through consumption, along which products travel.

The deseasonalized demand forecast is 500 units for the next year. If the seasonal index for the first quarter is 1.25, what is the forecast for next year's first quarter? A. 100 units B. 178 units C. 156 units D. 625 units

C. 156 units First, find the period deseasonalized demand by dividing the annual deseasonalized demand by the number of periods: 500 units / 4 quarters = 125 units. Next, multiply the deseasonalized first quarter demand by the seasonal index: 125 x 1.25 = 156.25, rounded to 156 units.

20 Days of Sales Outstanding 45 Inventory Days of Supply 30 Days of Payables Outstanding With the payment performance shown in the image, what is the cash- to- cash cycle time in days. A. 20 B. 55 C. 35 D. 95

C. 35

Which of the following uses a finite-scheduling model to determine when an item can be delivered to a customer and includes any constraints that might restrict production? A. Operating curve B. Constraint finite scheduling C. Capable-to-promise D. Available-to-promise

C. Capable-to-promise Capable-to-promise is the process of committing orders against available capacity as well as inventory.

Which of the following business characteristics would typically make a lead capacity strategy appropriate? A. Price is the competitive priority being pursued. B. Both material and capacity constraints exist. C. Capacity can be activated or deactivated in increments. D. Activating and deactivating capacity is costly.

C. Capacity can be activated or deactivated in increments. A lead capacity strategy is one where, as demand is increasing, capacity is added prior to the realization of demand. If capacity can be activated and deactivated in increments, the business can respond accordingly to changing demand.

Which of the following is an example of a push system for replenishing inventory? A. Producing only enough items to replace those consumed B. Withdrawing inventory for the shop floor as needed C. Centralized distribution planning D. Kanban

C. Centralized distribution planning In general, a push system creates inventory in anticipation of demand.

A representative of a supplier has called a buyer to tell her that the minimum order quantity for a raw material is being increased to 1,000 pieces immediately. Which of the following would be the most appropriate action for the buyer to take next? A. Firm all planned orders for the item at 1,000 pieces. B. Change the quantity for all scheduled receipts. C. Change the lot sizing parameters for the item. D. Use a pegging report to identify all affected customer orders.

C. Change the lot sizing parameters for the item. The revised minimum order quantity should result in a change to the lot size for the item.

A company monitors customer orders and inventory levels daily and generates production orders weekly. Those orders are processed the following week to maintain inventory at a fairly steady level. Which production planning method is being used? A. Hybrid B. Replenishment C. Chase D. Level

C. Chase Demand is being met with a one-week lag by varying production and maintaining stable inventory levels.

Which production planning method maintains a stable inventory level while varying production to meet demand? A. Critical path method B. Critical chain method C. Chase production method D. Level loading method

C. Chase production method The chase production method seeks to keep inventory levels stable while varying production levels based on demand. This method typically has higher costs associated with varying staffing and overtime.

When demand exceeds supply, which would be the first choices in prioritizing demand (select all that apply) A. Thank customers for loyalty, but honestly state no inventory is available B. Buy compatible products from competitor & resell under your brand C. Convince customers to delay purchases, perhaps with extra discount D. Promote item substitution

C. Convince customers to delay purchases, perhaps with extra discount D. Promote item substitution

What are the three components of sustainability? A. Social, environmental, regulatory B. Social, economic, regulatory C. Economic, environmental, social D. Economic, environmental, ecological

C. Economic, environmental, social Sustainability includes elements of protecting the environment, sustaining the future economy, and being a responsible citizen.

In what way can ISO 14001 compliance be misleading? A. ISO regulations are different for each country. B. A company's compliance may have expired, but there is no way to verify that. C. Existing violations are permitted as long as there is a commitment to comply. D. ISO regulations can be interpreted in a variety of ways

C. Existing violations are permitted as long as there is a commitment to comply. ISO 14001 describes an environmental management system intended to continually improve the environmental performance of a company. However, companies set their own goals, so improvement is not standardized. As a result, third-party certification is often required by customers to ensure that suppliers are following stringent standards. Existing violations of environmental regulations are permitted as long as there is a clear commitment to comply.

Forecasting cash flow in a make-to-order business involves converting which of the following to dollars? A. Final assembly schedule B. Carrying cost of finished goods C. Final assembly schedule and planned component purchase orders D. Final assembly schedule, planned component purchase orders, and carrying cost of finished goods

C. Final assembly schedule and planned component purchase orders Converting purchased materials and final assembly of finished goods from inventory to cash is the cornerstone of cash flow in a make-to-order business.

A customer order for a quantity of 50 exists within the planning time fence. A change order has been received to increase the quantity to 100. There is a forecast in that period of 80. Which of the following changes should occur? A. Forecast quantity and order quantity should both be changed to 100. B. Forecast quantity should not be changed; order quantity should be changed to 80 in this period and 20 in the next period. C. Forecast quantity should not be changed; order quantity should be changed to 100. D. Forecast quantity should be changed to 120; order quantity should be changed to 100.

C. Forecast quantity should not be changed; order quantity should be changed to 100. Within the planning time fence, the order change can be accepted. The forecast does not change.

When designing a forecasting system, which of the following principles of forecasting needs to be integrated into the design in order to improve the forecast system over time? A. Forecasts are more accurate for nearer time periods. B. Forecasts are more accurate for groups or families. C. Forecasts should include an estimate of error. D. Forecasts are usually wrong.

C. Forecasts should include an estimate of error. An effective forecasting system must have a method of estimating and managing forecast error built into its design. The other answers refer to the general condition of forecasting that is assumed in every system.

Which of the following flows is most likely used in a flow environment that is supply-constrained by the availability of a seasonal vegetable? A. Mixed B. Finite C. Forward D. Backward

C. Forward Forward flow is used when there is a defined starting point or when work can only begin upon receipt of supply.

Which design method identifies the physical similarity of parts and provides for rapid retrieval of existing designs? A. Taguchi methodology B. Design of experiments C. Group technology D. Design for the environment

C. Group technology Group technology is an engineering and manufacturing philosophy that identifies the physical similarity of parts. It provides for rapid retrieval of existing designs and facilitates a cellular layout.

An organization is attempting to break into a market that already has several competitors who have significant market share. Which action would increase the level of competition and pressure on these established competitors? A. Imitate the competitors' products features and price closely. B. Choose specific products to produce where the cost of switching brands is high for the consumer. C. Introduce a daring but risky strategic innovation. D. Start with products that already have steadily increasing demand.

C. Introduce a daring but risky strategic innovation. Rivalry tends to be weaker when the rival (the company trying to break into the market in this case) pursues a "me too" strategy and there are no daring strategic innovators. Therefore, daring innovations are an opportunity that could pay off.

What generalization about vertical integration is often true? A. It poses fewer risks than outsourcing. B. It usually works best when it occurs in the downstream direction. C. It aims at lowering both costs and risks of production. D. It is usually driven by capacity needs.

C. It aims at lowering both costs and risks of production. Vertical integration provides greater control over the supply chain, which can lower costs and risks.

What will likely happen when a company adds a selling option to its own website? A. It will see growth in its market share. B. It will experience no change in its market share. C. It will risk disintermediating its traditional retailers. D. It will find its net profits increasing year over year.

C. It will risk disintermediating its traditional retailers. Companies that use a traditional model of selling product through retail stores may consider adding a selling portal to their own website. This will likely risk disintermediating their traditional retailers.

What does a large backlog indicate in an engineer-to-order environment? A. Capacity is too low. B. Engineering design is too slow. C. Job security is stable. D. Inventory turns are high.

C. Job security is stable. A backlog means job security and is a measure of the effectiveness of the sales process.

Which of the following statements is true of enterprise resources planning (ERP)? A. Only a few databases are required, and they seldom relate to one another. B. ERP systems are similar to MRP II systems, as they both deal with manufacturing. C. Large data requirements tend to make these systems expensive and difficult to operate. D. Advances in technology have made ERP systems affordable for companies of any size.

C. Large data requirements tend to make these systems expensive and difficult to operate.

Which of the following is an advantage of multiple sourcing? A. More cooperation of new product development B. Greater economies of scale C. Less vulnerability to supply disruptions D. Upward pressure on price if there are few other buyers

C. Less vulnerability to supply disruptions

Assume that design, purchase, inventory, manufacturing, assembly, and ship steps each individually have a lead time of one week. In which environment would delivery lead time be two weeks? A. Engineer-to-order B. Make-to-stock C. Make-to-order D. Assemble-to-order

D. Assemble-to-order In an assemble-to-order environment, the delivery lead time would include assembly and ship steps, for a total of two weeks.

Which type of network channel would be appropriate for distributing candy bars or breakfast cereal A. Direct/internal B. Exclusive C. Select D. Complex

D. Complex

Which of the forces in the five forces is most intense A. Substitute products B. Power of customers C. Power of Suppliers D. Level of competitive rivalry D. New entrants

D. Level of competitive rivalry

What are the four concerns of sales and operations planning (S&OP)? A. Demand, supply, forecast, inventory B. Volume, mix, money, sales C. Volume, mix, demand, supply D. Sales, production, inventory, money

D. Sales, production, inventory, money The four concerns of S&OP are sales, production, inventory, and money.

What does the term "decomposition" refer to? A. Reaching the end of a product's life cycle B. Disaggregating a total forecast into individual forecasts C. Method of transferring customer requirements into forecasted demand D. Separating time series data into trend, seasonality, and cyclical data

D. Separating time series data into trend, seasonality, and cyclical data Decomposition is a method of forecasting where time series data is separated into up to three components: trend, seasonal, and cyclical.

What can customers do to facilitate reducing the bullwhip effect? A. Lock retailers in to long-term commitments. B. Implement the drum-buffer-rope theory in manufacturing. C. Manipulate demand by managing promotions and discounts. D. Share demand information using point-of-sale data.

D. Share demand information using point-of-sale data. To assist in reducing dynamic instability in the supply chain, customers can share demand information using point-of-sale (POS) data.

Which of the following benefits is the most likely reason for reducing internal setup time when implementing continuous improvement? A. Shorter cycle times can be quoted to the end customer. B. The number of kanbans in the process can be reduced. C. There are fewer activities where a mistake can be made. D. The lot quantity per kanban can be reduced.

D. The lot quantity per kanban can be reduced. The lot quantity can be reduced due to being able to perform more frequent setups.

Which of the following actions by purchasing would reduce a manufactured product's environmental impact? A. Encouraging customers to reduce their carbon footprint B. Reengineering the purchasing processes to reduce time and costs C. Requiring suppliers to sign a statement that they do not use child labor D. Working with key suppliers to reduce product packaging

D. Working with key suppliers to reduce product packaging Reducing a product's packaging would reduce the environmental impact of the product by reducing packaging production and disposal.

A company that chooses to implement increases in existing manufacturing capacity in anticipation of demand is following: A. a compete-with-innovation strategy. B. a conservative fiscal strategy. C. a compete-with-lowest-cost strategy. D. a lead capacity strategy.

D. a lead capacity strategy. A lead capacity strategy is one in which capacity is added prior to the realization of the demand.

A company has historically provided a high level of customer service. A past-due condition in the master production schedule might be a result of: A. the production plan being overloaded and the condition not being caught by resource planning. B. the master production schedule being overloaded and the condition not being caught by rough-cut capacity planning. C. production not following the master production schedule priorities and not completing all of the orders as scheduled. D. an exception occurring in the availability of capacity and materials.

D. an exception occurring in the availability of capacity and materials. Since the past-due condition is not normal, an exception must have occurred.

To "roll up" a forecast refers to the process of: A. making sure that the resource plan validates the sales and operations plan. B. combining salespersons' forecasts into a total forecast for an item. C. combining the master production schedule quantities to meet the forecast demand. D. generating detailed forecasts that aggregate to the total forecast.

D. generating detailed forecasts that aggregate to the total forecast. In pyramid forecasting, detailed forecasts are aggregated to higher levels until a total number is generated.

Companies that both provide valuable social benefits and fulfill customer needs are likely to: A. reduce investment in research and development. B. win more government contracts. C. see profits drop. D. improve their competitive strength.

D. improve their competitive strength Today's corporations must implement social responsibility in order to be competitive in the marketplace..

A strategy to attain technology superiority in product development may lead to: A. overly complex products containing unnecessary features. B. copycat manufacturers who have no regard for intellectual property rights. C. unnecessary complexity in the manufacturing process. D. market domination during the early stages of a product's life cycle.

D. market domination during the early stages of a product's life cycle. A principal offensive competitive strategy includes leapfrogging competitors by being the first to market with next-generation products. For example, with its Xbox, Microsoft led the market by 12 months, until Sony's PlayStation was released.

When refurbishing an older building, the cost of investing in better insulation: A. may serve as an argument for the status quo. B. becomes a barrier to the project's return on investment. C. should be contrasted with the cost of new construction methodologies. D. must be contrasted with the likely significant energy savings that can be produced.

D. must be contrasted with the likely significant energy savings that can be produced. If a building is well-insulated and properly engineered for heating, cooling, and lighting, significant savings can be produced as a result of the systems required for the building itself.

True or False- For any personal or organizational change to succeed, three things must be present desire, knowledge, and skill

True

True or False- Having committed to Sustainability, the organization must now, examine & Modify its Supply Chain, Processes, and Products

True

True or False- Low- Level Coding assigns code numbers to items according to where they are used in assembly of all BOMS being processed

True

Which of the following steps completes the purchasing cycle? A. Approving supplier's invoice for payment B. Closing the purchase order C. Receiving and accepting goods D. Filing the purchase order

A. Approving supplier's invoice for payment The purchasing cycle consists of the following steps: Generate Requisition Issue Purchase Order Follow Up Receive Goods Approve Payment

The relationship between control limits and specification limits are A. Control limits are more exacting, allowing less variation B. Specification limits are more exacting, allowing less variation

A. Control limits are more exacting, allowing less variation

In a bill of material, the path that adds up to the greatest number of lead time periods defines the: A. cumulative lead time. B. demand lead time. C. delivery lead time. D. lead time offset.

A. Cumulative lead time Cumulative lead time for an item consists of the longest lead time path for a given bill of material. Delivery and demand lead times are subsets of the cumulative lead time. The lead time offset is a technique used in MRP where a planned order receipt in one time period requires the release of that order in an earlier time period based on the lead time for the item.

In Final Assembly Scheduling, which capacity tool is used when collecting customer order specifications. A. RCCP, linked with the MPS B. CRP, following MRP

A. RCCP, linked with the MPS

A make-to-stock organization sells premium clothing that comes in a wide variety of sizes. What sort of inventory policy would be best for this organization? A. Risk pooling B. Postponement C. Ordering far in advance D. Placement closest to point of customer demand

A. Risk pooling Products that have many different SKUs, such as sizes of shirts, will generate large inventories unless inventory is centralized. Risk pooling describes a method of centralizing inventory.

Which of the following requires no disaggregating to develop the master schedule from the sales and operations plan and check for feasibility? A. Supply B. Mix C. Volume D. Demand

A. Supply Supply, or capacity, is shared across product families. The other responses all relate specifically to a product family and so would have to be disaggregated to end units for the master schedule

What is the objective of performance measurements? A. To determine if the operation is meeting or exceeding expectations B. To reward employees for jobs well done C. To provide information for finance D. To provide benchmarking for other companies

A. To determine if the operation is meeting or exceeding expectations Measurements are put in place to determine if the operation is meeting or exceeding expectations.

Which of the following new product characteristics will most affect the choice of a product family for sales and operations planning (S&OP)? A. Mix B. Design C. Volume D. Life cycle

B. Design S&OP plans families of items within a production environment and process choice, so the design of the product would determine which production process it would be similar to.

If the backlog is higher than the planned amount, which of the following elements is likely to be increasing? A. Work in process B. Quoted lead times C. Cycle times D. Employment concerns

B. Quoted lead times An increase in backlog indicates that order delivery dates are longer than targeted.

The master production schedule (MPS) serves as the basis for communication between which two functions? A. Manufacturing and purchasing B. Sales and manufacturing C. Sales and marketing D. Purchasing and sales

B. Sales and manufacturing The production plan from sales and operations planning (involving sales, manufacturing, and others) is the input to the MPS and the output is an MPS for each end item given information on the desired sales mix (sales provides mix forecasts or other information on the desired sales mix).

Which of the following may be used as a measure of flexibility? A. Machine efficiency B. Skills per employee C. Output per employee D. Reduction of burden rate

B. Skills per employee The skills possessed by employees can be used to measure their flexibility to work on other tasks.

Using the information provided below, what is the monthly planned production if level production is used? Beginning inventory- 600 units Total annual forecast demand- 12,600 units Ending inventory target-1,200 units Working days per month-20 days Number of periods- 12 periods Employee productivity- 11 per day A. 630 units per period B. 660 units per period C. 1,000 units per period D. 1,100 units per period

D. 1,100 units per period Level Production per Period = (Annual Demand - Beginning Inventory + Ending Inventory)/Number of Periods = (12,600 units - 600 units + 1,200 units)/12 periods = 1,100 units per period

All is true of outsourcing except A. Good when work could be performed cheaper, quicker, & with equal quality B. Risk may increase because of loss of control C. Good choice if internal resources are already running at full capacity D. Core competencies should be contracted to acknowledged outside experts

D. Core competencies should be contracted to acknowledged outside experts

A company has a lag capacity strategy. If demand growth is predictable, this strategy: A. will always generate high levels of past-due customer orders. B. should be paired with a chase manufacturing strategy. C. increases the risk of inventory loss (e.g., obsolescence, theft, damage). D. Fully utilizes capacity, so unit costs are lower.

D. Fully utilizes capacity, so unit costs are lower. A lag capacity strategy will add capacity after it is needed, which will mean that equipment remains at full utilization. When demand growth is predictable, a lag capacity strategy works well if inventory is manufactured ahead of time; demand that cannot be met using current-period capacity can be met using inventory that was produced ahead of time. Using a chase manufacturing strategy would not produce such inventory in advance and so some demand would not be met in a timely fashion.

What is the primary goal of the theory of constraints? A. Elevating constraints B. Managing buffers C. Identifying bottlenecks D. Maximizing throughput

D. Maximizing throughput The primary goal of the theory of constraints is to maximize throughput. This is done by identifying bottlenecks, or constraints, and elevating them so that they are no longer constraints. Sometimes this will include buffering the constraint with either time or inventory.

Which of the following best measures the production operation's contribution to delivery reliability? A. Cycle time per part B. Number of customer complaints C. Direct labor hours per product D. Percentage of master schedule achieved

D. Percentage of master schedule achieved There is a direct correlation between the percentage of the master schedule that is completed as scheduled and on-time delivery.

Which of the following actions will a company most likely take as a primary focus of its level production strategy to deal with demand peaks while meeting standard lead time delivery? A. Level load demand. B. Subcontract. C. Work overtime. D. Produce ahead.

D. Produce ahead. Building up inventory is used to buffer peak demand.

True or False- Planning Systems Provide Action messages when manual intervention is needed such as to reschedule an MPS earlier

True

What are useful metrics for measuring distribution performance

Fast Flow Response Minimum Inventories Transportation Reduction Product Life Cycle Support

What will happen with a moving average forecast of a product with distinct seasonality if the seasonality is included when forecasting is performed? A. At the end of the seasonal upswing, the forecast will show demand continuing to increase. B. At the end of the seasonal low, the forecast will show demand starting to increase again. C. The forecast will always have a bias toward overproduction. D. The forecast will lag the trend unless the results are subsequently deseasonalized.

A. At the end of the seasonal upswing, the forecast will show demand continuing to increase. Using any time series forecast method without first removing seasonality will result in seasonal upswings being projected to continue upward and seasonal downswings projected to continue downward. Therefore, the forecast will tend toward underproduction at the end of a seasonal downswing.

True or False- Inventory for a normal distribution item, mean=400, is carried at 400 units. What is the expected service level.

50%

What is the best technique for ensuring master schedule stability for production? A. Demand time fence B. Production time fence C. Planning time fence D. Supply time fence

A. Demand time fence A demand time fence identifies the point within which production changes need to be authorized by senior management.

Aspects of low-cost providers include (select all that apply): A. Easily imitated by rivals B. Exploit economies of scale C. Price wars can generate high revenues and profits D. Including all features that customers might want

A. Easily imitated by rivals B. Exploit economies of scale

Dependent demand relates to which of the following elements? A. Gross component requirements B. Throughput time C. Order quantities D. Forecast error

A. Gross component requirements The planned order for an independent demand item becomes the gross requirements for its dependent components.

Which of the following customer service measures is appropriate for mature make-to-stock products? A. Line-item fill rate B. Finished goods inventory turnover C. Capacity planning using overall factors (CPOF) D. Total manufacturing cycle time

A. Line-item fill rate The line-item fill rate measures the performance by line. The percentage of orders shipped on schedule would be a good complementary metric.

Which group is responsible for defining and creating a corporate culture? A. Management B. Human resources C. Board of directors D. Each individual department

A. Management It is management's responsibility to set the culture necessary for business success.

Which type of legal risk refers to the misuse of intellectual property? A. Patent infringement B. Bribery and corruption C. Contract D. Compliance

A. Patent infringement Trademark or patent infringement refers to the misuse of intellectual property or using a trademark without authorization. It may result in financial and legal damages.

Which principle of supplier partnerships is least important? A. Pricing B. Mutual need C. Trust D. Compatibility of interests

A. Pricing The essential keys for effective supplier relationship management are compatibility of interests, mutual need, and trust. While price is important, a buyer will pay more if the supplier relationship provides other factors such as high quality and on-time delivery.

Which of the following environments is most unlike the others from an operational perspective? A. Synchronized production B. Repetitive manufacturing C. Discrete manufacturing D. Batch processing

A. Synchronized production Synchronized production is a philosophy that can be implemented in a number of ways. The others are all production processes.

Which production activity control scheduling technique often involves searching orders for ones that have the same setups as the last batch but just for one or more particular work centers? A. TOC drum-buffer-rope B. MRP-based scheduling C. Priority sequencing D. Lean scheduling

A. TOC drum-buffer-rope The TOC (theory of constraints) drum-buffer-rope scheduling method approaches job sequencing by considering how to maximize throughput at bottleneck work centers first. One way this is done is by searching orders for the same setup as the last batch at bottleneck work centers and moving those to the top. Non-bottleneck work centers still use priority sequencing rules.

What is the most likely reason for establishing a financial tolerance when cycle counting? A. An inventory shortage beyond the tolerance requires material review board involvement. B. A tolerance requires an override from management, so the cause for error can be found. C. Exceeding the tolerance enables cost accounting to get involved to verify asset value. D. The adjustment meets the 80-20 rule for items requiring material planning re-explosion.

B. A tolerance requires an override from management, so the cause for error can be found. Tolerances provide an opportunity to recheck the count and then track the history of the usage, adjustments, and receipts to determine the cause of the error.

Of the following, which has the most influence on the choice of manufacturing environment? A. S&OP B. Business planning C. Master scheduling D. Logistics resource planning

B. Business planning The business planning process uses the strategic plan as a key input. Business planning leads to decisions such as what products to sell, types of customers, product variety and volume, and order fulfillment lead time. These decisions have a major influence on choice of manufacturing environment. The other answers are tactical planning processes aimed at leveraging the capabilities of manufacturing environments to create profitable manufacturing processes.

A demand-pull facility produces five versions of an end item with final assembly schedules. Which of the following elements must be accounted for when scheduling a dedicated final assembly line? A. Available capacity B. Customer demand C. Tooling availability D. Historical yield

B. Customer demand A pull facility will schedule based on demand.

Which of the following is the least likely to result from using certified suppliers? A. Reduced cost of quality B. Increased cost of managing supplier quality C. Reduced supplier risk D. Delivery of quality products and services

B. Increased cost of managing supplier quality Reduced supplier risk, reduced cost of quality, and delivery of quality products and services are benefits of supplier certification. Increased cost of managing supplier quality is incorrect because costs of managing supplier quality decrease when using certified suppliers.

Approach utilizing specific measurement tools at organizational levels: strategic, departmental, individual, A. SWOT analysis B. Integrated Measurement Model C. Factors to consider in horizontal and vertical integration D. Five Forces Framework

B. Integrated Measurement Model

What does the APICS Dictionary define as the activities and techniques of maintaining the desired level of items? A. Lot control B. Inventory control C. Incoterms D. Traceability

B. Inventory control The APICS Dictionary, 16th edition, defines inventory control as "the activities and techniques of maintaining the desired levels of items, whether raw materials, work in process, or finished products."

Which is not a benefit of forecast accuracy A. Improved customer satisfaction B. Reduced inventory staffing C. Lower safety stock requirements D. Fewer overstock & sotckout situations

B. Reduced inventory staffing

Managers must consider which of the following basic types of risks? A. Risk that have been fully defined and those that have been historically documented B. Risks associated with only negative results and risks that may have either negative or positive results C. Risks that cannot be avoided and risks that can be avoided D. Risks with losses that difficult to quantify and risks that are variable due to a number of unknowns

B. Risks associated with only negative results and risks that may have either negative or positive results Speculative risk differs from pure risk in that pure risk is associated with only negative results while speculative risk sees opportunity for both negative and positive outcomes.

Which component control strategy can help mitigate the bullwhip effect? A. Imposing strict territorial boundaries between retailers B. Using vendor-managed inventory processes C. Using backward horizontal integration D. Extending the forecast horizon

B. Using vendor-managed inventory processes A supply chain coordination activity that can help mitigate supply chain instability is to increase channel alignment via vendor-managed inventory (VMI) processes.

Forecasts are more accurate for: A. smaller time periods. B. nearer time periods. C. larger time periods. D. further time periods.

B. nearer time periods. The near future holds less uncertainty than a time in the distant future.

Rough-cut capacity planning checks whether critical resources are available to: A. keep track of past-due orders. B. support the preliminary master production schedules. C. establish the takt time of the work cells. D. create work center load capacity profiles.

B. support the preliminary master production schedules. Rough-cut capacity planning checks whether critical resources are available to support the preliminary master production schedules. Critical resources include bottleneck operations, labor, and critical materials.

An order is received for 3,600 items to be produced in a process that has an unavoidable scrap loss of 10%. What quantity should be started? A. 3,600 B. 3,960 C. 4,000 D. 4,360

C. 4,000 The calculation is as follows: 3,600/(1 - 0.10) = 4,000 units.

In a make-to-order environment, what is most likely to be used to convert product demand into material requirements planning over the planning horizon? A. Customer orders B. Customer order quantity C. Customer order forecast D. Customer order ship dates

C. Customer order forecast Even in make-to-order environments, some forecasting is required to extend requirements over the planning horizon.

After implementing an improvement the next step is to A. DETERMINE - the next priority area for improvement B. ADJOURN - members move on to other endeavors C. SUSTAIN - monitor performance, prevent backsliding, further enhance D. REWARD & REST - acknowledge accomplishments and give team rest

C. SUSTAIN - monitor performance, prevent backsliding, further enhance

When strategically aligning operational capabilities with market needs, caution must be exercised so that: A. operations capabilities are 100% aligned with all market forecasts. B. employee staffing is soft enough so that a good amount of overtime will be necessary. C. capabilities are not so tightly aligned as to offer little to no room for response flexibility. D. all capital projects are completely approved and aligned with the most optimistic market forecast.

C. capabilities are not so tightly aligned as to offer little to no room for response flexibility. When assessing the potential for failure, operations should look to its line of fit concerning alignment to market needs. Too tight a fit risks market needs expanding beyond operational capabilities.

The most effective results of training are A. work standardization and more efficient performance of specialized and repetitive tasks. B. the ability to organize, schedule, and plan work. C. changes in worker behavior, performance, and flexibility. D. improvement in teamwork, quality, and offering of ideas.

C. changes in worker behavior, performance, and flexibility. The ability to organize, schedule, and plan work can be a result, but it is not as important. Improvement in teamwork, quality, and offering of ideas describes the benefits of an effective appraisal and rewards program. The inclusion of more efficient performance of specialized and repetitive tasks describes results that are not conducive to the state of worker self-control.

The replacement of internal capacity and production with that of a supplier's is known as: A. capacity buying. B. buying down. C. outsourcing. D. outpartnering.

C. outsourcing. Outsourcing is the process of having suppliers provide goods and services that were previously provided internally.

Production orders are riskiest to dispatch without knowing: A. equipment availability. B. operator availability. C. purchased part availability. D. information availability.

C. purchased part availability. Purchased parts are from an outside source and are hardest to control.

Pyramid forecasting is an example of A. A scheduling method used in the construction of Egyptian pyramids B. Using external indicators to determine SKU quantities C. An anonymous forecast, to avoid "groupthink" D. A quantitative roll-up forecast modified at the top by a qualitative value

D. A quantitative roll-up forecast modified at the top by a qualitative value

Which manufacturing attributes would apply to toothpaste A. MTO, Pull, short customer lead time B. MTS, Pull, high product variety C. MTO, Push, intermittent manufacturing D. MTS, Push, short customer lead time

D. MTS, Push, short customer lead time

Which of the following concepts supports an employee involvement initiative? A. Individual incentive schemes encourage improvement to the process. B. Workers must have access to their supervisors when discussing improvements and must accept that their word is final. C. Employees should act as facilitators, not problem solvers. D. Management should provide the vehicle to allow employees to solve problems themselves when possible.

D. Management should provide the vehicle to allow employees to solve problems themselves when possible. Utilizing employee brainpower and skills to solve problems is part of employee involvement.

A piece of electronics equipment is several years old, and new models with new functionality are common on store shelves. Which of the following factors are likely to be more important to consumers when choosing this product? A. Design and availability B. Price and quality C. Quality and delivery D. Price and delivery

D. Price and delivery Electronic equipment usually has relatively short life cycles. With newer models available, customers interested in the more mature products typically want price reductions and/or faster or more reliable delivery. Quality is important, but a mature product typically will have demonstrated adequate quality by this point.

Which type of lead time is the time required to design a product, modify or design equipment, conduct market research, and obtain all necessary materials? A. Manufacturing lead time B. Supplier lead time C. Purchasing lead time D. Procurement lead time

D. Procurement lead time The APICS Dictionary, 16th edition, defines procurement lead time as follows: "The time required to design a product, modify or design equipment, conduct market research, and obtain all necessary materials. Lead time begins when a decision has been made to accept an order to produce a new product and ends when production commences."

In addition to a financial evaluation, assessment of capital investments should include taking which of the following actions? A. Adopting the latest technologies B. Dictating customer needs C. Revising organizational structures D. Reviewing organizational capabilities

D. Reviewing organizational capabilities Financial planners need to review organizational capabilities and available related technologies, and analyze customer needs when assessing capital investments.

The A3 methodology is used as a tool for which of the following? A. Tracking statistical process control B. Replacing the plan-do-check-action (PDCA) process C. Documenting manufacturing costs D. Solving problems

D. Solving problems A3 is a problem-solving methodology. The method typically involves a team using simple communication to describe and track problem solving on metric "A3" (11 inch x 17 inch) paper.

Which of the following tools is used to specify periods when various types of changes can be made to the master schedule? A. Firm planned orders B. Sales and operations planning (S&OP) C. Pegging of requirements D. Time fences

D. Time fences Time fences are guidelines established to note where various changes in operating procedures may take place.

What is the most important reason for knowing and reporting throughput? A. Throughput measures capability in addition to reporting production status. B. Throughput is a good measure for reporting to external stakeholders. C. Throughput per hour can be used to monitor continuous improvement at a work center. D. Throughput can vary due to the time period being reported when capacity is underutilized.

A. Throughput measures capability in addition to reporting production status. It is important not only to know throughput for current orders; it is useful for planning, scheduling, and continuous improvement prioritization.

A small past-due load often exists at a certain workstation. Otherwise, past-due loads move around the facility based on product volume and mix. This is an indication that the workstation: A. is a bottleneck. B. follows a bottleneck. C. is a stand-alone work center. D. precedes a bottleneck.

A. is a bottleneck. A bottleneck is a facility, function, department, or resource whose capacity is less than the demand placed upon it.

The internal rate of return (IRR): A. is used when considering investing in projects. B. equals the net present value. C. is the interest rate that makes the net present value of the investment equal to 1. D. is used to calculate the profitability index.

A. is used when considering investing in projects. The IRR is the rate of compound interest at which the company's outstanding investment is repaid by proceeds from a project.

Capacity requirements planning (CRP) directly interfaces with: A. material requirements planning (MRP). B. work center finite scheduling. C. master production scheduling (MPS). D. rough-cut capacity planning (RCCP).

A. material requirements planning (MRP). CRP directly interfaces with MRP.

Forecast deviation per period is 12, -8, 15, 17, -22, and -3 units for each of the prior periods, respectively. What is the mean absolute deviation for these periods? A. 1.83 B. 12.83 C. 2.57 D. 3.33

B. 12.83 To calculate the mean absolute deviation, first remove the plus and minus signs from each deviation and sum these absolute values: 12 units + 8 units + 15 units + 17 units + 22 units + 3 units = 77 units. Next divide by the number of periods, or 6: 77/6 = 12.83 (rounded).

A major goal of Quality Function Deployment (QFD) is to A. Ensure each design step is approved before passing to the next department B. Capture the voice of the customer (VOC)

B. Capture the voice of the customer (VOC)

Lean purchasing must include which of the following features? A. Deliveries are made at least daily. B. Cost reductions are shared and purchase order paperwork is minimized. C. Cost reductions are shared and deliveries are made at least daily. D. Cost reductions are shared, purchase order paperwork is minimized, and deliveries are made at least daily.

B. Cost reductions are shared and purchase order paperwork is minimized. Sharing of cost reductions and minimization of purchase order paperwork are essential features of lean purchasing.

In a process industry, which of the following elements decouples the scheduling of sequential stages? A. Kanbans B. Inventory C. Queues D. Ropes

B. Inventory Inventories decouple the scheduling of sequential stages within a process industry.

What is the term for the splitting of a set of operations of a specific order into subgroups so that each can be run on a different machine? A. Group splitting B. Operation splitting C. Job splitting D. Order splitting

B. Operation splitting Dividing a lot into two or more sublots and simultaneously processing each sublot is known as operation or lot splitting.

A scheduling system sends part of a lot on to the next stage in processing before it has completed working on all materials it has received. What is the name given to this useful expediting tool? A. Split scheduling B. Overlapped scheduling C. Manufacturing order D. Infinite loading

B. Overlapped scheduling Overlapping occurs when the completed portion of an order at one work center is processed at one or more succeeding work centers before the pieces left behind are finished at the preceding work centers.

Which of the following factors are required for effective project control? A. Automated project control system and stakeholder agreement that plan is realistic B. Procedures for performance measurement and stakeholder agreement that plan is realistic C. Procedures for performance measurement and weekly progress reports to executive steering committee D. Automated project control system, procedures for performance measurement, and weekly progress reports to executive steering committee

B. Procedures for performance measurement and stakeholder agreement that plan is realistic For a project to succeed, project activities must be periodically assessed and reported on so that progress can be effectively measured. An essential part of this process is the establishment of an agreed-upon set of performance measurements and progress metrics that will show project status at any time. A critical element of project management is attaining the commitment and participation of all stakeholders involved in the project. If stakeholders do not feel the project is realistic, they will not provide their full support.

Which two of the following approaches to product design most positively impact manufacturing performance? A. Reducing parts complexity, and organizing design processes. B. Reducing parts complexity, and integrating product and process design. C. Organizing design processes, and debugging during the manufacturing cycle. D. Organizing design processes, and integrating product and process design.

B. Reducing parts complexity and integrating product and process design. By reducing parts complexity and closely integrating product and process design, the manufacture of products is more rationalized and simplified, thereby improving performance.

At a toy manufacturer, one work center is assigned the task of attaching an action figure's head. Two lots of the figure's head are provided. As soon as one lot is exhausted, a replenishment order is issued. The worker continues to work on assembly using the second lot while the replenishment lot is processed. What is the name for this inventory system? A. Min-max system B. Two-bin inventory system C. Lot-for-lot system D. Hybrid system

B. Two-bin inventory system Two-bin inventory is a fixed-order system in which inventory is carried in two bins. A replenishment quantity is ordered after the first is exhausted. During the replenishment time, material in the remaining bin is used.

Which of the following choices will improve a company's responsiveness to customer demand? A. Increased productivity B. Two-level master schedule C. Drum-buffer-rope D. Large lot sizes

B. Two-level master schedule A company using a two-level master schedule would have flexibility in operations based on actual demand.

The standard hours of load placed on a resource within a time period is the: A. resource driver. B. resource profile. C. bill of resources. D. resource calendar.

B. resource profile. The resource profile is the standard hours of load placed on a resource by time period.

Which of the following is a technique for analyzing and planning logistics and manufacturing during short, intermediate, and long-term time periods? A. Master scheduling B. Production planning C. Advanced planning and scheduling D. Sales and operations planning

C. Advanced planning and scheduling Advanced planning and scheduling (APS) deals with the analysis and planning of logistics and manufacturing during short, intermediate, and long-term time periods.

The input/output report for a work center in the current period is showing an input queue at the work center. What is the most appropriate action? A. Decrease the work center input. B. Increase the work center output. C. Check the cumulative input/output report. D. Re-run capacity requirements planning.

C. Check the cumulative input/output report. It is necessary to check the cumulative report to determine if this is a one-period scenario or a trend occurring at the work center.

Which of the following components should be addressed by a world-class customer service strategy? A. Customer concerns only B. Customer call volume and wait times C. Customer, employee, shareholder, and supplier concerns D. Customer backlog and backorder balancing

C. Customer, employee, shareholder, and supplier concerns A world-class customer service strategy will be strongest if customer, shareholder, employee, and supplier concerns all are addressed.

What is the best definition of participative design/engineering? A. Increasing time to market to decrease risk of poor launch B. Taking a serial approach to product development C. Doing several development tasks in parallel D. Relying on a single engineer to perform all development

C. Doing several development tasks in parallel Participative design/engineering focuses on parallel processes in order to reduce time to market and changes later in the process. Participative design/engineering is not a serial approach, nor an approach intended to increase time to market. All involved departments and key suppliers participate.

Which statement are true for a demand driven enterprise A. Forecasting is the primary control element B. The "bullwhip" effect is a major problem C. Downstream entities initiate movement through the supply chain D. It is considered a "push" supply chain

C. Downstream entities initiate movement through the supply chain

Which of the following is a key principle of collaborative planning, forecasting, and replenishment (CPFR)? A. Integrating enterprise resources planning systems B. Using the internet to exchange information C. Exchange of information between trading partners D. Joint meetings between customers and suppliers

C. Exchange of information between trading partners CPFR is a process where supply chain trading partners jointly plan key supply chain activities, from production and delivery of raw materials to production and delivery of final products to end customers.

Which of the following describes the UN Global Compact Management Model? A. Choices made by a company's top executives regarding how they define objectives, motivate effort, coordinate activities, and allocate resources B. Set of choices made by executives about how the work of management gets done C. Framework for guiding companies through the process of formally committing to, assessing, defining, implementing, measuring, and communicating the UN Global Compact and its principles D. Inspiring sequential change management process that challenges us to examine our values and the way we react to change in our lives

C. Framework for guiding companies through the process of formally committing to, assessing, defining, implementing, measuring, and communicating the UN Global Compact and its principles The UN Global Compact Management Model is a practical yet comprehensive tool to help companies evolve their sustainability efforts.

Which element of flexibility is most related to the number of kanbans in the system? A. Ease with which movable equipment allows a layout to be reconfigured B. Having a certification program that ensures operator cross-training C. Having short internal setup times that permit frequent changeovers D. Ability of a work center to match the required output rate

C. Having short internal setup times that permit frequent changeovers The shorter the setup, the fewer the required kanbans.

As an organization becomes more horizontal, which of the following will occur? A. Decreasing exposure to integration and culture risk B. Neutral risk, because many suppliers provide the same components C. Increased exposure to supplier risk D. Need to expand the supplier base with redundant suppliers to reduce overall risks to supply chain performance

C. Increased exposure to supplier risk Increased reliance on suppliers in the supply chain increases exposure to supplier risk. Also, if the horizontal integration involves entering new global markets, this may increase risks related to cultural differences. If the horizontal integration requires new business partnerships, mergers, etc., this will increase integration risk. However, horizontal integration can increase diversification, which reduces overall business risk.

A product characterized by standardized designs, price competition, and process improvement is in which stage of its life cycle? A. Introduction B. Growth C. Maturity D. Decline

C. Maturity The mature phase takes place when sales begin to level off due to market saturation. Price competition has increased, and process improvements can be made to lessen the impact of declining profits.

Which of the following describes the outputs of the business planning process? A. Mission, goals, and objectives of the organization, with action plans B. Determination of capital equipment investment to support the resource plan C. Statement of revenue, cost, and profit objectives by product family D. Sales and operations plan, production plan, and inventory or backlog plan

C. Statement of revenue, cost, and profit objectives by product family The business plan is a statement of long-range strategy and revenue, cost, and profit objectives usually accompanied by budgets, a projected balance sheet, and a cash flow statement.

An artificial grouping of items or events in a bill-of-material format used to facilitate production planning is known as: A. a routing. B. a pick list. C. a planning bill of material. D. an item master.

C. a planning bill of material. A planning bill of material is an artificial grouping of items or events used to facilitate production planning. Routing describes the method for manufacturing an item. Item master refers to the database repository where information about an item is kept. A pick list references finished goods, materials, and components to be withdrawn from stock for shipment or production purposes.

When seeking long-term stability in market share, a company has many alternatives, such as adding features and functions, keeping costs stable, or reducing costs and functionality. Each alternative has pros and cons. This type of company has likely: A. considered whether its products are candidates for outsourcing. B. accepted a lower margin with hopes for a future price increase. C. adopted overcoming tradeoffs as an operations strategy. D. increased product features with hopes of spreading higher costs over more products.

C. adopted overcoming tradeoffs as an operations strategy. A company seeking market stability would likely adopt overcoming tradeoffs as an operations strategy.

Items that have been assigned to specific orders but have not yet been released from the stockroom to production are referred to as: A. work-in-process. B. reserved. C. allocated. D. promised.

C. allocated. Allocation is the classification of quantities of items that have been assigned to specific orders but have not yet been released from the stockroom to production.

Which of the following describes reverse logistics? A. Building process schedules that start with the last stage and proceed backward B. Returning trucks full instead of empty to save transportation costs C. Customer supplying the transportation instead of the supplier D. Flow of products and materials for the purpose of returns, repair, remanufacture, or recycling

D. Flow of products and materials for the purpose of returns, repair, remanufacture, or recycling Reverse logistics is a supply chain dedicated to the reverse flow of products and materials for the purpose of returns, repair, remanufacture, and/or recycling.

The advantage of cycle counting over periodic inventories is A. It's required by GAAP accounting rules B. Inventory corrections are applied for all items at the same time C. Cycle counting only deals with finished goods D. Identify and resolve root cause of errors

D. Identify and resolve root cause of errors

Which of the following statements about pyramid forecasting is most accurate? A. It facilitates management review of item-level forecasts. B. It strives to overcome the instability of aggregate forecasts. C. It disaggregates item demand to project demand for a product family. D. It enables senior management to influence the aggregate forecast.

D. It enables senior management to influence the aggregate forecast. Pyramid forecasting enables senior management to coordinate and integrate the forecast and ensure consistency between the forecast and any company constraints or goals.

Material requirements planning has overloaded a work center in a make-to-order company. What is the most easily adjusted factor? A. Scheduled date/part B. Setup hours/order C. Standard hours/person D. Overtime hours/part

D. Overtime hours/part Overtime is the easiest to adjust and has the least impact on other orders.

Which of the following products is most likely to be the simplest to develop a sales and operations plan for? A. Printers B. Blue jeans C. Ballpoint pens D. Plywood

D. Plywood Plywood is produced using a continuous process and then cut into lengths. The other products would have more complex product structures and multiple product families.

Which of the following methodologies would be most appropriately used in the design of a new product to ensure that it meets customer needs? A. Quality at the source B. Early supplier involvement (ESI) C. Concurrent engineering D. Quality function deployment (QFD)

D. Quality function deployment (QFD) QFD is a methodology to ensure that all major requirements of the customer are identified and then met or exceeded through the design of the product.

In developing the standard economic order quantity formula, which assumption is made? A. Replenishment is in split lots. B. Demand for the item is subject to only random variation. C. Ordering and carrying costs are subject to normal market variation. D. Replacement occurs all at once.

D. Replacement occurs all at once. Replenishment occurs all at once, meaning that the full reorder is available at receipt. The other answers are incorrect and the actual assumptions are as follows: Demand is known and relatively constant; items are purchased or made in batches or lots; and ordering costs and carrying costs are known and the curves are stable.

Which example is the most sustainable according to the waste hierarchy? A. Burning waste oil in an incinerator that produces electricity B. Sending batteries to a processing center that specializes in disposal of batteries C. Disposing of both recyclable and non-recyclable plastic rather than wasting energy cleaning them D. Sending recyclable plastics to a recycling center and responsibly disposing of non-recyclable plastics

D. Sending recyclable plastics to a recycling center and responsibly disposing of non-recyclable plastics Recycling is higher on the waste hierarchy than recovery or disposal.

Which of the following approaches will facilitate the smooth integration of a new product to production? A. Prototyping B. Statistical process control C. Quality function deployment D. Standardization of components

D. Standardization of components Standardization of components and processes shortens the prototyping time and learning curve, getting products to market faster.

What is the best reason for a company to use multiple suppliers for the same part? A. It is a complex product that requires no special skills to produce. B. The company has a decentralized purchasing function. C. Competing suppliers have quoted the same price, lead time, and quality. D. The company has multiple divisions with geographically separate locations.

D. The company has multiple divisions with geographically separate locations. Geographically dispersed companies may find that total purchased cost is lower by buying from local sources.

What information is necessary for determining the production planning horizon? A. Financial year-end cycle B. Cumulative lead time C. Product life cycle D. Time frame for acquiring additional capacity

D. Time frame for acquiring additional capacity The production plan has to reach far enough into the future for the organization to be able to acquire additional capacity if needed to produce the plan.

What needs to be considered during new product introductions to ensure that the reverse supply chain is as cost-effective as possible? A. How to design the product for speed of returns B. Whether returns will be processed internally or through a 3PL C. How to ensure that the reverse product receiving area layout is compatible D. Whether to consider designing packaging for returns

D. Whether to consider designing packaging for returns Packaging for returns may need to be considered along with packaging for forward shipping. This would best be done during product design. Speed of returns is not as important as lowering the cost of returns, such as by using design for sustainability.

Which of the following is a characteristic of flow manufacturing? A. The sequence of operations depends on the part being manufactured. B. Planning and control tasks are complicated. C. Workers and equipment must be flexible. D. Work centers are dedicated to producing similar products.

D. Work centers are dedicated to producing similar products. Flow manufacturing produces high-volume, standard products, so work centers are dedicated to producing similar products.

The top level of the distribution requirements planning record should be: A. at the distribution center. B. at the master production schedule level. C. at the manufacturing facility. D. at the point closest to the customer.

D. at the point closest to the customer. The best information to drive the planning would come from the point closest to the customer, whether that be direct information from the customer or from the distribution center closest to the customer.

The supplier in a new product introduction can reduce time to market by: A. making hard tooling. B. developing new technology. C. automating production processes. D. early involvement.

D. early involvement. Getting the supplier involved early in the design process significantly assists in cutting design and production lead times for the components and materials needed to build the new product.

The maximum of the output capabilities of a resource is known as: A. maximum capacity. B. protective capacity. C. rated capacity. D. productive capacity.

D. productive capacity. Productive capacity is the maximum of the output capabilities of a resource or the market demand for that output for a given time period.

The process used to validate that adequate resources and capacity exist for the S&OP production plan is A. bill of resources. B. capacity requirements planning. C. rough-cut capacity planning. D. resource planning.

D. resource planning. Resource planning is the process that evaluates the availability of key resources and the feasibility of the production plan generated by the sales and operations plan. A bill of resources is incorrect, because it determines the amount of key resources used in the manufacturing process to produce a product and is a necessary input to the resource planning process. Rough-cut capacity planning is incorrect, because it is the process used by master scheduling to validate that capacity is adequate. Capacity requirements planning is incorrect because it is the process that validates the adequacy of capacity to execute the material plan.

Customer order promises should be made by: A. using sales and operations planning. B. the use of standard lead times. C. the salesperson estimating when the product will be available. D. taking into account material and capacity availability.

D. taking into account material and capacity availability. Without checking material and capacity availability, promises may be made that cannot be kept.

When quality requirements are especially high which sourcing strategy is most appropriate. A. Strategic sourcing B. Tactical buying

A. Strategic sourcing

In period 1, planned input was 36 hours but actual input was 32 hours. In period 2, planned and actual input were 36 hours. In period 3, planned input was 34 hours but actual input was 30 hours. All hours are standard hours. What was the cumulative variance? A. 8 standard hours B. 4 standard hours C. -8 standard hours D. -4 standard hours

C. -8 standard hours Cumulative Variance (Inputs) = Previous Cumulative Variance + Actual Input - Planned Input. First day: 32 hours - 36 hours = -4 hours. Second day, no change. Third day: -4 hours + 30 hours - 34 hours = -8 hours.

The master scheduler would ignore which of the following elements when setting up the bill of resources? A. Equipment B. Labor C. Setup D. Demand

D. Demand Demand is external, not a resource or a constraint on a resource.

What are attributes of a differentiation strategy A. Can apply to a broad or to a narrow niche market focus B. Risk of including costly features with low market appeal C. Always among the lowest cost products D. Offers features and benefits not available from competitors

A. Can apply to a broad or to a narrow niche market focus B. Risk of including costly features with low market appeal D. Offers features and benefits not available from competitors

Failure Mode and Effects Analysis (FEMA): which factors are multiplied together to determine the risk priority number? (select multiple) A. Probability of Occurrence B. Severity of Failure C. Dollar Impact of Failure D. Probability of Escape from Detection

A. Probability of Occurrence B. Severity of Failure D. Probability of Escape from Detection

As a companys products approach the end- of life stage, what actions might they consider? A. Transition pull-based production to a more efficient MTS model B. NPI strategic & marketing plans in conjunction with product retirement plan C. Notify customers when products will not be sold, supported, or returned D. Update risk management plans, as well as crisis response contingencies

B. NPI strategic & marketing plans in conjunction with product retirement plan D. Update risk management plans, as well as crisis response contingencies

U-shaped cells that group dissimilar machines to perform various operations on a part result in reduction of all of the following except: A. lead times. B. machine downtime. C. in-process inventory. D. travel distances.

B. machine downtime. Regardless of how machines are arranged in a work center, machine downtime can occur. The way to prevent machine downtime is an effective preventive maintenance program.

In a job shop environment, the technique that results in a short-term, planned set of projected completion times for operations and simulated queue levels is: A. capacity requirements planning. B. operations sequencing. C. constraint-based scheduling. D. infinite loading.

B. operations sequencing. Operations sequencing is a technique for short-term planning of actual jobs to be run in each work center based upon capacity and priorities. The result is a set of projected completion times for the operations and simulated queue levels for facilities.

What is Adding a material one layer at a time to make 3D object (example replacement part or prototype) A. Cloud Computing B. Blockchain C. 3-D Printing D. Drones

C. 3-D Printing

Reducing lead time has which of the following results? A. Increased fixed manufacturing costs B. Decreased fixed manufacturing costs C. Increased responsiveness to customer demand D. Shorter planning cycles

C. Increased responsiveness to customer demand Reducing lead times, specifically setup times, allows for more frequent changes to adapt to changes in demand.

In addition to a new product introduction schedule, which of the following are data required for the development of a realistic MPS? A. Shipment history and workforce constraints only B. Sales forecasts and shipment history only C. Sales forecasts and workforce constraints only D. Sales forecasts, shipment history, and workforce constraints

C. Sales forecasts and workforce constraints only Shipment history does not necessarily reflect true historical demand, and therefore any answer that includes that is incorrect.

What can be used to help ensure that demand management inputs are as insightful and timely as possible? A. Relying only on aggregated forecasts B. Focusing on historical sales data C. Using customer relationship management software D. Getting external market information using electronic data interchange (EDI)

C. Using customer relationship management software Customer relationship management software can be used to secure more accurate insights into the timely needs and preferences of customers rather than relying only on historical data or projections. EDI is used primarily for data transfers from internal or supply chain partners, and this is not what is generally meant by external market information.

Which of the following terms is associated with the systematic use of techniques that identify a required function, establish a value for that function, and finally provide that function at the lowest overall cost? A. Value stream B. Value chain analysis C. Value analysis D. Value-added

C. Value analysis A value analysis focuses on the functions of an item rather than the methods of producing the present product design.

What should an effective manufacturing strategy provide in addition to supporting the overall organizational strategy? A. Stable supply and demand B. Advanced planning and scheduling capabilities C. Maximization of volume and variety D. Competitive advantage

D. Competitive advantage The APICS Dictionary defines manufacturing strategy as follows: "A collective pattern of decisions that acts upon the formulation and deployment of manufacturing resources. To be most effective, the manufacturing strategy should act in support of the overall strategic direction of the business and provide for competitive advantages (edges)."

A call center operates with 130 customer service representatives in an 8-hour period. The company receives 8,000 calls per day, and the average call takes 7 minutes. What is the utilization of the call center? A. 0.9 B. 0.91 C. 0.97 D. 1.03

A. 0.9 Available time = 8 hours x 60 minutes per hour x 130 representatives = 62,400 minutes. Call time is 8,000 calls per day x 7 minutes per call = 56,000 minutes. Utilization = 56,000 / 62,400 = 0.897 which rounds to 0.9 or 90%.

Causes of Bullwhip include: (check all that apply) A. Each echelon forecast independently B. Order Batching C. Rationing and Gaming D. Price fluctuations

A. Each echelon forecast independently B. Order Batching C. Rationing and Gaming D. Price fluctuations

Which of the following capacity management techniques calculates the capacity required at a work center in a time period without considering the capacity available? A. Infinite loading B. Forward scheduling C. Input/output control D. Finite loading

A. Infinite loading Infinite loading is the calculation of the capacity required at work centers in the time periods required regardless of the capacity available to perform this work.

An important criterion for measuring a group's process is that the measurements should: A. be consistent with company objectives. B. chart the individual progress of each team member. C. be based on standard operating procedures. D. be linked to bonus compensation.

A. be consistent with company objectives. Group objectives should always be consistent with company objectives.

Which of the following techniques is best for relating one set of forecast economic data to another set of economic data? A. Trend analysis B. Regression analysis C. Exponential smoothing D. Moving averages

B. Regression analysis Regression analysis is a statistical technique for determining the best mathematical expression describing the functional relationship between one response and one or more independent variables.

The final assembly schedule (FAS) is differentiated from the master production schedule (MPS) because demand: A. is defined by a bill of material. B. consists solely of shippable end items. C. may be satisfied from finished goods. D. is configured per customer order.

B. consists solely of shippable end items. The FAS is only for shippable items.

Which of the following primarily focuses on ensuring that inventory records accurately represent the value of inventory? A. Audit B. Cycle counting C. Periodic inventory D. Perpetual inventory

C. Periodic inventory The main purpose of periodic inventory is to satisfy financial auditors that the inventory records represent the value of the inventory.

Certification of suppliers enables a company to take advantage of what kind of stocking location? A. Automated storage retrieval B. Floor stock C. Random D. Point-of-use

D. Point-of-use The supplier is able to deliver directly to the point-of-use location, since there is no need for incoming inspection.

What is the best reason for an engineer-to-order company to use standard hours in a production plan? A. Complex units cross multiple production months and skew results. B. One unit is unlike the next, even within the same product family. C. Subassembly departments cannot relate to end products or systems. D. Standard hours are a common denominator among products.

D. Standard hours are a common denominator among products. Standard hours are a better indicator of workload than the number of dissimilar units, no matter how many months are required to build a unit.

Using the information provided below, how many employees are needed to accomplish the planned production assuming level production? Beginning inventory- 250 units Total annual forecast demand- 60,000 units Ending inventory target- 250 units Working days per month- 20 days Number of periods- 12 periods Employee productivity- 25 per day A. 10 employees B. 25 employees C. 200 employees D. 2,400 employees

A. 10 employees Level Production per Period = Annual Forecast Demand - Beginning Inventory + Ending Inventory/Number of Periods = (60,000 units - 250 units + 250 units)/12 periods = 5,000 units per period Units per Day = 5,000 units per period/20 days = 250 units per day Number of Employees = Units per Day/Employee Productivity Rate = 250 units per day/25 units per day per employee = 10 employees

Which of the following capabilities of finite loading is most important in an environment where routings use many of the same work centers? A. Establishing sequence B. Determining load C. Defining capacity D. Maintaining priority

A. Establishing sequence Determining sequence is most important due to shared resources.

End-of-line inspection often fails to improve quality for which of the following reasons? A. It disregards the causes of poor quality. B. It excludes quality circles. C. Inspectors do not understand quality improvement techniques. D. It requires extensive personnel.

A. It disregards the causes of poor quality. When a product is inspected at the end of the production process, inspectors do not have a window into the possible causes of defects occurring back in the process. Continuous inspection during the production process does not require more personnel, only trained operators, and it includes quality circles.

Which scheduling technique considers slack time to increase or decrease the calculated lead time of an order? A. Probable scheduling B. Forward-flow scheduling C. Mixed-flow scheduling D. Constraint-based scheduling

A. Probable scheduling Probable scheduling considers slack time to increase or decrease the calculated lead time of an order.

What is a company that uses the theory of constraints trying to achieve? A. Schedules that adapt to restrictions B. Resource leveling C. Increased capacity utilization D. Mixed-flow scheduling

A. Schedules that adapt to restrictions The theory of constraints manages the constraints, or restrictions, that exist in the process.

When might it be appropriate for lean production systems to use time fences? A. When planning the parts of production with longer lead time than the required customer lead time B. When the master schedule is broken into daily time buckets C. When a heijunka box is used to break the time slots equal to takt time D. It is not appropriate to use time fences in lean because all orders are based on customer demand.

A. When planning the parts of production with longer lead time than the required customer lead time The portion of production in which lean uses demand-pull signals will operate on orders rather than forecasts and so will not use time fences. It will be purely reactive to demand. For elements with longer lead times than the required customer lead time, lean will still use master schedules and capacity planning on this push side of operations. For these push elements, lean can benefit from using time fences, because schedule stability in turn promotes production stability.

In a supply network, the company is in the center, and it is surrounded by: A. competitors, suppliers, and perhaps several tiers of customers. B. suppliers and their suppliers but never competitors. C. suppliers and perhaps several tiers of customers but never competitors. D. third- and fourth-party provider

A. competitors, suppliers, and perhaps several tiers of customers. In a supply network, the company is surrounded by competitors, suppliers (and perhaps their suppliers), and perhaps several tiers of customers (e.g., distributors/wholesalers, retailers, and end customers).

A lead-time offset is a technique used in material requirements planning (MRP) where a planned order receipt in one time period will require the release of that order: A. in an earlier time period based on the lead time for the item. B. in an earlier time period based on the lead time for the finished product. C. in a later time period based on dynamic load on the shop floor. D. in a later time period based on the lead time for the item.

A. in an earlier time period based on the lead time for the item. A lead-time offset is a technique used in MRP where a planned order receipt in one time period will require the release of that order in an earlier time period based on the lead time for the item.

A logistics company surveying customers asks how well the company performs against a set of important/non-important attributes. Assuming that appropriate action is taken in response to the survey, this is an example of putting a system in place to: A. increase value in product delivery. B. identify poor-performing groups or services for discipline. C. justify price adjustments for superior performance. D. use in future marketing promotions.

A. increase value in product delivery. After plotting the results of a survey like this, a company would be able to see where their improvement emphasis should be applied.

In the five forces model of competition, if switching suppliers is relatively simple, then supplier rivalry is said to: A. increase. B. decrease. C. enable risk pooling. D. inhibit innovation.

A. increase. The less costly it is for buyers to switch purchases from one seller to another, the easier it is for sellers to steal customers from rivals.

Customer relationship management supports lean principles because: A. it encompasses quality at the source. B. it creates the demand that lean supplies. C. on-time delivery relies on production simplification. D. both address equal service to all customers.

A. it encompasses quality at the source. Both customer relationship management and lean focus on the elimination of waste through quality at the source.

Purchasing several items together in order to lower ordering costs is known as: A. joint replenishment. B. concurrent replenishment. C. economic order quantity. D. periodic ordering.

A. joint replenishment. Joint replenishment is coordinating the lot sizing and order release decision for related items and treating them as a family of items. The objective is to achieve lower costs.

In an attempt to reduce costs associated with information system transactions, which of the following approaches should be considered? A. Backflushing component issues and reducing levels in the bill of material (BOM). B. Backflushing component issues, reducing levels in the bill of material (BOM), and using electronic data interchange (EDI) to transmit orders to suppliers. C. Backflushing component issues, using electronic data interchange (EDI) to transmit orders to suppliers, and reducing lot sizes of manufactured products. D. Reducing levels in the bill of material (BOM), using electronic data interchange (EDI) to transmit orders to suppliers, and reducing lot sizes of manufactured products.

B. Backflushing component issues, reducing levels in the bill of material (BOM), and using electronic data interchange (EDI) to transmit orders to suppliers. Backflushing enables a mass deduction of components on a BOM for a production order. By aggregating materials on a BOM (reducing levels), transactions will be reduced. By using EDI to submit orders, manual transactions will be reduced.

The primary use of the Bill of Material (BOM) is A. Serves as the "invoice" for supplier-delivered parts B. Define all component parts & quantities to make the finished product C. List the sequence of work centers for manufacturing the product D. Identifies the customers ordering the product

B. Define all component parts & quantities to make the finished product

A dispute arises over damage to goods shipped between two entities in different countries. Which international standards, if applied at the time of the shipment, would clearly resolve the dispute? A. Export Trading Company Act B. Incoterms C. UN Global Compact D. Omnibus Foreign Trade and Competitiveness Act

B. Incoterms When goods are moved between two entities, it is imperative that clarity exists as to who is responsible for what. Incoterms, developed by the International Chamber of Commerce, are specifically designed to address this need.

Master schedulers require the details of a customer order for which of the following production strategies? A. Assemble-to-order, engineer-to-order, and make-to-stock B. Make-to-order, assemble-to-order, and engineer-to order C. Make-to-order and engineer-to-order D. Make-to-order and assemble-to-order

B. Make-to-order, assemble-to-order, and engineer-to order The master scheduler needs to be experts in the product, plant, production process, and market - that is, they must know what to produce, how much, and when to deliver it in order to align production schedules. If they are not experts, they may fail to produce reliable schedules which will have a severe impact on the stability and effectiveness on the production facility, on material and capacity planning, and on customer service.

How is the projected available balance (PAB) within the demand time fence calculated? A. Opening stock plus MPS (master production schedule) orders minus actual demand and production forecast B. Opening stock plus MPS orders minus actual demand C. Opening stock minus actual demand and production forecast D. Opening stock plus MPS orders

B. Opening stock plus MPS orders minus actual demand Within the demand time fence, the forecast is no longer included in total demand and projected available inventory calculations; only customer orders are considered. Therefore, the PAB would include opening stock plus MPS orders minus actual demand (customer orders).

A part has an effectivity date that goes into force tomorrow. What will change at that time? A. Part ID number at the instance level only B. Part ID number at the class level C. Part ID numbers at the batch/lot and instance levels only D. Engineering drawings but not part ID number

B. Part ID number at the class level At the class level, a product or part ID code identifies the unique product or part class. An effectivity date is the date when a new set of engineering drawings and documents come into effect. At that time, the new part will have a new part ID number at the class level. The instance level is a unique serialized ID to identify a unique instance of a produc

Which explanation best describes when a pull system works well? A. Production is based on a schedule. B. The flow of incoming material is consistent. C. Decision making is centralized. D. Emphasis is on producing as much as possible.

B. The flow of incoming material is consistent. A pull system works well when the flow of incoming material is consistent. As variation in process flow increases, implementation of a pull system, such as lean, becomes more difficult. The other answers are incorrect because production is based on a rate called takt time that is consistent with the rate at which the customer has agreed to accept delivery, although sometimes in transfer batches; the remaining two answers are inherently untrue in a pull system.

Which of the following results is indicated as the standard deviation becomes smaller through continuous improvement efforts? A. The entire process is moving from non-capable to capable. B. The range related to deviation is being systematically reduced. C. Chance causes of variation are being systematically reduced. D. The sample mean is moving closer to the standard deviation.

B. The range related to deviation is being systematically reduced. The range is a measure of +/- 3 standard deviations. It gets smaller as the standard deviation gets smaller.

Why would a company choose make-to-stock instead of make-to-order for specific products? A. Customer product specifications require a unique design. B. There is a need to decouple manufacturing processes from customer orders because customer lead time is less than the time needed to make the product. C. There is a need to decouple manufacturing processes from customer orders because customer lead time exceeds the time needed to make the product. D. There is more risk involved when building a product with a firm customer order in hand.

B. There is a need to decouple manufacturing processes from customer orders because customer lead time is less than the time needed to make the product. When the lead time that the customer requires is longer than the lead time needed to make the product, then the company must make-to-stock and keep the finished goods in inventory until an order arrives. If the customer lead time is shorter than the lead time needed to make the product, then the company can make-to-order, which has the advantage of less risk since the customer order is in hand. Engineer-to-order has customer product specifications that require a unique design.

When two business units are merged in order to exploit the opportunity to exchange R&D resources or use common manufacturing or distribution facilities, the companies are said to be sharing: A. intellectual property. B. economies of scope. C. design for manufacturability concepts. D. economies of scale.

B. economies of scope. Economies of scale are cost savings that accrue directly from a larger operation. For example, manufacturing costs may be lower in a larger plant than in a small plant. Economies of scope stem directly from strategic fit along the value chains of the related businesses.

A preventive maintenance program is being initiated at a company. The program should first be implemented for: A. a work enter that has only one machine. B. equipment that gates work center capacity. C. equipment that has the longest setup time. D. the most expensive equipment.

B. equipment that gates work center capacity. It is critical that the gating work center capacity be available to feed downstream operations.

Multiplying the requirements for each material or component in a bill of material by its usage quantity and recording the results in a product tree is known as: A. resource planning. B. exploding the bill of material. C. production planning. D. stock taking.

B. exploding the bill of material. Exploding the bill of material is the process for determining and indicating the component identities, quantities needed, and other parent-child relationships in a bill of material.

Given the following information, what is the master production schedule (MPS) for week 5? Opening inventory = 100 units Lot size = 200 units Forecasted sales: Week 1 = 150 units Week 2 = 100 units Week 3 = 60 units Week 4 = 80 units Week 5 = 140 units Note: Assume that the master scheduler wants to keep inventory levels to a minimum while still meeting all projected demand. A. 0 B. 100 C. 200 D. 400

C. 200 To walk through the required calculations: Week 1: 100 units of opening inventory minus 150 units of demand in week 1 = -50 units, so an order is placed for 200 units in week 1, leaving a PAB of 150 units. Week 2: 150 units PAB minus 100 units demand = 50 units. Week 3: 50 units PAB minus 60 units demand = -10 units, so another 200-unit order is placed, for a PAB of 190 units. Week 4: 190 units PAB minus 80 units demand = 110 units PAB. Week 5: 110 units PAB minus 140 units demand = -30 units, so another 200-unit order is placed. (This is the answer.) This leaves a PAB of 170 units.

A company that manufactures roofing material uses housing start statistics to develop its sales forecast. Using this data is an example of what type of forecasting? A. Exponential B. Intrinsic C. Extrinsic D. Adaptive

C. Extrinsic Extrinsic forecasting models use historical data occurring outside the organization to help determine the best forecast.

Which of the following priority rules is used in a dedicated assembly line? A. Critical ratio B. Required date C. First in, first out D. Last in, first out

C. First in, first out Dedicated assembly lines are FIFO (first in, first out) by design.

Which of the following approaches to managing engineering changes is the most disruptive to manufacturing? A. Establishing an engineering change committee B. Including the supplier in engineering change decisions C. Holding all changes until the product is in production D. Introducing changes during prototype runs

C. Holding all changes until the product is in production Engineering changes can be very expensive. They are best handled as they arise rather than as a complete overhaul after production has begun.

The drum in the drum-buffer-rope scheduling process serves which of the following functions? A. It provides protection for the shipping schedule. B. It is the communication device for releasing work to the manufacturing process. C. It is used to create the master production schedule. D. It provides protection to the constraint.

C. It is used to create the master production schedule. The drum of the system refers to the 'drumbeat' or pace of production. It represents the master schedule for the operation, which is focused around the pace of throughout as defined by the constraint.

When implementing new productivity technology, a significant risk is that the application: A. May not have the necessary documentation for training and implementation. B. May not meet paying customers' needs. C. May not work as planned, be done on schedule, or stay within budget. D. May not be operable without internal or external experts.

C. May not work as planned, be done on schedule, or stay within budget. The risk with implementing new productivity technology is that it may not work and the project may not be done on time or within budget.

What is the key output of the sales and operations planning process? A. Master schedule B. Material requirements plan C. Production plan D. Rough-cut capacity plan

C. Production plan The production plan is the agreed-upon plan that comes from the sales and operations planning process, specifically the overall level of manufacturing output planned to be produced, usually stated as a monthly rate for each product family (group of products, items, options, features, and so on).

Which option is the most sustainable long-term approach to waste in manufacturing? A. Recycle as much leftover and returned material as possible. B. Purchase materials from suppliers with certifications in sustainable practices. C. Redesign products to minimize use of materials. D. Donate reusable materials, such as lumber, to nonprofits.

C. Redesign products to minimize use of materials. The most sustainable waste strategy is to avoid using materials in the first place (i.e., to minimize their use in product and packaging design).

Which of the following is a key principle of lean purchasing? A. Blanket orders are used. B. All packaging is returned to the supplier. C. Single-source suppliers are used. D. Suppliers stock inventory at their location.

C. Single-source suppliers are used. All of these may be used in a lean environment, but most will not be possible without the key element of single-source supplier partnerships.

Environmental scanning is used to A. evaluate various locations for production facilities and warehouses B. identify geographical elements that may impede transportation of products C. expose organizational strengths, weaknesses, opportunities, and threats D. determine if weather events might impact production or shipment of goods

C. expose organizational strengths, weaknesses, opportunities, and threats

Which letter from a VATI analysis would most likely represent the flow of material through the production process of manufacturing an orbital satellite? A. I B. V C. T D. A

D. A An orbital satellite is a complex device assembled from many parts and subassemblies, so it conforms to an A type plant where all the parts converge. It is not a V-type plant because this type of plant consists primarily of diverging processes where a few raw materials are processed into a variety of products. T-type plants diverge into many possible product combinations. I-type plants utilise a simple linear flow.

Item A is produced using the following components, and each has lead times as shown: A (1 week), B (2 weeks), C (2 weeks), D (5 weeks), E (3 weeks), F (1 week), and G (5 weeks). If the following choices represent all of the possible paths through the product tree, what is the longest cumulative lead time for use in calculating the planning horizon? A. A-C-E-F B. A-D C. A-B D. A-C-G

D. A-C-G To determine the longest cumulative lead time, calculate the cumulative lead time for each path shown. A-C-G = 1 week + 2 weeks + 5 weeks = 8 weeks. A-C-E-F = 1 week + 2 weeks + 3 weeks + 1 week = 7 weeks. A-B = 1 week + 2 weeks = 3 weeks. A-D = 1 week + 5 weeks = 6 weeks. The highest total is the longest cumulative lead time (since these are all of the possible paths), which is A-C-G.

Available to Promise (ATP) supports customer order promising. Which statement is not true about ATP A. ATP includes uncommitted inventory: on-hand & scheduled production B. ATP is calculated in period 1 and any period with an MPS C. ATP handles production methods differently: MTS, MTO, ATO D. ATP information is authored by the Sales department

D. ATP information is authored by the Sales department

A frozen foods manufacturer and distributor has a well-developed cold chain. If the organization is considering becoming a distributor for certain pharmaceuticals that are not considered controlled substances, what does it need to consider? A. Ability to trace to the class level rather than just the batch level B. Ability to succeed in unrelated diversification in the manufacturing area C. Ability to provide a temperature-controlled environment for source, make, and deliver D. Ability to create chain-of-custody data that are difficult to counterfeit

D. Ability to create chain-of-custody data that are difficult to counterfeit Traceability requirements have become stricter in recent years, in part because of concerns about counterfeit and adulterated drugs in the pharmaceutical industry. Therefore, not only does the organization need a system that provides traceability, but that system needs to be secure.

In a job shop environment, which situation is optimal from a capacity planning perspective? A. Key work center available hours are less than or equal to material plan standards hours. B. Bottleneck work center hours are scheduled at less than or equal to full utilization. C. The required production rate is less than or equal to the production line design rate. D. All work centers are fully loaded and no orders are overdue per the materials plan.

D. All work centers are fully loaded and no orders are overdue per the materials plan. Having all work centers loaded and no orders past due is the best possible scenario.

Which of the following statements is true about inventory in an engineer-to-order (ETO) environment? A. Lot-size inventory increases to the finished goods level. B. Customer influence on the product design should not affect inventory levels. C. Large safety stocks must be maintained. D. Buffer inventory should be held closer to the raw material stage.

D. Buffer inventory should be held closer to the raw material stage. In an ETO environment, most inventory needed for production is ordered after authorization of the customer order. The reason for this is that the product being built is almost always unique. However, the manufacturer may have raw material and component inventories that are common to all of the possible configurations it can make. As such, the producer might have buffers for these types of inventory. Because they are usually unique, ETO orders are rarely, if ever, built to a lot size. An ETO producer will not purchase inventories until the customer order configuration has been authorized for production. The finalized customer product design for an ETO product has a very high impact on an ETO producer's inventories.

In which of the following zones is it most difficult to respond to changes in customer demand? A. Danger B. Liquid C. Slushy D. Frozen

D. Frozen The frozen zone should be the most protected in terms of the amount of change permitted. The other answers are incorrect because there is no zone called the danger zone; in the liquid zone extensive changes can be made without causing much disruption to the MPS; in the slushy zone some change is tolerated, but changes must be controlled carefully.

A make-to-order company is ready to introduce a new product family that has many of the criteria the market is demanding. Which of the following production strategies is most applicable for the introduction phase of the new product family? A. Level B. Ramp-up C. Chase D. Hybrid

D. Hybrid Demand is unknown, but the company believes that sales will be good. Some inventory buildup enables the company to be somewhat flexible for the actual timing and quantity of demand.

Which of the following terms applies to spreading orders out in time or rescheduling operations so that the amount of work to be done in sequential time periods tends to be distributed evenly and is achievable? A. Capacity management B. Input/output control C. Line balancing D. Load leveling

D. Load leveling Load leveling refers to spreading orders out in time or rescheduling operations so that the amount of work to be done in sequential time periods tends to be distributed evenly and is achievable.

Which of the following statements about the use of bottlenecks is correct? A. The best operators should be assigned to the bottleneck. B. Queues are an example of waste and should be kept at zero. C. Bottlenecks are typically the gating workstation. D. Loading should account for normal variability and be at 100%.

D. Loading should account for normal variability and be at 100%. Bottlenecks may need to be planned to allow for normal variability in the planning parameters.

A make-to-order company has typically employed the fixed-order-quantity approach for its commonly used components. This has resulted in excess inventory over time due to customer changes and new product configurations. The planner should consider which lot-sizing technique to get the problem under control A. Economic order quantity B. Fixed period C. Minimum D. Lot-for-lot

D. Lot-for-lot Lot-for-lot will minimize or eliminate any residual inventory.

Which of the following is an objective of a focused factory? A. Worker generalization B. No routings C. Emphasis on utilization D. Machine specialization

D. Machine specialization A focused factory is centered on worker/machine specialization, simplified routings, and maximum output.

Which of the following is the most likely manufacturing environment for an industrial hydraulic press? A. Make-to-stock B. Engineer-to-order C. Assemble-to-order D. Make-to-order

D. Make-to-order According to the APICS Dictionary, a make-to-order manufacturing environment is one in which "a good or service can be made after receipt of a customer's order. The final product is usually a combination of standard items and items customed-designed to meet the special needs of the customer." In the question's example, the hydraulic press would include standard components as well as special components specific to the needs of the customer.

Which of the following is a point in the master scheduling process planning horizon that marks a boundary inside of which changes to the schedule may affect component schedules, capacity plans, customer deliveries, and cost? A. Available-to-promise B. Demand time fence C. Projected available balance D. Planning time fence

D. Planning time fence The planning time fence is a point in the planning horizon of the master scheduling process that marks a boundary inside of which changes to the schedule may affect component schedules, capacity plans, customer deliveries, and cost. Demand time fence is not as good an answer because changes inside the demand time fence are almost certain to have adverse effects in a well-planned process.

S&OP typically is done at which of the following levels? A. Component options B. Stock keeping units C. End item D. Product family

D. Product family S&OP typically is done at the product family level. End items or stock keeping units generally are planned at the master scheduling level, and are therefore incorrect answers. Component options are planned at the material planning level of MPC, and therefore also incorrect.

What is the term for the process of interpreting the production plan's impact on critical key materials and capacity? A. Master production scheduling B. Infinite scheduling C. Strategic business planning D. Resource requirements planning

D. Resource requirements planning Production planning is a long-term planning technique, and it is checked by means of resource requirements planning for key work centers.

In a planning bill for an updated configuration of a cellphone, the total percentages for the amounts required for the three possible memory chips used equal 115. What does this indicate? A. There has been an error in the calculations. B. The manufacturer is making up for missed orders. C. The manufacturer has received more orders for blue than other colors. D. The manufacturer is making a hedge against higher demand.

D. The manufacturer is making a hedge against higher demand. When a planning bill's percentage is higher than 100, it is a form of hedge against volatility in demand. It serves roughly the same purpose as safety stock. Because this is a planning bill, no orders have yet been received, and therefore it does not refer to received orders.

Which of the following is the primary consideration in designing a forecasting system? A. The sample must be representative. B. The data must be derived from the correct sources. C. The form of the data must be suitable for compilation. D. The purpose of the forecast must be adequately define

D. The purpose of the forecast must be adequately define The overriding consideration in forecast system design is ensuring that the forecast reflects the purpose that planners feel meets company requirements.

Adding a distributor as a channel between manufacturers and retailers will result in all of the following except A. a decrease in the number of transactions for retailers. B. a reduction in number of shipments from manufacturers. C. a decrease in transportation costs. D. an increase in the number of transactions for manufacturers.

D. an increase in the number of transactions for manufacturers. Natural results of reducing the complexity of transactions between manufacturers and customers include a decrease in the number of transactions for retailers, a decrease in transportation costs, and a reduction in number of shipments from manufacturers. Transportation costs will also decrease as manufacturers ship to fewer customers (the distributor) and retailers buy from fewer suppliers.

Utilizing a lead capacity strategy has which attributes (check all that apply) This approach follows a conservative investiment strategy If demand falls short, overproduction could result or capacity be wasted There's a substantial risk of stockouts Unit costs will be lower Most customer demand will be fulfilled Competitors are more likely to take over your customers

- If demand falls short, overproduction could result or capacity be wasted - Most customer demand will be fulfilled

Arrange the manufacturing environments by customer lead time, with the shortest lead time first? ETO MTS ATO MTO

1. MTS 2. ATO 3. MTO 4. ETO

Formula for Projected Available Balance and when do you apply it

Beginning Inventory + Replenishments - Demand S&OP, MPS, MRP, DRP

The distribution center servicing a corner store chain initiated isolating food groups by storage temperature. This action represents competing on: A. products at lower costs. B. product speed. C. superior-quality products. D. varying product volumes.

C. superior-quality products. From a competitive perspective, isolating food groups by storage temperature facilitates the company's ability to deliver quality products.

Which tool is used to analyze process dispersion and illustrate the main causes and subcauses leading to an effect or symptom? A. Scatter chart B. Pareto chart C. Control chart D. Cause-and-effect diagram

D. Cause-and-effect diagram The cause-and-effect diagram is a tool for analyzing process dispersion. The diagram illustrates the main causes and subcauses leading to an effect (symptom).

A company is required to provide lot traceability for all of its products. This means that the company must be able to: A. track every step of the process through the manufacturing facility. B. provide a listing of all raw materials used in the product. C. show exactly where each lot is stored in the warehouse. D. track every step of the process from supplier to customer.

D. track every step of the process from supplier to customer. Lot traceability is the ability to identify the lot or batch number of products in terms of one or all of the following: its composition, purchased parts, manufacturing date, shipped items.

What is DMAIC?

Define, Measure, Analyze, Improve, Control

Formula for Total Production Qty needed and when do you apply it

Demand + Ending Inventory - Beginning Inventory Application- MPS

What is Base Stock

Demand is refilled one unit at a time

What are the steps that are commonly used for planning and influencing demand.

Plan Do Check Act

True or False Social responsibility= commitment to behave ethically, contribute to community, improve workforce quality of list

True

True or False- A disadvantage of Push distribution is potential slow reaction to changing customer demand

True

True or False- A disadvantage of pull distribution is the lack of coordination with other members

True

True or False- A forecast bias occurs when deviations from the mean are consistently in one direction (always over or under)

True

True or False- A higher alpha value would make the forecast more responsive to actual product demand

True

Arrange the manufacturing environments in the ability to meet unique customer requirements (most flexible option first)

1. ETO - Engineer to Order 2. MTO - Make to Order 3. ATO - Assemble to Order 4. MTS - Make to Stock

Operating inventory has the highest value, arrange these other inventory classifications in decreasing value over time. 1. Obsolete 2. Inactive 3. Scrap 4. Excess

1. Excess 2. Inactive 3. Obsolete 4. Scrap

Why is it important to track forecast errors (select four answers) 1. Forecast error rates are published in annual reports 2. Improve quality of forecasts 3. Detect bias 4. It's required by auditors 5. Know how much reliance to put on forecast (e.g., calculate safety stock) 6. Get measurable data on actual customer service level

2. Improve quality of forecasts 3. Detect bias 5. Know how much reliance to put on forecast (e.g., calculate safety stock) 6. Get measurable data on actual customer service level

Which of these inventories below require special handling check all that apply Bulky/odd shaped materials Temperature sensitive Hazardous Cross-contamination

All of them Bulky/odd shaped materials Temperature sensitive Hazardous Cross-contamination

A food producer and distributor of processed meats is considering purchasing a poultry business. This is an example of: A. horizontal integration. B. vertical integration. C. green manufacturing. D. sustainable business practices.

B. vertical integration. Vertical integration is the degree to which a firm has decided to directly produce multiple value-adding stages from raw material to the sale of the product to the ultimate consumer.

Corrective actions are defined as: A. adjustments to inventory balances based on cycle counts. B. changes to the general ledger to fix incorrect entries. C. the implementation of solutions to reduce or eliminate problems. D. the discipline of employees for nonconformance.

C. the implementation of solutions to reduce or eliminate problems. Corrective action is the implementation of solutions resulting in the reduction or elimination of an identified problem.

Whether a company's internal weaknesses make it competitively vulnerable depends upon: A. the competitor's strength in this area. B. product, price, promotion, and place. C. the importance of the liability and if it is negated by a strength. D. customer perceptions.

C. the importance of the liability and if it is negated by a strength. Nearly all companies have competitive liabilities. Whether a company's internal weaknesses make it competitively vulnerable depends upon how much they matter in the marketplace and whether they are offset by the company's strengths.

True or False- A net requirement is created wheenver an items projected available balance falls to zero

False

True or False- Although PO & production orders are planned, there's no method to sync that purchased materials will arrive when needed

False

True or False- Backward Scheduling answers the question: "if a job is started now, when will it finish?"

False

True or False- Developing reverse logistics is best handled in the PLC growth stage when requirements and needs can truly be observed.

False

True or False- Safety Stock and Safety Lead Time are essentially the same and can be used interchangeably.

False

True or False- Capacity Requirements Planning (CRP) is the first process that transitions from planning to transactional execution

True

A company sells printer paper at a fairly steady rate. A back-to-school promotion results in higher-than-normal sales for August. In order to realign the forecast with historical demand, what should the forecast for September be? May- 350 June- 290 July- 325 August- 1000 September- ? A. 322 B. 491 C. 538 D. 662

A. 322 The average for May, June, and July is 322 (350 + 290 + 325 divided by 3). This type of environment would use a seasonal adjustment for August due to the high promotional sales that month.

Which of the following is true of inventory in an engineer-to-order (ETO) environment? A. Large safety stocks must be maintained. B. Buffer inventory should be held closer to the raw material stage. C. Customer influence on the product design should not affect inventory levels. D. Lot-size inventory increases to the finished goods level.

B. Buffer inventory should be held closer to the raw material stage. In an ETO environment, most inventory needed for production is ordered after authorization of the customer order. The reason for this is that the product being built is almost always unique. However, the manufacturer may have raw material and component inventories that are common to all of the possible configurations it can make. As such, the producer might have buffers for these types of inventory. ETO orders, because they are usually unique, are rarely, if ever, built to a lot size. Other than a small number of very common materials and components, an ETO producer will not purchase inventories until the customer order configuration has been authorized for production, so there is no need to maintain large safety stocks. The finalized customer product design for an ETO product has a very high impact on an ETO producer's inventories.

Which of the following statements about finite capacity loading is true? A. It does not require knowing the capacity available in each time period. B. It requires recalculating load when the schedule is missed. C. It does not require the ability to determine priorities when loading jobs. D. It is a simpler process than infinite capacity loading.

B. It requires recalculating load when the schedule is missed. Missed schedules result in load that must be accounted for when determining available capacity.

Which helps set boundaries around the type of work the company will pursue and indicates what is out of scope? A. Vision B. Mission C. Project scope statement D. Core values

B. Mission The APICS Dictionary, 16th edition, defines mission as "the overall goal(s) for an organization set within the parameters of the business scope."

A supplier has notified a buyer that an order for a component will be two weeks late due to a material shortage. Which of the following actions should the material planner take? A. Expedite the order to the required date. B. Perform bottom-up replanning based on pegging and available inventory. C. De-expedite the order to synchronize required dates. D. Identify affected parent orders and reschedule each by two weeks.

B. Perform bottom-up replanning based on pegging and available inventory. The planner first needs to identify the effect of a late shipment on parent requirements.

Which scenario would tend to promote diversifying the supply base the most? A. A non-governmental organization (NGO) has rapidly formed to apply social pressure on the organization to source sustainably. B. The procurement functional is moving from being decentralized to being a centralized shared service center. C. The organization is working toward becoming a lean manufacturer and needs materials just in time. D. A key input material has come under economic sanctions in the primary sourcing country of origin.

D. A key input material has come under economic sanctions in the primary sourcing country of origin. Sanctions will have consequences for organizations and supply chains with facilities, suppliers, or customers in affected locations if the materials involved are part of the sanctions. Sanctions can have far-reaching effects on economies and supply chains. The other answers would tend to promote consolidation of suppliers rather than diversification. Transitioning to more sustainable sourcing may require eliminating some non-compliant suppliers. Moving from decentralized to centralized procurement will likely result in supplier consolidation. Lean procurement tends to work toward fewer but more trusted suppliers.

Which of the following is least likely to focus on throughput? A. Lean manufacturing B. Theory of constraints C. Total quality management D. Activity-based costing

D. Activity-based costing Activity-based costing is focused on the actual costs incurred for one item.

Which of the following labor reporting elements is most important to a continuous improvement program in a standard cost environment? A. Actual setup hours B. Standard internal setup hours C. Standard production order hours D. Actual run hours

D. Actual run hours Actual run hours can be compared to the standard to determine any variance.

If supply and demand are not in balance at the aggregate supply level, what should be the priority to resolve the issue? A. Adjusting how supply and demand are measured so imbalances are less frequent B. Adjusting supply and demand at the strategic level so it is not needed at the aggregate supply level C. Adjusting demand if it is less difficult than adjusting supply D. Adjusting supply even if it is difficult

D. Adjusting supply even if it is difficult Supply and demand balancing both occur regularly at a well-functioning organization, but the more difficult and costly efforts that may be required are typically attempted on the supply side before resorting to greater efforts on the demand side. This is because supply adjustments require internal changes while demand adjustments involve influencing external customers to accept changes.

Distribution replenishment requirements enter a manufacturer's planning hierarchy in which of the following planning processes? A. Demand management B. Master production schedule C. Production plan D. Distribution schedule

A. Demand management Distribution requirements are part of the overall demand.

Which is an order winner characteristic that is typical in the growth phase of a product or service's life cycle and that is challenging to maintain in this life cycle phase when sales are growing exponentially? A. Dependability B. Flexibility C. Quality D. Competitive price

A. Dependability During the growth phase, a key order winner tends to be dependability, because a product needs to be available online/at a desired location and/or available within the desired lead time. This can be a challenge if the growth rate is steep.

Given the following information, calculate the new forecast for product A using exponential smoothing. α factor—0.7 Actual demand—600 Old forecast—562 Seasonal index—2.1 A. 589 B. 260 C. 813 D. 882

A. 589 The formula for forecasting using exponential smoothing is as follows: New Forecast = α × Actual Demand + (1- α) × (Old Forecast) or 0.7 × 600 + .3 × 562 = 588.6 ≈ 589.

Which observation about forecast preparation is most accurate? A. Circumstances relating to demand data should be recorded. B. Seasonality should never be removed until after forecasting is complete. C. Forecasts used at the operational level should be in dollars. D. Demand forecasts need to use past sales as their basis.

A. Circumstances relating to demand data should be recorded. Recording circumstances around data is a way of determining if wide variations from the forecast error are attributable to anomalies, which is important in analyzing forecast error. One would never remove seasonality in forecasts used in master production scheduling, but one would in sales and operations planning. Forecasts should be based on demand and not sales, and while forecasts based on monetary units are used in business planning, manufacturing needs forecasts in terms of physical units.

While assessing market opportunities, successful companies: A. view every industry opportunity as tempting, but they will be constrained by their resources and capabilities. B. view every industry opportunity as an emerging market channel, and they prepare accordingly C. view every industry opportunity as a potential game changer, and they will be prepared to thoroughly pursue them. D. view every industry opportunity as a possible industry disruptor, and they devote resources to investigate them.

A. view every industry opportunity as tempting, but they will be constrained by their resources and capabilities. Managers must guard against viewing every industry opportunity as a company opportunity. Rarely does a company have the resources to pursue all available opportunities.

Which of the following best represents inputs to the master scheduling process? A. MPS, production plan, resource planning B. Production plan, forecast, distribution planning C. S&OP, MRP, capacity planning D. MPS, forecast, RCCP

B. Production plan, forecast, distribution planning The MPS is the output of the master scheduling process, so the answers including it are incorrect. Resource planning is used in the S&OP process. MRP is driven by the master scheduling process, and therefore cannot be in the correct answer.

An organization decides that mass customization will be their strategy to fight increasing competition. Which of the following will need to be present for this strategy to succeed? A. The product design needs to be for a family of products that can be produced on a continuous line while also being fully understood by marketing so it can be forecasted at the level of the final stock keeping unit. B. The product design must be for a basic family of products that is capable of both being mass-produced and being customized to individual customer needs. C. The basic product design must be simple enough to allow it to be tailored or customized in the field. D. The basic product needs to be produced on a continuous line and in a kit form that allows using postponement to require assembly by the customer in many different configurations.

B. The product design must be for a basic family of products that is capable of both being mass-produced and being customized to individual customer needs. When mass customization becomes the driving operational strategy to thwart competition, the product design must define a basic family of products or services that can be mass-produced and still be customized to the needs of the individual customer.

According to the five forces model of competition, when does supplier rivalry weaken? A. When buyer costs to switch brands are low B. When buyer costs to switch brands are high C. When buyer demand is diminishing D. When competitors are numerous

B. When buyer costs to switch brands are high When customers' costs to switch brands of purchased components are high, rivals have less opportunity to convert customers to their products.

What factors would prompt a manufacturer of playground equipment to choose to be assemble-to-order (ATO)? A. After-market service used to be an order winner but now is a qualifier, and the product's life cycle is moving into decline. B. Quality used to be a customer order winner but now is a qualifier, and the product's life cycle is moving into maturity. C. A customer order winner is flexibility, and the push/pull frontier can be at the module level. D. A customer order winner is delivery speed, and the push/pull frontier needs to be at the end-item level.

C. A customer order winner is flexibility, and the push/pull frontier can be at the module level. Order winners and qualifiers plus the location of the push/pull frontier are two of the strongest determinants of the type of manufacturing environment (or service environment) an organization will need to have. In this case, the need for flexibility and the ability to use actual customer orders for modular assembly both point to using ATO.

Which of the following is the most likely manufacturing environment for a custom single-family home? A. Make-to-stock B. Make-to-order C. Engineer-to-order D. Assemble-to-order

C. Engineer-to-order When a customer's specifications require a unique engineering design (i.e., high variety and low volume), an engineer-to-order environment is the most likely. Given that the home in question is a custom-design, this is most appropriate.

Which of the following statements about capacity is true? A. The number of machines in a machine shop is the primary determinant of capacity. B. Common units such as quantities or hours are used at all levels for consistency. C. The master scheduler can schedule load above that indicated by rough-cut capacity planning. D. Resource planning capacity is more accurate than rough-cut capacity planning due to aggregation

C. The master scheduler can schedule load above that indicated by rough-cut capacity planning. Rough-cut capacity planning is a check of only critical resources.

When aligning capabilities with needs, the response could be extremely focused with little excess capacity or flexibility or be designed with excess capacity and more flexibility. What would be the more desirable strategy? A. Aligning with little excess capacity to better contain overhead costs B. Aligning tightly initially and then expanding in a stepwise fashion C. Aligning more tightly and continuously assessing and adjusting D. Aligning or responding with excess capacity

D. Aligning or responding with excess capacity Markets and operational capabilities must be aligned. The superior strategy here is to align more loosely (with excess capacity) rather than more tightly (with just the right level of capacity).

In an assemble-to-order environment, how can the execution and control function help ensure a valid material plan? A. By identifying alternate routings if the primary routing is unavailable B. By providing accurate efficiency and utilization factors for work centers C. By maintaining bottleneck flexibility through utilizations of at least 85% D. By achieving on-time start and completion dates for production orders

D. By achieving on-time start and completion dates for production orders In any environment, achieving start and completion dates best supports the material plan.

In the maturing phase of the product life cycle, how is the organization likely to compete? A. By ceasing product promotions B. By focusing on building brand loyalty C. By differentiate the product from its rivals D. By emphasizing competitive price and reaching new customer groups

D. By emphasizing competitive price and reaching new customer groups As sales level off, sellers must compete aggressively through prices and promotions to take competitors' shares. They may also seek new user groups to expand the market. Differentiating the product is more appropriate for the introduction phase. Building brand loyalty is part of the growth phase, and ceasing spending on promotions marks the decline phase.

Which of the following is an indication that the current manufacturing lead time is longer than that used by rough-cut capacity planning to check the feasibility of the master schedule? A. Load attributed to past due orders is remaining stable from period to period. B. Resource planning determines that the production plan was infeasible to begin with. C. A tour of the production area indicates that there is too much work in process. D. Customer orders are being shipped, but a high percentage are late.

D. Customer orders are being shipped, but a high percentage are late. Late customer orders are a potential indicator that there is sufficient capacity, so lead time may be the problem.

What are the steps of the TOC constraint/bottleneck management in sequence (note that repeat will be the 5th step?

1. Identify 2. Exploit 3. Subordinate 4. Elevate 5. Repeat

Statistically determined lines on a control chart are called: A. axes. B. control limits. C. standard deviations. D. medians.

B. control limits. Control limits are statistically determined lines on a control chart.

What is the formula for an order point or reorder point and what is the application

(Demand During Lead Time) + Safety Stock OP = DDLT + SS Application- When to replenish

Please identify all the ISO Standards and there responsibility 1. ISO 26000 2. ISO 31000 3. ISO 14000 4. ISO 9000 5. ISO 28000

1. ISO 26000- Social Sustainability 2. ISO 31000- Risk Management 3. ISO 14000- Environments 4. ISO 9000- Quality 5. ISO 28000- Security and Resiliance

Arrange these capacity planning steps in the proper order Develop the load profile for a time period at each work center Calculate operation time for each production order Resolve work center capacity imbalances Simulate order scheduling for all operations at each work center

1. Calculate operation time for each production order 2. Simulate order scheduling for all operations at each work center 3. Develop the load profile for a time period at each work center 4. Resolve work center capacity imbalance

What are the four out of seven steps of the strategic sourcing process in there proper order?

1. Determine items needed, quantity, usage, timing, & cost 2. Identify potential suppliers, risk factors, competitive forces 3. Define selection process & criteria, competitive forces in play 4. Select supplier, finalize contract, initiate business, monitor performance

Which statements are true regarding ERP systems 1. Implementations are expensive, challenging, and time consuming 2. They facilitate communications, business planning, and overall performance 3. Modern ERP systems include all critical security & failsafe features needed 4. An ERP system can be one of the most beneficial & influential technologies

1. Implementations are expensive, challenging, and time consuming 2. They facilitate communications, business planning, and overall performance 4. An ERP system can be one of the most beneficial & influential technologies

What are the manufacturing environments in customer lead time order (with fastest delivery option first)

1. MTS - Make to Stock 2. ATO - Assemble to Order 3. MTO - Make to Order 4. ETO - Engineer to Order

Machines- 2 Shifts- 2 shifts per Day, 8 hours each Work Week- 5 days per week Utilization- 75% Efficiency- 90% What is the rated capacity

108

A lean manufacturer runs 1 shift, 8 hours/day, 5 days/week. Customer demand is 20/week. Takt time=?

2 hours 1 X 8X 5= 40 40/20 hours a week= 2

Using the EOQ formula and items variables below, calculate the EOQ A= Annual Demand (units)- 1000 units S= Ordering Cost ($ per order)- 500 c= item cost ($ per unit)- 200 i= Carrying cost (%)- 10%

224

Evolving technology already providing ability to quickly deliver critical parts to customers in inaccessible locations 3D printing Blockchain Internet of Things (IoT) Robotic Process Automation (RPA)

3D printing

Fixed Cost- 25,000 Variable Cost per unit- $1,500 Selling Price per Unit- $2,000 A manufacturing company is evaluating the financials for a new gym product how many units must they sell to break even

50 units 25,000/(2,000-1500)= 50

What is the inventory turnover COGS (in $M)- Current Year= $96 Year- End Inventory (in $M) Last Year- $15 Current Year- $ 17

6 96/17=5.64 it rounded to 6

What process of sorting and packing products eliminates the need for storage? A. Split delivery B. Honeycombing C. Cross-docking D. Floating inventory

C. Cross-docking Cross-docking is packing products on incoming shipments so they can be easily sorted at intermediate warehouses or for outgoing shipments.

A company introduced a new product five months ago, and it is selling at twice the rate projected by marketing. What is the best alpha factor to use in order to make the smoothed forecast as responsive as possible? A. 0.7 B. 0.2 C. 0.1 D. 0

A. 0.7 An alpha factor of 0.7 weights the most recent period's usage the greatest, because in exponential smoothing a high alpha factor reacts more quickly to a trend and a low alpha factor reacts more slowly.

The lead time for a particular stock-keeping unit is four weeks, the average demand is 100 units per week, and safety stock is set at one week's demand. The order quantity is 1,000 units. The order point is A. 500 units. B. 4,100 units. C. 200 units. D. 1,500 units.

A. 500 units. Order point (OP) = demand during lead time (DDLT ) + safety stock (SS) = (100 units x 4 weeks ) + 100 units = 500 units

Which of the following statements regarding scheduling bottlenecks is true? A. A bottleneck must be fed at a rate equal to its capacity. B. The time buffer in front of the bottleneck should be longer than the time of any expected delay. C. Not everything that increases the capacity of the bottleneck increases the capacity of the system. D. A gateway operation does not control the work feeding the bottleneck.

A. A bottleneck must be fed at a rate equal to its capacity. A bottleneck must be fed at a rate equal to its capacity so that the time buffer remains constant.

Which is an accurate statement about ABC classification? A. About 20 percent of the items will account for about 80 percent of the total value. B. C items account for about 80 percent of the total value. C. A general rule for using ABC classification is to have plenty of everything in inventory. D. A items should have the most safety stock.

A. About 20 percent of the items will account for about 80 percent of the total value. The general rule of thumb is that about 20 percent of the items will account for about 80 percent of the total value. A items should have the tightest control over safety stock levels, not the largest amount of safety stock. Good inventory management would not have plenty of everything in stock. Also, C items account for about 5 percent, not 80 percent, of the total value.

Which of the following inventory classifications most contributes to cycle time? A. Active B. Excess C. Obsolete D. Inactive

A. Active Cycle time is the time from receipt to the time of shipping.

What can make producing an unrealistic final assembly schedule (FAS) a worse problem than producing an unrealistic master production schedule (MPS)? A. An FAS is based entirely on actual customer orders. B. The shorter planning horizon for an FAS magnifies the impact of forecasting error. C. An FAS is the last step of the MPS, so there is less time to make corrections. D. An FAS is based entirely on forecasts.

A. An FAS is based entirely on actual customer orders. The consequences of an unrealistic FAS can potentially be more severe than those of an unrealistic MPS because an FAS is based entirely on actual customer orders and has no forecasted component, meaning any change will directly impact a customer order.

What is the best description of an open order? A. An order released to production B. An order planned to be produced C. An assignment to specific orders not yet released D. The amount of an order reserved for a customer

A. An order released to production An order released to production is a scheduled receipt, which is the same as an open order. The amount of an order reserved for a customer and an assignment to specific orders not yet released - both of these describe allocation. An order planned to be produced is a planned order release.

Which accounting method for valuing inventory estimates total cost, including allocated overhead, to produce a batch of goods divided by the total number of units produced? A. Average cost B. Standard cost C. First in, first out D. Last in, first out

A. Average cost Average cost per unit is based on estimating total cost, including allocated overhead, to produce a batch of goods divided by the total number of units produced.

A manufacturer of building supplies decides to improve its competitive advantage by buying sand and gravel suppliers near its factories. What type of strategy is this? A. Backward integration B. Forward integration C. Disintermediation D. Horizontal integration

A. Backward integration According to the APICSDictionary, backward integration is "the process of buying or owning elements of the production cycle and channel of distribution back toward raw material suppliers." When an organization is able to produce raw materials, parts, or services with at least the same efficiency, reliability, and quality as its suppliers, then backward integration may make sense.

Which of the following best describes performance related to sales and operations planning (S&OP)? A. Balance supply with demand over the planning horizon. B. Balance current supply with the next period's demand. C. Balance supply with demand within the demand time fence. D. Balance supply with demand within the cumulative lead time.

A. Balance supply with demand over the planning horizon. The key to S&OP is to balance supply and demand throughout the entire planning horizon.

In an assemble-to-order strategy, when are orders for products received? A.Before the product can be assembled and made available for sale B. After the product is in inventory and available for sale C. Before the product can be engineered, produced, and made available for sale D. Before the product is produced, placed in inventory, and made available for sale

A. Before the product can be assembled and made available for sale In an assemble-to-order environment, orders specify the variations of the assembly to be produced and therefore must be received before the product can be assembled and made available for sale.

What is an example of corruption that should be worked against if a company is following the UN Global Compact's 10 principles? A. Bribery B. Union membership C. Child labor D. Racial discrimination

A. Bribery Bribery is a form of corruption, and it is specifically listed in the UN Global Compact. Child labor and racial discrimination are both considered to be in violation of the UN Global Compact but are not considered forms of corruption. The UN Global Compact embraces the right of freedom of association and collective bargaining.

Attributes of a differentiation strategy (select all that apply): A. Can apply to a broad or to a narrow niche market focus B. Risk of including costly features with low market appeal C. Always among the lowest cost products D. Offers features and benefits not available from competitors

A. Can apply to a broad or to a narrow niche market focus B. Risk of including costly features with low market appeal D. Offers features and benefits not available from competitors

Which of the following processes employs a finite scheduling model of a company's manufacturing system to determine when an item can be delivered? A. Capable-to-promise B. Available-to-promise C. Make-to-order D. Engineer-to-order

A. Capable-to-promise Capable-to-promise employs a finite scheduling model of the manufacturing system to determine when a new or unscheduled customer order can be delivered. It includes any constraints that might restrict the production, such as availability of resources, lead times for raw materials or purchased parts, and requirements for lower-level components or subassemblies.

What needs to be part of a new product introduction strategy when the product is a replacement for a product in decline? A. Capital equipment changes need to be planned and executed. B. Plans must find a way to sell both the old and new products for a period of time. C. The old product's production equipment needs to be moved out of the prime shop floor locations while keeping its capacity available. D. The new product strategy needs to coordinate most closely with the material requirements planning process.

A. Capital equipment changes need to be planned and executed. If the new product introduction is a replacement for a product in the decline phase, there needs to be a transition strategy that provides enough time to build or acquire the production capacity. While some organizations will sell the old and new units at the same time, other organizations will have a cutoff from one to the other to reduce market confusion.

In repetitive manufacturing, standardization of products can be achieved through which two of the following? A. Commonality of parts and modularity of design B. Commonality of parts and supplier conformance to quality standards C. Modularity of design and supplier conformance to quality standards D. Modularity of design and standard costing practices

A. Commonality of parts and modularity of design Commonality of parts and modularity of design can help with standardization of products in repetitive manufacturing.

What must management do in order to ensure that the operational performance of the business is measured by the production plan? A. Communicate expectations of the plan. B. Use the management-by-walking-around philosophy. C. Publish the plan to all employees. D. Change the plan only annually.

A. Communicate expectations of the plan. Since the production plan has been agreed to by sales, manufacturing, and finance, short-term company objectives are inherent in the plan. Everyone needs to understand what is expected in order to achieve the plan.

Three points for diversification include all except A. Compatibility with current markets B. The "better-off test," considering improved synergies gained C. Cost of entry into an unfamiliar market D. Industry attractiveness (environmental scanning) & the 5-Forces Framework

A. Compatibility with current markets

Which of the following process choices is likely to simplify the sales and operations planning process? A. Functional B. Batch C. Lot-for-lot D. Line

D. Line Lines produce at a rate that can be converted into a monthly supply quantity. The other responses may all have significant planning variation by month.

Which of the following is most likely to occur in a company that does not use a formal sales and operations planning process? A. Conflicting processes will exist individually within the various departments. B. Inventory turns will be used to plan production for the next month. C. Senior executives will develop the plans required for operation. D. The potentially available demand quantity will not be recognized.

A. Conflicting processes will exist individually within the various departments. Each department will have its own plan for tracking plan to actual, but the plans will not be integrated.

Which Statements are true regarding growth opportunities A. Consider diversification, when current markets & profitability are down. B. Avoid vertical integration if it requires new technology or skills. C. Global expansion for a local Texas boot company, to leverage its success. D. New product development within the company's current market.

A. Consider diversification, when current markets & profitability are down. D. New product development within the company's current market.

Business-to-business customers have said that new products being rolled out need to have reasonable delivery reliability and price but insist on a product design that meets exacting precision requirements so it integrates with their product without costly rework. They do not care about delivery speed because they are able to place their orders far in advance. Which of the following strategies would be most likely to delight these customers? A. Consider product design to be the only order winner to focus on, work to be above average at delivery reliability and price, and make-to-order and ship via slow and inexpensive methods when given sufficient lead time. B. Consider product design, delivery reliability, and price to be order winners to focus on so as to exceed expectations. C. Consider product design to be the only order winner to focus on and accept that this will require a higher-than-average price, use slow and inexpensive shipping to compensate, and work on great delivery reliability using a make-to-stock strategy. D. Create a good design with best-in-class delivery reliability and a reasonable price by focusing on high production rates and inspections to ensure that only products that match the exacting specifications go out the door to the customer.

A. Consider product design to be the only order winner to focus on, work to be above average at delivery reliability and price, and make-to-order and ship via slow and inexpensive methods when given sufficient lead time. The combination of product and related services will delight customers when their order qualifiers are all met and their order winner qualities are kept as the highest priority. In this case, the organization does not try to make all things be order winners but focuses on great product design. They use slow shipping methods and make-to-order to keep their costs down and offer a price that keeps it as an order qualifier. Any extra costs required to ensure above-average delivery reliability could then be absorbed.

A medium-sized make-to-order manufacturing company has three operating divisions and four locations, with three plants in one country and one plant in another country. The second largest division is a recent acquisition. There are three different software packages in use at the plants, and each plant has its own way of operating its business. The overall costs per transaction for the company are the highest in its industry. Senior management has decided that the plants should standardize on one software package and one approach to all major business processes to achieve some economies of scale. A new software package is selected and a project leader is named. The new project leader has assembled a team to perform the implementation. For the change to be effective, what should senior management do first? A. Create a sense of urgency among the company's leaders. B. Create a vision statement about this new strategy. C. Send out a memo to the plant managers explaining the decision. D. Build the project team from key members of each division.

A. Create a sense of urgency among the company's leaders. Senior managers should start the project by communicating a sense of urgency and the importance of the new implementation project to the project team and the company as a whole.

Value added services performed by distribution centers often include (select multiple) A. Cross-docking B. Break-bulk C. New product design D. Freight consolidation

A. Cross-docking B. Break-bulk D. Freight consolidation

Improving forecast accuracy contributes to which of the following actions? A. Decreasing delivery lead times B. Decreasing sales and operations planning frequency C. Increasing productivity D. Increasing inventory turnover

A. Decreasing delivery lead times An increase in forecast accuracy means more of the correct product is available to fill customer orders when they arrive.

Distribution replenishment requirements enter a manufacturer's planning hierarchy at which of the following levels? A. Demand management B. Distribution schedule C. Production plan D. Master production schedule

A. Demand management Distribution orders have the same level of importance as a customer order.

Which is a primary risk in a demand-pull model and which is a primary risk in a forecast-push process? A. Demand-pull: insufficient capacity; forecast-push: excess supply chain inventory B. Demand-pull: insufficient inventory; forecast-push: unacceptable lead times C. Demand-pull: poor understanding of actual market requirements; forecast-push: excess capacity D. Demand-pull: bullwhip effect; forecast-push: shifting push-pull frontier

A. Demand-pull: insufficient capacity; forecast-push: excess supply chain inventory In the demand-pull model, the risk is that orders will begin to come in above capacity and all along the supply chain there will be expensive activity to run the plant using overtime, expedite more and faster transportation, or convince customers to wait or accept substitute product. In a forecast-push model, everything is pushed downstream from one point to the next according to schedules based on forecasts. Unfortunately it's difficult to predict even the most stable demand, and the serial forecasting by each supply chain partner contributes to the bullwhip effect, which involves variability at each supply chain stage being magnified each stage back up the chain, and this can result in either excess supply chain inventory or costly stockouts. Since forecast-push is often make-to-stock, lead times are usually short. Demand-pull helps enable better understanding of actual market requirements.

What can happen when management fails to articulate a concise operational strategy that is aligned with overall corporate strategy? A. Departmental "specialists" will tend to optimize their own areas of control without consideration for the rest of the organization. B. IT security will likely fall victim to corporate espionage. C. Enterprise resources planning (ERP) system accuracy will continue to be reliable because employee training is part of ERP system startup. D. Company-wide solutions will become a viable substitute for the weak operational strategy.

A. Departmental "specialists" will tend to optimize their own areas of control without consideration for the rest of the organization. In the absence of a more explicit operations strategy, specialists in areas such as inventory control or process technology will tend to develop their own "systems" protecting their own organizational positions.

A large manufacturer/distributor is working to reduce water use in its production processes and to improve the water supply in emerging supply markets. What is this an example of? A. Design for sustainability B. Regulations working for the greater good C. Migrating environmental standards D. Getting in front of an issue that is likely to affect corporate image

A. Design for sustainability A manufacturer/distributor working to reduce the water intensity of its production processes and to improve water resources in developing countries is focused on design for sustainability.

Which of the following is a key element of customer relationship management? A. Differentiating the company's customer experience from rivals by superior anticipation and responsiveness B. Handling customer requests for changes to due dates outside the system C. Promising from on-hand inventory and future supply D. Setting filter limits at multiples of MAD

A. Differentiating the company's customer experience from rivals by superior anticipation and responsiveness Differentiating the company's customer experience from rivals by superior anticipation and responsiveness is one of three important elements of customer relationship management. The others are to increase customer retention and loyalty and to provide insight into the timing and quantity of impending customer orders. Setting filter limits is incorrect because it is an element of demand filters, not customer relationship management. Handling customer change requests is incorrect because changes made by the customer for delivery must be entered into the system. Promising from on-hand inventory and future supply is incorrect because this is a characteristic of ATP, not customer relationship management.

Which of the following activities in the physical distribution system creates time value by placing the product close to the customer? A. Distribution inventories B. Materials handling C. Warehousing D. Order processing and communication

A. Distribution inventories Distribution inventory includes all finished goods inventory at any point in the distribution system. Distribution inventories create time value by placing the product close to the customer.

What is a typical question to ask when evaluating the acquisition of new process technology? A. Does the process technology improve the specification of the product or service? B. Will this put the company into a market-share leadership position? C. Will the process improvement meet the performance promises of the process technology supplier? D. How will this process improvement affect the company's balance sheet?

A. Does the process technology improve the specification of the product or service? When evaluating the acceptability of a process technology investment, a key question to ask is "Does the process technology improve the specification of the product or service?"

What is the primary difference between enterprise resources planning (ERP) and manufacturing resource planning (MRP II)? A. ERP includes supplier and distribution/delivery information. B. ERP provides balance between production, marketing, and information technology. C. ERP includes manufacturing information only. D. ERP is computer-based, but MRP II is not.

A. ERP includes supplier and distribution/delivery information. Supplier and distribution/delivery information is included in ERP.

What manufacturing environment would best support the distribution channel attributes of low distribution intensity, high product variety, and low channel dependency? A. ETO/MTO B. ATO C. ATO/MTS D. MTS

A. ETO/MTO Generally a direct/internal channel with low distribution intensity, high product variety, and low channel dependency would support an ETO/MTO environment. Answers including ATO and MTS are incorrect because these environments tend to require high distribution intensity, low product variety, and high channel dependency.

Which of the following takes place in group consensus building? A. Each member supports the decision whether or not they agree with it. B. The majority of the members agree with the decision. C. The members have reached 100% agreement on the decision. D. There was 100% participation in the agreement.

A. Each member supports the decision whether or not they agree with it. Consensus is a group decision-making process where everyone agrees to support the decision whether or not they voted for it.

Which of the following is the most important consideration when implementing an information system to control shop floor operations? A. Ensuring that shop personnel have input into the choice or the design of the new technology B. Supporting differentiation between functional areas and production operations C. Encouraging users to operate independently with a minimal amount of training D. Providing staff specialists with the information needed to control production operations

A. Ensuring that shop personnel have input into the choice or the design of the new technology An effective information system should place as much responsibility for managing production operations as possible on factory personnel. This requires then that these personnel have input into designing the system that they will be required to use.

As manufacturing planning and control has become more complex, the need for integration of knowledge and decision making has resulted in which of the following computer systems? A. Enterprise resources planning B. Collaborative planning, forecasting, and replenishment C. Manufacturing resource planning D. Manufacturing execution systems

A. Enterprise resources planning As the needs of organizations have grown in the direction of a truly integrated approach toward materials management, the need for integrated systems has arisen. As these systems have grown both in size and in integration of functionality, they have come to be referred to by the term "enterprise resources planning (ERP)."

In a service environment with a sufficient labor force, what is often still a labor scheduling constraint when attempting to balance supply and demand in the short term? A. Equipment capacity B. Skilled labor pool shortage C. Cross-training D. Overscheduling

A. Equipment capacity For service industries, assigning labor schedules is the primary way that supply and demand are balanced in the short term. Equipment capacity can still play a role (e.g., too many cooks in the kitchen), however.

Which if the following performance objectives refers to an operation's ability to offer different configurations of a product and react to requests for changes from a customer? A. Flexibility B. Speed C. Quality D. Cost

A. Flexibility There are five generic performance objectives: quality, speed, dependability, flexibility, and cost. Flexibility has two dimensions: volume/mix and agility. That is, an operation's ability to produce different types and/or varieties of products or services, and also how quickly the operation is able to respond to requested changes.

A company produces a line of handheld drills, various types of drill bits hardened to different levels, and a new fixture for different drills. These products are sold to customers through retail stores. Given the common use among these products, what is the best approach for the master scheduler to take for planning production? A. Establish modular bills of material for the drills, the drill bits, and the fixture. B. Add the fixture to the drill family group and plan using sales and operations planning. C. Plan and maintain separate bills of material for the drills, the drill bits, and the fixture. D. Enter orders for the new fixture to material requirements planning until historical demand is available for forecasting.

A. Establish modular bills of material for the drills, the drill bits, and the fixture. Modular bills allow for similar products and percentages for options, which would work for each type of product.

Which of the following is the most appropriate first step in a significant organizational change? A. Establishing a sense of urgency that change is needed B. Setting breakthrough objectives for the effort C. Consolidating previous improvements D. Developing the vision of the future state for the organization

A. Establishing a sense of urgency that change is needed An important first step in organizational change is to motivate people to change by creating a sense of urgency. This may be due to a change in the organization's competitive situation, market position, technological trends, financial performance, and so on.

Which of the following is true in a bottleneck situation? A. Establishing a time buffer before the bottleneck minimizes flow disruption. B. A bottleneck must be fed at a rate less than or equal to its capacity. C. Utilizing a non-bottleneck resource 100% of the time produces 100% utilization overall. D. Capacity and priority must be looked at independently.

A. Establishing a time buffer before the bottleneck minimizes flow disruption. Establishing a time buffer prior to the bottleneck allows for any delay from the feeding workstation to be minimized.

Which of the following actions is the first step in the theory of constraints (TOC) improvement process? A. Examine the entire system to identify what is limiting output. B. Develop a value stream map of the entire system. C. Create time buffers of inventory in front of critical work centers. D. Reduce the level of variability in production volume.

A. Examine the entire system to identify what is limiting output In TOC, the first step of the five-step process for performance improvement is to identify the constraint.

Warranty claims and repair costs fall into which of the following categories of quality costs? A. External failure B. Internal failure C. Prevention D. Appraisal

A. External failure External failure costs includes such costs as warranty claims and returns.

At the close of a project to design a new process for operations, an important unit manager refuses to cooperate in implementing the process. What is the most likely cause for this problem? A. Failure to engage the unit manager earlier in the process B. A personality conflict with the project manager C. Insufficient budget to meet all stakeholder needs D. Poor quality in the new process

A. Failure to engage the unit manager earlier in the process The most likely problem when a customer rejects a deliverable is that this critical stakeholder was not involved early in the project and engaged throughout the project. The other choices are all possible but would have appeared and been addressed earlier.

Which functional role is most likely to oppose increasing multiple work-in-process (WIP) buffer sizes after a series of missed customer orders? A. Finance B. Marketing C. Operations D. No one

A. Finance The goals of finance are to increase profit and cash flow and reduce investment. Increasing WIP buffer sizes will likely increase inventory investment.

The business plan reflects a connection between which of the following areas? A. Financial numbers and sales forecasts B. Customer orders and production quantity C. Sales forecasts and customer orders D. Production quantity and financial numbers

A. Financial numbers and sales forecasts The financial goals (profit and loss) are directly tied to the sales forecasts, which will provide a statement of expected company revenues.

What are three of the broad areas necessary to address how well the strategy execution process is performing? A. Financial, customer, employees B. Operations, financial, schedule C. Quality, financial, employee turnover D. Customer, backorder/backlog, critical ratio

A. Financial, customer, employees Accurate and timely information about daily operations is essential if managers are to gauge how well the strategy execution process is proceeding. Information systems need to cover five broad areas: Customer data Operations data Employee data Supplier/strategic partner data Financial performance data

A company owns a large number of retail stores and obtains products from manufacturers worldwide. Only a few new stores are planned to be opened within the next five years in key geographic areas. The company is focusing on internet ordering as an alternative to an aggressive new store growth strategy. All stores and projected internet demand will be adequately served by existing distribution centers for at least the next seven years. Which of the following is the most important consideration in the development of this strategy? A. Finished goods inventory turns B. Existing store growth rate C. Capacity of current distribution centers D. Geographic location of new stores

A. Finished goods inventory turns Since the focus of the company is on internet sales, issues relating to facilities locations, growth rates, and capacities are not of the first importance. However, inventory turns is of critical importance to validate the new internet sales strategy.

Which scheduling technique builds a schedule by proceeding sequentially from the initial period to the final period while observing capacity limits? A. Finite forward scheduling B. Capacity requirements scheduling C. Process sequencing D. Finite backward scheduling

A. Finite forward scheduling Finite forward scheduling is an equipment scheduling technique that builds a schedule by proceeding sequentially from the initial period to the final period while observing capacity limits.

Which option would be most likely to result in a realistic and achievable schedule while also taking advantage of excess capacity? A. Finite forward scheduling B. Infinite forward scheduling C. Finite backward scheduling D. Infinite backward scheduling

A. Finite forward scheduling Finite loading is used to generate a realistic and achievable schedule because it takes available capacity into account and forces scheduling of the promise date to reflect capacity constraints. Forward scheduling allows taking advantage of excess capacity and helps with load leveling.

The sales forecast is disaggregated into individual forecasts at the distribution center level. What may this result in? A. Forecast errors at the detail level B. Inconsistency between the total forecast and the distribution center forecasts C. Increases in the planners' need for involvement D. Decreases in safety stock levels

A. Forecast errors at the detail level Forecasts are more accurate at the aggregate level. It is necessary to break the aggregate forecast into individual forecasts at the distribution center level, but the detailed forecasts will be less accurate.

The information needed to develop a master schedule will come from which source? A. Forecast of individual end items B. Production activity control C. Capacity requirements plan D. Material requirements plan

A. Forecast of individual end items The capacity requirements plan, production activity control, and material requirements plan relate to capacity planning, execution, and priority planning activities that follow the master scheduling process. Therefore, to develop a master schedule, you will need the forecast of individual end items.

Which of the following scheduling techniques is used in an assemble-to-order environment for customer order promising? A. Forward B. Rate-based C. Mixed-model D. Backward

A. Forward Forward scheduling enables current orders to be accounted for when determining a new order's ship date.

At what do the organizational structures commonly found in large and successful organizations tend to be effective and efficient? A. Functioning and executing B. Innovating and changing C. Such organizational structures tend to be neither effective nor efficient. D. Such organizational structures tend to be effective in most areas but not efficient.

A. Functioning and executing Traditional organizational structures that most large and successful organizations have are usually good at keeping the organization functioning and executing effectively and efficiently. However, these same structures tend to have lost the entrepreneurship and agile innovation ability that makes start-ups so great.

A make-to-order company is in the process of implementing lean manufacturing techniques, making equipment layout changes and standardizing the designs of their highest-value products in order to transition to assemble-to-order. They begin building the options that the customers will select. Which of the following actions should also be taken? A. Gradually reduce marketing's quoted lead time as the changes reduce the backlog. B. Work overtime until the backlog has been reduced so the changes can be permanent. C. Don't take orders for the assemble-to-order products a time to enable the backlog to go to zero as the changes come into effect. D. No action is required, since the backlog will reduce automatically.

A. Gradually reduce marketing's quoted lead time as the changes reduce the backlog. As product design and production improvements shorten cycle time, the backlog will be reduced as well. However, if the quoted lead time is not reduced, customers will continue to order too far in advance.

A new product line consisting of many individual products is projected to experience low volumes for the foreseeable future. What would be the appropriate manufacturing strategy for this situation? A. High involvement with people, low involvement with machines B. High involvement with machines, low involvement with people C. Highly scalable workforce D. Significant use of outsourcing for peak capacity seasons

A. High involvement with people, low involvement with machines Small-scale technologies combined with skilled staff or higher involvement of staff tends to be more flexible than investing in machines because higher involvement with machines requires more capital investment up front. The capital investment in dedicated machinery could be made later if demand increases.

Operations management is responsible for a product line where minimizing labor rates and maximizing operation efficiencies are very important. The product line will most likely have which of the following characteristics? A. High volume, standard design B. Medium volume, custom design C. Medium volume, short life cycle D. Low volume, engineer-to-order

A. High volume, standard design A product line characterized by high volume and standard design will need to make sure that efficiencies and utilizations are at a high level so the maximum production can be ensured from the available capacity.

Which of the following is a disadvantage of being an innovator in product design and technology? A. Higher research and development expenses may not increase market share or margins. B. A lengthy learning curve will be required of customers for correct product operation. C. Competitors may make poor-quality copies and destroy the market by making customers believe that all such products have poor quality. D. Early adopters will not aware of the product's unique features.

A. Higher research and development expenses may not increase market share or margins. Being an innovator in product design and technology is more costly than using previous designs or existing technology, so the increased research and development expense needs to be offset by higher market share or higher margins per sale or the organization will not be as profitable as competitors that spend less on innovation.

Which is a six-step process that forces designers to consider customer needs can a manufacturer use to support and generate a customer's desired product attributes? A. House of quality (HOQ) B. Continuous improvement C. Voice of the customer (VOC) D. Total quality management (TQM)

A. House of quality (HOQ) The house of quality is a structured process that relates to customer-defined product attributes, achieved by mapping certain steps: Identification of customer attributes Identification of supporting technical features Correlation of customer attributes with supporting technical features Assigning priorities to customer requirements and technical features Evaluation of competitive stances and products Identification of technical features to be used in the final design

Why do companies that are striving to continuously improve environmentally often require suppliers to obtain third-party ISO 14001 certification? A. ISO 14001 allows companies to outline their own environmental policies. B. It avoids the legal liability of accepting a supplier's personal assertion that they're ISO 14001-compliant. C. If the supplier commits an egregious environmental error, the company can claim innocence. D. When advertising the use of an environmentally compliant supply chain, the company can refer to authorized certification entities.

A. ISO 14001 allows companies to outline their own environmental policies. ISO 14001 describes an environmental management system intended to continually improve the environmental performance of a company. However, companies set their own goals, so improvement is not standardized. As a result, third-party certification is often required by customers to ensure that suppliers are following stringent standards.

Tracking signals do which of the following? A. Identify forecast bias. B. Compute the appropriate trip value to be used in demand filtering. C. Identify causes of forecast errors. D. Adjust forecasts when errors are reported.

A. Identify forecast bias. Tracking signals indicate bias within the forecast when then running sum of the forecast error (RSFE) exceeds MAD by a predetermined amount (e.g., at least three times). RSFE is also called the cumulative forecast error. The other answers are incorrect because tracking signals indicate deviation from the forecasts but not the causes of these deviations; management is responsible for computing the true value to be used, and this is not the function of a tracking signal; and tracking signals do not adjust forecasts; they only report deviations from the forecast.

Which of the following statements about capacity in a job shop environment is true? A. If capacity is insufficient, no shop floor system will be able to decrease backlog. B. If capacity is insufficient, effective shop floor control can be used to achieve objectives. C. If capacity is sufficient, shop floor control reports only material movement. D. If capacity is sufficient, there is no need for shop floor control.

A. If capacity is insufficient, no shop floor system will be able to decrease backlog. If the load at a work center exceeds the available capacity and it is permitted to continue, the backlog will never be decreased. The backlog can only be reduced either by increasing capacity or reducing the load on the work center.

Which of the following is a downside associated with linking corporate financial incentives to specific performance objectives? A. If the objectives are not long-term, executives may follow risky strategies, hoping to increase short-term earnings. B. While achieving their goals, executives may not communicate deep enough into the organization. C. Executives always prioritize financial goal achievement over sustainability goals. D. Since executives always focus on long-term strategies, there are typically few downsides.

A. If the objectives are not long-term, executives may follow risky strategies, hoping to increase short-term earnings. Compensation packages at many companies have increasingly rewarded executives for short-term performance improvements—most noticeably achieving quarterly and annual earnings targets and boosting stock prices by specified percentages. This can motivate the executives to take unwise business risks to boost short-term earnings. The focus on short-term performance has proved damaging to long-term company performance and shareholder interests.

A gear manufacturer's operations are as follows: The gear machining process produces 85 units per hour, operating at three shifts per day, five days per week. The final assembly line is currently a bottleneck. It is capable of producing at a rate of 120 units per hour, operating at one shift per day, five days per week. The heat-treating furnace produces 50 units per hour, operating 24 hours per day, seven days per week, with no downtime. Shifts for all departments except the heat-treating furnace are eight hours with one hour of lunch/break time per day. Demand is for 8,000 end items per week. What actions should the company take that will allow the 8,000 end items to be made? A. Increase final assembly to two shifts per day and adjust the pace of production for a throughput of 8,000 per week. B. Reduce gear machining to one shift per day, increase final assembly to three shifts per day, and adjust the pace of production for a throughput of 8,000 per week. C. Increase final assembly to three shifts per day and adjust the pace of production for a throughput of 8,000 per week. D. Reduce the heat-treating furnace to two shifts per day, increase gear machining to two shifts per day, and adjust the pace of production for a throughput of 8,000 per week.

A. Increase final assembly to two shifts per day and adjust the pace of production for a throughput of 8,000 per week. The output for the three operations can be calculated: The heat-treating furnace currently produces 8,400 units per week (7 days x 24 hours x 50 units). Therefore, it already produces enough for the 8,000 units per week. Gear machining currently produces 8,925 units per week (5 days x 3 shifts x 7 hours x 85 units). It also already produces enough for the 8,000 units per week. Final assembly currently produces 4,200 units per week (5 days x 7 hours x 120 units). Increasing the final assembly process to 2 shifts per day would produce 8,400 units per week (5 days x 2 shifts x 7 hours x 120 units), which would handle the 8,000-per-week demand. Once these changes are made, the three operations can make 8,400, 8,925, and 8,400 respectively. The pace of production (the "drum" in the theory of constraints) should be tuned to meet the 8,000-per-week demand.

A gear manufacturer's operations are as follows: The gear machining process produces 85 units per hour, operating at three shifts per day, five days per week. The final assembly line is currently a bottleneck. It is capable of producing at a rate of 120 units per hour, operating at one shift per day, five days per week. The heat-treating furnace produces 50 units per hour, operating 24 hours per day, seven days per week, with no downtime. Shifts for all departments except the heat-treating furnace are eight hours with one hour of lunch/break time per day. Demand is for 8,000 end items per week. What actions should the company take that will allow the 8,000 end items to be made? A. Increase final assembly to two shifts per day and adjust the pace of production for a throughput of 8,000 per week. B. Reduce the heat-treating furnace to two shifts per day, increase gear machining to two shifts per day, and adjust the pace of production for a throughput of 8,000 per week. C. Increase final assembly to three shifts per day and adjust the pace of production for a throughput of 8,000 per week. D. Reduce gear machining to one shift per day, increase final assembly to three shifts per day, and adj

A. Increase final assembly to two shifts per day and adjust the pace of production for a throughput of 8,000 per week. The output for the three operations can be calculated: The heat-treating furnace currently produces 8,400 units per week (7 days x 24 hours x 50 units). Therefore, it already produces enough for the 8,000 units per week. Gear machining currently produces 8,925 units per week (5 days x 3 shifts x 7 hours x 85 units). It also already produces enough for the 8,000 units per week. Final assembly currently produces 4,200 units per week (5 days x 7 hours x 120 units). Increasing the final assembly process to 2 shifts per day would produce 8,400 units per week (5 days x 2 shifts x 7 hours x 120 units), which would handle the 8,000-per-week demand. Once these changes are made, the three operations can make 8,400, 8,925, and 8,400 respectively. The pace of production (the "drum" in the theory of constraints) should be tuned to meet the 8,000-per-week demand.

An organization produces industrial-capacity printer systems. They sell relatively few units a year at a high margin. If this product's technology clockspeed is low, what would be the best design and manufacturing philosophies? A. Integral design and push-pull manufacturing B. Modular design and push manufacturing C. Modular design and pull manufacturing D. Integral design and make-to-stock manufacturing

A. Integral design and push-pull manufacturing The question describes a product that has low technology clockspeed, which is a product with a long life cycle. Since it has few buyers, its demand will by nature be unstable compared to a product with a much larger customer base. The combination of high demand uncertainty plus low new product introduction frequency enables an integral design to be the most efficient design choice. Push-pull manufacturing is called for to enable the organization to be make-to-order but have reasonable lead times. The long lead time sourcing and component manufacture requirements can be push, while the products themselves can be make-to-order and pull.

In manufacturing, what is the cash conversion cycle? A. Length of time from purchase of raw materials to collection of accounts receivable B. Length of time for a new product to generate profits C. Ratio of accounts receivable for shipped end items to accounts payable for raw materials D. Average time open to close for accounts receivable

A. Length of time from purchase of raw materials to collection of accounts receivable The cash conversion cycle in manufacturing is defined as the length of time from the purchase of raw materials to the collection of accounts receivable.

A company competes in an industry that serves other manufacturers. Their customers play a significant role in defining requirements, and most products have a seven- to ten-year life. What is the most likely advantage a company in this industry would realize from having a fast product and service design process? A. It can delay start of design and still meet demand. B. It can charge higher prices for its products and services. C. It can evaluate competitors' products before beginning the design. D. It can involve customers early in the design process.

A. It can delay start of design and still meet demand. Starting design late, rather than introducing a product or service early, may have advantages when customer requirements are uncertain or changing. Design decisions can be made closer to the time that the product or service is introduced to the market.

What must leaders be aware of when developing a company's strategy policy? A. It is acceptable to develop a separate and more specific sustainability policy. B. ISO regulators will likely be on site to validate the sustainability plan once it is published. C. ISO 14001 requires strict adherence to their outline. D. All sustainability goals and objectives must be included.

A. It is acceptable to develop a separate and more specific sustainability policy. The overarching foundation of a company's sustainability management system is a sustainability policy consistent with the company's overall mission, vision, and core values. Many companies choose to have a separate and more specific sustainability policy, one that includes goals for both environmental stewardship and social well-being.

A company has few products but highly variable order quantities, and it uses forward scheduling. Why is it beneficial to use standard run hours as a basis for calculating completion dates? A. It provides a more realistic completion date than using fixed lead times. B. It helps to prioritize orders in key work centers. C. It automatically balances the load across operations. D. It provides start times knowing queue and setup times.

A. It provides a more realistic completion date than using fixed lead times. Run time can be used to load operations based on standard hours per part times order quantity.

A company defines the critical parameters for a component of a new product and then lets a supplier partner design the component. What is the most significant advantage of this approach? A. It simplifies internal project coordination. B. It reduces the cost of the final product. C. It enables a reduction in the marketing staff. D. It improves the performance of the final product.

A. It simplifies internal project coordination. The practice of subcontracting work to suppliers with whom the organization has developed a close relationship has the advantage of simplifying the amount of internal project coordination required, which can result in shorter lead times and higher development efficiencies.

What is a normal progression for a unique product characteristic that delights customers? A. It starts as an order winner and eventually becomes an order qualifier. B. it moves from an order qualifier to eventually become an order winner. C. It becomes a likely catalyst for a line extension or a new product. D. It always starts off at the product introduction stage as the focal point for advertising and sales presentations and always moves to the growth stage.

A. It starts as an order winner and eventually becomes an order qualifier. Such characteristics rely on their novelty, and they're no longer novel once they are offered in the market. What was an order winner may in time become an order qualifier if it starts to be considered a standard requirement

Preventive maintenance—comprising adjustments, replacements, and basic cleanliness—is used to forestall machine breakdowns. With regular preventive maintenance, what can be expected to happen to the cost of failure and poor quality? A. It will be reduced in the long term. B. It will increase in the short term. C. It will increase in the long term. D. It will be reduced in the short term.

A. It will be reduced in the long term Preventive maintenance ensures that production quality is maintained and that delivery schedules are met. A well-cared-for machine is also more likely to last longer and suffer fewer problems. Increased investment in prevention will initially make costs rise, because failure costs will not immediately drop. Investing in quality has a long-term positive return on investment.

Which of the following is a pull system in which work centers signal that they wish to withdraw parts from feeding operations or suppliers? A. Kanban B. Shop packet C. Andon D. Dispatch

A. Kanban Kanban is a method that uses standard containers or lot sizes with a single card attached to each. It is a pull system in which work centers signal with a card that they wish to withdraw parts from feeding operations or suppliers.

Which is an objective of material requirements planning? A. Keep priorities current. B. Determine the forecast. C. Keep the factory busy. D. Minimize inventory investment.

A. Keep priorities current. The objective of MRP is to keep priorities, or due dates for end items and components, current. Keeping the factory busy is an objective of capacity planning; determining the forecast is an input to the master production schedule; and minimizing inventory investment is an overall objective of aggregate inventory management.

Which of the following areas in the UN Global Compact contains the principle calling for the elimination of discrimination in respect of employment and occupation? A. Labour B. Human Rights C. Environment D. Anti-Corruption

A. Labour Principle 6, which is located within the Labour area of the UN Global Compact, calls for the elimination of discrimination in respect of employment and occupation.

What is the best time to measure master scheduling performance? A. Last period where actual production can be compared to company-planned targets B. Between the current period and the planning time fence to encompass the cumulative lead time C. Over the entire planning horizon to provide forward planning visibility to the organization D. Between the current period and the demand time fence to encompass released and firm planned orders

A. Last period where actual production can be compared to company-planned targets Performance can be measured only after production has occurred; the other responses do not have performance measures.

One of an organization's core values is that "we share bad news early." Which is necessary to see this value in practice? A. Leaders and managers model the behavior. B. The value is published in the employee handbook. C. The value is included in the mission and vision. D. The mandate comes from the top.

A. Leaders and managers model the behavior. Core values serve as business and ethical principles for all members in the business, but they function only when they are mirrored in the behavior of leaders and managers.

What is an advantage of small-scale operations and facilities? A. Less overcapacity during scale-up B. Higher average production cost per unit C. Good fit for high-volume, low-variety operations D. Good fit for high-volume, low-variety operations

A. Less overcapacity during scale-up The smaller facility better matches demand during the scale-up period; a larger facility would have excess capacity until demand catches up with it. Higher unit cost is not an advantage. The other choices are advantages of large-scale operations and facilities

In relation to time fences, in which of the following zones can scheduling software make automatic adjustments without the input of the master scheduler? A. Liquid zone B. Frozen zone C. Forecast zone D. Slushy zone

A. Liquid zone In the liquid zone, scheduling software may automatically make adjustments without input from the master scheduler. Manual changes can also be made in this zone. The only constraint will be the limits set in the production plan. This zone is usually the extra time added beyond the cumulative lead time of the product.

What are decoupling points? A. Locations in the product structure or distribution network where inventory is placed to create independence between processes or entities B. Locations in a distribution network where demand is not passed up the supply chain C. Broken links with a supply chain where demand is lost D. Cross docks used to transfer goods from one trailer to another while in transit to their final destination

A. Locations in the product structure or distribution network where inventory is placed to create independence between processes or entities Decoupling points are the locations in the product structure or distribution network where inventory is placed to create independence between processes or entities.

What is a potential risk associated with using GPS systems to track a shipment as it moves through the supply chain? A. Loss of power due to reliance on a battery B. Increased risk of theft C. Incorrect data stored in the blocks D. Reader malfunction during the scanning process

A. Loss of power due to reliance on a battery GPS systems typically use battery power, so power loss is a potential risk. Data being stored incorrectly on blocks would apply to blockchain technology, and reader malfunction would apply to radio frequency identification (RFID) technology instead of GPS systems. GPS systems add an extra layer of security by allowing location records to be created and associated with incidents like container doors opening, thereby lowering theft risks instead of increasing them.

Effectively managing production execution and capacity might include (select multiple) A. Lot splitting B. Send the production schedule back to CRP for optimization C. Alternate routings to exploit additional or faster equipment D. Increase capacity via additional staff and overtime

A. Lot splitting C. Alternate routings to exploit additional or faster equipment D. Increase capacity via additional staff and overtime

A guitar retailer sells four Gibson Les Pauls and a Fender Telecaster in one week. The manager places an order to Gibson for four Les Pauls and another order to Fender for a single Telecaster. What is the name for this lot ordering technique? A. Lot-for-lot B. Min-max system C. Batch ordering D. Stock keeping

A. Lot-for-lot Lot-for-lot is a lot-sizing technique that generates planned orders in quantities that equal the net requirements in each period.

A successful pharmaceutical company produces aspirin products. Which NPI characteristics would they likely demonstrate. A. Low clockspeed, stable demand, push manufacturing B. High clockspeed, stable demand, push manufacturing C. Low clockspeed, variable demand, push-pull manufacturing D. High clockspeed, variable demand, pull manufacturing

A. Low clockspeed, stable demand, push manufacturing

Which of the following situations is a result of anticipation inventory? A. Lower overtime costs B. Lower inventory carrying costs C. Higher subcontracting costs D. Higher required capacity

A. Lower overtime costs Building up inventory in advance of an anticipated need would lower the need for overtime, subcontracting, and additional capacity later. It would also raise inventory costs.

What is the logical connecting point between the supply system and the distribution system? A. MPS B. ISO 9000 C. MRP D. TOC

A. MPS The master production schedule (MPS) connects the distribution system, DRP, with the production system, material requirements planning (MRP). ISO 9000 is incorrect, because it is a documentation process related to documentation of production, return, and service policies and practices. TOC is incorrect because it is the theory of constraints, an internal philosophy related to increasing throughput at bottlenecks in the production and delivery process. MRP is incorrect because it receives input from the MPS and explodes the required bills of material to order purchased and production items.

Which of the following statements about material requirements planning (MRP) and scheduled receipts is true? A. MRP will neither reschedule nor explode scheduled receipts. B. MRP will reschedule and explode scheduled receipts. C. MRP will reschedule but not explode scheduled receipts. D. MRP will not reschedule but will explode scheduled receipts.

A. MRP will neither reschedule nor explode scheduled receipts. MRP may recommend the rescheduling of a scheduled receipt but will not automatically reschedule; all components for scheduled receipts have already been exploded.

What is the term for items used in support of general operations and maintenance such as maintenance supplies, spare parts, and consumables used in the manufacturing process and supporting operations? A. Maintenance, repair, and operating supplies B. Expense items C. Overhead D. Indirect spend

A. Maintenance, repair, and operating supplies Maintenance, repair, and operating supplies (MRO) include items used in support of general operations and maintenance such as maintenance supplies, spare parts, and consumables used in the manufacturing process and supporting operations.

Which of the following relationships are most mutually exclusive? A. Make-to-order and flow manufacturing B. Make-to-stock and line production C. Assemble-to-order and repetitive manufacturing D. Engineer-to-order and intermittent production

A. Make-to-order and flow manufacturing Make-to-order will have some custom-engineered parts, while flow is continuous with no design required.

Which of the following production environments is most likely to have customer, forecast, and distribution demand? A. Make-to-stock B. Make-to-order C. Engineer-to-order D. Assemble-to-order

A. Make-to-stock Make-to-stock has forecast and distribution demand and possibly customer demand. The others typically do not have distribution demand.

A demand-driven material requirements planning (DDMRP) system detects a qualified spike as part of its net flow position calculation for a strategic buffer zone. What will the system's logic propose? A. Making an order to return the net flow position to the top of the green zone B. Making an order to return the net flow position to the bottom of the green zone C. Regenerating the MRP using only a decoupled explosion D. Regenerating the MRP only if the buffer size would enter the red zone

A. Making an order to return the net flow position to the top of the green zone The net flow position is the current on hand inventory plus inventory on order minus qualified sales order demand. Qualified sales order demand is the sum of orders due today plus qualified spikes. Qualified spikes are the accumulated day's demand relative to a threshold typically specified as a percentage of the red zone. Identifying qualified spikes is important because these are areas of unusually high demand that would consume the buffer and remove its benefits. Instead when a spike or other variable lowers the net flow position to the bottom of the green zone, the system will propose making an order to return the net flow position to the top of the green zone.

When altering operations schedules to accommodate an exception, what is the scheduler's priority? A. Making decisions that help maintain valid plans B. Getting the expedited job done immediately regardless of the schedule impact C. Assuming infinite capacity when rescheduling D. Influencing decision makers to stop allowing exceptions

A. Making decisions that help maintain valid plans An exception management process needs to prioritize making and implementing decisions that help maintain valid plans.

Before workers can begin operations, they are issued a shop order packet. What does this contain? A. Manufacturing orders B. Manufacturing calendar C. Planned orders D. Inventory location

A. Manufacturing orders Manufacturing orders have already gone through the validation process in capacity requirements planning. The shop order packet is made up of all the manufacturing orders that are waiting to start operations or are works in progress.

What does process flexibility refer to? A. Manufacturing system that allows quick changeovers to respond to near-term changes in product volume and mix B. Training machine workers to perform tasks outside their immediate jobs and in problem-solving techniques C. Certification procedures verifying that a supplier operates, maintains, improves, and documents effective procedures that relate to the customer's requirements D. Ease with which current designs can be modified in response to changing market demands

A. Manufacturing system that allows quick changeovers to respond to near-term changes in product volume and mix Process flexibility is the design of a manufacturing system, including operators and machinery, that allows quick changeovers to respond to near-term changes in product volume and mix.

Which attributes apply to continuous (flow) manufacturing environments A. Many products are manufactured from one or few raw materials B. Capacity is planned from the forecast demand C. Scheduling production is very complex & requires computers D. Product doesn't stop, but moves in a continuous flow E. Focus is on using capacity efficiently F. Used primarily with MTO and ATO

A. Many products are manufactured from one or few raw materials B. Capacity is planned from the forecast demand D. Product doesn't stop, but moves in a continuous flow E. Focus is on using capacity efficiently

Which of the following is typically an advantage of implementing a multidomestic/multicountry strategy rather than a global strategy? A. Marketing can be adapted to the local culture. B. Brand recognition is increased. C. Plants can be located where total costs are lowest. D. Economies of scale are achieved.

A. Marketing can be adapted to the local culture. In a multidomestic/multicountry strategy, a company varies its product offering and competitive approach from country to country to be responsive to differing markets. In a global strategy, product variations are minimized from country to country.

Which of the following drives the material requirements planning (MRP) system and is the statement of which end items are to be produced? A. Master production schedule B. Preproduction plan C. Demand forecasts D. Inventory replenishment orders

A. Master production schedule The master production schedule states which end items are to be produced, in what quantities, and when, and it provides input of the items needed to the MRP system.

Which of the following are among the major activities of a distribution planning system? A. Material handling, transportation, warehouses, distribution inventory control, reverse logistics B. Material handling, transportation, distribution inventory control, operations management, reverse logistics C. Order administration, communication network, material handling, transportation, marketing, warehouses, operations D. Reverse logistics, material handling, transportation, warehouses, sales and operations planning, distribution inventory control

A. Material handling, transportation, warehouses, distribution inventory control, reverse logistics According to the APICS Dictionary, distribution planning is, "The planning activities associated with transportation, warehousing, inventory levels, materials handling, order administration, site and location planning, industrial packaging, data processing, and communications networks to support distribution." It includes all activities related to physical distribution as well as the return of goods to the manufacturer (reverse logistics).

What is an advantage of the lead capacity strategy? A. Maximizing of revenue potential B. Low unit cost of production C. Risk of permanent overcapacity D. High plant utilization

A. Maximizing of revenue potential As capacity will lead demand, utilization will be lower and production costs per unit will be higher than in a lag strategy. The risk of permanent overcapacity is high, so it is not an advantage.

An organization is looking to meet its sustainability goals but has budget constraints. Which is the best sustainability option for this organization? A. Minimize total inventory investment by ordering efficiently. B. Match inventory turnover with the product life cycle. C. Change products to use only recyclable plastics. D. Install solar panels on the roofs of all facility buildings.

A. Minimize total inventory investment by ordering efficiently. A lower inventory investment aligns with organizational sustainability objectives by avoiding excess inventory that may otherwise enter the waste stream if it becomes obsolete.

What is a method for increasing throughput? A. Relieving bottleneck work centers B. Delivering materials to point-of-use C. Using group technology D. Increasing order sizes to minimize setup

A. Relieving bottleneck work centers Bottleneck work centers determine throughput time for the entire product line.

Why does sales and operations planning (S&OP) address both monetary units and product families? A. Monetary units are an input, and product family plans are an output. B. The planning horizon covers both long- and short-term planning. C. Knowing both enables a cross-check to ensure consistency. D. Accounting needs monetary unit information, and production needs product information.

A. Monetary units are an input, and product family plans are an output. The business plan is an input to the demand part of S&OP and is stated in monetary units; the production plan is an output and is stated in product families. S&OP is considered a medium-term planning horizon.

A B2B organization makes replaceable belts for newspaper printing press maintenance. When identifying their customer segments, who would be the economic buyer? A. Newspaper companies B. Printing press manufacturers C. Newspaper readers D. The Associated Press

A. Newspaper companies The economic buyer is the organization whose budget funds the purchase. Since these are maintenance items for products out in the field, the newspaper companies would be the primary buyers. The printing press manufacturers would also be buyers but would buy in lower volume.

What are four common types of benchmarking? A. Noncompetitive, competitive, performance, practice B. Covert, overt, cooperative, professional C. Financial or net profit, per-share earnings, competitive, cooperative D. Within vertical, outside vertical, best-in-class, world-class

A. Noncompetitive, competitive, performance, practice Four common types of benchmarking are noncompetitive, competitive, performance, and practice benchmarking.

For what type of materials is tactical buying used? A. Nonstrategic B. Strategic C. Quality-critical D. High-value

A. Nonstrategic Tactical buying is used for items with stable pricing, ready availability, and controlled lead times. The other answers are more related to strategic sourcing.

Which efficiency measurement is applied to distribution for calculating capacity? A. Number of order lines picked vs. standard for number of order lines to be picked B. Number of pallets received vs. number of pallets shipped C. Number of trucks that have been unloaded D. Number of trucks that have been loaded

A. Number of order lines picked vs. standard for number of order lines to be picked In distribution, the standard measure of order lines picked would be compared to the actual order lines picked.

Which is a market strategic driver with strong potential to result in changes to the attributes of an existing product? A. Observation of a customer configuring the product in an undocumented way that improves performance in high winds B. Observation of a new competitor product that addresses target customer segment needs in an entirely new way C. Inquiry into supplier costs that indicates a different process could result in an identical supplied component at a lower cost D. Inquiry into customer satisfaction levels that indicates customers are highly satisfied with the product in normal wind conditions

A. Observation of a customer configuring the product in an undocumented way that improves performance in high winds. Strategic drivers influence business unit and manufacturing strategies. Market research can use observation, such as observation of customer product use in relevant conditions. In this case, the product is capable of being improved for use in windy conditions. Product development could test out these changes, and, if they are valid, the product attributes could be changed in simple ways. For example, this could involve adding the relevant instructions to the user manual and adding visual guides to the product to ensure correct reconfiguration for windy conditions. A competitor product that approaches customer needs in entirely new ways could result in the need for a new product rather than a change to existing product attributes (assuming no other existing products could serve as a viable substitute and the new approach is determined to be needed).

Which is a category of performance measures that relates to daily work routines, such as cycle time and utilization? A. Operational metrics B. Strategic metrics C. Tactical metrics D. Sustainability metrics

A. Operational metrics Operational metrics relate to daily work. Tactical metrics relate to intermediate-term goals to support the strategic plan. Strategic metrics relate to the long-term goals of a business. Although sustainability can be measured, it is not necessarily associated with daily operations.

Which of the following types of costs is related to the clerical work of preparing, releasing, monitoring, and receiving orders, the physical handling of goods, inspections, and setup? A. Ordering cost B. Purchase order cost C. Total cost D. Carrying cost

A. Ordering cost Ordering cost is used in calculating order quantities, the costs that increase as the number of orders placed increases. It includes costs related to the clerical work of preparing, releasing, monitoring, and receiving orders, the physical handling of goods, inspections, and setup, as applicable.

A production plan has established 1,000 units in a period for a stocked product family. Specific percentages for end items are not known with certainty. Which of the following alternatives should the master schedule ignore when translating the product family into specific master production schedule quantities? A. Overplan the end items based on historical deviations to provide for some uncertainty. B. Use a super bill of material to overplan the percentages in a two-level master production schedule. C. Make an estimate of the number of actual end items to produce based on history. D. Use a modular bill of material and overplan the options to provide for some uncertainty.

A. Overplan the end items based on historical deviations to provide for some uncertainty. The end item quantities should not be overplanned, as they must equal the quantity in the production plan.

Which Statement is true regarding push and pull replenishment A. PULL: starts @ warehouse, meets local demand, safety stock as needed B. PUSH: starts @ warehouse, constant order quantities, low safety stock C. PULL: starts @ central supply, fair share to warehouses, low safety stock D. PUSH: starts @ central supply, equal quantity to all sites, no safety stock

A. PULL: starts @ warehouse, meets local demand, safety stock as needed

According to Tuckmans ladder at what stage are project teams at there peak productivity A. Performing B. Norming C. Forming D. Storming

A. Performing

A market leader in systems computing fails to adapt to market trends for smaller devices and cloud computing. This reveals a poor assessment process concerning its: A. operations strategy. B. executive dashboard capabilities. C. strengths, weaknesses, opportunities, and threats (SWOT) analyses. D. monthly sales and operations planning (S&OP).

A. operations strategy. The operations strategy shapes the long-term capabilities of an operation and should be consistent with the overall strategy

What type of inventory record system uses transactions as they occur to track inventory levels? A. Perpetual inventory system B. Periodic inventory system C. Two-bin inventory system D. Cycle counting inventory system

A. Perpetual inventory system A perpetual inventory system is an up-to-date, continuous record of transactions. A periodic inventory system is an order replenishment system, not an inventory record system. A two-bin inventory system is a visual replenishment system. A cycle counting inventory system buffers against variability of demand, not an inventory record system.

Which of the following terms applies to a suggested order quantity, release date, and due date created by the planning system's logic when it encounters net requirements in processing material requirements planning (MRP)? A. Planned order B. Planned order release C. Reschedule recommendation D. Planned order receipt

A. Planned order A planned order includes a suggested order quantity, release date, and due date created by the planning system's logic when it encounters net requirements in processing MRP.

One hundred units of part A are needed at the start of week 6. They have a one-week lead time. Two part Bs are needed for one part A, and Bs have a two-week lead time. Which shows a proper exploding and offsetting entry in the material requirements planning grid? A. Planned order release of 200 Bs in week 3. B. Planned order receipt of 200 Bs in week 4. C. Planned order release of 100 Bs in week 4. D. Planned order receipt of 100 Bs in week 3.

A. Planned order release of 200 Bs in week 3. The planned order receipt of 100 As in week 6 with a one-week lead time means that the planned order release of the 100 As will be in week 5. Because 2 Bs are needed for one A, there will be a planned order receipt for 200 Bs in week 5. Due to the two-week lead time, offsetting will put the planned order release in week 3.

A training program is developed to ensure that powder-coating professionals know how to select the right chemical pretreatment for the given substrate and how to set the right curing temperature and dwell time for parts based on their density. Experienced powder coaters provide their input to the course developer, who also relies on the results of a design of experiments. The materials get to the specifics, especially as they relate to actual errors in the past, and include some hands-on training. The course is taught to new employees on their first day of work just after the basic powder-coating process is covered in a different training course. If this is the only time this course is offered, why might this training program still fail? A. Poor timeliness B. Poor participation C. Poor method D. Poor level of detail

A. Poor timeliness In this case, the course is being offered too soon, just after the new employees have been taught the basic process. The training is not being provided when the actual knowledge or skill will be used. It would be better to offer the course after the new employees have had some time to learn the basic process and get some practice under supervision.

Universal power supplies can be set to different voltages based on the country the customer resides in. What is this an example of? A. Postponement B. Concurrent design C. Curve fitting D. Decoupling

A. Postponement Postponement shifts product differentiation closer to the consumer by postponing specific changes to the last possible supply chain location.

Which of the following will have the greatest influence on an employee's evaluations and promotions? A. Problem-solving skills B. Performance to standard C. Setup time D. Product output

A. Problem-solving skills An employee's problem-solving skills provide the most value to an organization. The other measures will show productivity, but what is really valued is an employee's ability to propose new ideas and search for avenues for continuous improvement.

Which of the following is typically a significant benefit of using bar-coded labels to identify parts and storage locations? A. Product identification errors are reduced. B. The cost of labeling is transferred to the supplier. C. The data entered is more complete. D. Stockroom employee morale is improved.

A. Product identification errors are reduced. Bar codes are a series of alternating bars and spaces printed on parts, containers, and labels, representing encoded information that can be read by electronic readers. Bar coding facilitates timely and accurate input of data to a computer system, reducing errors.

Which of the following is used by capacity requirements planning to determine the total load on work centers in a job shop environment? A. Product routings B. Schedule accuracy C. Demonstrated capacity D. Customer orders

A. Product routings Routings tie actual and planned orders to work centers for load planning.

A buyer asks a supplier to design a product to the buyer's specifications. Which of the following steps is the buyer not responsible for? A. Production of samples B. Approval of test procedure C. Analysis of test results D. Detailed product requirements

A. Production of samples The production of samples is the responsibility of the supplier, who will eventually make the product if tests are successful. The other three actions all are the responsibility of the buyer.

A company sells a product that has fairly steady sales throughout the year. The company is using lean manufacturing initiatives to improve quality, reliability, and cost, and they expect sales to remain steady for some time. What should the forecasting characteristics for this product include? A. Quantitative and intrinsic B. Qualitative and intrinsic C. Qualitative and extrinsic D. Quantitative and extrinsic

A. Quantitative and intrinsic History, trend, and annual sales data should be used. In other words, this example is a good candidate for using quantitative and intrinsic forecasting methods that rely on such historical sales data.

Which of the following situations will best enable a company to react swiftly to changes in the volume and mix of its products? A. Quick changeover of equipment B. Increased forecast accuracy C. Decreased safety stock D. Continuous production

A. Quick changeover of equipment A manufacturing environment that is characterized by agility and nimbleness has the best chance of responding to changes in the volume and mix of products. Decreased safety stock levels inhibit quick production changeovers. Better forecasting is too long-range to impact very short-term schedule change requirements. Continuous production is normally focused on producing large lot quantities; these large quantities are produced in a very narrow range of highly standardized products, where shop floor setup cannot be easily changed economically to accommodate abrupt changes in the schedule.

Which are the primary outputs from MRP (select multiple) A. Updated forecast B. Action messages C. Planned production orders D. Planned purchase orders

B. Action messages C. Planned production orders D. Planned purchase orders

Why is it important for an organization to consider setting waste hierarchy policies for its suppliers? A. Reputation risk B. Liability risk C. Regulatory compliance risk D. It is worth the added expense.

A. Reputation risk Setting policies for suppliers related to the waste hierarchy is important because the organization can be held responsible for its supply chain partners' activities in terms of public opinion. Enforcement of efficiency-related policies can also help drive unnecessary costs out of the supply chain. Liability and regulatory compliance are risks for the supplier, not the buyer.

An information system implementation project is six months behind schedule because many people involved with the project are working on a serious problem with product quality. Which of the following actions should the executive steering committee take in this situation? A. Reschedule implementation efforts based on the resources currently available. B. Let the project manager handle the problem and get the project back on schedule. C. Contract with an outside systems and consulting group to implement the system. D. Cancel the system implementation because it is adversely affecting product quality.

A. Reschedule implementation efforts based on the resources currently available. The executive sponsors of the project need to get the project restarted. This will probably mean that schedule dates, costs, and resources will need to be changed from the original plan.

An executive suggestions that the organization's strategy update should include a focus on sustainability as expressed by the voice of the customer. Which of the listed activities should be done before the others? A. Scan the political and social environment for sources of social pressure related to sustainability. B. Find quick wins related to sustainability and create a project profile. C. Research potential sustainability technologies and solutions. D. Determine the available budget for sustainability initiatives.

A. Scan the political and social environment for sources of social pressure related to sustainability. Before adding sustainability or other goals to a strategy, it is vital to first scan the market to get a better understanding of the sources of social pressure as well as any related government regulations in the organization's areas of operation. The other steps can occur once the requirements are better defined.

Which quality tool is used to predict a variable based on a relationship with another variable? A. Scatter chart B. Cause-and-effect diagram C. Pareto chart D. Control chart

A. Scatter chart In a scatter chart, two sets of data are plotted on a graph, with the y axis used for the variable to be predicted and the x axis used for the variable to make the prediction. The graph will show possible relationships.

What inventory data is used by MRP? A. Scheduled receipts B. Gross requirements C. Net requirements D. Planned order releases

A. Scheduled receipts Inventory data used by MRP are scheduled receipts and on-hand amounts. The other answers are incorrect because gross requirements come from the master production schedule or are calculated by MRP from higher level requirements; and because MRP calculates both net requirements and planned order releases.

What could happen if the new demand is added within the DTF without careful consideration (select all that apply) A. Schedules for production labor become unworkable B. Production stops due to lack of parts or raw materials C. Utilization, efficiency, and quality metrics improve D. Committed orders could be delayed, causing customer dissatisfaction

A. Schedules for production labor become unworkable B. Production stops due to lack of parts or raw materials D. Committed orders could be delayed, causing customer dissatisfaction

Which of the following aspects of a job most determines the day and time when the job will be done? A. Sequence B. Availability C. Priority D. Queue

A. Sequence Sequence determines in what order jobs are done.

What will happen if internal setup tasks are converted to external tasks (for example, organizing tools and materials for setup while the machine is still running a batch)? A. Setup time will be reduced and the operation's throughput and velocity will be increased. B. Setup time will be increased and the operation's throughput and velocity will be reduced. C. The complexity of the setup will be increased, thus increasing the lead time to make a product. D. The overall lead time for the product won't be affected.

A. Setup time will be reduced and the operation's throughput and velocity will be increased. Converting internal setup tasks to external tasks is one of the five steps for reducing setup time. Reducing setup time increases operations velocity and throughput.

Increasing the number of distribution centers usually results in a reduction in which of the following? A. Shipping times to the customer B. Cumulative lead time C. Safety stock D. Transportation costs

A. Shipping times to the customer More warehouses typically means less time, and therefore less cost, for shipping to the customer.

Which is a key aspect of selecting organizational supply chain performance metrics for an improvement initiative that is leveraging ASCM's Supply Chain Operations Reference Model Digital Standard (SCOR-DS) as a guiding framework? A. Some metrics will need targets that drive superior performance relative to competitors while other metrics will only need to drive equivalent performance. B. Organizations use the levels 1 through 3 calculation methods in SCOR-DS without modifications so that any organization using SCOR-DS metrics will be comparable. C. Organizations select the level 4 metrics listed in the SCOR-DS that apply to their industry using the SCOR-DS practices as a guide. D. Organization's select their own level 4 metrics for supply chain support processes such as demand generation or product development to show how these integrate with the primary supply chain metrics.

A. Some metrics will need targets that drive superior performance relative to competitors while other metrics will only need to drive equivalent performance. Organizations select the metrics that will drive them toward superior performance in priority areas and equivalent performance in lower priority areas relative to competitors or other benchmark organizations. Organizations then adapt the SCOR-DS metrics as needed to enable them to be calculated using the data that are actually available in their databases (or will be after they make improvements). Organizations need to make their own level 4 metrics; they are not provided in SCOR-DS. In SCOR-DS, support processes such as demand generation or product development are out of scope.

How often is the forecast information used in the sales and operations planning process updated? A. Weekly B. Monthly C. Quarterly D. Annually

B. Monthly The sales and operations plan and the inputs to it are updated on a rolling monthly basis.

Why is stockout duration important when considering the customer service level? A. Stockout duration is most likely associated with the number of orders shipped late. B. Stockout duration is assumed to be constant, so variability affects the customer service level. C. Stockout duration is immaterial as it is not related to the number of exposures to stockout. D. Stockout duration is important because customer service isn't 100% until all line items ship.

A. Stockout duration is most likely associated with the number of orders shipped late. Stockout duration is the amount of time an item is stocked out and is not available for sales. Stockout duration directly impacts the number of orders that are shipped on time.

In the theory of constraints, which of the following actions best reduces work-in-process (WIP) inventory on the shop floor? A. Subordinating all else to the constraint to the system B. Elevating the constraint to the system C. Deciding how to exploit the constraint D. Identifying the constraint to the system

A. Subordinating all else to the constraint to the system Once a process constraint has been identified, WIP is reduced by reducing all load to be equal to the allowable capacity found at the constrained process. Any load released to the manufacturing floor that is greater than the constrained process capacity will simply end up as excess load. Identifying process constraints is the first step in WIP reduction. Maximizing the constraint means that planners will search for alternative methods for working around the constraint so that productivity can actually be increased.

Why does production become less synchronous the lower a part is in a bill of material? A. Successive lot quantities decouple demand from supply. B. Bills of material typically exclude floor stock at lower levels. C. Machining and assembly occur in batches to reduce setups. D. Cumulative lead times introduce a measure of variability.

A. Successive lot quantities decouple demand from supply. Different lot quantities support production but are often not directly in sync with the sequence in which the end item is produced.

Who, if anyone, is responsible for creating item inventory policies such as for inventory levels, lot sizes, and safety stock when vendor-managed inventory (VMI) is used? A. Supplier B. Customer C. Independent third party D. Such policies are not needed when using VMI.

A. Supplier With vendor-managed inventory, the supplier is responsible for maintaining the inventory level required by the customer. This activity is accomplished through regularly scheduled reviews of the on-site inventory. The vendor creates the item inventory policy (e.g., inventory level, lot size, safety stock), within the bounds of an agreement with the customer.

Which of the following reasons is most likely the cause for using safety lead time instead of safety stock? A. Supply delivery reliability is a concern. B. The part stocks out too frequently. C. Demand variability is too biased. D. Carrying safety stock is too expensive.

A. Supply delivery reliability is a concern. Using safety lead time will cause the order to be delivered earlier, minimizing the supplier delivery unreliability issue.

In its haste to roll out new products, marketing often sells product too early and promises delivery dates that are unworkable. What is a good way to prevent this type of failure? A. Systematically prevent any orders from being accepted until the product is fully released, monitor published lead times, and ensure that operations has a say in the release. B. Appease the affected customers with promises of future discounts. C. Track how often marketing sells product prematurely and use this information as justification for introducing remedial training. D. Punish the marketing people with a negative hit to their bonuses.

A. Systematically prevent any orders from being accepted until the product is fully released, monitor published lead times, and ensure that operations has a say in the release. It is always better to prevent a problem than to deal with the negative consequences after a problem occurs.

Which shipping mode would be appropriate for high volume long distance trip from factory to the warehouse. A. TL B. LTL C. Parcel D. OTC

A. TL

Which statement about information and process technology is true? A. Technology should be selected on the basis of the competitive advantage it conveys. B. Information infrastructure requirements in push and pull systems are the same. C. ERP systems are more important to pull systems than push systems. D. The learning curve should not affect investment decisions.

A. Technology should be selected on the basis of the competitive advantage it conveys. One of the selection criteria for technology should be whether it conveys an advantage that is significant and hard to copy. An ERP provides organizational benefit by providing access to accurate and current data. The learning curve should be a consideration since it will affect the payback analysis. Push and pull systems do require different types of technology.

Which of the following guidelines should be used when selecting activities for performance measurement? A. The activity has a significant effect on the performance of the overall system, and the activity is measurable (objective and quantifiable). B. The activity has a significant effect on the performance of the overall system, the activity has a high potential for improvement, and the activity is measurable (objective and quantifiable). C. The activity has a high potential for improvement, the activity falls within the responsibility of the organization, and the activity is measurable (objective and quantifiable). D. The activity has a significant effect on the performance of the overall system, the activity has a high potential for improvement, the activity falls within the responsibility of the organization, and the activity is measurable (objective and quantifiable).

A. The activity has a significant effect on the performance of the overall system, and the activity is measurable (objective and quantifiable). Performance measurement should focus on important activities, and only measurable activities can be measured.

Which is an objective of purchasing? A. To obtain goods and services of the required quality at the right cost. B. To keep many sources of supply available to ensure competitive pricing. C. To control budgetary expenditures of all employees through sound purchase order control. D. To ensure that goods are always purchased at the lowest possible price.

A. To obtain goods and services of the required quality at the right cost. The objectives of purchasing are to obtain goods and services of the quality and quantity needed at the right cost, to provide customer service, and to identify qualified suppliers and maintain good relations. The other answers are correct because many sources of a supply may not be available; purchasing does not control or approve the budgetary expenditures; and the lowest price is not necessarily the right price.

What is the capacity validation tool for Master Scheduling? A. RP B. RCCP C. CRP D. CVT

B. RCCP

What is the most difficult phase in a product's life cycle in terms of determining how to best arrange the supply chain, and why? A. The growth phase is most difficult for supply chain design because the problem is how to meet profit and growth objectives given irregular demand. B. The decline phase is most difficult for supply chain design because the problem is how to meet profit objectives given irregular demand. C. The decline phase is the most difficult for supply chain design because the problem is how to protect market share despite competitors using some of the same supply chain intermediaries. D. The growth phase is most difficult for supply chain design because the problem is how to grow and protect market share despite competitors using some of the same supply chain intermediaries.

A. The growth phase is most difficult for supply chain design because the problem is how to meet profit and growth objectives given irregular demand. During the growth phase, the objectives are to grow the market and to produce an acceptable profit. Note that the most difficult part of how to arrange the supply chain is actually during the growth phase. This is because demand may be very irregular, especially considering that forecasts may lack reliable data.

When a company is pursuing a capacity-lagging strategy, which of the following will likely be true? A. The plants should always be working at full capacity. B. The plants will be more expensive from a machine and labor perspective than for a capacity-leading strategy. C. The organization will be more capable of protecting its market share than if it had used a capacity-leading strategy. D. Operations will typically find that achieving 90% to 100% capacity utilization is very difficult.

A. The plants should always be working at full capacity. A capacity-lagging strategy should always find plants working at full capacity.

When considering a potential customer order, ATP can establish if (Select all that apply) A. The product is available at time of order B. Items can be shipped by customer's requested C. Which other customers are ordering the same items D. Items are available for a single shipment in full

A. The product is available at time of order B. Items can be shipped by customer's requested D. Items are available for a single shipment in full

Which of the following is most correct regarding the production plan in a make-to-stock environment? A. The production plan is the time-phased plan of overall output, and it may be stated in terms of units, tons, or linear feet. B. An overloaded production plan alerts the master scheduler to correct the condition in the master production schedule. C. A production plan cannot be used for one-of-a-kind products that have not been assigned to a product family. D. Past-due load in the production plan receives an increased priority by the planner's use of the critical ratio technique.

A. The production plan is the time-phased plan of overall output, and it may be stated in terms of units, tons, or linear feet. The production plan is the time-phased plan of overall output.

If a customer or service provider is given less leeway to customize a service, what is one tradeoff? A. The sales opportunity is lower. B. Production efficiency is lower. C. The perceived value of the service must be higher. D. The degree of contact between the customer and the service provider must be higher.

A. The sales opportunity is lower. Per the service design matrix, reducing opportunities for customization will reduce the likelihood of making a sale. However, production efficiency will be higher.

Which of the following is true of internal initiatives that enhance existing order qualifiers? A. They are unlikely to provide much competitive benefit. B. They should be driven by the voice of the customer. C. They are most appropriately prioritized using customer feedback. D. They will likely increase business.

A. They are unlikely to provide much competitive benefit. Any further improvement in qualifying factors above the qualifying level is unlikely to gain much competitive benefit.

What is necessary in a new product introduction schedule? A. Time for the customer to review the prototype and give detailed feedback B. Time for the concept to be developed without needing to have multiple iterations C. Time for the customer to review engineering drawings and documents for manufacturability D. Time for the manufacturing capacity to be at full scale before launch

A. Time for the customer to review the prototype and give detailed feedback During prototyping, a working model of the product and related services is developed. A prototype's purposes include to prove feasibility and to elicit feedback. Sufficient time needs to be given to customers and to supply to give this feedback. Supply should make suggestions, such as for manufacturability, at this stage, not the customer.

Which of the following is a planning logic for independent demand items where the planned order releases are input to the master schedule? A. Time-phased order point B. Distribution planning C. Final assembly scheduling D. Distribution resources planning

A. Time-phased order point Time-phased order point is a planning logic for independent demand items where gross requirements come from a forecast, not via explosion.

What flows downstream toward the customer in the transaction channel? A. Title to goods B. Goods C. Cash for sales D. Nothing other than cash for returns

A. Title to goods While the distribution channel handles physical distribution, the transaction channel handles the related transactions, which include both payment of funds up the channel and transfer of ownership down the channel. Transfer of ownership is accomplished by transferring the title to the goods to the next party.

Which is an objective of a pull system? A. To limit the total inventory B. To assign priority to orders C. To increase throughput (rate) D. To establish due dates

A. To limit the total inventory One objective of a pull system is to produce exactly what is needed, when it is needed, and avoid unnecessary WIP and finished goods inventory. Increasing throughput would have the effect of speeding up production and could build up inventory in advance of customer demand. Establishing due dates and assigning order priority are features of a push system.

True or False- The quality performance objective can be equally handled in all 5 manufacturing process types A. True B. False

A. True

By validating the need and timing of capacity requirements and by recommending adjustments to capacity, resource planning can add what to the strategic plan? A. Value B. Lead time C. Efficiency D. Longer planning horizon

A. Value Resource planning can add value to the strategic plan by, for example, validating the need and timing of capacity requirements and by recommending whether to expand capacity in advance of need all at once, to expand capacity incrementally in steps, or to lag behind the need.

Which of the following characteristics are desirable in a system measuring overall plant productivity? A. Visibility of multiple manufacturing resources, and identification of factors for improving throughput B. Visibility of multiple manufacturing resources, and presentation of data in discounted dollars C. Identification of factors for improving throughput, and detailed analysis of labor variances D. Visibility of multiple manufacturing resources, identification of factors for improving throughput, and detailed analysis of labor variances

A. Visibility of multiple manufacturing resources, and identification of factors for improving throughput Visibility of multiple manufacturing resources and identification of factors for improving throughput provide for the measurement of overall plant productivity.

A supplier indicates that the ideal temperature for a raw material being considered as a possible ingredient in a food product is 0 degrees Celsius. What is an important follow-up question? A. What is the acceptable temperature range? B. Is air transport acceptable? C. Is there a need for a safety data sheet? D. For what duration of time can the product be above freezing?

A. What is the acceptable temperature range? Temperature requirements are usually specified in a range. Items could get too cold or too warm. How long a product can stay above freezing would be highly dependent on the ambient air temperature and would not be very accurate information. If the range is known and the product temperature can be monitored, however, the temperature reading will indicate when the product is being stored outside of the acceptable range (too warm or too cold).

Two technology tools to optimize system performance are "what if" and "simulation". Which Statements are true? A. What-if analysis allows changing a single factor and evaluating the outcome B. Simulation is extensive, changing many factors & running over long periods C. Simulation is performed on the production system, to use current live data D. What-if gives a simple output to the changed scenario: success or failure

A. What-if analysis allows changing a single factor and evaluating the outcome B. Simulation is extensive, changing many factors & running over long periods

Under which of the following conditions is it most necessary to perform bottom-up replanning of an overloaded key work center? A. When the overload exceeds rated capacity B. When the overload is due to utilization C. When the overload exceeds standard hours D. When the overload is due to efficiency

A. When the overload exceeds rated capacity If load exceeds rated capacity, the work center cannot produce the desired load.

When are final assembly schedules typically used? A. When there are many options and it is difficult to forecast which combination the customer will want B. When production is a continuous flow process C. When products come from an engineer-to-order production strategy D. When all assemblies are the same with no variation in product structure

A. When there are many options and it is difficult to forecast which combination the customer will want When there are many possible combinations of options, it can be impractical to store every possible configuration. Using a final assembly schedule, combinations are assembled based on customer order input.

Which of the following information is contained in a routing file? A. Work center to be used B. Supplier of raw material C. Customer part number D. Quantity to be ordered

A. Work center to be used The work center reference in the routing informs the production planners where the production order is to be built in the factory.

Mass customization is the ability to produce: A. a large variety of individual products at a low cost. B. generic products that the customer can use in multiple ways. C. products with multiple features. D. large quantities of customer-configured products.

A. a large variety of individual products at a low cost. Mass customization is the creation of a high-volume product with large variety so that a customer may specify an exact model out of a large volume of possible end items.

Tailoring the company's competitive approach and product offering to fit specific market conditions in each host country would be an example of: A. a localized multicountry strategy. B. a broad differentiation strategy. C. a focused differentiation strategy. D. a focused low-cost provider strategy.

A. a localized multicountry strategy. A localized or multicountry strategy is one in which a company varies its product offering and competitive approach from country to country in an effort to be responsive to differing buyer preferences and market conditions.

A company produces a variety of chocolate products on a repetitive basis to require less cleaning from one product to another. The most likely means of capacity planning is: A. a process train. B. finite capacity planning. C. optimization planning. D. capacity requirements planning.

A. a process train. A process train is used in a process industry to represent the flow of materials and plan capacity flow.

Capable- to- promise (CTP) includes ATP inventory plus... A. additional production added within capacity constraints B. an infinite potential capacity including all supply sites C. inventory freed by canceling other customer orders D. planned production beyond the customer due date

A. additional production added within capacity constraints

Pull systems of planning and control in a distribution environment A. allow each distribution center to manage its own inventory. B. centralize inventory management. C. are centralized at the first level in distribution and the first level in production and are decentralized at every other point. D. rely on replenishment orders from the stocking locations closest to the production facilities.

A. allow each distribution center to manage its own inventory. With a pull system, a distribution center replenishes inventory based upon its own demand and supply parameters. The other answers are incorrect because centralized inventory management pushes inventory out to the distribution centers; pull systems are based on demand closest to the customer, not closest to production; and there is no centralization of inventory management in a pull system of planning and control.

When assessing potential points of failure prior to an acquisition, it is critical to analyze manufacturing activities as well as: A. operational strategies. B. the degree of manufacturing automation. C. shop floor work instructions. D. the electronic data interchange capabilities of all suppliers.

A. operational strategies. Prior to Daimler's acquisition of Chrysler, Chrysler had applied lean principles to its operations and modularized its designs within its operational strategy. They had trimmed new product development time from five years to two. When Daimler folded Chrysler's operations into theirs, Chrysler's rapid development process and lean profit formula were lost.

The strategic management of any operation: A. cannot be separated from how well operational resources are managed at the detail level. B. is the key driver of operations, regardless of the operation's past performance. C. will be determined by the ability of the facility to react to short-term changes in schedule or product mix. D. should not be constrained by past operational efficiencies or quality performance.

A. cannot be separated from how well operational resources are managed at the detail level. Operational knowledge is vital to establishing an operations-based strategic advantage. A superior understanding of what one's processes can do at the limits of their capability allows the organization to better provide products and services, due to confidence in knowing for sure that the processes can deliver. Well-controlled processes will also have fewer errors and waste and therefore higher efficiency (lower costs, higher quality).

a time fence policy does which of the following? A. Controls the amount of change that can occur during predefined areas of the planning horizon B. Controls supply planning information for production C. Monitors changes in supply and demand conditions D. Avoids excess inventory through a dynamic process

A. controls the amount of change that can occur during predefined areas of the planning horizon The time fence policy controls the amount of change that can occur within a predefined area of the planning horizon. The other answers are incorrect because the time fence policy is designed to control the demand side of the MPS; time fence policies control the amount of change permitted to a MPS, and are not maintained; and time fence policies control the amount of change permitted within predetermined zones of the MPS, not changes in supply and demand conditions.

When outsourcing products or processes, a critical first step for all involved is identification of the company's: A. core competencies. B. patents. C. existing capacity strategy. D. strategic plan.

A. core competencies. Core competencies are the skills or knowledge sets that enable a firm to provide the greatest level of value to its customers in a way that is difficult for competitors to emulate and that provides for future growth.

The removal of outliers from demand data in order to provide a reasonable historical base from which to forecast is called: A. demand filtering. B. regression. C. time series decomposition. D. smoothing.

A. demand filtering. Demand filtering is a method of controlling variations by providing a check that limits the amount of the variation from one period to the next. A demand filter typically is a ratio of the new demand to the average of the old demand.

The primary objective of cycle counting is to: A. eliminate the causes of errors. B. update inventory locations. C. eliminate annual physical inventory. D. update inventory quantities.

A. eliminate the causes of errors.

The strongest threats relating to competition in an established industry are likely to come from: A. existing competitors. B. angel investors. C. mergers and acquisitions. D. new technology innovators.

A. existing competitors. Established companies in an industry already have the resources to compete and are the most likely source of new competition.

Forward integration occurs when a company: A. expands on its demand side. B. insources a previously outsourced operation. C. expands on its supply side. D. expands into overseas (foreign) markets.

A. expands on its demand side. Forward integration occurs when a company expands toward the end user or customer side.

The production forecast A. forecasts the family ATP multiplied by option percentages. B. represents the product family forecast in two-level master scheduling. C. is based on production lead times. D. is primarily used with master production scheduled items.

A. forecasts the family ATP multiplied by option percentages. The production forecast is used with two-level master scheduling and represents the ATP (MPS minus customer orders) at the family level multiplied by the option percentage. The other answers are incorrect because the production forecast is used with a subset of master-scheduled items only; the production forecast does not represent the product family forecast; and the production forecast is not based on production lead times.

Acquiring elements of the finished goods distribution channel is called: A. forward integration. B. alliance development. C. backward integration. D. a partnership.

A. forward integration. Forward integration is the process of buying or owning elements of the production cycle and the channel of distribution forward toward the final customer.

A supplier corrective action program should be used to: A. help identify root causes of problems and correct them. B. provide a way for suppliers to communicate buyer issues to management. C. process credit memos. D. correct invoices that do not match their purchase orders.

A. help identify root causes of problems and correct them. Corrective action systems are in place to identify the root causes of problems and take action to correct them.

An engineer-to-order environment with fairly long lead times has a severely overloaded work center in the middle of the production process. Assuming that deadlines cannot be changed, a simulation of the situation is most likely to: A. identify changes to specific work orders required. B. resolve the overload for each period. C. identify the magnitude of the overload. D. project new end-item dates.

A. identify changes to specific work orders required. Load is tied to specific orders in this situation.

Through the use of value chain analysis, cost performance may be improved by: A. identifying and eliminating non-value-added activities. B. imposing high utilization targets for value chain operations. C. charging more for products that use activities within the value chain. D. finding lower-cost raw materials.

A. identifying and eliminating non-value-added activities. Value chain analysis can improve the company's cost performance by identification and elimination of non-value-added activities.

The plan for the production and purchase of components used in making items in the master production schedule is the: A. material requirements plan. B. sales and operations plan. C. capacity management plan. D. production plan.

A. material requirements plan. The material requirements plan explodes the products from the master production schedule orders to determine the quantities and dates for all manufactured and purchased components.

Capacity requirements planning (CRP) directly interfaces with: A. material requirements planning (MRP). B. rough-cut capacity planning (RCCP). C. work center finite scheduling. D. master production scheduling (MPS).

A. material requirements planning (MRP). CRP directly interfaces with MRP.

Selecting the required quantity of specific products for movement to a packaging area and documenting that the material was moved from one location to shipping is known as: A. order picking. B. order allocation. C. order extraction. D. order validation.

A. order picking. Order picking is selecting, or "picking," the required quantity of specific products for movement to a packaging area (usually in response to one or more shipping orders) and documenting that the material was moved from one location to shipping.

Maintaining physical control of point-of-use is accomplished by: A. procedures. B. cycle counting. C. receipt and issue transactions. D. limited access.

A. procedures Procedures limit the input and control the output based on demand.

Generating and rewarding short-term performance improvements within organizational change: A. sidelines cynics and selfish resisters. B. proves that the project champion was right. C. may be the only success within the entire project. D. should strike fear into the hearts of the naysayers.

A. sidelines cynics and selfish resisters. Short-term performance improvements help transformations.

Organizations consisting of a collection of companies that have similar and complementary supply chains will likely perform better together because of: A. the potential for skills transfer and/or volume discounts in procuring materials, resource sharing, and logistics. B. their leverage with municipalities that depend on them for jobs and taxes. C. the capability to move inventories off the books in transit between various business entities. D. their ability to corner the market for certain component parts and raw materials, driving prices down.

A. the potential for skills transfer and/or volume discounts in procuring materials, resource sharing, and logistics. Diversified corporations with multiple businesses that have a strategic fit with respect to their supply chain activities can perform better together because of the potential for skills transfer and/or volume discounts in procuring materials, resource sharing, and logistics.

In a functional layout A. there is little buildup of WIP inventory. B. capital costs are higher than in a product-based layout. C. each work center must be flexible. D. specialized equipment is used.

A. there is little buildup of WIP inventory. The advantage to a functional layout is that equipment can handle a wide variety of products. Capital costs generally are higher for a product layout, not a process layout. Dedicated equipment is used in a process layout, hence its relative inflexibility. There tends to be more WIP inventory in a process layout because, unlike in a product layout, workflow is lumpy because of varying batch sizes and non-standard routings.

What term is used for consolidating several units in a warehouse into larger units? A. Containerization B. Unitization C. Unit loads D. Palletization

B. Unitization In warehousing, unitization is the consolidation of several units into larger units for fewer handlings.

An organization's average inventory in the aggregate is $3 million. Capital costs are 7 percent per year, storage costs are 8 percent per year, and risk costs are 11 percent per year. What is the annual carrying cost? A. $570,000 B. $780,000 C. $1,848 D. $450,000

B. $780,000 Carrying Cost = Average Annual Inventory × Carrying Cost Rate. To determine the carrying cost rate, sum the capital cost, storage cost, and risk cost percentages: 7% + 8% + 11% = 26%. Carrying Cost = $3,000,000 × 0.26 = $780,000.

Using the information provided below, what is the forecast error for the previous week? 12 tubes per case 50 cases per pallet Current mean absolute deviation (MAD) = 100 Previous week: Forecast = 5,000 cases Sales = 100 pallets Scrap loss = 500 A. -500 B. 0 C. 5 D. 500

B. 0 100 pallets x 50 cases = 5,000, so the error is 0.

A line works one eight-hour shift per day, five days per week. If the demand is 960 units per day, what is the takt time? A. 0.04 minutes B. 0.5 minutes C. 2.5 minutes D. 12.5 minutes

B. 0.5 minutes (8 hours x 60 minutes)/960 = 0.5 minutes per unit

Records state that finished goods inventory has 100 items in stock when there are actually 110. The first 100 customer orders are accepted and scheduled for immediate shipment. The next 50 customer orders are scheduled and promised for shipment the following week based on the next scheduled receipt. What is the customer service level for the orders scheduled for shipment? A. 91% B. 100% C. 111% D. Not enough information to determine answer

B. 100% The 100 that were promised this week will all be shipped, so this is a 100% customer service level for the time period.

An MTS company would like to cut its physical inventory from four to two months. If annual demand is 360 units, the production plan for this year should be how many units? A. 480 units B. 300 units C. 360 units D. 420 units

B. 300 units In an MTS environment, the objective to decrease finished goods inventory by two months requires producing two months' less inventory than annual demand requirements. There are currently 4 months of physical inventory in stock (360 units/12 = 30 units; 30 units x 4 months = 120 units) the objective is to reduce to 2 months (60 units). To do this, they must sell off 60 current inventory units to reduce backlog. Next year they need to sell 360 units, so they only need to produce 300 units as 60 units are already in inventory.

A door handle assembly is sold as an independent demand item. It has an economic order quantity of 500 units, and the average demand is 100 units per week. The stock keeping location holds 80 units of safety stock. There is a lead time of 3 weeks to order and receive units at the location. What is the order point using an order point system? A. 240 units B. 380 units C. 500 units D. 300 units

B. 380 units Order Point = Demand During the Lead Time + Safety Stock. Demand During the Lead Time = Units per Period × Lead Time = 100 units per period × 3 week lead time = 300 units during lead time. Order Point = 300 units during lead time + 80 units safety stock = 380 units.

An organization's annual sales for a particular motor scooter total $50 million. Variable costs for the product over the year amounted to $30 million. It had $10 million in fixed costs for the year. What is the organization's contribution margin (CM) ratio for the year? A. 20% B. 40% C. 60% D. 80%

B. 40% The contribution margin (CM) is sales minus variable costs, or $50 million minus $30 million, which equals $20 million. The CM ratio is CM divided by sales, or $20 million divided by $50 million, which equals 0.4, or 40%. Fixed costs are not needed to calculate the CM ratio.

In a company with a 12% internal rate of return, a capital budget item costs $18,000 and has annual savings of $2,500 in labor and $500 in annual power use. What would be the simple payback period in years? A. 5 years B. 6 years C. 8.3 years D. No enough information is provided to calculate the payback period.

B. 6 years $18,000/$3,000 = 6 years. The internal rate of return is not needed to calculate this answer.

A company had a cost of goods sold of $500,000 and net sales of $800,000 in one year. Beginning inventory was valued at $50,000 and ending inventory at $60,000. What was the inventory turnover for the year? A. 8 times B. 9 times C. 10 times D. 14 times

B. 9 times Average inventory = ($50,000 + $60,000)/2 = $55,000 $500,000/$55,000 = 9 times per year

How does demand-driven material requirements planning (DDMRP) avoid system nervousness? A. The system uses daily buckets and daily reviews so system-wide changes are minor. B. A change only affects the subsystem related to the strategic buffer. C. The system uses a red, yellow, and green zone system to show when changes would be too frequent. D. Late changes in requirements are prevented because it is driven by demand pull.

B. A change only affects the subsystem related to the strategic buffer. While the nature of conventional material requirements planning (MRP) is to make everything dependent so it can all be fully automated, this means that late changes can have a systemic effect called system nervousness. Strategic buffers in DDMRP prevent system nervousness by preventing a change from affecting the entire system. Instead, a change an only affect the subsystem created by the placement of the strategic buffers at decoupling points. This is called a DDMRP decoupled explosion.

Which organization is pursuing a multidomestic strategy? A. A manufacturer enters into distribution agreements with dealer networks in multiple foreign market to sell goods produced in the manufacturer's country. B. A manufacturer makes multiple foreign acquisitions and produces components in different countries with standard processes, but products are assembled locally to appeal to local market preferences. C. A cereal manufacturer buys similar businesses in other countries. The manufacturer invests in improving the acquisitions' costs. Products remain the same. D. A services provider acquires similar businesses around the world, changes their names to reflect the provider's brand, and standardizes policies and services sold.

B. A manufacturer makes multiple foreign acquisitions and produces components in different countries with standard processes, but products are assembled locally to appeal to local market preferences. A multidomestic strategy allows for integration of capabilities and customization to local practices and tastes.

Which manufacturing environment does the Subway deli restaurant use for walk in customers A. MTS B. ATO C. MTO D. ETO

B. ATO

Which of the following describes the process of order entry? A. Releasing the shop order into manufacturing to produce the product B. Accepting and translating what a customer wants into terms used by the manufacturer or distributor C. Qualifying the customer's creditworthiness and ship-to information and assigning a salesperson D. Completing the entire cycle of the sales order, from creation to closure and payment

B. Accepting and translating what a customer wants into terms used by the manufacturer or distributor Order entry is the process of accepting and translating what a customer wants into terms used by the manufacturer or distributor.

Material requirements planning (MRP) indicates that safety stock will be dipped into in period 2. The next order will be received in period 3 due to a component availability issue at the supplier. Which of the following actions will most likely occur? A. Action message to reschedule order from period 3 to period 2; planner temporarily reduces safety stock quantity. B. Action message to reschedule order from period 3 to period 2; planner allows safety stock to be used. C. No action message from MRP; buyer attempts to expedite order from supplier. D. No action message generated by MRP, so no action from planner.

B. Action message to reschedule order from period 3 to period 2; planner allows safety stock to be used. An action message will be generated to reschedule the order. However, as the order cannot be expedited, safety stock should be consumed. Safety stock is in place for this very purpose.

What does the term "distribution" refer to? A. Art and science of obtaining, producing, and distributing material and product in the proper place and in proper quantities B. Activities associated with the movement of material, usually finished goods or service parts, from the manufacturer to the customer C. Action of transporting someone or something or the process of being transported D. General flow of merchants shipping between two departure/terminal areas

B. Activities associated with the movement of material, usually finished goods or service parts, from the manufacturer to the customer Distribution is the action or process of supplying goods to stores and other businesses that sell to consumers.

When updating the sales forecasting reports, what information must be used? A. Changes to the manufacturing environment type B. Actual sales data from the period that most recently ended C. Updated data on manufacturing defects per million opportunities D. Updated gross domestic product (GDP) data for the country and region

B. Actual sales data from the period that most recently ended The sales forecasting reports must be updated with data from the period that most recently ended. This data may include actual sales, production, inventory levels, and other information. The manufacturing environment type and manufacturing defects would not impact the sales plan unless they altered projected inventory levels substantially, and GDP data would be too broad to be applicable to sales forecasts.

Visibility into suppliers' systems can allow an organization to prepare its own system to manage production and logistics. Which of the following is an example of this? A. Making decisions on a supplier's viability B. Adjusting production schedules in response to delayed material delivery C. Finding processes a supplier can eliminate to reduce costs D. Collecting data for the next sales and operations planning meeting

B. Adjusting production schedules in response to delayed material delivery Visibility into a supplier's system allows the organization to react more quickly to supplier delivery changes.

When multiple products are produced using the same resources over the same time horizon, what must an organization do prior to checking capacity? A. Remove the competing products from production. B. Aggregate master schedules for all related items. C. Prioritize production of one product over the others. D. Set up new resources so the production processes do not conflict.

B. Aggregate master schedules for all related items. When multiple products use the same resources over the same time horizon, the organization must aggregate the schedules before performing capacity checks.

What should leaders do to ensure that strategic goals are clearly articulated and prioritized to address only those of highest importance? A. See that improvement initiatives are acceptable to the people and to the departments in which the people reside. B. Align improvement initiatives with strategic objectives. C. Make sure that all IT initiatives are dollarized and prioritized using the internal rate of return method for improvement. D. See that all department-initiated improvement initiatives are prioritized based on speed and value of implementation.

B. Align improvement initiatives with strategic objectives. To get the most from initiatives to execute strategy more proficiently, managers must have a clear idea of what specific outcomes really matter. Once initiatives to improve operations are linked to the company's strategic priorities, then comes the managerial task of building a total quality culture that is genuinely committed to achieving the performance outcomes that strategic success requires.

Which often has the advantages of providing better response to customer wishes, lowering cost, speeding decision making, and helping to get people who are directly aware of problems more involved in solving them? A. Allowing customers to provide feedback in their own words B. Allowing people further down the management structure to make decisions independently C. Getting middle managers more involved in everyday decision making D. Getting upper managers out on the shop floor on a daily basis

B. Allowing people further down the management structure to make decisions independently Allowing people further down the management structure to make independent decisions, or employee empowerment, can have all of the advantages listed in the question. The other answers may provide some but not all of these advantages.

Which of the following describes the planning horizon? A. Two years' long B. Amount of time a plan extends into the future C. Maximum amount of lead time required to order and receive all purchased materials required D. Amount of time it takes to conduct the planning process

B. Amount of time a plan extends into the future This is the APICS Dictionary definition of planning horizon. The other answers are incorrect because a planning horizon does not include manufacturing lead time; although the planning horizon may be two years in some instances, the length of a planning horizon varies depending on the particular planning activity taking place.

What is a good policy concerning a company's internal rate of return (IRR)? A. Exceed the costs of material, labor, and overhead prior to approval. B. Approve the project if the IRR exceeds the cost of capital. C. Reverse-engineer competing products whenever possible. D. Set margins based on competitive analysis.

B. Approve the project if the IRR exceeds the cost of capital. The IRR is the rate of compound interest at which the company's outstanding investment is repaid by the proceeds from a project.

When should suppliers be involved in the product development process? A. Immediately prior to the beginning of production B. As soon as their involvement is productive C. At the prototype stage D. After design specifications have been developed

B. As soon as their involvement is productive Suppliers should be involved in the process as soon as their involvement is productive. The other answers are incorrect because this point will vary based on the type of product and whether the relationship is tactical (involvement is later) or strategic (involvement is earlier).

The process of costing is commonly done in two steps. The first is cost accumulation. What is the second? A. Valuation of labor and overhead for all jobs as they are completed B. Assignment of these costs to products C. Totaling of all timecard-hour reporting at the order number level D. Complete physical count of all work in process, semi-finished goods, and finished goods within the facility

B. Assignment of these costs to products Costing systems are used to collect costs and assign them to the cost object. This is essentially a two-step process: the measurement of costs that are applicable to manufacturing operations during a given accounting period and the assignment of these costs to products.

If a company implements the time-phased order point (TPOP) technique rather than the order point technique, which of the following is a benefit that likely will be achieved? A. Planning of end items but not capacity for future lumpy demand B. Assistance in maintaining true dates of need for open orders C. Historical data to determine the optimum time to reorder D. Availability of future planned orders for current capacity planning

B. Assistance in maintaining true dates of need for open orders The TPOP technique provides planners with the ability to view supply and demand within a user-defined planning horizon. By providing a simulation of possible future supply and demand for an item, TPOP enables the planner to maintain the true dates of need for all orders, to use future supply requirements to plan for future capacities, and to see component demand requirements and capacity for future lumpy demand.

How far into the future should the MRP planning Horizon extend? A. Total duration of all manufacturing assembly operations B. At least as long as the cumulative lead time for the end items C. Same as customer order lead time D. No further than the longest purchased item lead time

B. At least as long as the cumulative lead time for the end items

As part of a contract-buying improvement initiative, approved suppliers are integrated so they can use supplier scheduling. Which of the following should be implemented with these suppliers? A. Frequent price reviews of supplier materials B. Audits of individual transactions with these suppliers C. Issuing of purchase orders D. Significant reduction of purchasing fraud-related checks and balances

B. Audits of individual transactions with these suppliers An organization that is using contract buying with a supplier can use supplier scheduling. For MRP (material requirements planning) planned orders, often the supplier is given a copy or view of the material requirements plan so they can produce the units that will be needed. This is called supplier scheduling when the supplier uses the planned orders directly in its own MRP process. In this arrangement, no purchase orders are issued. However, both the purchasing process itself and the performance of individual suppliers still needs to be monitored and controlled in this situation. Since purchasing involves large amounts of money, the organization needs checks and balances and audits to safeguard against fraud. Prices will be regulated by the blanket purchase order or other long-term contract, so price reviews should not need to be more frequent in this scenario.

What does it mean when a material requirements planning (MRP) planned order is released? A. Work has begun on the item referenced. B. Authorization has been given to manufacture or purchase the item. C. The item on the order must be scheduled. D. The item on the order has been completed and placed in stock.

B. Authorization has been given to manufacture or purchase the item. When the manufacturing or purchasing planner has been authorized by the MRP output, the planner can release planned purchasing and manufacturing orders.

What are the four primary inputs to MRP A. Forecast B. BOM C. Inventory data D. Master production schedule E. RCCP F. Planning factors (lot size, lead time, etc.)

B. BOM C. Inventory data D. Master production schedule F. Planning factors (lot size, lead time, etc.)

A lean manufacturer using backflushing finds recurring inventory discrepancies. On what should they focus attention? A. Production staff training B. BOMs C. MRP D. Routings

B. BOMs

A company produces toys that can be personalized with a predetermined set of options. Delivery is quoted as ten days from receipt of the order. Which of the following sales and operations planning elements is most likely to be of little use to management? A. Production plan B. Backlog plan C. Demand forecast D. Inventory plan

B. Backlog plan This is an assemble-to-order environment; it would not have a backlog plan.

Moving averages, 1. Can be beneficial because they prevent an overreaction to random variability. 2. Can be problematic because they delay recognition that the market is suddenly trending up or down. Which of the statements in the image are true regarding Moving averages A. #1 only B. Both #1 and #2 C. #2 only D. Neither

B. Both #1 and #2

Trying to achieve the lowest production cost possible would likely conflict with which of the following scenarios? A. Reducing setup time by holding a kaizen event B. Breaking into a production run to make product needed for a customer C. Stopping production for a week to install new equipment that will increase production output D. Initiating a new project that will enable setup to be offline, increasing production line uptime

B. Breaking into a production run to make product needed for a customer Breaking into a production run typically requires an additional setup, which translates to lost production time, thereby increasing expenses.

Sales and operations planning is focused on which of the following objectives? A. Making recommendations to release replenishment orders for material and rescheduling existing orders to align with the master schedule B. Bringing together all the plans for the business into one integrated set of plans C. Stating what the company plans to produce in terms of specific configurations, quantities, and dates D. Converting the master production schedule into requirements for key resources

B. Bringing together all the plans for the business into one integrated set of plans The sales and operations planning process brings together all the plans for the business (sales, marketing, development, manufacturing, sourcing, financial) into one integrated set of plans.

The connection(s) between the execution phase and the rest of the manufacturing planning and control (MPC) system is (are) which of the following? A. Strategic plan and business plan B. Capacity and material requirements plans C. Master production schedule D. Capacity plan and business plan

B. Capacity and material requirements plans Execution deals with the execution of both capacity and material requirements plans. Capacity and material plans alone would be insufficient. The business plan's interface is with S&OP.

Which is true about time fences in a master schedule system? A. Changes in the frozen zone entail scheduling difficulty but no added production cost. B. Changes in the liquid zone can be made with little or no cost to production. C. In the slushy zone, capacity and materials can easily be committed to new orders. D. The master planner can authorize changes in the frozen zone

B. Changes in the liquid zone can be made with little or no cost to production. Changes in the liquid zone can be routine and entail no cost to production. The other answers are incorrect because it is still relatively difficult to change production priorities in the slushy zone; and because the cost of changes in the frozen zone is such that authorization should come from the management level above the master planner.

Which is a benefit related to service design? A. Service design can prioritize cost minimization since services have minimal impact on customer satisfaction. B. Changing or customizing a service can be rapid and inexpensive. C. Services can be patented or copyrighted. D. Services can be designed independently from related product design.

B. Changing or customizing a service can be rapid and inexpensive. Unlike products, it is difficult to protect services from imitation since they typically cannot be copyrighted, though a process or related products might be patented or copyrighted. On the plus side, a service can be easily changed or customized very quickly and with very little expense, especially in the case of basic services. Services strongly impact customer satisfaction, and service design is inseparable from related product design.

Which of these scheduling methods considers the total amount of remaining work (rather than just dates) A. First-come, first-served (FCFS) B. Critical ratio (CR) C. Shortest process time (SPT) D. Earliest job due date (EDD)

B. Critical ratio (CR)

An assemble-to-order environment using a mixed-model production schedule has a bottleneck work center. What is the best rough-cut capacity planning approach for determining the feasibility of the master production schedule? A. Define capacity as some percentage less than 100% of rated capacity by management policy. B. Define capacity at 100% of rated capacity and utilization when the mix of demand justifies it. C. Define capacity as 85% of rated capacity to provide 15% to accept additional customer orders. D. Define capacity as rated capacity times utilization times efficiency to factor the engineering standard.

B. Define capacity at 100% of rated capacity and utilization when the mix of demand justifies it. Bottlenecks should be scheduled at the rated capacity if there is sufficient business volume to justify it.

Which of the following is likely to be the most important order winner for a producer of custom-designed, low-volume products? A. Price/cost B. Design capability C. Delivery speed D. Image

B. Design capability Companies that build custom-designed products normally will be competing based on the special capabilities or attributes of the product made to a specific customer specification.

What is the purpose of a gate review meeting? A. Perform periodic reconciliation of project scope, schedule, and budget B. Determine if the project should continue based on prospects of success C. Secure initial senior management support for project goals D. To identify and respond to signs of scope creep

B. Determine if the project should continue based on prospects of success Gate review meetings, also called go/no go decision points, are used in long or complex projects to review that the project can be successful and that the initial benefit and risk profiles are still accurate. The other choices are incorrect because management support must be in place before the project begins; periodic reconciliation of project scope and identifying and responding to signs of scope creep are performed by the project manager at regular intervals throughout the executing phase.

Which of the following best describes the participative design/engineering approach? A team is formed to evaluate the impact of an engineering design on the plant's capabilities. B. Development of products or services, productive processes, marketing plans, and packaging/shipping processes is simultaneous. C. Engineering initiates product design, operations initiates methods development, and logistics ships product. D. Marketing, purchasing, operations, and customer service prepare for a new product by jointly establishing performance measures.

B. Development of products or services, productive processes, marketing plans, and packaging/shipping processes is simultaneous The goal of participative design/engineering is to remove time and cost from the design process while ensuring higher quality levels by simultaneously performing all the steps for product design and rollout instead of doing them in a serial progression.

Identify two advantages of using private warehouses. A. No startup capital expense B. Direct control C. Less expensive D. Easy adjustment to changing market demand levels

B. Direct control C. Less expensive

Infinite loading will indicate which of the following situations when comparing a gateway work center to a non-gateway, non-bottleneck operation? A. Either may precede the other. B. Either may be overloaded. C. Gateway capacity is higher. D. Either may be in multiple routings.

B. Either may be overloaded. Any operation may be overloaded, which will be shown using infinite capacity.

A project team's members openly disagree with and challenge each other at team meetings. How should the project manager handle this? A. Let the disputes develop since they will contribute to a stronger product. B. Enforce the project's ground rules and refocus the team on its objectives. C. Find a team member who can intervene to settle disputes. D. Allow more time at project meetings for project members to get to know each other.

B. Enforce the project's ground rules and refocus the team on its objectives. The team members are in the storming phase of team formation. The project manager should enforce rules about how team members behave and handle disagreement. Refocusing on the project's objectives can help the team unite behind shared goals. Allowing more time for project members to get to know each other is a tactic for managing the formation phase. Letting disputes to develop may encourage conflict that undermines the team's work, and doesn't necessarily contribute to stronger product (and may actively work against this). Finding a team member who can intervene is incorrect because a project manager should not delegate a core responsibility such as managing team dynamics.

The PDCA cycle of quality improvement can be used for which of the following? A. Planning quality concurrently with production planning B. Exploring a range of solutions to a problem and piloting them in a controlled way before selecting one for implementation C. Prioritizing changes by identifying the problems that will be resolved by making these changes D. Working toward a decision that satisfies all participants

B. Exploring a range of solutions to a problem and piloting them in a controlled way before selecting one for implementation The PDCA (plan-do-check-action) cycle is a four-step process for quality improvement. In the first step (plan), a plan to effect improvement is developed. In the second step (do), the plan is carried out, preferably on a small scale. In the third step (check), the effects of the plan are observed. In the last step (action), the results are studied to determine what was learned and what can be predicted.

What is the most common form of international distribution? A. Establishing a joint venture with a foreign organization B. Export of products into foreign markets C. Licensing international companies for manufacturing processes D. Expansion into foreign markets through warehousing

B. Export of products into foreign markets All of these are ways to expand into foreign markets, but exporting is by far the most common and the least expensive.

What are the two different types of performance targets that should be used to achieve organizational stretch objectives? A. Tactical and financial B. Financial and strategic C. Strategic and tactical D. Operational and personal

B. Financial and strategic To achieve organizational stretch objectives, a company must develop two types of performance targets: financial and strategic.

When evaluating new technology, valid considerations include (select multiple) A. Costing is easy: only initial purchase & deployment expenses are relevant B. Financially, the new technology should deliver a positive ROI C. Needs are often recognized in strategic planning & continual improvement D. With today's training tools, workers can learn new technology on their own

B. Financially, the new technology should deliver a positive ROI C. Needs are often recognized in strategic planning & continual improvement

Which inventory transaction type is most likely found in an environment that produces to a forecast as opposed to an environment that produces to a customer order? A. Service parts B. Finished goods C. Work in process D. Raw materials

B. Finished goods Make-to-stock environments must receive, issue, and adjust finished goods inventory that has been produced mainly to a forecast.

A make-to-stock company ships product within three days of completion of two weeks of manufacturing. Any components with lead times greater than one week are stocked in inventory. The product is standard, with minor customizations, though demand may be erratic. Why should the company maintain the make-to-stock environment rather than attempting to change to assemble-to-order? A. Level production minimizes the total inventory investment over a chase strategy. B. Finished goods inventory enables stable production even though demand is erratic. C. A product requiring two weeks to produce cannot be assembled and shipped in three days. D. Marketing cannot guarantee a three-day shipment time for an assemble-to-order environment.

B. Finished goods inventory enables stable production even though demand is erratic. Minor customizations, erratic demand, and stable production favors make-to-stock. Assemble-to-order would require forecasting and stocking of subassemblies and options to meet a three-day delivery.

What must leadership do when multiple important tasks remain for the company to pursue? A. Articulate each and every goal in priority sequence. B. Focus on a few goals while putting some others aside. C. Prioritize all important tasks. D. Align bonus rewards by group based on departmental goals.

B. Focus on a few goals while putting some others aside. Strategy involves focus and choice. Choice means setting aside some goals in favor of others. When this hard work of prioritization is not done, weak strategy is the result.

What is a significant advantage of using forward scheduling in a make-to-order environment? A. Forward scheduling ensures that operations aren't scheduled in the past. B. Forward scheduling determines when orders could be completed. C. Forward scheduling reduces idle time in production. D. Forward scheduling minimizes the overloading of work centers.

B. Forward scheduling determines when orders could be completed. Forward scheduling is a technique in which material procurement and operations scheduling start when the order is received. Operations are scheduled forward from this date. This method is used to determine the earliest delivery date.

What determines the frequency with which material requirements should be replanned? A. Frequency of bill of material changes B. Frequency with which requirements and/or priorities change C. Total manufacturing lead time D. Amount of forecast error

B. Frequency with which requirements and/or priorities change Material requirements planning (MRP) is used to maintain the priorities of manufacturing and purchase orders. As demand changes, so do the priorities, so MRP should be run to rebalance supply and demand.

A well-crafted business strategy should have which attributes? A. Resistance to changes in the external environment B. Generates increased revenue, rising stock values, and market share C. Good strategic fit to the market D. Hard to imitate, but but sustainable in the long term

B. Generates increased revenue, rising stock values, and market share C. Good strategic fit to the market D. Hard to imitate, but but sustainable in the long term

Planned orders from a distribution warehouse become which of the following? A. Planned orders in material requirements planning B. Gross requirements in the master production schedule C. Planned orders in the master production schedule D. Demand in the sales and operations plan

B. Gross requirements in the master production schedule Planned orders from a warehouse become gross requirements in the master production schedule during distribution requirements planning.

Which of the following quantitative techniques responds most quickly to trends? A. Moving average B. High-α-factor exponential smoothing C. Expert opinion D. Seasonal index

B. High-α-factor exponential smoothing High alpha (α) factor exponential smoothing reacts more quickly; a low α factor will react more slowly to a trend. Moving average is incorrect because it does not respond well to trends. Seasonal index is incorrect because it is not used for trend evaluation. Expert opinion is incorrect because it is a qualitative technique.

When a company seeks to measure the success of a change from a breakthrough improvement, as contrasted with a change from continuous improvement, what should they see? A. Improved processes rather than higher employee morale B. Higher profitability rather than improved processes C. Better processes and better short-term profit D. Lower capital expenditures

B. Higher profitability rather than improved processes Change strategies can be categorized in two general groups: continuous improvement and breakthrough improvement. Breakthroughs are usually expensive and are often disruptive of existing work processes (so the processes may be replaced rather than being improved). They frequently involve changes in product/service or process technology, which should lead to improved potential for profitability if done correctly (though short-term profit may suffer due to the cost of the changes). Continuous change assumes more and smaller incremental improvement steps.

Today's information systems deliver operation-specific performance data concerning machine, people, and product detail within the time frame required directly to managers. What is this an example of? A. Invasive big-brother-type monitoring B. IT systems delivering production value C. Nice-to-have feature of a fully implemented enterprise resources planning system D. Fully functioning numerically controlled computer system

B. IT systems delivering production value Tracking key performance indicators, gathering information from operating personnel, quickly identifying and diagnosing problems, and taking corrective actions are all integral pieces of the process of managing strategy execution.

All of these are advantages for a single sourcing strategy except A. Improved pricing B. Impervious to catastrophic disruption event C. Greater buyer leverage D. Responsive deliveries

B. Impervious to catastrophic disruption event

Inventory turns & Cash to cash cycle time are tracked. Ideally how should metrics (respectively) change in the future. A. Decrease, decrease B. Increase, decrease C. Decrease, increase D. Increase, increase

B. Increase, decrease

Engineering has suggested that a company's products would provide more value to customers if the products were capable of identifying and automatically reporting problems to service and repair associates. What would be the most likely effect of this strategy? A. Facilitating a move to higher selling prices B. Increasing customer uptime, reducing customer repair costs C. More frequent on-site service, thus increasing costs overall D. Enhancing the product's order-qualifying features

B. Increasing customer uptime, reducing customer repair costs An elevator company has diagnostic capabilities built into each system so that a worldwide 24-hour remote electronic monitoring system can detect any one of 325 problems with an elevator or escalator installed at a customer's site. After notification, the system can analyze and diagnose the problem. It then may make the call to a company service person at the nearest location and assists the mechanic in identification of the part(s) in question. This system helps keep outage times to less than three hours. Design is in the loop too, so that they can assess and update as necessary for recurring problems (continuous improvement). Customers also have access to the performance history of each of their elevators and escalators.

What added benefit can result from incorporating sustainability policies in the strategic planning process? A. Reducing transportation costs B. Increasing expertise and diversity at the board of directors' level C. Adding measurable activities to job descriptions for facilities personnel D. Avoiding plant-level regulatory fines

B. Increasing expertise and diversity at the board of directors' level The board of directors' level would be strategic. The other responses would be tactical, not strategic.

Which could increase the opportunity cost of holding inventory that is available for sale? A. Diverting some funds from sold goods into unrelated financial investments B. Increasing the duration of the sales cycle C. Substituting lower-grade raw materials as inputs to products for sale D. Buying and selling more lots of inventory in the year

B. Increasing the duration of the sales cycle Inventory costs include opportunity costs, which is the value that the money invested in inventory could have produced if it had been invested in other value-producing activities. Opportunity costs grow larger the longer it takes to turn over inventory (convert it back to cash). Increasing the duration of the sales cycle will reduce inventory turnover and increase opportunity cost.

Which of the following actions is likely to improve the accuracy of a sales forecast? A. Adjusting the sales forecast up or down by a certain percentage to offset errors B. Informing sales representatives about the company's business outlook C. Basing territorial advertising on sales estimates D. Increasing the sales quotas to match the sales forecast

B. Informing sales representatives about the company's business outlook Using business information would help sales personnel to better determine potential forecasts.

Which of the following is true of a company's core competency? A. It is related to a company's product quality. B. It could be the company's product innovation capabilities. C. It is tied to a measure of production efficiency. D. It is associated with a task in the company's value chain activities.

B. It could be the company's product innovation capabilities. A core competency is a proficiently performed internal activity that is central to a company's strategy and competitiveness. 3M has a core competency in product innovation. Its record of introducing new products goes back several decades, and new product introduction is central to 3M's strategy of growing its business.

Which of the following is likely true of a new product development strategy? A. It will be used to augment manufacturing if there is significant uncertainty in operational delivery. B. It will be more robust and aggressive if accompanied by heightened confidence that operations is capable of delivering a quality product. C. It will be downsized if operations continuously beats standard times. D. It will take a back seat to product volumes if operations are highly efficient.

B. It will be more robust and aggressive if accompanied by heightened confidence that operations is capable of delivering a quality product. Operational knowledge is vital to establishing an operations-based strategic advantage. A superior understanding of what one's processes can do at the limits of their capability allows the organization to better provide products and services, due to confidence in knowing for sure that the processes can deliver. Well-controlled processes will also have fewer errors and waste and therefore higher efficiency (lower costs, higher quality).

An organization's demand management professionals indicate that there will be a sales promotion at the end of the month for one of the organization's products. The product is in maturity. A substitute product was just introduced by a subsidiary, and marketing mentions something about potential for product cannibalization. What should operations professionals ask more about? A. Likelihood of convincing the subsidiary to retire their harmful product B. Likely impact on demand of the product cannibalization C. Amount of dollar spend on the sales promotion D. Timing of when to retire the mature product

B. Likely impact on demand of the product cannibalization Questions could include the likely impact of the product cannibalization and of the sales promotion. Asking about the dollar spend would be less useful because it is demand management's responsibility to estimate this impact.

What is a bill of resources? A. Listing of key materials required to manufacture one unit of a selected item B. Listing of key resources required to manufacture one unit of a selected item C. Amount of product that can be loaded for distribution D. Unique configuration created to aid the master scheduler

B. Listing of key resources required to manufacture one unit of a selected item The bill of resources details the key resources required to manufacture one unit of an item.

An overstated forecast results in an overestimate of which of the following elements? A. Capacity and backlog B. Load and inventory C. Backlog and load D. Inventory and capacity

B. Load and inventory An overstated forecast will show an overestimated load on production and will drive component, subassembly, and finished goods inventory to be ordered or produced.

Which of the following nonfinancial factors are critical to consider when setting up an offshore production facility? A. Local laws, quality of labor force, and differences in time zone. B. Local laws, quality of labor force, and local infrastructure. C. Local laws, differences in time zone, and local infrastructure. D. Quality of labor force, differences in time zone, and local infrastructure.

B. Local laws, quality of labor force, and local infrastructure. Understanding local laws, the quality of the local workforce, and local infrastructure are all critical considerations when searching for a location.

Which of the following descriptions of the decoupling point does not apply in all manufacturing environments? A. Latest point in the supply process at which a supplier holds inventory in expectation of a customer order B. Location of subassemblies awaiting final assembly C. Where inventory is placed to create independence between processes or entities D. Strategic decision that determines customer lead time and inventory investment

B. Location of subassemblies awaiting final assembly The location of subassemblies awaiting final assembly is the correct answer, because it describes the decoupling point only in an ATO manufacturing environment. All of the other answers apply to all manufacturing environments.

An organization uses rough-cut capacity planning (RCCP) at the tactical level during master scheduling as a capacity check on raw materials. What type of organization is this? A. Assemble-to-order B. Make-to-order C. Make-to-stock D. This would not happen at any type of organization; RCCP occurs only during material requirements planning.

B. Make-to-order The level of detail at the tactical level will depend on the manufacturing environment. A make-to-order environment will plan master schedules at the raw materials level because nothing is produced until orders come in. Critical raw materials (scarce, bottleneck, etc.) would be part of RCCP.

Which of the following engineering groups is most involved with a process design quality initiative? A. Design B. Manufacturing C. Quality D. Industrial

B. Manufacturing Manufacturing engineers can apply the proper lean principles, quality systems, and use of technology for the process.

Which of the following uses a format that includes time periods, the forecast, customer orders, projected available balance, and available-to-promise? A. Resource requirements plan B. Master schedule C. Material requirements plan D. Distribution requirements plan

B. Master schedule The master schedule includes time periods (dates), the forecast, customer orders, projected available balance, available-to-promise, and the master production schedule.

A company uses rated capacity for capacity requirements planning. Which of the following statements is true? A. The planner can schedule up to the theoretical capacity. B. Material planning may not use work center capacity effectively. C. Orders will be on time and operations will be well balanced. D. The rated capacity includes regular plus overtime hours.

B. Material planning may not use work center capacity effectively. There may be times when demand does not balance with supply; material requirements planning can overload any work center regardless of the type of capacity planning.

Pull systems have which of the following advantages over push systems? A. End item customer satisfaction is higher. B. Material tracking on the shop floor is decreased. C. Product designs are more robust. D. End item production output is higher.

B. Material tracking on the shop floor is decreased. The need for scheduling and tracking the movement of materials is minimized or eliminated in a pull system.

Which is a key reason to use the SCOR-DS model? A. Ensuring the targets for all metrics seek superior performance relative to competitors B. Measuring performance improvement success against benchmarked competitive priorities C. Maximizing the number of metrics available to decision makers D. Determining order winners, order qualifiers, and the location of the push-pull frontier

B. Measuring performance improvement success against benchmarked competitive priorities Part of the definition of the SCOR-DS model is as follows: "Use of the model includes analyzing the current state of a company's processes and goals, quantifying operational performance, and comparing company performance to benchmark data." Once an organization's metrics have been calculated, they are compared against internal standards and possibly industry or best-in-class benchmark data. An organization uses the results to drive performance improvements. However, an organization needs to determine its competitive priorities and work toward superior performance relative to competitors in those areas. Since trying to prioritize all areas at once would dilute any strategy due to the inherent tradeoffs, they seek only parity in other benchmarked areas.

Which metrics would suggest the MRP system is performing well A. High inventory levels B. Minimal management intervention C. Master schedule accomplished D. Expediting of vendor and/or customer orders E. Order due dates met F. Active production orders with very few missing component

B. Minimal management intervention C. Master schedule accomplished E. Order due dates met

Which of the following are benefits of a cellular layout (Select all that apply) A. Requires a lesser amount of worker training and expertise B. Minimizes material handling and worker movement C. A single cell can handle any item for all product families D. Minimal work-in-process buildup

B. Minimizes material handling and worker movement D. Minimal work-in-process buildup

Which scheduling technique is effective for situations in which several bottleneck stages may exist? A. Forward-flow scheduling B. Mixed-flow scheduling C. Material-dominated scheduling D. Mixed-model scheduling

B. Mixed-flow scheduling Mixed-flow scheduling is a procedure used in some process industries for building process train schedules that start at an initial stage and work toward the terminal process stages.

During the S&OP process, performing a financial evaluation of alternative strategies includes which of the following? A. Number and productivity of workers, cost of changing work levels, inventory costs, and priority sequence of load B. Number and productivity of workers, cost of changing work levels, and inventory costs C. Inventory costs only D. Cost of changing work levels and inventory costs

B. Number and productivity of workers, cost of changing work levels, and inventory costs "Cost of changing work levels and inventory costs" would be correct if it were to include the number and productivity of the workers, which does have a financial impact. "Inventory costs" is incorrect because, in addition to excluding the number and productivity of workers, it also excludes the cost of changing work levels, which has an impact on the financial alternatives. "Number and productivity of workers, cost of changing work levels, inventory costs, and priority sequence of load" is incorrect because it includes the priority sequence of the load, which is determined at the execution level of MPC and not during the S&OP process.

What would be an effective response for an established company when faced with a threat of new competitors in an industry? A. Cut costs related to customer service level. B. Offer price discounts. C. Create a variety of marketing responses so long as they increase profit per unit. D. Pressure suppliers not to work with competitors.

B. Offer price discounts. Advertising, promoting, discounting, and adding new features to an existing product line will all make it more difficult for new rivals to enter the market.

Which of the following are examples of fringe benefits that can be used to enhance employee motivation? A. Sharing sales associates' goals and commissions and flextime B. On-site child care and sharing company financial data C. Personal travel services and sharing top management's personal goals and objectives D. On-site workout facilities and sharing executive financial packages

B. On-site child care and sharing company financial data Some nonfinancial rewards companies use to enhance employee motivation are: Providing additional perquisites and fringe benefits such as on-site child care. Providing public recognition. Promoting from within when possible. Implementing employee suggestions. Sharing financial data with employees.

Which is an important feature in total productive maintenance? A. Inspectors ensure that every machine is ready for work each day. B. Operators are responsible for most routine machine maintenance. C. Skilled mechanics are not used for any machine maintenance. D. Operators regularly report maintenance productivity to management.

B. Operators are responsible for most routine machine maintenance. In total productive maintenance, machine operators take responsibility for most of the routine maintenance on their equipment, thus receiving a motivating sense of ownership. Meanwhile, skilled mechanics will still perform more involved maintenance or repair as needed; machine operators are trained to ensure that their machines are ready; and reporting maintenance productivity to management is not related to total productive maintenance.

Which of the following is true of strategy development in most corporations? A. The CEO is the primary strategy architect, with little influence from others. B. Other senior executives help fashion major elements of the strategy. C. The business strategy is formulated first by department heads and then fine-tuned by the CEO and staff. D. Much "borrowing" through competitive benchmarking occurs.

B. Other senior executives help fashion major elements of the strategy. In most corporations, strategy is the product of more than just the CEO's handiwork. Typically, other senior executives—business unit heads, the CFO, and the vice presidents of production, marketing, HR, and other functional departments—have influential strategy-making roles and help fashion the chief strategy components.

Which of the following is true of using planning bills to forecast options for an assemble-to-order product? A. Each planning bill option is forecast separately and is not combined with other options. B. Overplanning of an option would mean that the percentages equal more than 100%. C. The product mix cannot equal more than 100%. D. The product mix can equal less than 100%.

B. Overplanning of an option would mean that the percentages equal more than 100%. The mix for a planning bill must add up to a minimum of 100% but may be greater in order to gain flexibility.

What information do item master files provide to production activity control? A. Shop floor pick lists for the shop order packet B. Part number and description C. Shop order quantities and order due dates D. Operations required and sequence of work centers used

B. Part number and description The item master files provide the part number and description; quantity on hand, available, and on order; manufacturing lead times and lot size quantities.

What is a principal function of MRP? A. Provide accurate planned order loading for use by RCCP B. Plan and control orders released to the factory to ensure valid due dates are met C. Provide engineering change notice information to engineering D. Provide safety lead time to ensure supplier delivery dates are met

B. Plan and control orders released to the factory to ensure valid due dates are met The other answers are incorrect because MRP provides accurate planned order loading for capacity requirements planning, not RCCP; safety lead time simply is a technique for buffering lead time. Engineering issues engineering change notices, which affect the product structures of assemblies that are scheduled by MRP.

What information do shop order files provide as an input to production activity control? A. Quantity on hand, available, and on order B. Planned and actual setup and run times C. Operation capacity required (pieces × operation standard) D. Manufacturing lead time and alternative work centers

B. Planned and actual setup and run times Shop order files provide the shop order number; shop order quantities; order due dates; quantities issued, completed, scrapped, and balance due; planned and actual setup and run times; lead times remaining; and cost information.

An organization consistently wins awards for the designs of its products, but customer satisfaction scores don't seem to reflect this product superiority. What is likely the root cause of this issue? A. Even better competitor products B. Poor service provision C. Fickle customers D. Order winners becoming order qualifiers

B. Poor service provision The combination of the product and its associated services is sometimes called the product-service package to indicate that the two are inseparable, especially in the mind of the customer. The customer may like a product itself, but if it has poor associated services, the customer will still likely not be satisfied.

The firm planned order (FPO) technique may be used to achieve which of the following results? A. Prevent automatic rescheduling of planned orders by material requirements planning (MRP). B. Prevent automatic rescheduling of planned orders by material requirements planning (MRP), and reduce plant load fluctuation. C. Prevent automatic rescheduling of planned orders by material requirements planning (MRP), and increase plant capacity. D. Reduce plant load fluctuation, and trigger MRP to replan higher-level items.

B. Prevent automatic rescheduling of planned orders by material requirements planning (MRP), and reduce plant load fluctuation. When a planned order is firmed in the material requirements plan, it is frozen and will not be changed by the MRP processor. Since it is frozen, it will help in dampening small changes in supply and demand.

A product has moved from regular production to spare parts supply. Which of the following factors is likely to become least important? A. Delivery reliability B. Price C. Customer service D. Quality

B. Price Once a product has moved from regular production to intermittent spare parts supply, customer service, delivery reliability, and quality must remain high. Service parts are usually critical to the customer and must be available at all times with perfect quality. Since the product is no longer considered "product," its price can become elastic and based on what the market will bear. Price, therefore, declines as an important factor, as customers will pay a premium when equipment goes down.

Which are two primary inputs to the Master Scheduling process? A. Material requirements plan B. Production plan C. Cash flow statement D. Demand management

B. Production plan D. Demand management

Which of the following planning techniques affects material and capacity planning only indirectly? A. Order configuration B. Production plan C. Master scheduling D. Final assembly schedule

B. Production plan The production plan is stated in terms of families. The other responses are all inputs to material requirements planning (MRP).

A company has not been able to provide customers with information when a make-to-stock item is out of stock. Which of the following actions would be beneficial in this situation? A. Increase sales and operations planning frequency. B. Provide available-to-promise information to customer service. C. Increase safety stock levels to reduce stockouts. D. Implement forecast accuracy measures.

B. Provide available-to-promise information to customer service Available-to-promise is the uncommitted portion of a company's inventory and planned production maintained in the master schedule to support customer order promising.

In order to be sustainable in terms of financial returns, what should an organization focus on? A. Increasing costs charged to downstream members of the supply chain B. Providing competitive and stable return on investments while protecting company assets C. Lowering all variable costs as much as possible in the short term D. Pursuing profits from new sources, even if the company is not well equipped to serve a new customer

B. Providing competitive and stable return on investments while protecting company assets Sustainability in financial returns entails providing competitive and stable return on investments while protecting company assets. Lowering all variable costs in the short term may incur larger long-term costs that are financially damaging. Charging more to downstream members of the supply chain may cause the customer base to shrink and the company to lose money long-term. Chasing profits from customers that the company is not well equipped to service may lead to increased setup costs or costly contract breaches if the company cannot perform in ways that they have contractually agreed to.

Analysis shows that the top 22 percent of an organization's customers provide over 75 percent of the organization's revenues. What should be the top priority? A. Focusing marketing on top customers to cross-sell and up-sell to them B. Providing excellent service to top customers to increase their loyalty C. Continually trying to acquire new customers D. Shedding approximately the bottom 20 percent of customers

B. Providing excellent service to top customers to increase their loyalty Customer value usually starts out as negative and then grows over time as customers make repeat purchases. Customer lifetime value analysis can help show that maintaining customer loyalty is far cheaper than continually trying to acquire new customers. Therefore, rather than just using the knowledge of which customers are more valuable to market more things to these segments, it is important to determine how to develop greater loyalty from these segments.

Negotiating purchase order prices is resulting in the delay of procured materials. What should the buyer do to minimize this problem? A. Include negotiating capabilities as part of supplier performance measurements. B. Put together long-term contracts and purchase agreements with key suppliers. C. Increase order quantities so fewer orders are required. D. Increase purchasing lead times for future orders.

B. Put together long-term contracts and purchase agreements with key suppliers. Negotiating purchase order pricing can be eliminated with purchase agreements and long-term contracts with suppliers.

In which of the following processes are qualitative techniques appropriately used? A. Determination of a seasonal index B. Pyramid forecasting C. Detection of a demand increase or decrease D. Extrapolation of essentially level data

B. Pyramid forecasting Pyramid forecasting is correct because, at the conclusion of the roll-up process, a qualitative decision can be made before forcing the result down. The other answers are incorrect because seasonal indexing is a quantitative technique; demand increases and decreases are detected mathematically, so this would be a quantitative technique; and going forward with essentially level data would be a quantitative process.

A major multinational customer reported to its paper supplier that the supplier's inkjet paper product was curling under conditions of low humidity. Later, the plant was supplying acceptable paper, but plant productivity, scrap, and rework levels were poor and the major customer produced statistical proof that the supplier's process was out of control. They addressed these factors and eventually returned to an in-control state, which helped them return to an acceptable contribution margin. Which of the following best indicates the correct sequence of generic performance objectives that this organization used to recover from this catastrophic failure? A. Quality, cost, schedule, speed, profit B. Quality, speed, dependability, flexibility, cost C. Quality, cost, flexibility, speed, dependability D. Cost, flexibility, dependability, speed, quality

B. Quality, speed, dependability, flexibility, cost The paper supplier focused on quality and speed to quickly get the products to an acceptable level (using inspection at first). They then developed new processes to enhance dependability and flexibility, which eventually also helped improve their contribution margin (cost).

Which of the following are the desired results of removing a kanban card from between two steps of a smooth-flowing process? A. Reduced inventory level and insertion of a kanban card to replace the one removed B. Reduced inventory level and exposure of problems C. Insertion of a kanban card to replace the one removed and exposure of problems D. Reduced inventory level, insertion of a kanban card to replace the one removed, and exposure of problems

B. Reduced inventory level and exposure of problems Removing a kanban card from an inventory system that is in equilibrium will remove the inventory associated with the kanban and will throw the system into imbalance. The imbalance will enable the quality team to detect where the problems are arising due to less inventory in the system. These problems can then be attacked and the system returned to a state of equilibrium.

A min-max system is a variation of which of the following lot-sizing techniques? A. Lot for lot B. Reorder point C. Period supply D. Economic order quantity

B. Reorder point A min-max system is a type of order point replenishment system where the minimum is the order point and the maximum is the "order up to" inventory level.

A sales department decides it needs to increase the target service level for the company's customers from 90% to 95%. What effect will this decision have on safety stock levels? A. Safety stock levels will stay the same. B. Safety stock levels will increase. C. Safety stock levels will decrease. D. Safety stock levels will Increase temporarily and then go back to the original levels.

B. Safety stock levels will increase. Safety stock is used to buffer against variability of demand. A target service level can be defined as a tradeoff between the cost of inventory and the cost of stockouts. The higher the target service level, the more variability in demand is possible, and more safety stock will be required to buffer against that demand variation. The closer target service levels get to 100%, the more safety stock will be required. A service level of 100% is the mathematical equivalent of infinite safety stock.

What are the two primary outputs from the S&OP process A. Material requirements plan B. Sales plan C. Production plan D. Cash flow statement

B. Sales plan C. Production plan

A disagreement between sales and production when modifying the sales and operations plan is most likely to be caused by which of the following? A. No capacity for a two-week shutdown in July B. Sales volume being consistently overstated C. Product mix sales always being inaccurate D. Sales not considering production's overdue orders

B. Sales volume being consistently overstated An overstated sales plan will result in an overstated production plan, causing production to overplan resources.

What is the most likely reason for a lean manufacturing company to have only one supplier that uses kanban and returnable packaging designed for a specific part? A. It is unlikely that multiple suppliers can be found for the same part. B. Schedule and delivery are overly complicated with multiple suppliers. C. Lean manufacturing companies have only one supplier for most parts. D. Containers are owned by suppliers and must be returned to them.

B. Schedule and delivery are overly complicated with multiple suppliers In lean manufacturing, simplicity requires that there be only one supplier for a specific part. The use of kanbans and returnable packaging is best managed with a single supplier.

Which of the following production order transactions is used to update item information? A. Work center hours B. Scrap quantity C. Order complete D. Parts started

B. Scrap quantity Scrap is updated so material requirements planning can incorporate actual historical scrap values into the order quantity.

A company purchases almost 30% of its raw material directly from farmers, cutting out wholesalers and distributors. What does this allow the company to do? A. Increase its hold on the farmers by eliminating an echelon. B. See that the true suppliers of raw material realize a higher price for their efforts. C. Promote the farmers to tier one suppliers, facilitating tighter controls. D. Reduce the costs associated with an entire echelon, thus driving its profit margins up.

B. See that the true suppliers of raw material realize a higher price for their efforts. A popular coffee roasting company purchases about 29% of its coffee directly from farmers, cutting out the intermediaries. This has allowed the company to see that farmers realize a higher price for their efforts.

A company that recently initiated a sales and operations planning (S&OP) process is experiencing inadequate participation. Which of the following factors is most likely the reason for this? A. The manufacturing environment is make-to-order. B. Senior management is not committed to the new process. C. An integrated software system is not in place. D. The sales team continues to forecast inaccurately.

B. Senior management is not committed to the new process. The most likely reason is that senior management is not committed to the new process.

In addition to the ruinous price-cutting and easy imitation by competitors, which of the following is another common risk of pursuing a low-cost provider strategy? A. Need to offer best-in-class customer service B. Shift in market interest from low cost C. Need to improve product delivery speed D. Shift in value chain design

B. Shift in market interest from low cost The risk of a shift in market interest away from low cost is the most common risk of pursuing a low-cost provider strategy among the options. Offering best-in-class customer service, while desirable and nice for the customer, will likely increase costs and therefore is counter to pursuing a low-cost provider strategy. The need to improve product delivery is also desirable, but it is not a risk (but might be a solution).

What information does capacity requirements planning (CRP) provide to production activity control (PAC)? A. Materials to purchase and their lead times B. Shop floor load information C. Planned and released orders D. CRP is done by the point PAC starts, so no information is needed.

B. Shop floor load information CRP is used to calculate load on work centers based on planned and released orders from material requirements planning (MRP). Past-due orders, rework orders, and work in process are also inputs to the load calculation. This information on load is a key input to scheduling in PAC. It should be clear that MRP and CRP need a great deal of accurate data (both static and dynamic) from the shop floor to determine load.

Which of the following data elements are required for production scheduling (select multiple)? A. List of all components and parts needed B. Start & finish dates for each operation, and time estimates C. Operations to be performed in the proper sequence D. Work centers to be used

B. Start & finish dates for each operation, and time estimates C. Operations to be performed in the proper sequence D. Work centers to be used

Which of the following is part of a business plan? A. Master scheduling B. Statement of profit objectives C. Short-term sales objectives D. Production plan

B. Statement of profit objectives The statement of profit objectives is part of a business plan, along with a long-range strategy and revenue and cost objectives. The production plan is derived from the business plan through the S&OP process and must agree with the business plan, but it is not a part of the business plan. The business plan specifically is concerned with long-range strategy and revenue and cost and profit objectives, not short-term sales objectives. Master scheduling occurs following S&OP, which follows business planning.

Which two of the following actions within a change program will lead to improved organizational performance? A. Strengthening commitment through joint diagnosis of business problems, and institutionalizing systems and procedures early in the change process. B. Strengthening commitment through joint diagnosis of business problems, and using measures that support continuous learning and change. C. Institutionalizing systems and procedures early in the change process, and using measures that support continuous learning and change. D. Using measures that support continuous learning and change, and using a functional team management approach to reorganize operating units.

B. Strengthening commitment through joint diagnosis of business problems, and using measures that support continuous learning and change. To be successful, a change management program requires strong commitment, participation, freedom of discussion, and a collaborative approach among team members.

At which stocking level is independent demand planned for the master production schedule in an assemble-to-order environment? A. Finished goods B. Subassemblies C. Raw materials D. Purchased parts

B. Subassemblies The master production schedule would be planned at the subassembly level.

Which team has the responsibility for preparing the preliminary production plan? A. Pre-S&OP team B. Supply planning team C. Demand planning team D. Executive S&OP team

B. Supply planning team The supply planning team is responsible for preparing the production plan and recommending changes as necessary to meet the demand plan. The other answers are incorrect because the demand planning team reviews the sales plan; the pre-S&OP team makes decisions on balancing supply and demand; and the executive S&OP team reviews and makes the final decisions on sales and operations plans as necessary.

A company has researched expanding capacity by designing and acquiring the largest machine of its type in the industry, even though this would result in excess capacity if business remained steady. However, the new machine would provide capacity flexibility without requiring much more additional staff. The alternative would be a second smaller machine, but this would require twice as many workers. A new facility is also planned rather than expanding the existing one. This new facility would be big enough for the new equipment, and it would also allow the organization's support functions that are currently leasing space elsewhere to move into the new facility. What is this an example of? A. Wishful thinking about capacity utilization B. The business strategy driving the need for a focused factory C. The operations people having too much influence in the company D. Antiquated thinking that bigger is better

B. The business strategy driving the need for a focused factory This is a real example of a company that had an earlier plan to expand capacity, but market share had diminished and the plan was put on hold. During the next few years, they fine-tuned the plan on paper and decided that big was best because it allowed them to have excess capacity (flexibility) and the higher volumes would drive item costs down through economies of scale. When the market again rose, they decided to not expand incrementally, but instead to go big. The new facility had enough room for the largest machine of its kind and enough room to consolidate the business and marketing teams in the same focused facility. Their major customer liked what they saw and awarded them 100% of their orders over the next ten years. Success was achieved immediately.

During the supply planning step of the sales and operations planning (S&OP) process, the team is discussing a chase production plan. A plant manager points out that the use of average working days per quarter for some of the calculations will be off by a certain amount because some quarters have more shop calendar days than others due to things like holidays or other nonproductive days. How should the person who prepared the report respond? A. Let's bring this issue up at the pre-meeting. B. The calculations are kept simple on purpose at this level. C. I can make this improvement prior to the next month's planning session. D. I can make this improvement prior to the pre-meeting.

B. The calculations are kept simple on purpose at this level. A high level of detail in the planning factors is too much detail for the S&OP planning level. This is a broad planning level that already uses aggregated products and avoids planning in the near term (this is the province of master scheduling).

When designing a new part, a company can contract with one or more suppliers in a competitive bidding situation or perform concurrent engineering with one supplier. Which of the following situations would most support concurrent engineering? A. Concurrent engineering places the cost of part design on the supplier. B. The part design is not well defined and will affect the product design. C. It is too difficult to manage multiple suppliers for a single part design. D. One supplier will ensure lower prices, shorter lead times, and higher quality.

B. The part design is not well defined and will affect the product design. Concurrent engineering (also called participative design/engineering) enables the part design to be done in parallel, with shared knowledge.

What important assumption is made about quantitative forecasting methods? A. Random variations should not exist in a good forecast. B. The past is a valid indicator of the future. C. Seasonal variations are usually not significant. D. Demand trends are rarely linear.

B. The past is a valid indicator of the future. There is no basis for the assumptions that seasonal and random variations are small. Demand trends rarely being linear might have some validity, but the past as a valid indicator of the future is an assumption upon which a number of commonly used forecast techniques—such moving averages, seasonal indexes, and smoothing forecasts—are based.

The best practice for managing safety stock in supply chains is A. Carry safety stock for all inventory, just-in-case B. Use safety stock for critical inventory, develop resiliency for other risks C. Alternative sourcing should be identified for all inventory D. Best practice isn't needed; handle each shortage situation as appropriate

B. Use safety stock for critical inventory, develop resiliency for other risks

Which of the following is an advantage of simultaneous engineering? A. Multiple designers work on the design at the same time, producing multiple options to consider. B. The product design is worked on at the same time that the process design takes place. C. The product design is a success even if a profit cannot be made. D. The process requires fewer resources and lowers the cost of design.

B. The product design is worked on at the same time that the process design takes place. Product design and process design work hand-in-hand in simultaneous engineering (also called participative design/engineering) to achieve the design objectives and to produce the product for the lowest possible cost.

A high-volume, low-cost retail customer has the ability to report daily sales to all suppliers by supplier SKU. Which of the following is true of this situation? A. The retailer should be prepared to warehouse lots of inventory brought to it by its suppliers. B. The retailer can simply specify a delivery window for the supplier and not order daily or weekly replenishments. C. The suppliers should quickly reveal this detail to all of their suppliers. D. The suppliers should use this information to plan monthly shipments back to the retailer.

B. The retailer can simply specify a delivery window for the supplier and not order daily or weekly replenishments. A secret to picking the right strategic framework is assessing how your resources relate to each other. For example, a U.S.-based market-dominating big-box retailer's low-cost strategy depends heavily on its physical resources (often rural locations), sophisticated IT, which helps them maximize selling space, and quickly replenished inventories. In fact, they provide point-of-sale (POS) data to all of their suppliers at a very high frequency, thus allowing suppliers to have very accurate product demand history and facilitating "replenishing today what was sold yesterday."

After an order is released, it turns out that not all of the resources needed are available. What will happen next? A. An alternate work center will automatically be used. B. There will be idle capacity at some work centers unless rescheduled. C. Work-in-process inventory will be lower. D. Dispatching will arrange this order to occur a little later.

B. There will be idle capacity at some work centers unless rescheduled. When an order is released, and all resources are not available, WIP levels are higher, orders miss due dates, customers are left unsatisfied, and holes in the production schedule need to be filled.

Which of the following statements is true of companies that begin to automate before implementing lean production? A. They tend to have a higher success rate. B. They tend to spend more money on material handling. C. They find that the conversion to automation goes faster. D. They find that the conversion to lean production goes faster.

B. They tend to spend more money on material handling. Companies that automate before moving to lean will normally be using technologies to solve process problems. This will result in the addition of unnecessary technologies. The success of an automation project will be greater if lean is implemented first.

From the customer's perspective, what does delivery lead time consist of? A. Time from start of the order preparation to use of the product B. Time from receipt of the customer order to the delivery of the product C. Time from requirement for a product to receipt of the product D. Time from placing an order to use of the product

B. Time from receipt of the customer order to the delivery of the product Delivery lead time is the time from the receipt of a customer order to the delivery of the product.

If a team member is listed in a RACI chart as an R for a specific task, what is this member's role? A. To report on progress on the task to project stakeholders B. To confirm that a task has been satisfactorily completed C. To initiate the task and hand it off to the next team D. To assist in the completion of the task

B. To confirm that a task has been satisfactorily completed The R in the RACI acronym denotes the "responsible" role. This person may or may not perform the task, but the individual is responsible for confirming that the task has been satisfactorily completed.

During a core competency analysis, it is discovered that the company has best-in-class capabilities in designing integrated circuits for their top-end products. A few multinational integrated circuit manufacturers have the potential to lower costs significantly. What should the outsourcing decision be? A. To weight the highest-quality outside supplier most heavily B. To keep this technology in-house C. To outsource to the chip manufacturer whose technical design group is geographically closest to the company D. To outsource to the chip manufacturer that comes closest to sharing the company's vision of the future

B. To keep this technology in-house Outsourcing is the process of having suppliers provide goods and services that were previously provided internally. It involves substitution—the replacement of internal capacity and production by that of the supplier.

What information should a traceability system be able to provide? A. Available-to-promise B. Transfer of ownership C. Capable-to-promise D. Arrival date

B. Transfer of ownership Traceability provides the "who," among other things, which indicates the parties involved and the transfer of ownership between them. While the ongoing location of an item can be known with traceability, the arrival date can only be estimated.

A company produces a line of configurable desks, which are shipped from retailers. Orders are taken at the store and transmitted to the factory daily, with delivery promised within five to ten workdays, depending on the options. This is achieved by stocking drawers, desk subassemblies, and hardware. Which of the following master schedule formats is best for this product family? A. Single-level B. Two-level C. One-level D. Multilevel

B. Two-level The two-level format would allow the use of a super bill to master schedule an end product family, and also selected key features and options.

In an approach using both just in time (JIT) and total quality control (TQC), what is the role of TQC? A. Stimulating conversation B. Understanding root causes C. Identifying waste D. Providing feedback

B. Understanding root causes The role of TQC is the identification and elimination of root causes of quality defects.

Which of the following programs asks businesses to embrace, support, and enact, within their sphere of influence, a set of core values in the areas of human rights, labor standards, the environment, and anti-corruption? A. ADB/OECD Anti-Corruption Initiative B. United Nations Global Compact C. United Nations Children's Fund D. Universal Declaration of Human Rights

B. United Nations Global Compact The incorrect answers all represent global initiatives to increase human rights and well-being, but they do not have the focus of the United Nations Global Compact on supply chain management.

A commercial door manufacturer wants to add some make-to-stock (MTS) capabilities to its current make-to-order (MTO) manufacturing environment. Which of the following should be modified to reflect this strategy and what competitive advantage could be emphasized in line with this strategy? A. Vision statement should be modified to express a goal of low-cost leadership. B. Vision statement should be modified to express a goal of faster lead time. C. Mission statement should be modified to express a goal of faster lead time. D. Mission statement should be modified to express a goal of low-cost leadership.

B. Vision statement should be modified to express a goal of faster lead time. Essentially, a company's vision statement answers the question, "Where are we going?" The vision statement for this organization needs to express what competitive advantage they are pursuing in moving to a MTS environment for some of their products. Often MTS is about improving availability such as by having faster lead times. While low-cost leadership could be a goal, carrying MTS inventory will bake this goal harder to achieve.

During MRP record balancing, if no safety stock is specified, when is the first net requirement triggered? A. When projected available is less than the gross requirements for the next period B. When projected available first becomes negative C. When projected available is less than the lot size D. When projected available first becomes zero

B. When projected available first becomes negative The first net requirement is triggered during MRP record balancing when projected available first becomes negative. The other answers are incorrect because carrying no inventory until there is an item needed is a major advantage of MRP; because MRP generates the net requirement in the next period; and because lot size has no relation to net requirement calculation.

Statistical forecasting provides the best solution in which of the following situations in an MTS environment? A. When sales volume is high and forecast variance is high B. When sales volume is high and forecast variance is low C. When sales volume is low and forecast variance is low D. When sales volume is low and forecast variance is high

B. When sales volume is high and forecast variance is low Statistical forecasting works best in an MTS environment when sales volume is high and forecast variance is low. The other answers are incorrect because, although statistical forecasting can be used, when volume is low the benefit of the forecast is not as great, and perhaps the company should think of an MTO strategy; when sales volume is low and forecast variance is high, the company should definitely consider making to order; and statistical forecasting would work only when forecasting at the aggregate level and when assembling to order.

What is the best way to monitor a project's time and activities? A. With a spreadsheet maintained by the project manager B. With a method that is simple and easy for everyone to use C. With an online system D. With enterprise resources planning

B. With a method that is simple and easy for everyone to use In order for everyone to easily report time and activities, the solution must be easy to use and accessible.

Which process type would apply to a company that makes furniture with the customer selecting wood finish and fabric? A. Project B. Work center / job shop C. Batch D. Line / continuous

B. Work center / job shop

Which of the following statements is true when production lead time is increased? A. Work-in-process inventory will decrease. B. Work-in-process inventory will increase. C. Component inventory will increase. D. Work-in-process inventory may be insufficient.

B. Work-in-process inventory will increase. When production takes longer, the raw materials, components, and subassemblies will spend more time in work-in-process. The size of the component inventory and the necessary inventories needed in production are unaffected by an increase in product lead times.

The relationship for all components at the same level in the bill of material to be available at the same time is: A. component availability. B. a horizontal dependency. C. a parent-child relationship. D. a vertical dependency.

B. a horizontal dependency Horizontal dependency is the relationship between components at the same level in the bill of material.

Input/output control seeks to manage lead times by adjusting the input of load into the system on the basis of: A. material requirements. B. actual output. C. planned output. D. capacity requirements.

B. actual output. Effectively managing the load at a work center requires knowledge of work center output. The amount of load that is input into a work center should be controlled by the amount of output. Input load that exceeds output will simply add to the queue at the work center.

Plans for sales and operations planning are at the: A. detailed SKU level. B. aggregate product family level. C. customer level. D. manufacturing site level.

B. aggregate product family level. The sales and operations planning process must reconcile all supply, demand, and new product plans at aggregate levels and tie to the business plan.

Available to promise (ATP) fulfill. customer order within due date using? A. available on-hand inventory B. available on-hand inventory and items already planned for production C. inventory added via a special production order D. any items in the product catalog

B. available on-hand inventory and items already planned for production

The strategic management of any operation? A. will be determined by the ability of the facility to react to short-term changes in schedule or product mix. B. cannot be separated from how well operational resources are managed at the detail level. C. should not be constrained by past operational efficiencies or quality performance. D. is the key driver of operations, regardless of the operation's past performance.

B. cannot be separated from how well operational resources are managed at the detail level. Operational knowledge is vital to establishing an operations-based strategic advantage. A superior understanding of what one's processes can do at the limits of their capability allows the organization to better provide products and services, due to confidence in knowing for sure that the processes can deliver. Well-controlled processes will also have fewer errors and waste and therefore higher efficiency (lower costs, higher quality).

Rough-cut capacity planning performs a: A. scheduling routine and then checks capacity availability. B. comparison to available or demonstrated capacity. C. detailed capacity analysis. D. material requirements explosion.

B. comparison to available or demonstrated capacity. Rough-cut capacity planning is compared to available or demonstrated capacity and is usually done for each key resource.

Failure mode and effects analysis (FMEA) rates failures based on the probability of their occurrence and their: A. ease of mitigation. B. degree of severity. C. likelihood of causing other failures. D. chance of occurring more than once.

B. degree of severity. FMEA is used to identify the factors that are critical to failure and rates them by the likelihood that they will occur and the consequences of the failure (severity). Corrective actions can then be applied to those failures based on their rankings for occurrence and severity.

The function of recognizing all demands for goods and services to support the marketplace is called: A. demand forecasting. B. demand management. C. demand chain management. D. demand planning.

B. demand management.

In an MTO manufacturing environment, a key management issue to consider is A. determining finished goods inventory levels. B. determining the lead time for customers by managing the size of the backlog. C. line balancing. D. selecting a level production method.

B. determining the lead time for customers by managing the size of the backlog. Managing the size of the backlog is a key activity in the S&OP process in an MTO environment. If the backlog becomes too large, lead time to ship will lengthen, possibly beyond customer expectations. A backlog that is too low causes concern that sufficient work does not exist. The other answers are incorrect, because finished goods inventory would be a key planning factor in an MTS environment; selecting a level production strategy might be considered by an MTO company, but typically a chase method is the production choice; and line balancing is an execution technique for a repetitive or lean environment.

Demand for a part that is produced by another plant or division within the same organization is known as: A. internal demand. B. interplant demand. C. distribution demand. D. coupled demand.

B. interplant demand. Interplant demand is one plant's need for a part or product that is produced by another plant or division within the same organization.

The gateway work center performs the operation that: A. is just prior to final assembly. B. is first in a routing. C. consumes the most capacity. D. feeds a bottleneck

B. is first in a routing. A gateway work center performs the first operation of a particular routing sequence.

In the case where a customer is located far from the supplier and shipping costs and the potential for damage are creating problems, a plan to co-locate a customer's operation within the supplier's facility will: A. likely give the supplier a chance to raise prices significantly, since they know that they have all of the customer's business. B. likely improve multiple customer performance metrics. C. Likely become a source of employee dissatisfaction when cross-company salaries and benefits are discussed off-site. D. always lead to backward integration.

B. likely improve multiple customer performance metrics. Improved supply reliability could reduce customer inventories (safety stocks and quarantined for return), improve customer performance to schedule and on time delivery to customers, and reduce expediting and downstream costs. This could result in improvements in multiple performance metrics for the customer.

Under a high volume and low variety strategy, products usually compete with: A. high prices. B. low prices. C. manufacturing flexibility. D. skilled labor.

B. low prices. Companies serving high volume and low variety markets usually have a competitive position that values low prices.

A change from reporting operations to reporting only parts completed requires all of the following systems to be changed except: A. production activity control. B. master scheduling. C. inventory accounting. D. cost accounting.

B. master scheduling. The master schedule is concerned with the planning and scheduling of the firm's finished goods. The change from reporting operations to reporting only parts has no direct impact on the master schedule. Since the change will impact materials and operations reporting below the master production schedule level, it will impact inventory accounting, cost accounting, and production activity control.

The validity of the material requirements plan (MRP) is most reliant on the accuracy of the: A. projected available balance. B. on-hand inventory. C. gross requirements. D. scheduled receipts.

B. on-hand inventory. The first calculation in the process begins with the on-hand balance.

A company's sustainability strategy first has an impact on: A. recycling of by-products and co-products. B. product and process design. C. employee attrition. D. employee training.

B. product and process design. In order for sustainability to be an organizational strategy, it must start in the product and process design phase.

If the master production schedule (MPS) is overstated, then: A. material requirements planning output will be inconsistent with the MPS. B. raw material inventories will increase. C. shop floor priorities will be easier to schedule. D. work-in-progress inventories will decrease.

B. raw material inventories will increase. Raw materials are ordered to be in stock to fulfill the schedule. If the schedule is overstated, excess materials will be ordered.

A firm that produces a wide variety of goods to order for commercial and industrial customers is implementing customer relationship management (CRM). The most likely benefit the firm will realize from effective implementation is that it will be able to: A. make more realistic delivery commitments. B. recognize shifts in customer preferences. C. increase the markets it serves. D. capture a great deal of information about competitors.

B. recognize shifts in customer preferences. CRM is a marketing philosophy based on putting the customer first. Information is collected and analyzed to understand and support existing and potential customer needs. Collection of such information can provide early warnings of shifts in design and mix preferences.

Increased flexibility in order to meet customer demand changes can be achieved by: A. increasing component inventory. B. reducing lead times. C. increasing lot sizes. D. reducing scrap.

B. reducing lead times. Reducing lead times—specifically setup times—allows for more frequent changes to adapt to changes in demand.

Machine utilization can be increased by: A. increasing product changeovers. B. reducing unplanned downtime. C. reducing lot sizes. D. increasing efficiency.

B. reducing unplanned downtime. The longer the machine is operating, the greater the utilization.

Establishing a results-oriented, high-performance culture generally requires managers and other leaders to: A. foster competition in each department. B. set stretch objectives. C. increase the employee review cycle to once a month. D. implement a suggestion system.

B. set stretch objectives. Successfully leading the effort to foster a results-oriented, high-performance culture generally entails such leadership actions and managerial practices as setting stretch objectives.

Strategies that emphasize areas where the company is weak or has unproven competencies: A. are often used as stretch goals. B. should be ignored in favor of areas where competency exists. C. can improve morale by providing a target for improvement. D. act as catalysts for improvement and should be pursued.

B. should be ignored in favor of areas where competency exists. Strategies that place a heavy emphasis on areas where the company is weak or has unproven competencies should be avoided. The company's strategy should be aimed at capturing market opportunities that are most suited to the company's collection of capabilities.

The integration effort of cable companies to diversify into providing internet and telephone services is an example of: A. a company seeking to become a monopoly. B. strategic fit in R&D and technological activities. C. the need for more government regulations. D. a larger company restraining industry opportunities.

B. strategic fit in R&D and technological activities. Businesses with a strategic fit in R&D or technology activities perform better together than apart because of potential cost savings.

A company successfully incentivizes employees in a labor-paced environment to exceed scheduled output in scheduled time. This is an example of an employee wage policy: A. that will be totally compatible with almost every unionized organization. B. that is creating production value. C. that is bound to cause strife when engineering increases standard times by operation. D. that will likely put the company's products at the top in this industry for quality.

B. that is creating production value. When designing the payroll system at one steel company, management decided to incentivize the employees with a 1% bonus rewarded for every 1% that their output exceeded the goals. The company consistently achieved their low-cost provider goals.

A shipment of raw materials has arrived at a work center. The machine operators are finishing the work on an order already in process at the work center and are about to start preparing their stations for processing. The amount of time the materials wait to be processed is known as: A. a planning horizon. B. the queue time. C. a time bucket. D. the manufacturing calendar.

B. the queue time. The queue time is one element of the total manufacturing lead time. Increases in queue time result in direct increases in manufacturing lead time and work-in-process inventories. Queue time is often the largest component of lead time in functional manufacturing process types.

Product life cycle analysis concentrates on: A. the product development cycle. B. the sales history of a product in stages. C. the different versions of a product offering. D. the engineering changes made to a product's bill of material.

B. the sales history of a product in stages. A product life cycle is the stages a product goes through from beginning to end.

The final assembly schedule designates: A. the items to be shipped to the distribution warehouses. B. the specific goods to build in an assemble-to-order environment. C. the last master production schedule to provide to manufacturing. D. the list of products to be used in the planning cycle.

B. the specific goods to build in an assemble-to-order environment. The final assembly schedule is a schedule of end items to finish the product for specific customers' orders in a make- or assemble-to-order environment.

A company has redesigned its packaging and is saving a large amount of plastic annually. This helps the environment, lowers costs, and makes kit assembly easier for workers, so it is best understood as an example of: A. cost improvement efforts. B. the sustainable "sweet spot." C. common sense. D. a Global Reporting Initiative (GRI) requirement.

B. the sustainable "sweet spot." Saving a large amount of plastic annually is a sustainable strategy to benefit the environment, the organization's economic interests, and helps make workers jobs easier, so it improves each area of the triple bottom line, which is called the sustainability "sweet spot."

All of the following factors are required to implement effective cross-functional teams except: A. employee empowerment. B. total quality management. C. change management. D. shared vision.

B. total quality management. To be successful, cross-functional teams must be driven by employee empowerment, shared vision, and change management expertise. These factors are so important because team members cut across business functions and sometimes across supply chain partners. Total quality management refers to the activities surrounding product development and process management to eliminate the causes of variance and to build a philosophy of continuous improvement in all activities.

For some companies, value chain analysis has led to support processes such as design for sustainability, which is exemplified by: A. supplier rating systems where all key suppliers are graded using common scorecards. B. working to eliminate toxic chemicals from the supply chain. C. ensuring that multiple suppliers are qualified for sourcing key components. D. annual monitoring of the supply chain to ensure viability of parts and raw materials supply.

B. working to eliminate toxic chemicals from the supply chain. In its design for sustainability activities, Nestle, for example, is working to eliminate toxic chemicals from its supply chain. Pepsi and Coca-Cola are working to improve water resources in developing countries.

What competitive strategy applies to Southwest Airlines Low-cost Focused low-cost Differentiation Focused differentiation Best-cost

Best Cost

Which of the following are inputs to MRP Bill of Material Inventory Status MPS Planning Data

Bill of Material Inventory Status MPS Planning Data

Inventory on the balance sheet at the end of the last year was $5,000,000. Inventory at the end of this year was $4,000,000. Last year's annual cost of goods sold (COGS) was $3,000,000. This year's annual COGS was $2,300,000. What is this year's inventory turnover? A. 1.957 times B. 0.575 times C. 0.511 times D. 0.589 times

C. 0.511 times Inventory Turnover = Annual COGS/Average Inventory in Dollars. Average Inventory = (Inventory at Period Start + Inventory at Period End)/2. Since the inventory at the end of the last year will be the same as the inventory at the beginning of this year, it can be used when calculating average inventory. Average Inventory for this year: ($5,000,000 + $4,000,000)/2 = $4,500,000. Inventory Turnover = $2,300,000/$4,500,000 = 0.511 times.

A production facility is capable of producing 1,000 units per shift. Planned capacity is 7.2 hours per eight-hour shift, one shift per day, five days per week. Customer demand is 800 units per day. What is the takt time? A. 0.43 minutes per unit B. 0.50 minutes per unit C. 0.54 minutes per unit D. 0.60 minutes per unit

C. 0.54 minutes per unit (7.2 hours x 60 minutes per hour)/800 units = 0.54 minutes per unit

An operator can assemble a product at a rate of 30 units per hour. What is the throughput time? A. 0.5 minutes B. 1 minute C. 2 minutes D. 1 hour

C. 2 minutes 60 minutes/30 units = 2 minutes per unit. Throughput time is also called cycle time.

Last year a company had average inventory of $24,000,000, and the cost of sales for the year was $48,000,000. The budget for the year shows the cost of sales increasing by 25%, with no increase in the average inventory. What inventory turns did the company have, and what will they need to have this year to meet the budget? A. 0.5, 0.4 B. 0.5, 2.5 C. 2, 2.5 D. 2, 3

C. 2, 2.5 $48,000,000/$24,000,000 = 2; $60,000,000/$24,000,000 = 2.5

Over a one-year period, work center 12 was available for 14,000 hours (269.2 hours per average week), actually worked 11,980 hours, and produced 12,800 standard hours of work. What was the average weekly rated capacity? A. 230 actual hours B. 246 actual hours C. 246 standard hours D. 230 standard hours

C. 246 standard hours To calculate rated weekly capacity, first calculate utilization and efficiency. Utilization = Actual Hours/Available Hours = 11,980 hours/14,000 hours = 0.8557. Efficiency = Standard Hours Produced/Actual Hours = 12,800 hours/11,980 hours = 1.0684. Rated Weekly Capacity = Available Weekly Hours × Utilization × Efficiency = 269.2 hours per week × 0.8557 × 1.0684 = 246 hours (rounded).

There are currently 5,000 hydraulic door closers in stock, and analysts project that there will be sales of 58,500 units this year. If this turns out to be true, how many days of supply are currently on hand? A. 21.3 days B. 36.7 days C. 31.2 days D. 11.7 days

C. 31.2 days Days of Supply = Inventory on Hand/Average Daily Usage. To determine average daily usage, divide the annual usage by 365 days: 58,500 units/365 days = 160.274 units per day. Days of Supply = 5,000 units/160.274 units per day = 31.197 days, rounded to 31.2 days.

What monthly unit production amount would be required to satisfy the production plan given the following information? Planning horizon- 18 months Working days per planning period- 22 Production planning approach- Level Total demand- 72,000 units Beginning inventory- 4,800 units Target for ending inventory- 6,600 Planned lot size- 2,000 A. 3,900 units B. 4,000 units C. 4,100 units D. 6,000 units

C. 4,100 units Planned production per period equals the total production required divided by the number of periods (18 months in this example). Total production required equals the total forecasted demand (72,000 units) minus the beginning inventory (4,800 units) plus the ending inventory (6,600 units); 72,000 - 4,800 + 6,600 = 73,800. Planned production per period = 73,800 units/18 months = 4,100 units per month.

A B2B organization sells hydraulic presses that are priced at $25,000. The unit contribution margin (CM) is $10,000. If the organization has $4,000,000 in fixed costs, what is the break-even point in units? A. 160 units B. 267 units C. 400 units D. 1,600 units

C. 400 units The break-even point in units is calculated as the fixed costs divided by the unit CM. $4,000,000/$10,000 = 400 units.

A company intends to cut its backlog from four months to two. Annual demand is 360 units. What is the number of units that should be included in the production plan? A. 300 units B. 360 units C. 420 units D. 720 units

C. 420 units The production rate is 30 units per month. To decrease backlog, an extra 60 units should be produced above the annual demand of 360 units.

Demand= 900, Forecast= 800. Using a high alpha= 0.8 to emphasize actuals, the exponential smoothing forecast is ? A. 800 B. 820 C. 880 D. 900

C. 880 =(0.8×900)+(0.2×800)=720+160=880

Which is true of part numbers and their relationship on bills of material? A. A part can be either a parent or a child but never both. B. The same part used on different bills of material will need different part numbers. C. A part at a particular processing stage has one and only one part number. D. The same part number can be used to identify the same product at different stages of production before and after value has been added to it.

C. A part at a particular processing stage has one and only one part number. Part numbers must be unique for control purposes, and a part that receives further processing during production will have a new part number when it exits the work center doing the processing.

Which manufacturing environment offers good lead time, allowing customers to select among predefined product options? A. MTS B. MTO C. ATO D. ETO

C. ATO

Which of the following considerations of a supplier rating system would be most critical for the supplier? A. Performance reporting by month B. Clearly prepublished lead times C. Accurate drawings for unique customer parts D. Ability to compare suppliers with each other

C. Accurate drawings for unique customer parts Accurate drawings will improve the supplier's pricing and quality.

A large multinational retailer allows suppliers to see point-of-sales data using proprietary software. What does this facilitate? A. Use of experienced consultants at each of the suppliers to help manage all the detail B. Complex shipment route planning C. Accurate forecasting for the suppliers' products D. Wide variety of low-cost supplier-based IT systems being capable of capturing and using this point-of-sales data

C. Accurate forecasting for the suppliers' products A secret to picking the right strategic framework is assessing how your resources relate to each other. For example, a U.S.-based market-dominating big-box retailer's low-cost strategy in the U.S. depends heavily on its physical resources (often rural locations) and sophisticated IT, which helps them maximize selling space and quickly replenish inventories. They provide point-of-sale (POS) data to all of their suppliers at a very high frequency, thus allowing suppliers to have very accurate product demand history and facilitating the suppliers' ability to "replenish today what was sold yesterday."

Which of the following shipments is most likely to be subject to governmental safety regulations related to shipping and handling through a supply chain? A. Papayas B. Flu vaccines C. Acetylene D. Milk

C. Acetylene Due to the flammable nature of acetylene, it may be considered a hazardous material that must comply with governmental safety regulations for shipping and handling. Perishables like milk and papayas or pharmaceuticals such as flu vaccines may require the use of cold chain shipping technology to maintain storage within an acceptable temperature range to avoid spoilage, but they are less likely to be subject to safety regulations because they do not pose similar risks during shipment.

Which of the following performance measures is of no use to the management of a make-to-stock company with regard to master scheduling and sales and operations planning? A. Order completion per the master schedule B. Adherence to the inventory plan C. Achievement of the backlog plan D. On-time shipment per the promise date

C. Achievement of the backlog plan A make-to-stock environment uses an inventory plan, not a backlog plan.

CRP identify one advantage and one disadvantage A. Advantage - Guarantees viable work center load plans B. Disadvantage - Does not consider planning factors C. Advantage - Reveals potential load imbalances D. Disadvantage - Assumes infinite loading

C. Advantage - Reveals potential load imbalances D. Disadvantage - Assumes infinite loading

In a push system, authorization of order release is based on which of the following? A. Availability of material and tooling B. Current priority C. All of the above D. Planned orders in the MRP output

C. All of the above Work order release planning may take place until the moment of order release. Authorization of order release is based on Current priority Availability of materials and tooling Planned orders in the MRP output Availability of materials and tooling Loads specified by input and output control.

Production has determined that a particular order will be late due to a purchased part being past due. Which of the following scenarios is most likely to occur in a job shop environment? A. The order is completed up to the point where the part is needed. B. The order is cancelled and re-created when the purchased part arrives. C. Another order takes its place in the dispatch sequence. D. Material planning delays the order due date by one week.

C. Another order takes its place in the dispatch sequence. In a job shop, multiple jobs pass through functional departments in lots, and each lot may have a different routing. Multiple jobs would be using the same machinery, so if one could not be produced, another job would move ahead of it in sequence

Which of the following is the most likely manufacturing environment for a bicycle? A. Engineer-to-order B. Remanufacture C. Assemble-to-order D. Make-to-order

C. Assemble-to-order According to the APICS Dictionary, an assemble-to-order manufacturing environment is one in which "a good or service can be assembled after receipt of a customer's order. The key components... used in the assembly or finishing process are usually stocked in anticipation of a customer order. Receipt of the order initiates assembly of the customized product." In the question's example, a bicycle manufacturer will likely have all of the components for their various bicycle models already produced. When a customer orders a new bike, their chosen model (and any features) will be assembled from components in stock.

Which production environments will most benefit from capable-to-promise functionality? A. Engineer-to-order and make-to-order B. Assemble-to-order and make-to-stock C. Assemble-to-order and make-to-order D. Engineer-to-order and make-to-stock

C. Assemble-to-order and make-to-order Capable-to-promise is the process of committing orders against available capacity as well as inventory. Assemble-to-order and make-to-order are capacity- and lead-time-constrained, so orders should be promised based on the availability of resources.

Which of the following is true about lean production planning? A. It increases manufacturing lead time. B. Assembly-level planning explodes the BOM. C. Assembly-level planning reduces the number of parts being planned. D. It plans materials at the part rather than assembly level.

C. Assembly-level planning reduces the number of parts being planned. Lean plans materials at the assembly level, which is enabled by flattening the BOM or relying heavily on suppliers to provide subassemblies. This reduces the number of parts assembly operations and shortens manufacturing lead time.

A diversified company is typically a collection of businesses. Which of the following is a strategy-making challenge for such a company? A. Gathering local marketing data for each industry and for the businesses within that industry B. Making small incremental changes in individual business units based on current market direction C. Assessing multiple industry strategies, one for each industry arena in which the company operates D. Becoming a decentralized organization that allows each business to formulate its own corporate strategy

C. Assessing multiple industry strategies, one for each industry arena in which the company operates Because a diversified company is a collection of individual businesses, the strategy-making challenge involves assessing multiple industry strategies, one for each industry arena in which the company operates.

Analysts must be aware of which of the following when assessing potential points of weakness in a risk assessment for a technology-based business? A. Colleges and universities are often available for cutting-edge research and development. B. Outsourcing is a viable alternative to increase capacity and provide flexibility to customers. C. At any moment, a competitor may experience a breakthrough and take market share. D. A solidly composed patent will give the business many years of competitive protection.

C. At any moment, a competitor may experience a breakthrough and take market share. A technology-based supplier of high-tech coatings was caught by surprise when its competitor introduced a new coating technology, enabling it to produce product at significantly better levels of cleanliness.

In a linear sequence of operations A, B, C, D, and E, each operation receives one unit from raw materials or the prior operation and outputs one unit. Operation A produces 11 units a day, operation B produces 6 units a day, operation C produces 10 units per day, operation D produces 9 units a day and operation E, final assembly, produces 8 units a day. Operation E receives inputs from other parts of the process that do not pass through the constraint and it sends its output to shipping. Demand is for 8 units a day. Where else might inventory be stored in this production system? A. Before and after operation E only. B. At the raw materials before operation A and before operation E only. C. At the raw materials before operation A and before and after operation E. D. At the raw materials before operation A and after operation E only.

C. At the raw materials before operation A and before and after operation E. In addition to the constraint buffer before operation B, there will also be an assembly buffer before the final assembly point E because there are materials made in processes that do not pass through the constraint but are assembled here. There will also be a shipping buffer after operation E and prior to shipping. Finally, there will be stores of raw materials before operation A to ensure that this gateway operation is not starved for materials.

Which is an advantage of back scheduling? A. Commits resources as early as possible. B. Takes advantage of excess capacity. C. Avoids inventory buildup and cost. D. Levels the workload.

C. Avoids inventory buildup and cost. Back scheduling enables manufacturing to avoid committing resources until needed, thus avoiding a buildup of inventory and cost.

A large organization that maintains manufacturing, distribution, marketing, and retail operations wants to track key performance indicators (KPIs) to measure overall organizational performance. Which tool would be best suited for the desired tracking? A. United Nations Global Compact B. Blockchain C. Balanced scorecard D. SCOR model

C. Balanced scorecard The balanced scorecard can be used to evaluate organizational or supply chain performance. The SCOR model is tailored specifically to supply chain management, which is part of the organizational processes, but would not give a clear picture of overall performance. The United Nations Global Compact and blockchain are not tools tailored to tracking KPIs.

Which process type would apply to a pharmaceutical company producing drugs containing closely tracked narcotics? A. Project B. Work center / job shop C. Batch D. Line / continuous

C. Batch

Why will material requirements planning check for available inventory of a purchased part in an engineer-to-order environment? A. Because it is possible that the item was stocked at one time and is now considered non-stock B. Because the part may be in stock for another customer order and can be reallocated to this order C. Because a previous order of the part may have residual inventory from lot size or price break D. Because checking for available inventory can identify inventory inaccuracies

C. Because a previous order of the part may have residual inventory from lot size or price break If there was a minimum purchase quantity or a price break, there may have been excess inventory. A cancelled customer order could also result in residual inventory.

What tool is used to trace the inventory flow through a distribution network A. Bill of Material B. Bill of Sale C. Bill of Distribution D. Bill of Transport

C. Bill of Distribution

Which lead/lag strategy tends to increase cash requirements? A. Lead capacity only B. Lag capacity only C. Both lead capacity and lag capacity when lag capacity is combined with inventory stockpiling D. Both lead capacity and lag capacity regardless of the inventory strategy

C. Both lead capacity and lag capacity when lag capacity is combined with inventory stockpiling The strategy that tends to increase a company's cash requirements is to lead capacity and to lag capacity when lag capacity is combined with inventory stockpiling.

In a company that regularly has a past due order condition, backward scheduling in material requirements planning and forward scheduling in an assemble-to-order environment have what in common? A. Both techniques identify the same start dates. B. Both techniques use the same required dates. C. Both techniques use the same lead times. D. Both techniques calculate the same critical path.

C. Both techniques use the same lead times. Both will use either a standard or calculated lead time.

What is the term for an element of time or material that can be maintained at the constraint, convergent points, divergent points, and shipping points? A. Safety stock B. Rope C. Buffer D. Drum

C. Buffer In the theory of constraints, buffers can be time or material, and they support throughput and/or due date performance. Buffers can be maintained at the constraint, convergent points (with a constraint part), divergent points, and shipping points.

In the theory of constraints planning and control system, which of the following techniques facilitates the capacity control function? A. Pace of throughput B. Rope C. Buffer management D. Drum schedule

C. Buffer management The buffer ensures that the process will never be "starved" for needed inventory. This buffer of inventory represents the amount of time that the inventory in the buffer protects the constraint from disruptions.

To deal with excess inventory in one period and shortages in another period in a multi-node supply chain, a company implements point-of-sale reporting. What has this solution helped to eliminate? A. Tendency to add bias to forecasts B. Stress of stockouts C. Bullwhip effect D. Excessive costs of enterprise resources planning system changes

C. Bullwhip effect The bullwhip effect is an extreme change in the supply upstream generated by a small change in demand downstream. Inventory can quickly move from being backordered to being in excess. This is due to the serial nature of communicating orders up the chain with the inherent transportation delays of moving product down the chain.

What will increase rivalry among sellers in the same industry? A. Customer loyalty is high, and cost to switch brands is high B. Both strong and weak rivals exist. C. Buyer demand grows slowly or is flat, and both strong and weak rivals exist. D. Buyer demand grows slowly or is flat, and cost to switch brands is high.

C. Buyer demand grows slowly or is flat, and both strong and weak rivals exist. When buyer demand grows slowly or is flat, sellers must compete harder to increase revenues. When strong and weak rivals exist, strong competitors tend to exploit their advantages and weak ones have to move quickly to compete. It is harder to entice a customer to switch when they are loyal. Buyers are not likely to change suppliers.

Which of the following may be necessary to prove feasibility when seeking capital investment approvals? A. Investigating interest rates from various lending institutions B. Leveraging the existing overhead rates prior to completion C. Calculating the payback period or internal rate of return D. Outsourcing production until the project is complete or the machine comes up to speed

C. Calculating the payback period or internal rate of return To finance a large, expensive project or capital investment, it is often necessary to calculate the payback period or internal rate of return

Which manufacturing technology would most likely provide the greatest benefit to a company whose order winners are delivery speed and flexibility? A. Transfer line B. Quality function deployment C. Cellular manufacturing system D. Automated material handling

C. Cellular manufacturing system A cellular manufacturing system produces families of parts within a single line or cell of machines controlled by operators who work only within the line or cell. This configuration enables high output and flexibility.

Which is a benefit related to service design? A. Services can be designed independently from related product design. B. Service design can prioritize cost minimization since services have minimal impact on customer satisfaction. C. Changing or customizing a service can be rapid and inexpensive. D. Services can be patented or copyrighted.

C. Changing or customizing a service can be rapid and inexpensive. Unlike products, it is difficult to protect services from imitation since they typically cannot be copyrighted, though a process or related products might be patented or copyrighted. On the plus side, a service can be easily changed or customized very quickly and with very little expense, especially in the case of basic services. Services strongly impact customer satisfaction, and service design is inseparable from related product design.

A certified supplier has begun making late deliveries. What is the first action the buyer should take? A. Increase the purchasing lead time. B. Change the supplier status from certified to non-certified. C. Communicate with the supplier to help identify the reason and resolve the problem. D. Start sourcing the goods from a different supplier.

C. Communicate with the supplier to help identify the reason and resolve the problem. Communicating with the supplier to determine if this is a process, quality, or transportation issue, in addition to whether it is a long- or short-term issue, would be the first step.

A company has limited resources in some work centers and bottlenecks that move around based on product mix. Salespeople must be notified of overloads so schedule changes can be made with customers. Which of the following scheduling techniques should be considered by management? A. Resource requirements scheduling B. Finite master production scheduling C. Constraint-oriented finite loading D. Rough-cut capacity scheduling

C. Constraint-oriented finite loading Constraint-oriented finite loading is a technique that plans orders around bottleneck work centers. The objective is to maximize total production throughput.

Which of the following is a potential process transition point that a business with declining production volume may face? A. Project to jobbing B. Line to project C. Continuous to batch D. Batch to line

C. Continuous to batch With declining production volume, the appropriate choice would be to move from high-volume continuous production to building products in intermittent batches.

Which of the following performance metrics refers to an operation's ability to provide a products or services to customers inexpensively? A. Dependability B. Speed C. Cost D. Quality

C. Cost There are five generic performance objectives: quality, speed, dependability, flexibility, and cost. The cost objective refers to the goal of lowering the costs of individual units in order to increase profit and/or improve competitive advantage.

A strategic decision has been made to expand a highly customer-centric organization into a foreign country. What should a solid risk assessment reveal? A. Locals should carry the major share of customer interactions. B. Processes that work in one country should work in another. C. Cultural interactions are likely a major source of potential failure. D. Local regulations will probably not be an issue, as the opportunity for new tax receipts usually wins the day.

C. Cultural interactions are likely a major source of potential failure. When a U.S.-based amusement company decided to expand its largely successful theme park operations to Europe, it brought American management styles, cultural tastes, labor practices, and marketing pizzazz to Europe. When the French stayed away in droves, the company accused them of cultural snobbery.

In a company that has over 20,000 end items in stock, which of the following demand elements is likely to take the most time to assess for sales and operations planning? A. Demand for a new product B. Demand for a sales promotion C. Demand for existing products D. Demand for hedge inventory

C. Demand for existing products Demand must be determined for the product families in aggregate.

The most important order qualifier and order winner attributes (respectively) in the decline life stage are A. Cost and Innovation B. Flexibility and Functionality C. Dependability and Cost D. Quality and Flexibility

C. Dependability and Cost

The most important order qualifier and order winner attributes (respectively in the decline life stage are? A. Cost, innovation B. Flexibility, functionality C. Dependability, cost D. Quality, flexibility

C. Dependability, cost

Which of the following is a preferable strategy for the prevention of pollution? A. Plan for multiple energy sources to power critical resources. B. Ensure that all effluents emanating from a facility are monitored. C. Design products that use fewer resources and cause less pollution. D. Have at least one source of renewable energy in use at each facility.

C. Design products that use fewer resources and cause less pollution. Designing products that use fewer resources and cause less pollution is preferable and can reduce the overall cost of production.

Which of the following areas of push system documentation is reduced by a pull system during the process design phase? A. Material pick and shortage lists B. Calculation of start and end dates C. Detailed routings by operation D. Planned and overload conditions

C. Detailed routings by operation Routings by operation are defined during the process design phase.

What is pegging used for? A. Linking subassemblies with parent items B. Determining priorities for manufacturing C. Determining the source of gross requirements D. Displaying the quantity of a component in the bill of material

C. Determining the source of gross requirements Pegging is the ability to identify the sources of a given item's gross requirements and/or allocations.

How does enterprise resources planning (ERP) differ from manufacturing resource planning? A. ERP runs on different types of servers. B. Only the names have changed in order to market the software. C. ERP does not dwell on manufacturing alone. D. ERP uses relational databases.

C. ERP does not dwell on manufacturing alone.

Which of the following statements refers to project production? A. The project schedule is translated into production requirements. B. Engineering schedules and manages production. C. Each unit or small group of units is managed by a project team created especially for that purpose. D. Oversight of the manufacturing process is defined on a Gantt chart.

C. Each unit or small group of units is managed by a project team created especially for that purpose. In project production, each unit or small group of units is managed by a project team created especially for that purpose.

All are objectives of mergers and acquisitions except A. Expand geographical coverage B. Create cost efficiencies C. Eliminate competitors D. Expand product offerings

C. Eliminate competitors

What two areas of an end-of-life plan should be planned separately with their own time lines? A. Minimum order quantity and lifetime buy quantity B. Insourced and outsourced manufacture end C. End of sales and end of service D. Reverse logistics and final disposition

C. End of sales and end of service End of sales needs to be separated from end of service, because a product may need to be supported for a long time after new unit production has ceased.

A highly engineered product was introduced a few years ago, with standards defined, bills of material and routings finalized, and work centers set up to minimize material handling. Major improvements in cycle time have been made. What information is most likely to need to be changed? A. Cycle time and bills of material B. Bills of material and routings C. Engineering standards and work center output D. Routings and work center capacity

C. Engineering standards and work center output If cycle time has improved, lead times and output are most likely to have changed.

Which of the following responses is a company most likely to consider when establishing the forecast for a new item being added to an MTS product line? A. Apply quantitative analysis techniques based on leading economic indicators to establish short-term forecasts. B. Reduce the α factor so that downward-trending demand in recent periods is more heavily weighted. C. Evaluate the sales promotion effect of the new item on sales of existing products. D. Adopt pyramid forecasting in order to evaluate the importance of the new item above its family members.

C. Evaluate the sales promotion effect of the new item on sales of existing products. If the new product is to replace an older product, it would be prudent to know what promotion of the older product caused a sales response. The other answers are incorrect because the exponential smoothing techniques do not normally apply to new product introduction; pyramid forecasting is a forecast aggregation and disaggregation process and is not a method to emphasize certain products; and quantitative analysis typically is used when there is sales history. Leading economic indicators will predict the general direction of the entire industry for some period in the future but are not well-suited to individual product analysis.

Which of the following is a type of weighted moving average forecasting technique in which past observations are geometrically discounted according to their age? A. Qualitative B. Delphi method C. Exponential smoothing D. Seasonality

C. Exponential smoothing Exponential smoothing is a type of weighted moving average forecasting technique in which past observations are geometrically discounted according to their age. It gives more weight to the most recent demand information.

The purposes of a modular bill of material include which of the following? A. Translating the sales and operations plan to the master production schedule B. Minimizing inventory for unique components C. Facilitating forecasting D. Providing for easier material requirements planning processing

C. Facilitating forecasting A modular bill of material is a type of planning bill that is arranged in product modules or options. It is often used in companies where the product has many optional features.

A shoe manufacturer receives two orders minutes apart. The first order, A, is for 100 trainers in ten colors to be delivered in three weeks. The second order, B, is for 200 white trainers to be delivered in two weeks. The manufacturer assigns order A to be completed first. What is this dispatching rule called? A. Earliest operation due date B. Shortest process time C. First come, first served D. Earliest job due date

C. First come, first served With first come, first served (FCFS), jobs are done in the order in which they are received, regardless of due dates and processing times. This dispatching rule works well if schedules are well-designed and stable.

Which of the following is the most powerful and most widely used tool for diagnosing the principal competitive pressures in a market? A. Income statement B. Balance sheet C. Five forces model D. Four Ps (price, product, promotion, placement)

C. Five forces model The five forces model analyzes competitive pressures in a market and assesses the strength and importance of each of those pressures.

Greens is a fictional high-end gourmet shop that stocks and prepares unique foods for sale. Their clientele are a specific group of people who like to eat well, cook gourmet meals, or entertain guests. Greens offers a wide selection of gourmet products and focuses on excellence in customer service. They learn their customers by name, deliver products to their homes or businesses, and notify them when their favorites are available. Because of their business strategy, they have gained a loyal following with high customer satisfaction. How would you recommend Greens manage its competitors? A. Don't focus on current competitors. Think about future growth. B. Increase spending on mass advertising to raise awareness throughout the market. C. Focus on maintaining a quality and service gap between Greens and its rivals. D. Imitate the behavior of financially successful large chains.

C. Focus on maintaining a quality and service gap between Greens and its rivals. The best approach for Greens to take in managing its competitors is to focus on maintaining a quality and service gap. That is, Greens needs to ensure that its food offerings are of higher quality than its competitors.

A company has decided to redesign a product's overall value chain to eliminate some cost-producing activities. This product is currently in the company's broad differentiation strategy product group. What is the product likely moving to? A. Focused differentiation strategy product group B. Product group that will compete on delivery speed C. Focused low-cost strategy product group D. Innovation product group

C. Focused low-cost strategy product group A company competes on either an overall low-cost provider strategy, a broad differentiation strategy, a focused low-cost strategy, or a focused differentiation strategy.

Which of the following describes the Global Reporting Initiative (GRI) guidelines concerning a company's environmental performance? A. Set of rules that the U.S. Environmental Protection Agency (EPA) enforces for U.S.-based companies and their tier 1 suppliers B. Mandatory set of European Environment Agency (EEA) rules that EU-based companies are required to follow C. Framework around which a company can set its own goals D. Preliminary set of rules that the U.S. Environmental Protection Agency (EPA) is considering codifying into law

C. Framework around which a company can set its own goals The GRI framework sets out principles and performance indicators that organizations can use to measure and report their human rights, labor, environment, and anti-corruption practices and outcomes.

What is included in work-in-process inventory? A. Maintenance, repair, and operating supplies in the plant B. Purchased materials in the plant C. Goods in various stages of completion throughout the plant D. Finished and quarantined goods still in the plant

C. Goods in various stages of completion throughout the plant Work in process (WIP) includes a good or goods in various stages of completion throughout the plant, including all material from raw material that has been released for initial processing up to completely processed material awaiting final inspection and acceptance as finished goods inventory.

What term is used for the responsibility of the supplier to dispose of packaging materials or environmentally sensitive materials? A. Recycling B. Sustainability C. Green reverse logistics D. Environmental stewardship

C. Green reverse logistics Green reverse logistics places the responsibility on the supplier to dispose of packaging materials or environmentally sensitive materials such as heavy metals and other restricted materials.

Pegging shows sources of which of the following? A. Component lists B. Firm planned orders C. Gross requirements D. Scheduled receipts

C. Gross requirements Pegging is the capability to identify, for a given item, the sources of its gross requirements.

Often suboptimal performance is a result of activities occurring across multiple departments. What is the best way to remedy this? A. Hire a certified project manager and assign him or her to solve this problem. B. Implement or re-implement an enterprise resources planning system. C. Have an executive champion spearhead a business process reengineering effort. D. Create process flow diagrams of the entire process, document, and train.

C. Have an executive champion spearhead a business process reengineering effort. Companies searching for ways to improve their operations have sometimes discovered that the execution of strategy-critical activities is hampered by a disconnected organizational arrangement in which pieces of an activity are performed in several different functional departments, with no one group or manager being accountable for optimal performance of the entire activity. To address suboptimal performance, a company can reengineer the work effort using business process reengineering.

What is a problem in reducing rated capacity in order to allow for safety capacity? A. It affects related work centers even where safety capacity is not required. B. Actual utilization and efficiency will cause it to be increased with the next calculation. C. It shows that actual received orders cannot be scheduled if demand warrants it. D. Rated capacity cannot be reduced due to the way it is calculated.

C. It shows that actual received orders cannot be scheduled if demand warrants it. Actual capacity is more important than safety capacity for producing known orders in hand.

Which is a decision at the operations strategy level related to planning and controlling the delivery of products and services? A. Should the operation develop its products or services in house or outsource the design? B. What should be the size of the workforce and how much subcontracting should be used? C. How should operations adjust its activity levels in response to demand fluctuations? D. What aggregate levels of inventory should be maintained?

C. How should operations adjust its activity levels in response to demand fluctuations? Operational strategies address detailed day-to-day planning. The adjustment of activity levels is one example of an operational decision related to planning and controlling the delivery of products and services. The other answer choices either relate to other areas of the operational plan or are tactical (more long-term) decisions.

A distribution network that currently operates with a centralized replenishment planning team needs to reduce inventory. What would be the most appropriate action to reduce inventories without jeopardizing service? A. Perform an ABC classification. B. Reduce the number of stock keeping units stocked at the distribution centers. C. Implement decentralized inventory control. D. They should not make any changes.

C. Implement decentralized inventory control. Decentralized inventory control places the inventory decision making at each stocking location for stock keeping units at that location.

Massive supply chain disruptions began with COVID and many still exist. Companies realized the need to dramatically A. Expand risk identification skills B. Reduce costs to improve profitability C. Improve resilience D. Eliminate redundant suppliers

C. Improve resilience

Which of the following is a disadvantage of a centralized distribution system? A. Does not accommodate seasonal requirements B. Inability to respond to special sales promotions C. Inability to react to local demand D. Poor coordination between factory and distribution center

C. Inability to react to local demand Centralized systems cannot react to local demand, which lowers service; their advantage is the coordination between the factory and distribution supply.

Which is the biggest tradeoff that needs to be accepted when an industry with strong seasonality chooses a level production strategy? A. Increased overtime costs. B. Skilled workers unavailable for rehire. C. Increased inventory carrying cost. D. Lower production efficiency.

C. Increased inventory carrying cost. A level strategy for a seasonal product requires building extra inventory in times of low demand to enable satisfying demand at the seasonal peak. This is called anticipation inventory. It results in higher average inventory levels and therefore higher inventory carrying costs. The other answers are tradeoffs of other methods such as the chase strategy.

A firm's marketing strategy directly impacts the production plan by which of the following actions? A. Changing capacity B. Increasing customer service functions C. Increasing demand D. Increasing after-sale service options

C. Increasing demand

A company's electromechanical products are used heavily in sometimes unanticipated ways, thus leading to emergency service outages. The on-site repair team suggests that the products be made to automatically assess, diagnose, and report status. The cross-functional product review team sees this as an opportunity to increase overall product value. What would likely be the most impactful outcome of implementing this strategy? A. Providing data for continuous improvement B. Becoming a potential union problem if machine diagnostics replaces something a person could do C. Increasing the product's order-winning features D. Facilitating upstream integration

C. Increasing the product's order-winning features Order winners are competitive characteristics that cause customers to choose a firm's goods and services over those of its competitors. They are a competitive advantage for the firm. In this case, product design would be the order winner, ideally eliminating the expensive emergency service outages.

This technique uses internal historical data to project future demand: the past is usually a good future predictor A. Extrinsic (causal) B. Qualitative C. Intrinsic (time series) D. Exponential smoothing

C. Intrinsic (time series)

What is the term for the necessary activities and techniques used by a corporation to ensure that they always have the desired levels of raw materials to meet demand A. Safety stock B. Wall-to-wall inventory C. Inventory control D. ABC classification

C. Inventory control Inventory control includes the activities and techniques used to maintain the desired levels of items in inventory. These items can be raw materials, work-in-progress, components, or finished products.

What is a primary shortcoming of using the simple payback period method to justify capital budgeting expenditures? A. It will likely not remain stable over the time period used. B. It is too simple to compute and therefore is subject to adulteration. C. It does not recognize the time value of money. D. It does recognize the time value of money and is therefore more exact and realistic than using the accounting rate of return (ARR).

C. It does not recognize the time value of money. One of the primary shortcomings of using the payback period to justify capital budgeting expenditures is that it does not recognize the time value of money. The discounted payback period method does not have this disadvantage.

Which of the following is true of an aggregate forecast of a group of items? A. It is of little value when stock keeping unit (SKU) forecasts are available. B. It may be divided by the number of SKUs to establish the SKU forecasts. C. It is usually a better forecast than the SKUs forecasted individually. D. It is used to establish the economic order quantity.

C. It is usually a better forecast than the SKUs forecasted individually. Forecasting product families is more reliable than forecasting individual items.

Which of the following statements is most true of a one-card kanban system? A. It uses one combination move/production card. B. The two operations are not in line-of-sight. C. It often uses a visual signal instead of a card. D. The card quantity is equal to a one-day supply.

C. It often uses a visual signal instead of a card. A one-card kanban system typically has close operations, so the signal may be an empty spot for the next units or a different visual signal. In actual practice, cards are far less commonly used than visual signals.

After the business plan, what is the next step in the planning hierarchy? A. Logistics plan B. Master schedule C. Sales and operations plan D. Production plan

C. Sales and operations plan The business plan is a long-term plan; the next step is to break it down to a medium-term plan, which is what the sales and operations plan does.

Which of the following describes central point scheduling? A. It requires every piece in a lot to be finished at one work center before any piece in the lot can be processed at the succeeding work center. B. It proceeds sequentially from the initial period to the final period while observing capacity limits. C. It uses both forward and backward scheduling, starting from the scheduled start date of a particular operation. D. It automatically or manually interrupts the process to allow the scheduler the opportunity to review.

C. It uses both forward and backward scheduling, starting from the scheduled start date of a particular operation. Central point scheduling employs both forward and backward scheduling, starting from the scheduled start date of a particular operation.

In which of the following would you find detailed information about all of the components or parts you would find on a bill-of-material? A. Product structure B. Product data management C. Item master record D. Plan for every part (PFEP)

C. Item master record The item master record typically "contains identifying and descriptive data and control values (lead times, lot sizes, etc.) and may contain data on inventory status, requirements, planned orders, and costs." The items are linked by bill-of-materials records, and therefore define the BOM. (Dictionary)

An organization that sells industrial and consumer packaging to manufacturers wants to generate a strategic-level long-term extrinsic forecast to help determine whether to expand, contract, or leave capacity as it is. Given information on the level of correlation and leading versus lagging, which indicator would be the best choice for this organization to use in the extrinsic forecast if they want to restrict themselves to simple regression analysis? A. Leading and 55% correlated: manufacturers' orders for non-defense capital goods B. Lagging and 60% correlated: change in labor cost per unit of output C. Leading and 72% correlated: manufacturers' new orders for consumer goods/materials D. Lagging and 79% correlated: ratio of manufacturing and trade inventories to sales

C. Leading and 72% correlated: manufacturers' new orders for consumer goods/materials Extrinsic forecasting is a type of quantitative forecasting that works to find a link between information that is externally available and demand. If there is a link, it is called correlation, and a greater level of correlation is preferable to a lower level. The best information that can be used is leading indicators because these economic or demographic indicators tend to be among the first types of data that can show a change in a trend. Therefore, the correct answer is the leading indicator that has the highest level of correlation. Note that extrinsic forecasts tend to be more useful for large aggregations, such as total company sales, than for individual product sales.

Which of the following production strategies should show the most consistently high capacity performance? A. Optimized B. Hybrid C. Level D. Chase

C. Level In a level strategy, the company controls both the planned load and the available capacity.

Which production planning method usually creates a build-up of inventory? A. Subcontracting B. Chase C. Level D. Seasonal

C. Level The production planning methods that produce a build-up in inventory are level and hybrid. The chase method is incorrect, because it does not build up inventory. Neither seasonal nor subcontracting is a production planning method, and therefore also incorrect.

A company that uses a functional layout produces several product families that use the same work centers, with some units being a standard design and others having custom design. Which of the following management decisions is most applicable as it relates to master scheduling? A. Relevance of a demand time fence B. Use of a quantity/period or flow rate C. Level and type of inventory to stock D. Use of a final assembly schedule

C. Level and type of inventory to stock Decisions would be required on which products to keep in stock as finished goods versus assemblies.

Which basic production planning strategy will build inventory and avoid the costs of excess capacity? A. Demand matching strategy B. Product-based strategy C. Level production strategy D. Chase strategy

C. Level production strategy Chase and demand matching strategies are the same, and do not build inventory because they are designed with the capacity and flexibility to match variations in demand over time. Meanwhile, a product-based strategy is not a production strategy. Therefore, level production strategy is the correct answer.

Which of the following applies to the number of levels in a cause-and-effect diagram? A. Limited to two to three based on a significant few principles B. Limited by the length of the brainstorming session C. Limited by the number of causes and subcauses D. Limited by the physical dimensions of the paper

C. Limited by the number of causes and subcauses The only limit is the number of reasons for the problem.

A store orders and receives weekly shipments, made up of 20 line items, from a distributor. Which customer service measure is of most value to the store? A. Transportation costs B. Correct items shipped C. Line items shipped complete D. On-time shipment

C. Line items shipped complete Because it is getting only one shipment each week, the store is concerned that all the items are included.

Which of the following is a display of future capacity requirements based on released and/or planned orders over a given span of time? A. Customer order B. Yield C. Load profile D. Capacity

C. Load profile A load profile, also known as a load projection or a load report, is a display of future capacity requirements based on released and/or planned orders over a given span of time.

Which is a health, safety, and environment (HSE) procedure that can best prevent the electrocution of equipment maintenance staff? A. Safety data sheet provision B. Blocking off maintenance time in work center schedules C. Lockout/tagout procedures D. Total productive maintenance (TPM) scheduling

C. Lockout/tagout procedures Lockout/tagout procedures prevent equipment from being turned back on after it has been turned off for maintenance. A lockout physically prevents the equipment from being turned back on, while a tagout is a prominent sign indicating not to do so. Either method reduces the risk of electrocution or physical danger to maintenance staff. Blocking off maintenance time could also help but is not foolproof.

Which of the following would occur with a chase strategy? A. Low inventories and few capacity changes B. High inventories and frequent capacity changes C. Low inventories and frequent capacity changes D. High inventories and few capacity changes

C. Low inventories and frequent capacity changes With a chase strategy, inventories are kept relatively low due to following sales, but frequent capacity changes occur.

The design of a manufacturing process for high production volumes would likely facilitate which two of the following outcomes? A. High frequency of new product introduction and low level of finished goods inventory B. High frequency of new product introduction and low process flexibility except for options C. Low level of work-in-process inventory and low level of finished goods inventory D. Low level of work-in-process inventory and low process flexibility except for options

C. Low level of work-in-process inventory and low level of finished goods inventory Processes with a high volume of output will have a high degree of repeatability and specialization and a narrow variety of finished goods. Work-in-process and finished goods inventories will be low because of the high volume.

Which of the following outcomes are benefits of implementing group technology? A. Reduced need for employee training, and reduced manufacturing lead time. B. Increased product variety, and Lower work-in-process inventories. C. Lower work-in-process inventories, and reduced manufacturing lead time. D. Reduced need for employee training, increased product variety, lower work-in-process inventories, and reduced manufacturing lead time.

C. Lower work-in-process inventories, and reduced manufacturing lead time. Group technology is an engineering and manufacturing philosophy that identifies the physical similarity of parts (common routing) and establishes their effective production. It provides for rapid retrieval of existing designs and facilitates a cellular layout. Grouping products by family or some other attribute will streamline production, thereby reducing work-in-process inventories and production lead times.

A fashion house has forecasted the next season's colors and styles. Distribution plans have been drawn up that will send the majority of heavier items (e.g., sweaters) to distributors in colder regions, while a larger quantity of t-shirts and lighter fabric garments will be distributed in warmer regions. This is an example of what kind of manufacturing environment? A. Engineer-to-order B. Make-to-order C. Make-to-stock D. Assemble-to-order

C. Make-to-stock A make-to-stock environment relies on forecasting not only for supply and production but also for distribution, ensuring that appropriate products are distributed to the right locations. An assemble-to-order environment relies on forecasting for supply and component production, but from that point it uses actual orders for assembly and distribution. The point where push becomes pull is then wherever actual orders dictate activity rather than relying on forecasts.

How can the objectives of marketing be met while also considering other stakeholder objectives? A. Marketing and finance objectives can be met with lower inventories. B. Marketing and finance objectives can be met with higher inventories. C. Marketing and production objectives can be met with higher inventories. D. Marketing and production objectives can be met with lower inventories.

C. Marketing and production objectives can be met with higher inventories. Both marketing and production objectives can be met with higher inventories. The other answers are incorrect because high inventory investment that will increase costs is of concern to finance; low inventories do not support marketing or production objectives; and marketing prefers higher inventories.

What is the best reason for using planning bills of material in master scheduling? A. The company is make-to-stock, and planning bills match planned production levels. B. A single bill can be used no matter how many products are in a product family. C. Material procurement or production occurs prior to knowing actual end items. D. Planning bills do not require actual engineering or manufacturing bills of material.

C. Material procurement or production occurs prior to knowing actual end items. Planning bills are used to get necessary components on order prior to knowing the actual configuration. In other words, planning bills enable flexibility in what will be produced.

What is the key to reducing the organization's overall terminal handling costs for a time period? A. Maximize the number of shipments handled by the same carrier. B. Use a customs broker. C. Maximize the weight of individual shipments. D. Use the air transportation mode more often.

C. Maximize the weight of individual shipments. By increasing the weight of individual shipments, creating more TL shipments, there will be fewer shipments during a particular time period and therefore lower terminal handling, pickup and delivery, and billing and collecting costs.

Strategies that lack stability over time and employee acceptance are the result of an organization not having which of the following? A. Differentiation strategies B. Dependability and flexibility C. Mission and vision D. Big opportunities and eight accelerators

C. Mission and vision A business's mission, vision, and core values create a foundation for the organization's strategy by unifying leaders and employees behind a shared vision of the organization's principles and future. Without this foundation, strategies can lack stability over time and broad acceptance by executives, managers, and employees.

A company produces lawn mowers that have many options to choose: three horsepower choices, three cut widths, manual versus self-propelled options, and four color choices. Product is produced in lot quantities for retail sales and assembled-to-order for direct sales. Which of the following types of bills of material is most likely used for the two-level master scheduling? A. Common parts B. Multilevel C. Modular D. Single-level

C. Modular Modular bills (also called planning bills) would allow a percentage to be applied to each of the various options.

Which of the following forecasting models would be most responsive to changes in demand? A. Exponential smoothing using an alpha of 0.1 B. Moving average using six months of demand C. Moving average using three months of demand D. Simple average with three years of demand history

C. Moving average using three months of demand A moving average of three months of demand is based on the most recent data of the choices given. Therefore, it will be the most responsive to changes in demand.

Which investment analysis tool accounts for the time value of money? A. Return on investment B. Residual income C. Net present value D. Payback period

C. Net present value Of the choices, only net present value uses the discounted rate of the original investment. Return on investment does not reflect the time value of money. Payback period shows how long it will take for the initial investment to be recouped. Residual income uses a minimum required rate of return in its analysis of gain from capital investment.

A computer manufacturer is developing a new laptop model to replace two current product lines. What source of inventory loss is most likely to impact the organization as a result? A. Shrinkage B. Shelf life C. Obsolescence D. Scrap

C. Obsolescence The new laptop model is likely to cause the other two model lines to be obsolete, resulting in the devaluation of the inventory of those two lines.

When expediting purchased parts that are needed from the supplier before the original due date, a buyer should first try to do which of the following? A. Buy all the parts from an alternate source. B. Increase safety lead time by one week. C. Offer to de-expedite another part that is needed later than the original due date. D. Offer to pay a premium.

C. Offer to de-expedite another part that is needed later than the original due date. When expediting work at a supplier, an effective method is to reduce the supplier's load on some other order. Since the supplier has limited capacity, rescheduling might mean that the supplier will accept the expedite without adding costs.

Upon receiving an order for two products, a lean manufacturer processes one item from one step to the next before beginning the second item. What is this an example of? A. Perpetual inventory system B. Periodic replenishment C. One-piece flow D. Two-bin inventory system

C. One-piece flow Assuming that a lean manufacturer has managed to optimize its setup times and reduce its lot sizes to one (or as close to one as possible), a reorder point system can be implemented. As the lean ideal is an order size of one, this lowers the reorder point.

What is an important transaction point in both push and pull environments? A. Setup completion and start of production order B. Out-of-stock condition based on satisfying a customer order C. Order completions at departmental boundaries D. Cycle count adjustments based on a planned cycle

C. Order completions at departmental boundaries Departmental boundaries commonly act as costing points, regardless of whether pull or push is being used.

What is the Global Reporting Initiative (GRI)? A. Guidelines for a global enterprise to use in reporting on production B. Internet-based enterprise resources planning system C. Organization that pioneered a sustainability reporting framework D. Supplier scheduling tool for communicating supply status

C. Organization that pioneered a sustainability reporting framework The GRI is a network-based organization that pioneered the world's most widely used sustainability reporting framework.

A tool used for Planning and Influencing Demand is called A. CPFR B. MAD C. PDCA D. S & OP

C. PDCA

Which type of legal risk refers to the misuse of intellectual property A. Contract B. Compliance C. Patent infringement D. Bribery and corruption

C. Patent infringement Trademark or patent infringement refers to the misuse of intellectual property or using a trademark without authorization. It may result in financial and legal damages.

Which of the following can be considered a customer service measurement? A. Order fill percentage B. Inventory turns C. Percentage of orders completely satisfied D. Throughput percentage

C. Percentage of orders completely satisfied "Percent of orders completely satisfied" is the correct answer. Throughput and order fill percentages are incorrect because they are warehouse operations measurements. Inventory turns is incorrect because they are an inventory management measurement.

What change has resulted from the acceptance of computer systems in delivering products and services? A. Computer-generated kanban reports are used rather than kanban cards. B. Monolithic, one-size-fits-all enterprise resources planning (ERP) systems are used instead of multiple smaller ERP systems. C. Performance data is distributed to a much wider audience, not just to executives. D. Pull systems are used, rather than push systems, in every aspect of the operation, both internally and externally.

C. Performance data is distributed to a much wider audience, not just to executives. In his discussion of systems, Tom Kotter contrasts 20th-century organizational characteristics with 21st-century characteristics. He finds the following changes: Dependence on a few performance information systems has changed to dependence on multiple performance systems, especially those focused on customers. Performance data is not only distributed to executives; it is now distributed widely. Management training and support systems are offered to many people, not just to management.

A company wanting to maintain a high level of customer service at the lowest inventory carrying cost should take which of the following actions? A. Split safety stock between central and field warehouses. B. Place safety stock in field warehouses. C. Place safety stock in a central warehouse. D. Use faster modes of transportation.

C. Place safety stock in a central warehouse. By placing safety stock in a central warehouse, safety inventory can be reduced by aggregating demand.

Which of the following is most directly affected by forecast inaccuracy? A. Establishment of the firm planning time fence in the master schedule B. Safety stock levels of dependent demand items included in the forecast C. Planned finished goods inventory level in an MTS environment D. Leading indicators included in the extrinsic factors to determine the forecast

C. Planned finished goods inventory level in an MTS environment Planned finished goods inventory level in an MTS environment will cause levels to fluctuate based on degree and direction of inaccuracy. The other answers are incorrect for the following reasons: Establishing a firm planning time fence in the master schedule is incorrect, because this is not a criterion used to set time fences. Safety stock is not customarily set for dependent demand items. Internal processes like forecast accuracy don't affect leading indicators.

A company operates in a pull environment with final assembly lines in synchronous mode. Subassemblies maintain buffers ranging from hours to days. What would be a global production performance measurement? A. Standard hours compared to actual hours B. Planned number of setups compared to actual setups C. Planned throughput rate compared to actual rate D. Planned order completions compared to actual completions

C. Planned throughput rate compared to actual rate All work centers can measure throughput rate and relate to the rates of the final assembly lines they support.

Which is the best way listed for an organization to encourage suppliers to avoid use of hazardous materials when feasible? A. Zero tolerance policy B. Supplier co-location C. Pricing incentives D. Education

C. Pricing incentives Pricing incentives help promote voluntary compliance. Education would also be helpful but may not be as effective without the pricing incentives. A zero tolerance policy may result in losing suppliers who are valuable in many other ways. Working with the supplier in a more flexible way could lead to buy-in and eventual compliance.

What is the purpose of the inventory investment report as part of the logistics resource requirements plan (LRRP)? A. States actual item-level inventory costs for a past period based in part on shipping costs and inventory balances B. Projects item-level inventory costs for a weekly planning horizon based in part on shipping costs and inventory balances C. Projects aggregate inventory levels and related supply chain costs over a planning horizon based in part on product-family level replenishment D. Determines product family storage profiles for inventory based on product dimensions

C. Projects aggregate inventory levels and related supply chain costs over a planning horizon based in part on product-family level replenishment The inventory investment report portion of the LRRP projects aggregate inventory levels and the related supply chain costs over a planning horizon, based on product-family level replenishment, shipping costs, and inventory balances.

In distribution, which of the following terms refers to a system for replenishing field warehouse inventories where replenishment decisions are made at the field warehouse itself, not at the central warehouse or plant? A. Distribution requirements planning B. Push C. Pull D. Kanban

C. Pull In distribution, pull is a system for replenishing field warehouse inventories where replenishment decisions are made at the field warehouse itself, not at the central warehouse or plant.

What technique involves aggregating and disaggregating forecast demand? A. Demand forecasting B. Focus forecasting C. Pyramid forecasting D. Trend forecasting

C. Pyramid forecasting Pyramid forecasting enables management to review and adjust forecasts made at an aggregate level and keep lower-level forecasts in balance.

Sales and operations plans perform which of the following actions? A. Take into account the forecast, the production plan, and other important considerations such as the backlog, the availability of material, the availability of capacity, and management policies and goals. B. Determine in detail the amount of labor and machine resources required to accomplish the tasks of production. C. Reconcile all supply, demand, and new product plans at the aggregate level and tie to the business plan. D. Describe how to marshal and determine actions to support the mission, goals, and objectives of an organization.

C. Reconcile all supply, demand, and new product plans at the aggregate level and tie to the business plan. The sales and operations planning process must reconcile all supply, demand, and new product plans at the aggregate level and tie to the business plan.

A company is expecting a one-year downturn in the economy that is likely to reduce customer demand as compared to past annual sales levels. Which of the following responses would be best in this situation? A. Match competitors' responses to price and lead time. B. Increase order demand satisfied from production. C. Reduce production output and inventory levels. D. Increase inventory levels to reduce lead times.

C. Reduce production output and inventory levels. Reducing output and inventory sustains the business strategy while addressing the effect of the economy. Increasing inventory ties up more capital in a bad economy. Matching prices may become necessary but is not implied in the question, and order demand is already being satisfied from production.

Which of the following least applies to understanding the situation in the PDCA improvement cycle? A. Looking for root causes of undesired effects B. Knowledge of the key principles of lean manufacturing such as standard work procedures, level flow, and on-time delivery of supplies C. Reliance on the review of written reports D. Standing alone on the shop floor for a long period of time, observing and thinking critically

C. Reliance on the review of written reports Relying on written reports is given low priority in lean, though data are held in utmost regard. There is a premium placed on "going and seeing" what is happening in the factory, factory layouts that make production highly visible, graphically presented information, and evidence of key principles, as described in the three other options.

Seasonality is demand that shows which of the following patterns? A. Repetitive pattern based on economic conditions B. Repetitive pattern based on promotional activity C. Repetitive pattern over some time interval D. General movement up or down over time

C. Repetitive pattern over some time interval A repetitive pattern over some time interval is the correct definition of seasonality. General movement up or down over time is the definition of a trend; therefore, this answer is incorrect. "Repetitive pattern based on economic conditions" is incorrect because this is the definition of economic cycle. A repetitive pattern based on promotional activity is not related to seasonality, and therefore incorrect.

What should happen in the material requirements planning system if delivery dates change due to purchasing or delivery delays? A. Shift the items to the slushy zone to give them more time. B. Nothing should be done, as there should be slack time built in and the plan shouldn't change. C. Replanning should be done to keep plans current. D. Get master scheduler approval to change the plan, because it is in the frozen zone.

C. Replanning should be done to keep plans current. Changes in required delivery dates and delays in purchasing and component deliveries are all examples where replanning would be needed in the material requirements planning system. A system objective is to keep priorities current with changing conditions.

Which of the following actions is most likely to produce a high degree of sustained inventory data integrity? A. Increasing the frequency of cycle counts B. Changing cycle counting methods periodically C. Resolving problems exposed by cycle counting D. Performing periodic physical inventories

C. Resolving problems exposed by cycle counting Operations can count inventory as many times as they want, but variances will never disappear until the root causes of variances are fully investigated and the process changed to eliminate the variances from occurring again

Complete the definition: sustainability= Activities that A. Preserve the company profitability into the future B. Meet all environmental compliance requirements C. Retain present benefits without compromising future generations D. Are ethical & contribute to community development

C. Retain present benefits without compromising future generations

Which type of capacity provides protection from planned and unplanned activities? A. Theoretical capacity B. Productive capacity C. Safety capacity D. Demonstrated capacity

C. Safety capacity Safety capacity is the planned amount by which the available capacity exceeds current productive capacity.

Which observation is true as priority planning moves through the various levels of capacity validation and becomes more and more detailed? A. Master scheduling plans all resource capacities at the end-item level. B. Material requirements planning plans detailed resource requirements just for component-level bottlenecks. C. Sales and operations planning plans just critical resources at the product family level. D. The duration of the planning horizon gets longer to accommodate the increase in detail.

C. Sales and operations planning plans just critical resources at the product family level. S&OP plans critical resources at the product family level; master scheduling plans key resources and bottlenecks at the end-item level; and MRP plans detailed resource requirements at the component level.

With a holiday season fast approaching, a factory's capacity is deemed insufficient to meet the orders placed by a highly valued customer. The orders cannot be changed, nor can the load be rebalanced. What step(s) can the company take in the current time frame that would allow them to meet the customer demand as requested? A. Hiring part-time workers B. Outsourcing C. Scheduling more overtime D. All of the above

C. Scheduling more overtime If the required capacity or load exceeds the available capacity for any critical resource, the master planner can either find ways to increase capacity or revise plans. If there is available capacity in other periods, the load might be rebalanced. Possible solutions include scheduling overtime or hiring part-time workers to increase capacity. Outsourcing could be used to reduce the load. However, neither hiring part-time workers nor outsourcing would work for this time frame, since additional planning and training would be required.

A company has a historical 2% failure rate at final test. The failed units cannot be reworked. Which of the following information should be used in material planning? A. Safety stock of 2% should be statistically calculated for each part. B. Yield is 2% and is accounted for as an inventory master field. C. Scrap is 2% and is accounted for as an addition to the order quantity. D. Yield and scrap are basically irrelevant with a stocked item.

C. Scrap is 2% and is accounted for as an addition to the order quantity. Scrap is "material outside of specifications and possessing characteristics that make rework impractical" (Dictionary). The scrap (failure) rate of this process is 2%, which needs to be factored into the bill of material for this item. If this is done correctly, there would be additional material added to the work order to account for the anticipated scrap.

What is a typical first step in assessing a company's overall advantage or disadvantage as contrasted with its competitors? A. Reverse-engineer products from the top 20% of all competitors. B. Outsource all non-core-competency tasks. C. Segregate the company's operations into different types of primary and secondary activities. D. Identify all competitors and hypothesize their various strengths.

C. Segregate the company's operations into different types of primary and secondary activities. A first step in evaluating a company's economic advantage or disadvantage relative to its competitors is to segregate the company's operations into different types of primary and secondary activities.

Production material is issued upon release of an order, and costs are accumulated by department for a customer order based on direct material, direct labor, and allocated overhead. What would direct cost include? A. Tool sharpening as required for released orders B. Floor stock materials included on the bill of material C. Sheet metal layout in the shearing operation D. Direct sales by the sales and service departments

C. Sheet metal layout in the shearing operation Layout is part of internal setup, so it would be a direct labor cost. The others are all part of allocated overhead.

A company uses a moving average to forecast on a monthly basis, and it has many customers with varied demand. Which of the following is the best example of a root cause of an outlier in the forecast? A. Actual demand for a period that causes the next period's forecast to exceed the median B. Actual demand for a period that is three standard deviations greater than the forecast C. Shutdown of the company for a month with no customer orders accepted D. One customer order within a period that is 10 times larger than any other order

C. Shutdown of the company for a month with no customer orders accepted Not accepting orders for a period will artificially drive the forecast down for the following periods. Orders will always vary in size.

Which is true of a cold chain? A. Time spent above the ideal transportation temperature is unlikely to result in loss of value. B. All products in the cold chain are shipped at the same temperature and humidity. C. Some products can be damaged when temperatures dip below the ideal transportation temperature. D. They always use the fastest mode of transportation to minimize time in the cold chain.

C. Some products can be damaged when temperatures dip below the ideal transportation temperature. Some products, such as tropical fruits, may be damaged by overly low temperatures. The cold chain often uses slower transportation modes for certain products like produce and may handle products at different shipping temperatures and humidity. Time spent above the ideal transportation temperature may cause rapid deterioration and loss of value.

What data items are included in a manufacturing routing? A. Material cost per unit and lead time B. Sequence of operations and standard move times C. Standard setup time and run time per piece D. Average run and queue times

C. Standard setup time and run time per piece The routing for producing a particular item typically includes standard times for setup and run time. Average queue time would depend on the work center rather than the routing.

Which of the following includes an analysis of the nature of the firm, the market, and the business environment? A. S&OP B. Benchmarking C. Strategic plan D. Product family analysis

C. Strategic plan S&OP is incorrect, because although it is concerned with these factors, the analysis is conducted as a part of the business planning process. Benchmarking is incorrect because it is a separate part of business planning, which does not include analysis of the nature of the firm, the market, or the business environment. Product family analysis is incorrect because it occurs as a part of S&OP and does not include analysis of the nature of the firm, the market, or the business environment.

All of the following are sources of demand that should be considered in sales and operations planning (S&OP) except: A. interplant demands family. B. service part requirements family. C. firm planned orders family. D. customer order backlog family.

C. firm planned orders family. Firm planned orders are a planning convention used in master scheduling. They are not used in the calculation of S&OP.

Which organizational objectives are often tradeoffs with one another? A. Low-cost plant operation and strong cash flows B. High inventory investment and targeted level of customer service C. Targeted level of customer service and low-cost plant operation D. Cash flow and profitability

C. Targeted level of customer service and low-cost plant operation Meeting targeted levels of customer service and lowest-cost plant operations are in conflict. The latter requires long production runs to minimize the unit costs of production. While this will increase inventory levels and maximize customer service for some products, it also will make manufacturing less flexible and not able to meet the many product needs of different customers. Lean manufacturing techniques can diminish the conflict. The objectives paired in the other answers are complementary, and, therefore, these choices are incorrect.

Which of the following is true of the differences between inventory turns or costs in a distribution center (DC) versus for the manufacturer of the goods? A. Manufacturers typically approximate work-in-process value, so inventory turns tend to be more accurate in a distribution environment. B. Distribution environments tend to have lower turns because they don't carry any raw material inventory. C. The distribution environment has a higher cost of goods sold than does the manufacturer for the same finished goods. D. Distribution environments tend to have higher turns because inventory remains in stock for only a short time compared to that for a manufacturer.

C. The distribution environment has a higher cost of goods sold than does the manufacturer for the same finished goods. Distribution cost of goods sold includes the cost to buy or transfer the goods from the warehouse as well as the additional material-handling costs. DCs carry inventory longer as it is based on a forecast; the manufacturer would ship directly to the DC based on demand.

Which of the following is most true in a production environment with products that are subject to cyclical, random, seasonal, and trend types of demand? A. Temporary help is used to vary capacity. B. Forecasting is primarily based on historical demand. C. The hybrid production strategy is used to vary capacity. D. Finished goods inventory is a demand buffer.

C. The hybrid production strategy is used to vary capacity. Since it is a combination of the level and chase methods, the hybrid strategy can vary capacity in response to all types of demand variability.

An organization is working to earn the ASCM Enterprise Certification. What can make it more difficult to satisfy the certification's checklist related to plan, source, make, deliver, return, and enable? A. The organization is at the "civil" stage of corporate social responsibility maturity. B. The organization has a locally adaptive approach to globalization and supply chain management. C. The organization has a highly complex supply chain. D. The organization's culture places high value on sustainability and so has high expectations for its supply chain.

C. The organization has a highly complex supply chain. As the supply chain grows more complex, it becomes more difficult to know with certainty suppliers' and distributors' social and environmental conditions. Maintaining a sustainable supply chain may require use of third parties to assess and monitor supplier conditions.

A planner/buyer needs to expedite an order and indicates that a supplier should send 100 units of a raw material in the current order even though the normal order quantity is much smaller. The supplier indicates that this is possible but clarifies that at the end of the year, the final delivery will not be possible unless a one-time PO is issued at that time. What is the underlying reason for this? A. The planner/buyer is using a blanket purchase order that specifies a set quantity per order. B. The planner/buyer is using a kanban system. C. The planner/buyer is using a blanket purchase order that specifies a total quantity over time. D. The planner/buyer is using backflushing.

C. The planner/buyer is using a blanket purchase order that specifies a total quantity over time. A blanket purchase order (PO) may be for a total quantity over time. If the supplier orders more units than normal in one period, the total quantity specified on the blanket PO may be reached sooner, and a one-time PO could be needed until the next blanket PO is negotiated.

At a periodic review, a project manager notes that a sub-team has added features to the deliverable that were not in the scope statement. What will be the most likely result? A. The customer will be displeased by the change. B. The quality of the deliverable will be improved. C. The project's schedule or budget may be affected. D. The project's sponsors may cancel the project.

C. The project's schedule or budget may be affected. This is an example of scope creep, which can affect the project's schedule and budget without necessarily improving customer acceptance of the deliverables. Not all changes improve quality. The other answers are incorrect because the customer agreed to a deliverable with certain features; the customer may be happy but may not be or may not care; and it is more likely that the project's variance will be accepted than that the project will be canceled at this stage.

Which of the following generally applies to only a limited number of parts when determining the number of kanban containers and their quantities? A. The number of production kanbans is reduced through continuous improvement efforts. B. The number of kanbans is a function of the work-in-process target. C. The quantity per kanban should ensure that move frequency remains constant. D. The quantity per kanban may be a range between a one-hour supply and a 20-day supply.

C. The quantity per kanban should ensure that move frequency remains constant. Move frequency is an issue only with long-distance moves where multiple parts are picked up and moved per a schedule and does not apply to kanbans in general.

Success in operations drives better products and services, an increased range of product capability, better supply relationships, and heightened customer satisfaction due to high quality performance. Which of the following is true of all of these attributes? A. They are independent of strategy development, as they are all tactical. B. Once mastered, they should be relied upon to continue their high performance. C. They become strategic when taken from a holistic viewpoint. D. They may be relied upon to manage almost any new product design that could increase market share.

C. They become strategic when taken from a holistic viewpoint. Operational knowledge is vital to establishing an operations-based strategic advantage. A superior understanding of what one's processes can do at the limits of their capability allows the organization to better provide products and services, due to confidence in knowing for sure that the processes can deliver. Well-controlled processes will also have fewer errors and waste and therefore higher efficiency (lower costs, higher quality).

Which of the following is the general rule for planning horizons? A. They are based on the gross requirement of each distribution center in the system for that item. B. They depend on the delivery time and quantity of goods already ordered and in transit. C. They extend into the future to cover the lead times through supply processes and delivery to the final distribution point. D. They are primarily based on lead time in the manufacturing processes.

C. They extend into the future to cover the lead times through supply processes and delivery to the final distribution point. The definition of planning horizon is that it should extend far enough into the future to cover the sum of all lead times, from the beginning to the end of the manufacturing process through delivery to the final distribution point.

Which of the following performance measurements is likely to be the most important to operations managers of a product line with medium volume and a short life cycle? A. Capacity utilization B. Number of schedule changes C. Time to market D. Standard error of the forecast

C. Time to market Short life cycle production is usually focused on products that need to get to market quickly. Production is medium volume, so the smaller lot sizes enable managers to quickly schedule and reschedule production.

What is the term for an acceptable departure from a target value for a product's ability to function as established by engineers? A. Spread B. Statistical process control C. Tolerance D. Specification limits

C. Tolerance Specification results falling inside a product's tolerance limits are considered acceptable. Results falling outside of tolerance limits are rejected and require either rework or scrapping. Specification limits are set by customer requirements and engineers and are usually fixed.

What is an important metric for reverse cash flows in the reverse supply chain? A. Total cost of ownership of the reverse supply chain B. Pareto analysis of reasons for returns C. Total cost of returns in aggregate by product family D. Total cost of returns by end item

C. Total cost of returns in aggregate by product family The total cost of returns in aggregate by product family will indicate the magnitude of the reverse cash flows. The aggregate product family level will provide the right level of detail for decision making. The total cost of ownership and Pareto analysis are good metrics but do not relate to reverse cash flows in particular

Which channel of distribution is concerned with the transfer of ownership, specifically negotiation, selling, and contracting? A. Transportation B. Distribution C. Transaction D. Logistics

C. Transaction The transaction channel is concerned with the transfer of ownership including the activities of negotiation, selling, and contracting.

Safety stock depends on which of the following? A. Risk of obsolescence B. Ordering cost C. Variability of demand D. Inventory carrying cost

C. Variability of demand Safety stock, also known as fluctuation inventory, exists primarily to accommodate variations in demand. The other answer choices might have an indirect influence on safety stock decisions, but none of them provides the best answer

What is a significant difference between absorption costing and variable costing? A. Variable costing captures all costs of production. B. Variable costing should not be used for make-or-buy decisions. C. Variable costing does not assign fixed factory overhead to the product. D. Variable costing assigns a portion of fixed factory overhead to the product.

C. Variable costing does not assign fixed factory overhead to the product. Variable costing is an inventory valuation method in which only variable production costs are assigned to the product; fixed factory overhead is not assigned to the product.

What is a key question to ask concerning an enterprise resources planning (ERP) implementation? A. In which programming language is the source code written? B. Should the system be cloud-based? C. What technical or human skills are required to implement the technology? D. Can we afford the monthly fees that the consulting team will charge?

C. What technical or human skills are required to implement the technology? From a resource perspective, the technical or human skills required to implement the ERP system must be determined.

The inventory for a dependent demand item was incorrect during the last cycle count, and there is no safety stock. Which date from material requirements planning (MRP) is of most use to the material planner to ensure availability of the part? A. When the next cycle count will take place B. When the part's next scheduled receipt is scheduled C. When the next planned order is scheduled D. When the next gross requirement will occur

C. When the next planned order is scheduled The date of the planned order is when MRP has determined that inventory will be zero and a new order will be required.

What is a key up-front question concerning the viability of a process technology investment? A. What is the expected return on investment? B. How will the new system improve profitability? C. Will it shorten the time between when a customer makes a request and when the product is delivered? D. Is it cloud-based or client-server-based or both?

C. Will it shorten the time between when a customer makes a request and when the product is delivered? When evaluating the acceptability of a process technology investment, a key question is whether it will shorten the time between when a customer makes a request and when the order is confirmed or the product is delivered.

What does the work breakdown structure show? A. Project schedule B. Contingency funding C. Work to be done D. Task assignments

C. Work to be done The work breakdown structure should identify and organize the work that is required to produce the project deliverables. Task assignments is incorrect because the WBS does not show assignments, although it may provide references for the work being assigned. Project schedule cannot be addressed until the required work is identified. Contingency funding would be included in the project budget but not the work breakdown structure.

What is an advantage of pre-assigning storage locations upon receipt? A. The material handler can select the location of his or her choice. B. Working stock and reserve stock can be separated. C. Zoning rules can be automatically applied by the computer. D. No empty locations will go unused.

C. Zoning rules can be automatically applied by the computer. Zoning rules can be applied with the pre-assignment.

A company that chooses to see reduced revenue while postponing increases in existing manufacturing capacity is following: A. a revenue-neutral strategy. B. a non-innovator strategy. C. a lag capacity strategy. D. good manufacturing practices (GMP).

C. a lag capacity strategy. A lag capacity strategy is one in which capacity is added after demand is realized.

If the rate of sales of baby food follows the birth rate by six months, the birth rate statistic could serve as: A. a life-cycle factor. B. an intrinsic factor. C. a leading indicator. D. dependent variable.

C. a leading indicator. A leading indicator is a specific business activity index that indicates future trends. For example, housing starts is a leading indicator for the industry that supplies builders' hardware. The birth rate statistic is not a dependent variable, because the sale of baby food and the birth rate have a correlative relationship. Birth rate statistics are an extrinsic factor, not an intrinsic factor. The relation of baby food sales and the birth rate is not part of the product's life cycle.

The possibility of maintaining or acquiring other diverse businesses will be facilitated by finding: A. a company with a similar strategic vision. B. an entity with a positive cash flow. C. a manufacturing strategic fit. D. an entity with solid assets.

C. a manufacturing strategic fit. When snowmobile maker Bombardier diversified into motorcycles, it was able to set up motorcycle assembly lines within the same manufacturing facility where it was assembling snowmobiles.

A synchronized production principle that determines the size of the production batch as compared to other quantities is that the production batch is equal to: A. the order quantity. B. the work center activation quantity. C. a multiple of the transfer quantity. D. the bottleneck yield quantity.

C. a multiple of the transfer quantity. The production batch and the transfer batch need to be logically interrelated. The needs of production at a work center may dictate the production batch size; the transfer batch will then be some evenly divisible portion of the production batch so that each transfer batch can be exactly the same size. In other cases, such as in lean systems, the size of the transfer batch may dictate the size of the production batch, such as when the transfer batch is the same as or some multiple of the kanban quantity of the next work center.

A supplier that provides services such as warehousing, freight forwarding, and delivery is known as: A. a broker. B. a second-tier supplier. C. a third-party logistics provider (3PL). D. an importer/exporter.

C. a third-party logistics provider (3PL). A 3PL is a third party that provides product delivery services.

Demand that comes from a new customer or is outside the limits established by management policy is known as: A. random variation. B. a divergent point. C. abnormal demand. D. a trend.

C. abnormal demand. Abnormal demand is demand in any period that is outside the limits established by management policy.

A critical step in developing a corporate social responsibility (CSR) strategy is to identify: A. significant uses of energy in the supply chain. B. opportunities to reduce the operating costs of the firm. C. areas where the interests of the firm and society overlap. D. regulations that have a significant financial effect on the firm.

C. areas where the interests of the firm and society overlap. A company impinges upon society during its normal course of business, while external social conditions influence corporations. Therefore, a critical step in developing a CSR strategy is to identify these areas of overlap and, consequently, understand the mutual dependence of corporations and society as well as their shared values.

Compared to infinite capacity planning, the advanced planning and scheduling technique: A. uses a longer planning horizon. B. limits the plan to critical resources only. C. bases schedules on achievable operations within a set time period. D. validates the master production schedule.

C. bases schedules on achievable operations within a set time period. An advanced planning and scheduling tool uses priority rules to determine what orders will be produced in what time periods, and it takes capacity constraints into account.

Establishing standards and performance measurements for warehousing is important in order to: A. base compensation on achievement of standards. B. report performance to the central supply warehouse management. C. benchmark daily activities and guide continuous improvement. D. eliminate disagreements on what utilization and efficiency should be.

C. benchmark daily activities and guide continuous improvement. The objective of setting standards and measuring performance is to provide a baseline for performance and determine areas of improvement.

Material produced as a residual of or incidental to the production process is a: A. residual item. B. co-design. C. by-product. D. co-product.

C. by-product. A by-product is material of value produced as a residual of or incidental to the production process.

Supply chain variation frequently occurs when: A. variation in historical demand skews the quantitative forecast. B. product shortages are followed by price increases. C. customers place larger orders than necessary. D. a valley and a peak exist in product demand history.

C. customers place larger orders than necessary. Supply chain distortion may occur when customers place larger orders than necessary.

Some companies have created electronic scorecards to gather statistics on topics such as inventory, sales, costs, and forecasts. This is often referred to as a: A. wide area network (WAN). B. information technology strategy. C. decision support system (DSS). D. enterprise resources planning (ERP) system.

C. decision support system (DSS). A DSS assists managers in selecting and evaluating courses of action by providing a logical, usually quantitative, analysis of the relevant factors.

The point in time inside which changes to the master schedule typically must be approved by an authority higher than the master scheduler is referred to as the: A. capable-to-promise. B. cutoff date. C. demand time fence. D. planning time fence.

C. demand time fence. The demand time fence is a point in time inside which demand is based on customer orders rather than forecasts and changes to the master schedule must be approved by an authority higher than the master scheduler. Contrast this with the planning time fence, where changes in the schedule may be made within the constraints of the production plan and are made manually by the master scheduler.

In a functional layout, A. specialized equipment is used. B. there is little buildup of WIP inventory. C. each work center must be flexible. D. capital costs are higher than in a product-based layout.

C. each work center must be flexible. The advantage to a functional layout is that equipment can handle a wide variety of products. Capital costs generally are higher for a product layout, not a process layout. Dedicated equipment is used in a process layout, hence its relative inflexibility. There tends to be more WIP inventory in a process layout because, unlike in a product layout, workflow is lumpy because of varying batch sizes and non-standard routings.

A company is considering outsourcing one of its patented technologically advanced processes. Top on the list of concerns should be the fact that some countries do not always enforce laws on: A. facility safety. B. labor. C. intellectual property. D. hazardous material handling and training.

C. intellectual property. Intellectual property includes various legal entitlements to certain names, written and recorded media, and inventions. Outsourcing can put a company's proprietary technology at risk.

The movement of shipments using different types of equipment and combining the best features of each mode is called: A. freight brokerage. B. combined transport. C. intermodal transport. D. multimodal transport.

C. intermodal transport. Intermodal transport refers to shipments moved by different types of equipment in order to benefit from the best features of each mode.

Effective distribution planning requires balancing customer service with the costs of warehousing, transportation, and: A. overhead. B. changing capacity. C. inventory. D. ordering.

C. inventory. Carrying more inventory may improve customer service, but it increases the cost of holding inventory and so must be balanced with customer service.

Understanding the human and environmental aspects and impacts during the life of a product, process, or service is called: A. life cycle appraisal. B. life cycle analysis. C. life cycle assessment. D. life cycle analogy.

C. life cycle assessment. Life cycle assessment (LCA) is defined by the APICS Dictionary as follows: "Understanding the human and environmental impacts during the life of a product, process, or service, including energy, material, and environmental inputs and outputs. Sometimes called cradle-to-grave analysis, LCA includes raw material extraction through materials processing, manufacture, distribution, use, repair and maintenance, and disposal or recycling."

Storage considerations related to inventory accuracy are most likely to include: A.use of bar codes for location identification. B. use of a temperature-controlled environment. C. locked storage for high-value pilferable items. D. allowance for first in, first out usage.

C. locked storage for high-value pilferable items. Locked storage allows for limited access.

A set of techniques that uses bill-of-material data, inventory data, and the master production schedule to calculate requirements for materials is known as: A. a pull system. B. kanban. C. material requirements planning. D. the theory of constraints.

C. material requirements planning. The key input to material requirements planning (MRP) is the master production schedule (MPS), which provides due dates and quantities for end items. MRP systems combine bills of material with planning data on lead times to determine when to make or buy components.

Storing fast-moving items together in a distribution center helps to: A. increase total inventory velocity. B. minimize time to store received items. C. reduce picking time. D. simplify cycle counting activities.

C. reduce picking time. Locating fast-moving items together reduces the travel distance and total picking time.

A master schedule with too short a horizon will result in: A. release of past-due messages on planned assembly orders. B. the need to allocate materials to orders further into the future. C. release of past-due messages on planned material orders. D. less master production schedule flexibility.

C. release of past-due messages on planned material orders. If the master production schedule is too short, purchase orders will generally have to be placed in less-than-normal lead time.

Dispatching a production order results in: A. balancing input with output at the work center. B. ensuring that required resources are available. C. sequencing the production order for work. D. changing the planned start date to the actual start date.

C. sequencing the production order for work. Dispatching sequences the orders.

In its narrowest sense, an organization that provides only an intangible product is in the: A. health-care industry. B. hospitality industry. C. service industry. D. real estate industry.

C. service industry. The APICS Dictionary, 16th edition, definition of service industry is as follows, "1) In its narrowest sense, an organization that provides an intangible product (e.g., medical or legal advice). 2) In its broadest sense, all organizations except farming, mining, and manufacturing. Includes retail trade; wholesale trade; transportation, and utilities; finance, insurance, and real estate; construction, professional, personal, and social services; and local, state, and federal governments." An organization in a service industry provides an intangible product (e.g., medical or legal advice). The other industries are types of service industries in its broadest sense because these industries provide tangible products in addition to their service components: medical care, new homes and offices, and so forth.

Forecasters and users of forecasts use information on forecast accuracy to understand the reliability and relevance of the data as they are used to determine demand characteristics, variation, and: A. customer predictablity. B. sustainability. C. stability. D. reliablity of the sales and operations planning process.

C. stability. Forecasters and users of forecasts use information on forecast accuracy to understand the reliability and relevance of the data as they are used to determine demand characteristics, variation, and stability.

Practices or guidelines that minimize the impact of an operation on the environment are part of a company's policy on: A. strategic diversity. B. hazardous material (HAZMAT). C. sustainability. D. the reverse supply chain.

C. sustainability. Having a sustainability policy means that an organization's activities and operations will not compromise the needs of future generations.

All of the following are considerations in the adoption of a process focus except: A. the complexity of the manufacturing process. B. the type of technology used in the manufacturing process. C. the book value of current production assets. D. the capital intensity of the manufacturing process.

C. the book value of current production assets. The book value of current production assets will have no effect on how the assets will be used in production.

It is determined that it is not possible to complete all the jobs at a work center on time. To solve the problem, the dispatcher removes the job that will take the longest and reschedules it so that the remaining jobs will be completed on time. This sequencing technique is an example of: A. the critical ratio. B. first come, first served. C. the shortest processing time. D. the earliest job due date.

C. the shortest processing time. The shortest processing time rule directs the sequencing of jobs in ascending order by processing time.

The primary reason for "ABC Inventory Control" is to ensure adequate supply of critical items A. because it's manadated by federal law B. because ABC inventory control is part of financial GAAP requirements C. via high security, safety stock, & frequent counting D. because annual financial reports require the ABC analysis

C. via high security, safety stock, & frequent counting

In lean manufacturing, costs are reduced by reducing: A. variability. B. mismatches between work pace and machine-designed pace. C. waste. D. interruptions to the product workflow.

C. waste. In lean manufacturing, costs are reduced by reducing waste within a system. Note that variability is one of the causes of waste, so it is often addressed in lean manufacturing, but because waste reduction is the primary objective that results in cost reduction, variability is not the best answer.

During the assessment period of an acquisition, specific synergies are observed and found to be positive. However, the acquiring organization's strategists keep in mind that risks continue to lie in the fulfillment of the overall strategic goal. Strategically, the decision to acquire then becomes a question of: A. what the international market thinks of the plan. B. how long it will take to successfully implement a common order entry system. C. whether it is faster or cheaper to buy rather than develop internally. D. the compatibility of company cultures and how they can be made more similar.

C. whether it is faster or cheaper to buy rather than develop internally. The decision to acquire is a question of whether it is faster and more economical to buy something that the company could have developed on its own.

Subdividing project tasks into a hierarchy of individual tasks is done using a: A. Gantt chart. B. task list. C. work breakdown structure. D. resource graph

C. work breakdown structure. The work breakdown structure develops a structure of tasks by subdividing the work into manageable tasks.

What is the formula for Cash to Cash and what is the application

Cash-to-Cash = Days of Inventory on Hand + Average Days of Accounts Receivable - Average Days of Accounts Payable Application-Working Capital Required; and Management Performance

In the project process type, what are the 3 primary control elements? Quality Cost Time Throughput Quantity Scope

Cost Time Scope

Which of the following represent potential sources of demand (select all that apply) Customer orders Distribution center replenishments Sales promotions VMI customers New product introductions New retail channel

Customer orders Distribution center replenishments Sales promotions VMI customers New product introductions New retail channel

Gross requirements for a period on the material requirements planning grid are 100 units for unit A. Two units of A are needed to make one unit of Z. If net requirements are 80 units, what was the available inventory of A? A. Not enough information was provided to answer the question B. 40 units C. 60 units D. 20 units

D. 20 units Net Requirements = Gross Requirements - Available Inventory. This equation can be rearranged as Available Inventory = Gross Requirements - Net Requirements, resulting in 100 units - 80 units = 20 units. The information on how many As are used for the Zs is not needed to answer this question.

Scipa Automotive is a reputable automotive parts supplier with declining profit margins in its home market because of declining automobile sales and high labor costs. Scipa is considering acquiring a midsize parts manufacturer in another country, where a large automotive parts market is emerging. Scipa would transfer all manufacturing to this country. The business being considered for acquisition has weak management and technical competencies compared with Scipa's home-country levels. Which factor will likely be most influential in Scipa's decision? A. Creating economies of scale B. Cutting costs of operations in its home country C. Protecting proprietary information D. Access to a growing market

D. Access to a growing market Scipa wants to move production entirely, so economies of scale and cost cutting at home are not issues. Proprietary information can be an issue in expanding into another country, but that probably is not an issue in this case. Scipa is looking for more customers and could use its expertise to improve its investment in purchasing the company.

In an emerging market for a new product, financially strong companies pose which of the following risks to initial frontrunners? A. Reducing the barriers to entry B. Increasing the complexity of products C. Increasing the velocity of distribution channels D. Acquiring operations of weaker competitors

D. Acquiring operations of weaker competitors Financially strong organizations have the ability to reduce competition by buying weaker marketplace rivals.

Given the existence of forecasting error, what are manufacturers using in order to create more accurate production schedules and targets? A. Improved manufacturing methods B. Greater market analysis C. Previous years' targets and goals D. Actual demand data from supply chain partners

D. Actual demand data from supply chain partners Because of issues with forecasting, organizations are working to become less reliant on forecasts and more reliant on actual demand information provided by their downstream supply chain partners. This effectively means that organizations are moving toward a pull structure and away from a push structure.

Which of the following tools uses mathematical algorithms or logic to perform optimization or simulation on finite capacity scheduling? A. Manufacturing resource planning B. Enterprise resources planning C. Collaborative planning, forecasting, and replenishment D. Advanced planning and scheduling

D. Advanced planning and scheduling Advanced planning and scheduling uses advanced mathematical algorithms or logic to perform optimization or simulation on finite capacity scheduling, sourcing, capital planning, resource planning, forecasting, demand management, and others.

A product shortage exists across a distribution network. Which of the following techniques is the best use of the available inventory? A. Expediting B. Available-to-promise C. Drop shipping D. Allocation

D. Allocation A limited quantity of inventory can be allocated to one or more orders until it has all been consumed.

A discrete manufacturer's marketing strategy is to be the low-cost, high-quality, high-volume, rapid-delivery supplier. Which of the following manufacturing processes would best fulfill this marketing strategy? A. Jobbing B. Batch C. Cellular D. Line

D. Line A line process has high volume and high quality but usually narrow effective variety.

Orders for a specific assembly have been released over the last two weeks. Stockroom personnel have reported unplanned issues for one component and returns of another component. Which of the following is the most likely cause of this situation? A. The master scheduling horizon is not long enough. B. Material availability checking is not being performed before release of the orders. C. There are errors in the inventory records for the two components. D. An engineering change for the assembly is not in the bill of material.

D. An engineering change for the assembly is not in the bill of material. Product design engineers may have changed the components used in the product without updating the bill of material, resulting in the unplanned issue for one component and the return of the other component.

Available-to-Promise (ATP) supports customer order promising. All these statements are true about ATP except? A. Includes uncommitted inventory & planned production B. Calculated only for the first period and for periods with an MPS C. Considers customer orders but ignores forecasts D. Any potential order greater than the ATP must be declined

D. Any potential order greater than the ATP must be declined

What are four viable mitigation options for a situation in which a failure becomes external? A. Replacing, reworking, refunding, having a dinner meeting with purchasing agent B. Refunding, replacing, reworking, threatening a lawsuit C. Refunding, reworking, replacing, canceling all business D. Apologizing, refunding, reworking, providing compensation

D. Apologizing, refunding, reworking, providing compensation Failure recovery strategies can involve a wide range of activities such as apologizing, refunding monies, reworking the product or service, or providing compensation.

Using both a master production schedule and a final assembly schedule is most likely to achieve the highest on-time customer performance level for which of the following environments? A. Make-to-stock B. Engineer-to-order C. Make-to-order D. Assemble-to-order

D. Assemble-to-order Assemble-to-order promises product within a window of time and typically has a shorter lead time than engineer- or make-to-order, which have less flexibility and more variance. A final assembly schedule is typically not used in a make-to-stock environment.

Which of the following manufacturing situations most likely uses both a master schedule and a final assembly schedule (FAS)? A. Repetitive manufacturing of toasters B. Synchronized production of small motors C. Remanufacture of automotive engines D. Assemble-to-order personal computers

D. Assemble-to-order personal computers Many personal computer manufacturers partially build their computers but wait for the final order from the customer before adding items such as a hard drive, RAM memory, graphics cards, and similar items.

Which of the following actions is an effective way to use supplier partnerships? A. Determining which suppliers will receive annual awards B. Reducing the procurement department due to less work C. Using the supplier partnership to renegotiate prices D. Assisting suppliers with cost-saving initiatives and sharing the savings

D. Assisting suppliers with cost-saving initiatives and sharing the savings In a supplier partnership, both parties can benefit from cost savings based on continuous improvement.

What is the portion of inventory or production that has yet to be assigned to specific customer orders? A. Capable-to-promise B. Excess production C. Anticipation inventory D. Available-to-promise

D. Available-to-promise Available-to-promise (ATP) inventory has not yet been committed to customer orders. "Excess production" and "capable-to-promise" are not appropriate descriptions for inventory that might still have a chance of being sold. "Anticipation inventory" is not a term commonly used to describe ATP inventory.

Which of the following techniques should be introduced to reduce the cost of processing transactions? A. Larger order quantities, supplier certifications, and kanbans B. Larger order quantities, backflushing, and kanbans C. Larger order quantities, backflushing, and supplier certification D. Backflushing, supplier certification, and kanban

D. Backflushing, supplier certification, and kanban Although larger order quantities reduce the number of batches, they increase lead time, inventory, and costs.

What document shows the component parts and number of components needed to make one unit of the part? A. Routing sheet B. Material requirements plan C. Material requisition D. Bill of material

D. Bill of material According to the APICS Dictionary, a bill of material is "a listing of all the subassemblies, intermediates, parts, and raw materials that go into a parent assembly, showing the quantity of each required to make an assembly."

Which of the following conditions is typically a prerequisite for a successful partnership with a supplier? A. The supplier is a source of items that are critical to the customer. B. The customer represents more than a third of the supplier's business. C. There are many potential partners that can supply the items. D. Both companies are willing to make a long-term commitment to the partnership.

D. Both companies are willing to make a long-term commitment to the partnership

What is the term for an extreme change in the supply position upstream in a supply chain generated by a small change in demand downstream? A. Supply chain variation B. Forecast disconnects C. Market response effect D. Bullwhip effect

D. Bullwhip effect The bullwhip effect is a situation in which a small change in demand downstream in the supply chain - for example, by failing to communicate demand or promotion information - generates an extreme change in the supply position upstream.

Which of the following interfaces deals primarily with translating monetary units into product families for planning purposes? A. Master scheduling to detailed scheduling and planning B. Strategic planning to business planning C. Sales and operations planning to master scheduling D. Business planning to sales and operations planning

D. Business planning to sales and operations planning The business plan is in monetary units, while the sales and operations plan uses aggregate product family planning.

An organization has determined that brand recognition is its most important strategic advantage for breaking into a foreign market. Which entry option would create the greatest risk to this advantage? A. Export B. Subsidiary C. Joint venture D. Franchise

D. Franchise When using franchising as an entry option to gain access to foreign markets, the franchisor gives up some control over its brand. Franchisees can weaken the brand in the new market by delivering poor quality or service. They may also alter the brand when it conflicts with local culture and customer preferences. This has the effect of diluting the power of the brand.

Well-conceived policies and procedures facilitate strategy execution in which of the following ways? A. By providing detailed work instructions, helping ensure compliance with ISO 9000, and promoting a positive work environment B. By articulating the strategy in simpler terms, enabling low-skilled workers to become productive quickly, and always being reflective of current work practices C. By enabling total quality management, facilitating regulatory approvals, and helping to avoid defects from entering the marketplace D. By providing top-down guidance, helping ensure consistency, and promoting the creation of a work climate that facilitates good strategy execution

D. By providing top-down guidance, helping ensure consistency, and promoting the creation of a work climate that facilitates good strategy execution A company's policies and procedures can either support or hinder good strategy execution. Well-conceived policies and operating procedures facilitate strategy execution in three ways: By providing top-down guidance as to how things need to be done By helping ensure consistency in how critical activities are performed By promoting the creation of a work climate that facilitates good strategy execution

Effective execution control can improve customer service in which of the following ways? A. By reducing lead time B. By reducing lead time and by improving component availability C. By replenishing finished inventory on schedule and by improving component availability D. By reducing lead time, by replenishing finished inventory on schedule, and by improving component availability

D. By reducing lead time, by replenishing finished inventory on schedule, and by improving component availability Shorter lead times enable customers to get products faster and provide competitive advantage to the company. Completing orders on schedule is absolutely critical in meeting customer delivery expectations. By having the necessary components and materials on hand to build products, companies can meet customer due dates and service objectives

The selection of a measure of customer service should include which of the following considerations? A. Is the necessary data being directly provided by customers? B. Can the results be qualitatively analyzed? C. Does achieving the results require only a small drain on profits? D. Can the results be affected by management decisions?

D. Can the results be affected by management decisions? Effective customer service requires a 360-degree view of the customer and how the organization can achieve total customer satisfaction. As such, the right data needs to be available the results should be able to be affected by management decisions. If these are true, measurement and control using this metric will enable the organization to not only reach customer service goals but also to achieve productivity, profit, and ROI goals.

A customer contacts a manufacturer's salesperson and wants to purchase all production supply and capacity for a given item. Which of the following values will the salesperson need to obtain from his company to respond to his customer? A. Rough-cut capacity plan B. Available-to-promise C. Master schedule D. Capable-to-promise

D. Capable-to-promise Capable-to-promise is the process of committing orders against available capacity as well as inventory. This process may involve multiple manufacturing or distribution sites.

Which activity is a key interface with MRP? A. Sales and operation planning B. Customer service C. Calculating cost of goods sold D. Capacity requirements planning

D. Capacity requirements planning Capacity requirements planning checks to see if the necessary capacity is available to produce the MRP output as planned. Sales and operations planning indirectly influences MRP, but does not directly interact with MRP. Customer service levels are important in measuring customer satisfaction, but only indirectly interface with MRP. Cost of goods sold is the result of accumulating inventory costs; costs of goods sold is deducted from revenue when an item is sold.

Assuming that demand levels remain the same, what happens if the order quantity increases? A. Ordering costs increase. B. Average inventory levels decrease. C. Economic order quantity shifts. D. Carrying costs increase.

D. Carrying costs increase. When demand remains the same but order quantity increases, carrying costs will increase, average inventory levels will increase, and ordering costs will decrease.

Which of the following methods often is employed to make high-variety, low-volume manufacturing operate in a repetitive mode? A. Flow manufacturing B. Project production C. Process layout D. Cellular manufacturing

D. Cellular manufacturing Cellular manufacturing is a process that produces families of parts within a single line or cell of machines controlled by operators who work only within the line or cell. The ease of changeover makes it ideal for high-variety, low-volume products. The other answers are incorrect, as they refer to processes that are more specialized or less flexible and thus unsuited for this purpose.

Which disposition process decision will promote policy, cost, sustainability, quality, and supply goals? A. Adding reverse logistics to the existing forward supply chain without modifying either process B. Providing refunds to customers and having them dispose of the products themselves C. Empowering the echelon closest to the customer to do disposition D. Centralizing returned products in a single location

D. Centralizing returned products in a single location When handling returns, the organization must first assess and categorize returned items based on their condition and status. To do so, returned products are first centralized in a single location. This helps meet disposition goals because the items can be consolidated. For example, shipments for recycling could be consolidated into a full truckload to save money.

What would a job shop organization located in the U.S. need to get to put "Made in the U.S.A." on their products intended for export? A. Unique IDs at the instance level B. A lot traceability system C. Shipper's export declaration D. Certificate of manufacture

D. Certificate of manufacture The APICS Dictionary, 16th edition, defines a certificate of manufacture as a document that "attests that the goods were manufactured in the exporter's country. It is provided and signed by the exporter's chamber of commerce."

Demand management includes which of the following activities? A. Forecasting, determining safety stock, quoting new orders, and shipping product B. Taking orders, making delivery promises, shipping orders, and following up to ensure that delivery takes place C. Order processing, making delivery promises, shipping product, and following up to ensure that delivery takes place D. Forecasting, order processing, making delivery promises, and interfacing with the marketplace

D. Forecasting, order processing, making delivery promises, and interfacing with the marketplace Demand management includes forecasting, order processing, making delivery promises, and interfacing with the marketplace.

A company operating in a volatile industry, in which demand and events can frequently throw off predictions, has become frustrated with the unreliability of and its dependence on forecasts. What step could it take to generate better and quicker information about customer demand? A. Increase inventory. B. Focus more closely on key competencies. C. Improve order winners. D. Collaborate more closely with downstream customers.

D. Collaborate more closely with downstream customers. Closer collaboration will mean that upstream partners get downstream customer information directly and immediately. A key benefit of communicating demand rather than only orders is that you can see the reason for certain orders (e.g., to stockpile in advance of a plant shutdown versus a trend of higher sales), and this helps eliminate the bullwhip effect where variability in orders (both high and low) is magnified at each upstream supply chain node.

Which factor contributes most to the success of a change initiative? A. Using supervisors as coaches B. Education and training at the top of the organization C. Day-to-day involvement of top management in implementation and control D. Communicating to employees the reason for the change

D. Communicating to employees the reason for the change The most critical step listed is to communicate the purpose and objectives behind the initiative to employees. This creates a sense of urgency and involvement and reduces resistance.

What is the key to reducing costs, improving quality, reducing delivery lead time, and improving due-date performance for organizations conducting business-to-business (B2B) commerce? A. Vertical integration B. Backward integration C. Also engaging in B2C for the same products D. Connectivity

D. Connectivity The APICS Dictionary, 16th edition, defines B2B as follows, "Business conducted over the internet between businesses. The implication is that this connectivity will cause businesses to transform themselves via supply chain management to become virtual organizations—reducing costs, improving quality, reducing delivery lead time, and improving due-date performance."

Which managed inventory strategy would best suit a lean manufacturer that is unable to provide consistent order sizes due to fluctuations in demand for the various products it produces? A. Lot for lot B. Vendor-managed inventory C. Consignment D. Continuous replenishment

D. Continuous replenishment Continuous replenishment uses actual sales or warehouse shipments without stockouts, resulting in lower associated costs and improved inventory turnover. It would be best suited for the manufacturer due to the manufacturer's inability to provide consistent order information and its preference to reduce waste, which would include extra inventory storage in the form of consignment or VMI.

Why should caution be exercised in using value chain analysis alone in efforts to meet or beat top competitors' costs? A. Value chain analysis often ignores purchasing. B. Competitors may spend more on sales and marketing; this is typically not revealed in value chain analysis. C. Financial and portfolio analysis are superior tools for cost reductions. D. Cost and price differences may emanate from supplier and distribution superiority.

D. Cost and price differences may emanate from supplier and distribution superiority. Cost and price differences between competitors may have their origins in activities performed by suppliers or by distribution allies.

How is inventory turnover calculated? A. Average Inventory/Standards Sales B. Sales/Average Inventory Investment C. Sales/Inventory Investment D. Cost of Goods Sold/Average Inventory Investment

D. Cost of Goods Sold/Average Inventory Investment

When following the UN Global Compact Management Model, what must an organization do once it has assessed its current state of risks and opportunities related to human rights, labor, the environment, and anti-corruption? A. Commit in a transparent way to incorporate the principles into formal governance structures. B. Transform organizational strategy into tactics, such as capital improvement projects. C. Adjust metrics to ensure that there is a way to determine if new policies and procedures are being followed. D. Create or refine the organization's strategy and related policies, goals, and metrics.

D. Create or refine the organization's strategy and related policies, goals, and metrics. The "Assess" step, described in the question, is the second step in the model. The next step is the "Define" step, which consists of creating or refining the organizational strategy and related polices, goals, and metrics based on the results of the assessment step.

Which is a characteristic of customer service on the part of senior management that demonstrates leadership? A. Handling customer complaints B. Asking customers to define the company's vision of service excellence C. Being reactive with customers D. Creating and maintaining high standards

D. Creating and maintaining high standards Leadership needs to define a vision of service excellence, create and maintain high standards, and be proactive with customers. Leadership would not handle customer complaints themselves.

In a distribution environment, which of the following functions is generally considered a joint responsibility of the manufacturer and the distribution center? A. Determination of finished product packaging B. Distribution center site selection analysis C. Warehousing finished goods prior to shipment D. Customer order servicing and administration

D. Customer order servicing and administration Customer order management is handled by both the manufacturer and the distribution center, especially where demand variability causes unexpected stockouts, expediting is required, etc. Site analysis would be an issue only for the distribution center; warehousing finished goods and packaging would be the responsibility of the manufacturer.

How does demand-driven material requirements planning (DDMRP) determine the timing of warehouse replenishment orders? A. Lot-for-lot with central location decisions if there is a supply demand mismatch B. Dynamic buffer calculation based on average daily usage C. Projected on-hand balance offset by lead time D. Daily reviews of buffer priorities based on net flow position

D. Daily reviews of buffer priorities based on net flow position DDMRP performs daily reviews of buffer priorities for replenishment order generation. This review looks at the net flow position. It also considers potential for expediting (based on current and projected available balance).

A company's final process is currently outsourced. The five-year forecast suggests that the company's shipment volumes will quickly cause the subcontractor to allocate time between all of its customers, extending lead time by 25%. What is a possible solution? A. Finite scheduling B. Less-than-truckload (LTL) shipping C. Backward integration D. Forward integration

D. Forward integration Forward integration is the process of buying or owning elements of the production cycle and the channel of the supply chain toward the final customer.

Which method of setting the price of a good or service is the most realistic way to do it given today's global economy? A. Determine the desired profit margin, add actual variable costs per unit, and then sum them to find the price. B. Choose a costing approach that results in the best profit margin and then use it to find the price. C. Determine the desired total cost per unit and add the desired profit margin to find the price. D. Determine the necessary price and then subtract the total cost per unit to determine the resulting profit margin.

D. Determine the necessary price and then subtract the total cost per unit to determine the resulting profit margin. The price in today's global markets is determined by market forces and is often either fixed or falling. Therefore, the price is the starting point. Necessary price considers value to the customer relative to alternatives. It also compares the total cost of ownership against competitor pricing. To sell at a profit, total costs per unit need to be lower than the market-determined price per unit or the product should not be produced.

Which of the following typically contributes costs to a physical distribution system that are exceeded only by costs for transportation? A. Design B. Protective packaging C. Materials handling D. Distribution inventory

D. Distribution inventory Distribution inventory is second only to transportation in terms of cost in a physical distribution system.

Tracking signals are computed by which of the following methods? A. Increasing the α coefficient to the MAD B. Dividing the average error by the trip value C. Multiplying the MAD by four D. Dividing the cumulative sum of errors by the MAD

D. Dividing the cumulative sum of errors by the MAD The cumulative sum of errors divided by the MAD is the correct computation of a tracking signal. The cumulative sum of errors is also referred to as the running sum of forecast error. Dividing the average error by the trip value is incorrect because the trip value is a threshold predetermined by management. Multiplying the MAD by four is incorrect because it is one way to calculate a trip value. Increasing the α coefficient to the MAD is incorrect because the α coefficient can be adjusted to place more emphasis on recent information, but is not used to compute the tracking signal.

Which of the following describes the environment that exists when international competition has become significant? A. Operations must continuously apply cost-saving measures to all existing products to help increase market share. B. Offshoring becomes a necessary alternative. C. Mass customization is frequently used as a product differentiator. D. Even small advantages in product and service specifications can have a significant impact on competitiveness.

D. Even small advantages in product and service specifications can have a significant impact on competitiveness. From a market perspective, international competition has become increasingly intense. Even small advantages in product and service specifications can have a significant impact on competitiveness.

A company makes four product lines, each with a variety of features and options. Which of the following tools would be most appropriate for the company to use to document the product configurations to be built over the next two weeks? A. Planning bill of material B. Master production schedule C. Detailed material plan D. Final assembly schedule

D. Final assembly schedule The final assembly schedule (FAS) is prepared after receipt of a customer order, as constrained by the availability of material and capacity (based on the features and options ordered). It schedules the operations necessary to complete the product assembly and states the exact set of end products to be built over the time periods.

What is the term for a schedule of end items to finish the product for specific customers' orders in a make-to-order or assemble-to-order environment? A. Build sequence B. Shop floor schedule C. Dispatch list D. Final assembly schedule

D. Final assembly schedule The final assembly schedule identifies the end items necessary to complete a specific customer's order. A dispatch list is used to identify the priority and sequence of manufacturing orders at a workstation. The build sequence lists the order of jobs to be worked on at a workstation. The shop floor schedule is the actual assignment of starting or completion dates to operations or groups of operations to show when these must be done if the manufacturing order is to be completed on time.

Which of the following forms the basis for simple regression equations? A. Finding a line of least squares on a chart that shows how one variable actually behaved in the past versus one that is predicted to behave in a particular way B. Building a normal distribution or bell curve to indicate the magnitude and frequency of the deviation from the average C. Using exponential smoothing to weight the information one wants to predict against the information that is used to predict it D. Finding the line of best fit through a set of data on a chart that interrelates two types of variables and shows their actual historical values

D. Finding the line of best fit through a set of data on a chart that interrelates two types of variables and shows their actual historical values Simple regression (also called linear regression) uses the least-squares method. As defined in the Dictionary, the least-squares method is a "method of curve fitting that selects a line of best fit through a plot of data to minimize the sum of squares of the deviations of the given points from the line."

A company ships production to its distribution centers (DCs) weekly. When reporting inventory levels at the end of the month for the sales and operations planning process, under which of the following categories should the inventory at the production facility be reported? A. Distribution B. In-transit C. Pipeline D. Finished goods

D. Finished goods Inventory that has not yet shipped to a DC would be reported as finished goods.

In a warehouse that primarily does a lot of small order fulfillment of online orders, what is the best thing the warehouse can implement if storage capacity is becoming an issue? A. Cross-docking B. Floating inventory C. Honeycombing D. Flow-through

D. Flow-through Flow-through also emphasizes throughput, but it involves using some or all of a shipment to immediately replenish a picking area. In this case, cross-docking is not appropriate because of the online order fulfillment business model being used.

What technique best determines production and inventory quantities for goods and services with independent demand? A. Material requirements planning B. Capacity requirements planning C. Safety stock D. Forecast

D. Forecast Since demand for independent demand items is unknown, it will need to be forecasted.

Which is the best example of how a change to longer production runs with fewer changeovers at a make-to-order organization could result in a tradeoff with customer service objectives? A. The quality of the product will likely be lower due to tool and die wear. B. Some ability to customize goods will be lost due to standardized runs. C. The price to the customer may no longer be acceptable after the change. D. Fulfilling a customer's mix of goods for an order will require a longer lead time.

D. Fulfilling a customer's mix of goods for an order will require a longer lead time. Longer production runs with fewer changeovers will reduce production costs. If a customer order requires a mix of goods in an order, the various runs needed for the order will each need to be completed. Since each run is longer, the total lead time for the order will be longer in this method.

What should cross-functional project teams receive training in? A. Dealing with difficult people B. Project management C. Microsoft Project D. Group dynamics

D. Group dynamics Project teams are working together toward a goal and need to understand how teams work together successfully.

Which of the following would have the most impact on the use of a production activity control (PAC) system? A. Implementing modular bills of material for items with options B. Adding a new workstation that uses the work center manufacturing process type C. Changing the rate of production in a continuous manufacturing process type D. Grouping production equipment into focused work cells

D. Grouping production equipment into focused work cells Using cellular manufacturing would change the way product is scheduled, sequenced, and managed.

An organization creates a separate network organizational structure, using a "big opportunity" to help form the core of this network that operates alongside the traditional hierarchical structure. What will help this network keep an entrepreneurial spirit? A. Start using formal project management techniques to ensure that the next "big opportunity" is developed quickly. B. Assign formal roles to network team members to reduce duplication of effort. C. Assign a team member to develop a budget for the next "big opportunity" so it gets the time and energy it requires. D. Have core members recruit new volunteers and provide guidance on how to stay unstructured yet self-motivated.

D. Have core members recruit new volunteers and provide guidance on how to stay unstructured yet self-motivated. As a network team forms alongside the traditional hierarchical structure, the network members will need guidance to understand how a network needs to differ from a hierarchy so that they keep that entrepreneurial spirit rather than starting to build a hierarchy within the network (e.g., a focus on budgets, project management, roles, etc.).

If an organization wants to prioritize the customer's ability to customize the organization's service offerings, what is a tradeoff they must be prepared to accept? A. Lower sales conversion rates B. Higher degree of contact with the customer C. Higher contribution margin of services D. Higher cost of services

D. Higher cost of services Highly customizable services will reduce service standardization and therefore increase the cost of these services. This will tend to increase sales conversion rates. Higher contribution margins would be a positive thing. The degree of contact with the customer could also be higher or lower, but this represents a different area of tradeoffs from the degree of customization decision.

Which of the following is a graph of contiguous vertical bars that allows an organization to identify patterns in measurements of quality data? A. Flowchart B. Statistical process control chart C. Cause-and-effect diagram D. Histogram

D. Histogram A histogram is made up of bars that represent a frequency distribution in which groups or classes of items are marked on the x axis and the number of items in each class is indicated on the y axis. The pictorial nature of the histogram makes it easier to identify patterns.

How does the failsafe concept relate to equipment? A. Defective parts cannot be released to the next operation. B. Equipment shuts down automatically if a defect is detected. C. An action that will produce defective parts is prevented. D. Improper internal setup actions cannot be taken.

D. Improper internal setup actions cannot be taken. Hard stops are used to eliminate adjustments as part of internal setup. However, even failsafe methods cannot guarantee that there will be no defects.

Which of the following actions to improve the validity of the master schedule is most under the master scheduler's control? A. Identifying sources of demand problems B. Aggregating capacity by flattening bills of material C. Reducing sources of supply problems D. Improving the accuracy of the resource bills of material

D. Improving the accuracy of the resource bills of material Maintaining the resource bills of material to reflect current conditions has an ongoing impact on the validity of the master schedule.

The design of a product is improved by which of the following factors? A. Patents to ensure process uniqueness B. Elimination of standard part attributes C. Complete design by the supplier D. Input from the supplier

D. Input from the supplier Early input from the supplier enables better product design by ensuring component specifications, participation of the supplier in the design, and information about the capabilities of a supplier to supply components in the right quantities once production begins. Identifying process similarities helps in standardizing processes, removing overcomplexity, and reducing the number of components needed to produce the product.

What is the best approach for managing planning vs. execution in capacity management? A. Backlog monitoring B. Critical ratio C. Capacity requirements planning D. Input/output control

D. Input/output control Input/output control is a technique for capacity control where planned and actual inputs and planned and actual outputs of a work center are monitored.

A small engine parts manufacturer is working to segment suppliers and customers to enhance profitability. When it discusses the companies that carry those parts in retail locations, which segment is it considering? A. Suppliers B. Ultimate customers C. Lead time D. Intermediate customers

D. Intermediate customers Intermediate customers refers to the customers that are not at the end of the supply chain, which in this case would refer to retailers who carry the parts for sale to the general public. Ultimate customers would refer to the customers of those retailers that purchase the parts from those retail locations. Supplier segmentation refers to companies that supply the manufacturer with parts and raw materials. Lead time segmentation is a form of supplier segmentation.

True or False- Intermittent (batch manufacturing) is based on customer orders, in a relatively small scale , with start/stop flow?

True

What is the interval between the completion of run time for one operation and the beginning of the setup at the next operation called? A. Queue time B. Move time C. Post-operation time D. Interoperation time

D. Interoperation time The correct terminology for interoperation time is being tested here. Although queue and move times are both components of interoperation time, neither includes all the elements between completion of run time at one operation and the beginning of setup at the next. Post-operation time would include only wait time and possibly move time.

What would be an effective response for an established player when a competitor attacks with a disruptive business model or a product with features that are simpler and more affordable? A. Offer temporary discounts for existing products. B. Immediately start an aggressive plan to acquire the upstart. C. Wait to see if the competitor is successful. D. Introduce a better product, and cross-sell and up-sell existing products.

D. Introduce a better product, and cross-sell and up-sell existing products. Incumbents often fail to counterattack a competitor's disruptive advances. For example, Craig's List offers free classifieds, and in all but one of the top 50 U.S. metropolitan markets for classified ads, it dominates. What was different about that one metropolitan area? That company responded quickly to the business model threat by launching its own free classifieds site along with other significant changes. Lessons learned? When faced with a disruptive competitor, consider quickly matching the disruptive business model.

What is a key factor for determining the size of a new warehouse? A. Utility and other overhead costs for the facility B. Minimum square feet required to receive local tax breaks C. Number of forklifts required to perform material-handling operations D. Inventory and throughput requirements necessary to provide customer service

D. Inventory and throughput requirements necessary to provide customer service There are many factors to consider when establishing a warehouse, but knowing what is required to provide customer service is foremost.

Which of the following are prerequisites for a material requirements planning (MRP) system? A. Stock keeping unit locations and cycle counts B. Bills of material and routings C. Routings and stock keeping unit locations D. Inventory data and bills of material

D. Inventory data and bills of material MRP uses product structure data as well as available inventory data to determine any imbalance of supply and demand.

An organization has limited shop floor space to add new equipment and doesn't want to move or expand space this year. What would be the best way for it to still add agility and flexibility this year? A. Change from chase to level production planning and add a shift. B. Add new equipment in tighter configurations and train users on improving dexterity. C. Change from level to chase production planning and use hirings and layoffs more frequently. D. Invest in new methodologies and replace some equipment with more versatile versions.

D. Invest in new methodologies and replace some equipment with more versatile versions. Agility and process flexibility can be developed by making investments in methodologies such as lean as well as investing in equipment that enables flexibility.

What is the best description of strategic sourcing? A. It is being replaced by more agile, tactical buying. B. It focuses on the quality and efficiency of the transaction. C. It should be used for the purchase of all materials. D. It considers the supply risk of items critical to profitability.

D. It considers the supply risk of items critical to profitability. Strategic sourcing is a supply chain management approach to purchasing. One major objective is to manage the supply risk of items that have a major impact on profitability through supplier partnership arrangements. Strategic sourcing is not being replaced by tactical buying. Tactical buying is at the opposite end of the spectrum. Many items should be purchased via tactical buying to take advantage of supplier competition. In addition, a strategic approach to sourcing is based on reducing spend and transaction costs while safeguarding critical supply items and leveraging supplier design and production expertise through partnership arrangements. All of these strategies make the company more competitive

What is the best description of strategic sourcing? A. It focuses on the quality and efficiency of the transaction. B. It is being replaced by more agile, tactical buying. C. It should be used for the purchase of all materials. D. It considers the supply risk of items critical to profitability.

D. It considers the supply risk of items critical to profitability. Strategic sourcing is a supply chain management approach to purchasing. One major objective is to manage the supply risk of items that have a major impact on profitability through supplier partnership arrangements. Strategic sourcing is not being replaced by tactical buying. Tactical buying is at the opposite end of the spectrum. Many items should be purchased via tactical buying to take advantage of supplier competition. In addition, a strategic approach to sourcing is based on reducing spend and transaction costs while safeguarding critical supply items and leveraging supplier design and production expertise through partnership arrangements. All of these strategies make the company more competitive.

The automaker Toyota turned societal concerns for fuel efficiency and automobile emissions into an industry-leading hybrid car strategy that enabled them to gain early market leadership. How does this strategy measure up against the Triple Bottom Line? A. It demonstrates the tension that is created between the desire to deliver social and economic good. B. It sacrifices economic gain for social and environmental good. C. It focuses primarily on environmental and economic areas. D. It delivers benefits in all three areas of the TBL.

D. It delivers benefits in all three areas of the TBL. It produces benefits for people (interests in doing good for the environment), planet (lowered use of carbon-based fuels and emissions), and profit (increased company competitive advantage).

When an organization fails to follow up on supplier performance issues, how does that do the supplier a disservice? A. It increases the likelihood of future orders that outstrip the suppliers' ability to meet demand. B. It prevents the supplier from increasing brand value based on their performance on current contracts. C. It can lead to loss of morale among the supplier's workforce. D. It does not allow them to correct problems that may result in the failure to secure another contract.

D. It does not allow them to correct problems that may result in the failure to secure another contract. If an organization identifies issues with a supplier's performance and fails to communicate those issues back to the supplier, it does not allow the supplier the opportunity to correct the identified issues, which may result in the supplier being unable to secure a contract in the future.

Which of the following best applies to the sales forecast development process as it relates to sales and operations planning? A. It is constrained only by demonstrated capacity. B. It recognizes that forecasting is an inaccurate process. C. It enables forecasts to be extended to the demand horizon. D. It is a check and/or revision of the existing forecast.

D. It is a check and/or revision of the existing forecast. The forecast is already in existence, but it should be reviewed and revised if needed.

Which is a characteristic of the production plan? A. It facilitates forecasting. B. It cannot be used for order promising or capable-to-promise. C. It works with individual products. D. It is a plan that both the production and sales and marketing departments agree to.

D. It is a plan that both the production and sales and marketing departments agree to. The master production schedule uses the sales and operation planning process as a primary input in the form of the agreed-upon production plan. The APICS Dictionary, 15th edition, states within its definition of master scheduling that "the sum of the master production schedules for the items within the product family must equal the production plan for that family." The MPS is where this agreed-upon plan between the production and sales and marketing departments is put into effect. The other answers are incorrect because forecasts are an input to the MPS; the production plan is at the product family, not the end-item level; and the MPS is used for order promising.

Which of the following is true of a business plan? A. It is stated in terms of units and grouped by distribution channel. B. It is stated in terms of monetary units and detailed by product. C. It is stated in terms of units and grouped by manufacturing site. D. It is stated in terms of monetary units and grouped by product family.

D. It is stated in terms of monetary units and grouped by product family. A business plan is a statement of long-range strategy and revenue, cost, and profit objectives usually accompanied by budgets, a projected balance sheet, and a cash flow.

Why does the UN Global Compact single out supply chain partners as an important factor in a firm's ability to comply with its 10 principles? A. It spreads the Compact's reach, even though partner actions can't impact the firm. B. If the organization uses unionized labor, all of its suppliers should, too. C. Customers define which of the principles have the highest priority. D. It motivates suppliers in countries with low labor costs toward compliance.

D. It motivates suppliers in countries with low labor costs toward compliance. In an extended supply chain, the actions of an organization's suppliers may reflect positively or negatively on the organization, especially if they are the channel master or most visible partner in the network. Therefore, the Global Compact stresses the need to ensure that suppliers are compliant with the principles (or are making reasonable progress in that direction). When located in countries with lower labor costs, it is both more important to ensure compliance, while also harder to do so.

Improvement programs at a manufacturing company have increased efficiency 10% and utilization 5%. What is the effect on the theoretical capacity? A. It varies with work in process. B. It has increased. C. It has decreased. D. It remains constant.

D. It remains constant. Theoretical capacity is defined as "the maximum output capability, allowing no adjustments for preventive maintenance, unplanned downtime, shutdown, and so forth." As such, efficiency and utilization have no impact on the capacity calculation.

What does the five forces model of competition suggest will happen to rivalry between competitors when high exit barriers exist, such as job protection agreements, or in industries in which assets cannot be easily sold? A. It often results in backward integration. B. It will invite even more competition. C. It will diminish. D. It will increase.

D. It will increase. In a vertical market with many competitors, rivalry increases.

Which manufacturing environment is best suited for the introduction phase of a product's life cycle? A. Flow B. Assembly line C. Engineer-to-order D. Job shop

D. Job shop The job shop layout allows for the incorporation of new product into existing work centers.

Which of the following communications is the primary means of notifying suppliers of needs in a make-to-stock environment where the company is minimizing in-plant inventories? A. Forecast B. Blanket order C. Safety stock D. Kanban

D. Kanban Kanbans or signals are used in a lean manufacturing environment. A forecast is an estimate of future demand, and they may have an impact on how much inventory might be bought or produced, they are more concerned with predicting demand than minimizing on-hand inventory. Safety stock is extra inventory kept in case of emergency. A blanket order is a type of long-term contract that allows the release of materials at pre-determined delivery dates, so it may help maintain certain inventory levels, but it does not actively minimize them.

Which of the following is most likely a reason for establishing order priorities with a final assembly schedule based on internal measures rather than on customer-oriented measures? A. The kanban quantity is larger than the lot size. B. The customer has a short order due date. C. Damaged product needs to be replaced. D. Key work centers are level-loaded.

D. Key work centers are level-loaded. Level loading is independent of any customer priorities.

What cost includes the product cost plus the costs of logistics such as warehousing, transportation, and handling fees? A. Activity-based cost B. Total line-haul cost C. Procurement cost D. Landed cost

D. Landed cost Landed cost includes the product cost plus the costs of logistics such as warehousing, transportation, and handling fees.

Which of the following inventory accounting methods will minimize inventory valuation at the end of a period of unexpected increasing costs and stable on-hand inventory balances? A. Standard cost B. Double-declining balance C. First in, first out (FIFO) D. Last in, first out (LIFO)

D. Last in, first out (LIFO) LIFO raises the inventory valuation at the end of the period because the lower-cost item (last in) is sold first (first out).

Which of the following cost methods causes inventory valuation to decrease when costs increase? A. Actual B. Average C. First in, first out (FIFO) D. Last in, first out (LIFO)

D. Last in, first out (LIFO) The LIFO method causes inventory valuation to decrease when costs increase. All the others would cause inventory valuation to increase when costs increase.

True or False- Issues requiring forecasting in a Make-to-Order environment include design status, backlog, and customer delivery date.

True

In which of the following zones can changes be made with relative ease? A. Danger B. Slushy C. Frozen D. Liquid

D. Liquid In the liquid zone, extensive changes can be made without causing much disruption to the MPS. The other answers are incorrect because there is no zone called the danger zone; the frozen zone should be the most protected in terms of the amount of change permitted; and changes in the slushy zone must be reviewed for potential impact on existing supply and demand situations.

What is the term for the amount of scheduled work ahead for a manufacturing facility expressed in terms of hours of work or units of production? A. Released orders B. Load profile C. Open orders D. Load

D. Load Load is the amount of planned work scheduled for and actual work released to a facility, work center, or operation for a specific span of time.

What factors are evaluated by detailed capacity planning? A. Setup times and queue B. Budgeted and theoretical capacity C. Efficiency and utilization D. Load and capacity

D. Load and capacity The purpose of detailed capacity planning is to use data regarding orders, efficiency, and utilization to create a comparison of load versus capacity.

A component has three qualified suppliers, but none has been designated as the primary supplier. Which of the following lead times should be used by material requirements planning in order to ensure delivery reliability? A. Average B. Shortest C. Historical D. Longest

D. Longest The longest lead time ensures that sufficient lead time is provided if that supplier is selected. If one of the other suppliers is selected, they receive an order and additional lead time for delivery.

Which of the following features is characteristic of continuous process manufacturing? A. Large batches B. Responsiveness as an order-winning criterion C. Wide product range D. Low-cost production

D. Low-cost production Continuous manufacturing is defined as a type of manufacturing process that is dedicated to the production of a very narrow range of standard products. The rate of product change and new product information is very low. Significant investment in highly specialized equipment allows for a high volume of production at the lowest manufacturing cost. Thus, unit sales volumes are very large, and price is almost always a key order-winning criterion.

The master production schedule shows that the priority plan exceeds the capacity available. Which can resolve this situation? A. Authorize short time. B. Increase amount advertising for this period. C. Take back some work currently assigned to subcontractors. D. Make a sales promotion for this period happen in a later period.

D. Make a sales promotion for this period happen in a later period. Altering the timing of a sales promotion to occur later may shift demand to a later period, thus reducing the demand level for the period in question. Increasing marketing spend will likely increase demand and thus make the capacity shortfall worse, and is therefore an incorrect answer. The other two answers are incorrect because these actions would further reduce capacity.

A company is changing from a make-to-order environment to an assemble-to-order environment. Which of the following areas will likely change the most? A. Internal service measures B. Customer feedback C. Customer order service measures D. Management of backlog

D. Management of backlog Moving to assemble-to-order will minimize or eliminate that portion of the backlog.

For a make-to-stock company, what strategy would be appropriate for growth in an existing market when the organization doesn't want to increase its aggregate inventory levels and its products are still in the growth phase? A. Diversification B. Market development C. Product development D. Market penetration

D. Market penetration In the Ansoff product-market growth matrix, four quadrants are formed using existing markets and new markets on one axis and existing products and new products on the other axis. The company wants to grow in existing markets, and this could involve either market penetration or product development. Product development would expand aggregate inventory if new product lines are added. Replacement products are also not needed due to the current products being in the growth phase. Therefore, market penetration is the growth strategy.

When defining product families, which of the following is most important? A. Product load profile B. How the product is made C. Package size D. Market strategy

D. Market strategy Product families are ideally based on how the product is made and market strategy. If there is not alignment between these, then the dominant choice is the market strategy. How the product is made is an attractive choice, but market strategy is the best answer. If product groupings do not line up with the resources used in production, non-aligned resources are created. The other answers are incorrect because package size alone and product load profiles do not influence the determination of product families.

Which of the following warehouse activities involves bringing goods together and checking for omissions or errors in the order? A. Dispatching the shipment B. Picking goods C. Dispatching goods to storage D. Marshalling the shipment

D. Marshalling the shipment In marshalling, goods making up a single order are brought together and checked for omissions or errors. Order records are updated. Picking is the process of selecting items from storage and bringing them to a marshalling area. Dispatching goods to storage is the process of sorting goods upon receipt and placing them in a storage area. Dispatching the shipment is the process of order packing, preparing shipping documents, and loading items on the correct transport vehicles.

Which of the following criteria would be essential for the use of rough-cut capacity planning in an engineer-to-order company? A. Successful implementation of a material requirements planning (MRP) system B. Accurate work-in-process inventory and finished goods C. Education of customers on capacity management concepts D. Method of associating planned production with the amount of capacity required

D. Method of associating planned production with the amount of capacity required Managers and planners (not customers) have to be knowledgeable about capacity management and the use of computerized systems to link planned production and capacity availability. An MRP system is not required to perform this level of capacity management. In an engineer-to-order company, production is usually for unique, one-of-a kind products. This means that work-in-process inventories will be small.

Which is a characteristic of demand? A. Maturity B. Mean absolute deviation C. Standard deviation D. Seasonal variation

D. Seasonal variation Seasonal variation is the only demand characteristic shown. Other major characteristics are trend, random variation, and cyclical variation. The other answers describe some of the tools used in analyzing historical demand data and measuring forecast error.

When a customer orders a laptop online and selects from a variety of different options, such as RAM, hard disk space, color, etc., an order entry system will select the right options from what source to produce a bill of material (BOM) for this product? A. Product family B. Inventory list C. Design template D. Modular BOM

D. Modular BOM An order entry system for an assemble to order (ATO) product will generate a BOM for this custom configuration of options from the modular BOM options. An inventory list would not limit order entry to the options that are valid for the product and design templates are not used in the ATO environment.

A company monitors production by knowing what is in process and what the queue time is. Average run time is one hour, and queue times are kept fairly uniform by the planning and scheduling process. Jobs are produced in first in, first out sequence. Which of the following information is easiest for monitoring purposes in this scenario? A. Sequence of jobs based on input/output control B. Number of jobs in queue, running and waiting C. Priority of jobs based on required date D. Number of days a job is in queue

D. Number of days a job is in queue Knowing the number of days a job is in queue is essentially the monitoring required by the company.

Which formula is correct? A. Safety Stock = Order Point + Order Quantity B. Economic Order Quantity = (2AS/ic) C. Average Inventory = (Quantity + Safety Stock)/2 D. Order Point = Demand During the Lead Time + Safety Stock

D. Order Point = Demand During the Lead Time + Safety Stock Order Point (OP) = Demand During the Lead Time (DDLT) + Safety Stock (SS). "Average Inventory = (Quantity + Safety Stock)/2" is incorrect because average inventory is order quantity Q/2 + SS, not (Q + SS)/2. "Economic Order Quantity = (2AS/ic)" is incorrect because it omits the square root of the equation shown. Meanwhile, the formula "Safety Stock = Order Point + Order Quantity" is simply incorrect.

What is an accurate description of order winning and order qualifying factors? A. There can be only one order winning factor involved in a customer's decision to purchase a product or service. B. Performance must be above a certain level in at least three performance objective categories for an order winning threshold to be attained. C. Quality must always be one of the order winning factors of performance. D. Order qualifying factors represent minimal requirements, while order winning factors exceed expectations.

D. Order qualifying factors represent minimal requirements, while order winning factors exceed expectations. Order qualifying factors represent minimal requirements, while order winning factors exceed expectations. The other answer choices define the terms too precisely. For example, quality may or may not be the order winning factor, and the number of factors may vary.

What should a company look at when process flexibility becomes a key order winner? A. Keeping manufacturing in house to provide shorter customer delivery lead times B. A dual strategy of outsourcing and insourcing benefiting from scheduling simplicity C. Outsourcing to many smaller suppliers in hopes that one will have excess capacity when needed D. Outsourcing to a larger supplier with wider capabilities

D. Outsourcing to a larger supplier with wider capabilities If flexibility is a key order winner, the company should consider outsourcing to a larger supplier with wider capabilities.

Which of the following tools enables a planner to perform bottom-up replanning? A. Backorder report B. Firm planned orders C. Demand time fence D. Pegging

D. Pegging Pegging allows the buyer to determine what the source of the demand is and what the impact would be if a change is made.

An organization is pursuing a product differentiation strategy. Which is a production environment that could accommodate this strategy while also minimizing related inventories of components and/or finished goods? A. Cellular layout B. Decoupling C. Make-to-stock D. Postponement

D. Postponement Product differentiation as a strategy seeks to create unique product characteristics or selling points that differ from those of competitors. Postponement, a subtype of an assemble-to-order production environment, is a product design or supply chain strategy that deliberately delays final differentiation (assembly, production, packaging, tagging, etc.) until the latest possible time in the process. This shifts product differentiation closer to the consumer to reduce the anticipatory risk, eliminating excess inventory in the form of finished goods in the supply chain. Note that neither decoupling nor cellular layouts are terms that refer to a production environment.

The traditional understanding of managing risk typically identifies which of the following strategic risk responses? A. Find, fix, repair B. Proactive, reactive, semi-reactive C. Simulation, discovery, mitigation D. Prevention, mitigation, recovery

D. Prevention, mitigation, recovery A simple structure for controlling risk uses three strategic approaches: prevention, mitigation, and recovery.

Which of the following factors is likely to become LEAST important for a product that has moved from regular production to spare parts supply? A. Quality B. Customer service C. Delivery reliability D. Price

D. Price Once a product has moved from regular production to intermittent spare parts supply, customer service, delivery reliability, and quality must remain high. Service parts are usually critical to the customer and must be available at all times with perfect quality. Since the item is no longer considered a "product," its price can become elastic and can be based on what the market will bear. Price, therefore, declines as an important factor, as customers will pay a premium when equipment has downtime.

What function may be directly involved in developing and maintaining customer-supplier relationships? A. Business continuity management B. Finance C. Vendor managed inventory D. Product engineering

D. Product engineering Customer-supplier relationships involve the participation of purchasing management (which performs sourcing and purchase order management), product engineering (which defines product specifications and works with suppliers on product management), and quality management (which works with suppliers and internal purchase order inspection to ensure the highest-product quality at purchase order receipt).

An overload condition has been identified in the current period in spite of having a well-balanced final assembly schedule and material plan. What is the first action to be taken by production? A. Delay orders that caused the overload. B. Determine the reason for the overload. C. Adjust capacity planning parameters. D. Schedule overtime to get back on schedule.

D. Schedule overtime to get back on schedule. The immediate need is to resolve the existing overload using overtime.

True or False- MRP is affected by the quantity and timing of both demand and supply, so replanning is necessary if these factors change.

True

During the production strategy review portion of developing the supply plan, which would be a good reason to consider changing from chase production to a hybrid strategy of level production plus some outsourcing? A. The production performance review indicates that flexibility metrics for production are higher than targeted. B. The review of production rates finds that there is not sufficient aggregate capacity to meet the production plan's load requirements. C. The financial plan review indicates that the cost of maintaining excess capacity is low. D. Product family load profiles are becoming smoother, but competitor failures sometimes cause a spike in demand.

D. Product family load profiles are becoming smoother, but competitor failures sometimes cause a spike in demand. The production and inventory planning process that results in a supply plan starts with corporate strategy and includes a review of production strategy, then financial plans, then production rates, and then production performance. During the production strategy review phase, the inputs to that strategy are assessed for changes. The correct answer is an example of such changes. The other answer choices are from later in the process.

Market feedback suggests that a product is entering the decline stage of its life cycle. The vice president of manufacturing suggests a reassessment of the current make-to-stock supply strategy to learn if it is mismatched with current market requirements. What is this assessment an example of? A. Demand time fence B. Demand planning C. Product positioning D. Product profiling

D. Product profiling Product profiling uses a graphical device to ascertain the level of fit between a manufacturing process and the order winning criteria of its products.

What kind of layout would give Phillip Morris the level of cigarette production volume that it needs A. Fixed B. Functional C. Cellular D. Product-based

D. Product-based

What term is used for the sales and operations planning process of dividing products or services into families, brands, and subfamilies for various planning levels? A. Product load profile B. Product configuration C. Product positioning D. Product/service hierarchy

D. Product/service hierarchy A product/service hierarchy is an approach to dividing products or services into families, brands, and subfamilies for various planning levels.

Manufacturing is responsible for executing which of the plans that come from the sales and operations planning meeting? A. Capacity B. Sales C. Backlog D. Production

D. Production Manufacturing is responsible for the production plan.

Which of the following planning tools would most likely drive the process in a manufacturing environment using a push system? A. Inventory management based on distribution requirements planning (DRP) B. Lean-based production methods C. Reorder point control D. Production activity control based on material requirements planning (MRP)

D. Production activity control based on material requirements planning (MRP) In a production environment, MRP is used to identify production and then to push production orders to the plant floor and to continuously reschedule them until completion.

Which are primary activities in manufacturing planning and control? A. Sales support, demand management, and purchasing. B. Sales support and cost information. C. Inventory management and cost information. D. Production planning and inventory management.

D. Production planning and inventory management MPC is a method of determining how to prioritize the use of available resources to best satisfy customer demand. These resources include materials and available equipment and worker capacity. Inventory management and cost information is incorrect because cost information is not an activity (though it is an input to manufacturing planning and control). Sales support is not a major activity of MPC, though sales does provide important data used in MPC.

In a push system, products are released and pushed through production based on which of the following? A. Capacity requirements B. Material availability C. Kanban D. Production schedule

D. Production schedule A push system releases and pushes products, or work orders, through production or distribution based on a schedule. The other answers are incorrect because a kanban is an authorization to start production in a lean pull system; and capacity requirements and material availability are two of many factors that affect the schedule.

Using the total quality management definition of a customer, who is the production control department's most immediate customer? A. End users of products B. Central supply C. Shipping D. Production shop floor

D. Production shop floor Total quality management identifies both internal and external customers, and internal customers are the people or departments who use one's outputs as their inputs. In this example, production control's most immediate customer is production itself.

What factors are considered in determining industry attractiveness? A. Supplier collaboration and relative strength of seller versus rivals B. Supplier collaboration and cumulative competitive pressure C. Profitability and supplier collaboration D. Profitability and cumulative competitive pressure

D. Profitability and cumulative competitive pressure Profitability and cumulative competitive pressure are factors considered when determining an industry's attractiveness.

A company produces products that are unique and highly customized. Which of the following methods for costing should be used for each product they produce? A. Standard costing B. Direct costing C. Activity-based costing D. Project costing

D. Project costing The company's products are unique and highly customized. As such, the production environment is engineer-to-order and products are produced through projects. In this environment, project costing is the appropriate model.

Which of the four Ps influences how physical distribution planning and execution addresses product volume, location of demand, and demand fluctuations? A. Place B. Price C. Product D. Promotion

D. Promotion Promotion influences product volume, location of demand, and demand fluctuations. Product is incorrect because it is associated with such issues as order-winning and order-qualifying characteristics. Price is incorrect because it is associated with such issues as inventory costs. Place is incorrect because it is associated with such issues as market geography and distribution or sales channels.

The actual cost of an order can be different from its standard cost because of which of the following factors? A. Maintenance B. Tooling C. Queue D. Scrap

D. Scrap The reporting of scrap from a production order will increase the actual material, labor, and overhead, as additional inventory and labor will have to be expended to build scrap replacement products.

Which of the following is defined as the process of converting the MPS into the load for critical resources? A. Multilevel master scheduling B. ATP C. Resource capacity planning D. RCCP

D. RCCP Rough-cut capacity planning (RCCP) is defined as the process of converting the MPS into capacity needs for critical resources: workforce, machinery, warehouse space, vendors' capabilities, and, in some cases, money. Essentially, it is a validity check for the MPS. ATP is incorrect, because it is the uncommitted portion of a company's inventory and planned production, maintained in the MPS to support customer order promising. Resource capacity planning is incorrect, because it is used to determine the load placed on resources by product families in the production plan. Multilevel master scheduling is incorrect, because it is a master scheduling technique that enables any level in an end item's BOM to be master-scheduled.

Which inventory system? 1000s of items, boxes of all sizes and weights, widely varying quantities, forever changing mix. A. Fixed location B. Manual storage/retrieval C. Zones D. Random location

D. Random location

Which is a positive benefit that can be realized by implementing a new raw material ordering system that reduces the total lead time of in-transit inventory by a full day? A. Anticipation inventory levels at the plant can be reduced. B. The plant should experience lower overall setup costs and produce higher numbers of units overall. C. Fewer raw material transportation vehicles will need to be used. D. Raw material inventory levels held at the plant for decoupling purposes can be reduced.

D. Raw material inventory levels held at the plant for decoupling purposes can be reduced. Inventory can decouple supply from demand at the supply chain level by, for example, allowing raw materials to be pulled from inventory rather than relying on order lead times or maintaining inventories of finished goods rather than producing based on actual orders. If the lead time for raw materials can be reduced by a full day, up to one day's worth of raw materials inventory held for decoupling purposes can be eliminated with no impact on production.

An organization converting from a process-focused facility to work cells will most likely experience which of the following? A. Increased in-process inventory B. Reduced excess capacity C. A less focused, unstable workforce D. Reduced manufacturing lead times

D. Reduced manufacturing lead times Building products in smaller lot sizes will reduce process lead times.

Focused factory operations include which of the following likely results? A. More expensive quality B. Higher average inventory C. More flexible operations D. Reduced material handling

D. Reduced material handling Improved quality and reduced inventory and material handling are valid benefits of a focused factory.

Considering the service desired and the relative cost of the items, which would most likely be shipped by road for a fairly long line haul portion of a trip? A. Regular shipments of grain direct to a mill. B. Emergency maintenance parts direct to an auto plant. C. Regular shipments of iron ore direct to a foundry. D. Regular shipment of cut flowers direct to a florist shop.

D. Regular shipment of cut flowers direct to a florist shop. Regularly shipments of cut flowers direct to a florist shop would be appropriate to ship by truck because road transportation offers door-to-door service and fast service. Regular shipments of iron or to a foundry and grain to a mill would be better shipped by rail due to their high weight and bulk. Emergency maintenance parts would be better shipped by air for a faster response, depending on distance.

Which of the following activities is a reportable occurrence by production? A. Preventive maintenance B. New equipment installation C. Downtime for tooling change D. Repair of existing equipment

D. Repair of existing equipment Repair of existing equipment affects capacity and needs to be reported.

Which of the following approaches can streamline the sales and operations planning review process? A. Add additional months to the rolling plan only when necessary. B. Generate reports that show full detail and associated aggregations. C. Delegate the reviews among the demand team. D. Report only out-of-tolerance conditions, with further detail available.

D. Report only out-of-tolerance conditions, with further detail available. It is most important to identify and assess out-of-tolerance conditions.

Which of the following is the best use of a material requirements planning (MRP) simulation capability? A. Evaluating the number of standard deviations to protect via safety stock B. Determining the effect of the master production schedule on a bottleneck C. Determining the optimal order quantity required to maximize inventory turns D. Rescheduling orders to resolve a key work center overload problem

D. Rescheduling orders to resolve a key work center overload problem MRP modeling is for the purpose of establishing the best schedule possible within the given constraints of demand and supply.

Which of the following terms refers to a systematic approach to identifying, analyzing, and addressing an organization's exposure to uncertainty within the supply chain? A. Buffer management B. Safety factor calculation C. Producer's risk D. Risk management

D. Risk management Risk management is a systematic approach to identifying, analyzing, and addressing an organization's exposure to uncertainty within the supply chain.

What is the term for the process of validating the master production schedule against available demonstrated capacity? A. Sales and operations planning B. Resource requirements planning C. Capacity requirements planning D. Rough-cut capacity planning

D. Rough-cut capacity planning Rough-cut capacity planning is the process of converting the master production schedule into requirements for key resources, often including labor, machinery, warehouse space, suppliers' capabilities, and in some cases money.

Directing production through the proper sequence of operations and work centers requires which data A. BOM B. Item master information C. MRP D. Routing

D. Routing

A product is subject to only a distributor sales channel. Which of the following is used to identify the necessity of providing feedback to distributors regarding the feasibility of meeting their demand as forecasted for a seasonal product? A. Customer relationship management B. Master scheduling of end items C. Aggregate forecast of all distributors D. Sales and operations planning

D. Sales and operations planning Sales and operations planning provides a snapshot into how well the sales and operations plans are progressing.

True or False- Manufacturing Costs include Direct Materials Direct Labor Overhead

True

Which example of a key control to prevent inventory loss would be most prudent at a manufacturing location that uses precious metals in the manufacturing process? A. Annual physical inventory B. Blockchain C. Monitoring employee financials D. Segregation of duties

D. Segregation of duties Segregation of duties, in which the same personnel who authorize material moves cannot execute them, may be best suited to help prevent theft from a specific location. Annual physical inventory may not be sufficient; a periodic or continuous inventory approach may be better suited to this situation. Blockchain may be applicable, but it may be better suited to tracking inventory losses as a product moves through the supply chain and may not be as feasible in a single manufacturing location.

A company seeks to maximize the life span and utilization of all products delivered. From this perspective, which of the following would an elevator company do? A. Sell the elevators and provide free service. B. Sell the elevators at a breakeven or a loss and manage service as its key revenue generator. C. Sell the elevators and service contracts. D. Sell the elevators as a service, maintaining ownership itself.

D. Sell the elevators as a service, maintaining ownership itself. The concept of natural capitalism divides the world's resources into four basic areas: natural, human, manufactured, and financial capital. Under this philosophy, an elevator company would see the elevator as a service, maintaining ownership itself.

What is the most accurate description of the make-or-buy decision? A. Current capacity should be excluded from the analysis. B. The decision should not consider workforce stability. C. This type of decision should be revisited often. D. Short-term needs should be the primary consideration.

D. Short-term needs should be the primary consideration. Make-or-buy decisions need to be re-evaluated as conditions that led to a particular decision change. Long-term costs, workforce stability, and capacity are all considerations, but not the primary.

Why must top management coordinate with each other? A. So that creative groups are physically separated from the rules-based groups and will not disrupt them B. So that rules-based groups are prevented from spending much time with creative groups C. So that key performance indicators at the associate level are common D. So that diverse groups such as creative teams and rules-based teams operate with a common purpose

D. So that diverse groups such as creative teams and rules-based teams operate with a common purpose Formal continuous improvement methods may be too rigid when applied to creative organizations like research and development. So two styles of management may coexist: one for creative groups and another for everyone else, as is described in Kotter's Accelerate. Therefore, senior managers must coordinate their efforts so that separate and diversely managed units operate with a common purpose.

What should be included in the pre-S&OP meeting? A. Determination of reasons for quality problems B. Definition of product families to be used for planning C. Discussion of customer service improvement plans D. Solution for imbalances of supply and demand

D. Solution for imbalances of supply and demand In the pre-S&OP meeting, decisions on demand and supply balance are made, problems are resolved, issues are identified, and alternatives are developed. Findings are then sent to the executive S&OP group.

Long-term agreements with suppliers may include which of the following types of special arrangements? A. Additional complexities to paperwork systems B. Clauses preventing either party from early contract exit C. A supplier's certification of the buyer's use of the product D. Specially designed returnable containers

D. Specially designed returnable containers A long-range supplier contracts could specify collaborative tools such as reusable bins. Contracts should have exit clauses. Paperwork should be simplified. Supplier certification certifies that the supplier meets certain predetermined standards.

Which of the following actions should a dispatcher perform in an environment where there is excess capacity in order to meet a shortage at a downstream operation? A. Expediting B. Paying overtime C. Paying a premium D. Splitting the lot

D. Splitting the lot The dispatcher should split the lot so the required quantity is done in less time.

Exponential smoothing is generally used effectively under which of the following conditions? A. Seasonal demand B. Long-range forecasting C. Low demand D. Stable demand

D. Stable demand Exponential smoothing will detect trends but will lag actual demand. It works well with stable items and for short-range forecasting.

A company that makes products with multiple options is experiencing a temporary increase in sales. Which of the following inventories should be increased? A. Finished goods B. Raw materials C. Work in process D. Subassemblies

D. Subassemblies Increasing the subassemblies will allow flexibility to cover demand for various options and maintain lead times.

Which of the following actions best reduces work-in-process (WIP) inventory on the shop floor? A. Elevate the constraint to the system. B. Identify the constraint to the system. C. Decide how to exploit the constraint to the system. D. Subordinate all else to the constraint to the system.

D. Subordinate all else to the constraint to the system. Once a process constraint has been identified, WIP is reduced by making all loads equal to the allowable capacity found at the constrained process. Any load released to the manufacturing floor that is greater than the constrained process capacity will simply end up as excess load.

S&OP fundamentals include which of the following? A. Disaggregating volume into a master schedule and product family planning B. Product family planning and mix planning C. Supply and demand planning and mix planning D. Supply and demand planning and product family planning

D. Supply and demand planning and product family planning Supply and demand planning and product family planning are fundamental to S&OP. Disaggregating volume into a master schedule and mix planning are fundamental to master scheduling, not S&OP.

When generating the MPS, a lot-sized production is assigned A. in every period of the schedule B. based on the item's lead time C. in equal quantities across all periods D. in any period where the PAB is negative

D. in any period where the PAB is negative

The resource plan is typically stated in all of the following terms except: A. labor hours. B. pounds or kilograms. C. machine hours. D. item numbers.

D. item numbers. Resource plans deal with the planning and managing of plant capacities. Pounds/kilograms and hours are important capacity measurements. Item numbers are not relevant to capacity units of measure.

An organization does not engage in sales and operations planning (S&OP) at present. The organization has clear policies regarding aggregate inventory levels, but inventory tends to be too high toward the end of each budget year. What can an inventory management professional say if management is discussing whether or not to start using an S&OP process at the organization? A. The S&OP process reduces excess inventory levels relentlessly by identifying and removing waste in all of its forms. B. The S&OP process would eliminate the need to have aggregate inventory policies because it matches supply with demand. C. The S&OP process would move inventory targets to an 18-month basis for better stability. D. The S&OP process would promote monthly aggregate inventory corrections.

D. The S&OP process would promote monthly aggregate inventory corrections. The sales and operations planning process must reconcile all supply, demand, and new product plans at both the detail and aggregate levels and tie to the business plan. S&OP improves inventory planning by reviewing and adjusting aggregate inventory levels toward their targeted level at least monthly.

If a company's design cycle is shorter than that of its competitors, which of the following statements will most likely be true? A. The forecasting horizon will be shorter. B. The product's life cycle will be longer. C. The competitor's product will have more features. D. The company's products will reach the market sooner.

D. The company's products will reach the market sooner. A company that gets products to market faster than competitors has a strong competitive advantage. This can be accomplished through activities such as participative design/engineering.

Consider the metaphor of a funnel with a certain amount of "product" in the funneling cone leading to a choke point. Which part of this metaphor would correspond to the capacity available? A. The rate at which "product" is added to the funneling cone. B. The quantity of "product" in the funneling cone. C. The internal area of the funneling cone. D. The diameter of the choke point.

D. The diameter of the choke point. In the funnel metaphor, the capacity available is the rate at which the work center can produce output, so this would correspond to the diameter of the choke point. A wider diameter would let more "product" through faster and thus there would be a higher rate of output per time period.

The marketing director is complaining that even though material availability is not a problem, backorders are rising. The operations manager says that many of the workers who were laid off months ago are unavailable and the few new workers hired so far face a learning curve. Which of the following could explain why this situation is occurring? A. The organization has poor quality performance. B. The organization has failed to invest in employee training programs. C. The organization has only a single distribution warehouse. D. The organization is using a chase strategy.

D. The organization is using a chase strategy. The chase production strategy is a production planning method that maintains a stable inventory level while varying production to meet demand. In this situation, demand has increased again, and, while materials are available, scaling up the production workforce is proving difficult. While employee training may also be needed, the cycle of layoffs and hiring is more to blame for this issue.

A purchased component has a net requirement in period 4. It has a 6-period lead time and no scheduled receipts. Which of the following actions will be the result of material requirements planning (MRP)? A. The planned order is overdue and the planner will need to delay the master production schedule. B. The planned order release in period 1 is rescheduled for receipt in period 6. C. The planned order release is scheduled for period 2 and is overdue for release. D. The planned order release is scheduled for period 1 and is due in period 4.

D. The planned order release is scheduled for period 1 and is due in period 4. MRP will assume that the plan can be executed and will provide an action to release the overdue planned order. A second action message may be given to expedite.

A company has identified a cost-based competitive advantage using value chain analysis and benchmarking. Which of the following is true? A. Every effort should be made to keep this advantage secret. B. This activity must be exploited by designing it into all new products. C. This advantage should be used as a superior differentiator in all future marketing campaigns. D. The value chain activity may be a candidate for continuous cost reduction efforts.

D. The value chain activity may be a candidate for continuous cost reduction efforts. Achieving a cost-based competitive advantage requires a determined management efforts to be cost-efficient in performing these tasks. The goal must be continuous cost reduction.

The production planning process uses which of the following time fences? A. Demand time fence B. Planning time fence C. Production planning time fence D. There are no time fences in production planning.

D. There are no time fences in production planning. The production plan uses the planning horizon of the sales and operations plan but no time fences.

A company has made process improvements that have reduced shift lengths from ten to eight hours while maintaining production rates and material delivery schedules. What is the general effect on the level of raw material? A. It is increased by 20%. B. It is reduced by 20%. C. It is reduced by 25%. D. There is no change.

D. There is no change. The daily production rate and material delivery schedules are the same, so levels will not change.

Which of the following is a tool for reducing material requirements planning (MRP) system nervousness? A. Dynamic lot sizing B. Scheduled downtime C. Pull signals D. Time fences

D. Time fences Nervousness in this context refers to instability when changes in higher-level records cause significant changes in lower-level schedules or orders. Devices such as time fences, which restrict changes, introduce stability into the master schedule.

Many factors affect P & L but which factor can have the greatest positive impact on the size and shape of the PLC graph A. Selling Price B. Production efficiency C. Promotions D. Time to market

D. Time to market

A company is debating whether to add production capacity or outsource the additional volume. The process they must go through is called a: A. capital expenditure request. B. total cost decision. C. core competency evaluation. D. make-or buy decision.

D. make-or buy decision. A make-or buy decision is the act of deciding whether to produce an item internally or buy it from an outside supplier. Factors to consider in the decision include costs, capacity availability, proprietary and/or specialized knowledge, quality considerations, skill requirements, volume, and timing.

True or False- Order Point works when a demand is relatively stable with only random variation and lead time is known and reliable

True

Neither an organization nor its suppliers have much public awareness or exposure due to the nature of the industry. What is a reason this organization may want to set waste hierarchy policies for its suppliers? A. To avoid being held liable for suppliers' waste hierarchy choices B. To avoid being held responsible for suppliers' sustainability choices C. To build public awareness for the industry and the organization D. To drive unnecessary costs out of the supply chain

D. To drive unnecessary costs out of the supply chain Waste hierarchy policies help organizations and their suppliers be more efficient and drive unnecessary costs out of the supply chain. While avoiding being held responsible for a supplier's sustainability choices is also a good answer, it is less important to this organization since it has no public awareness and likely does not need any to continue operating due to the nature of the industry. A buyer cannot be held legally liable for the actions of a separate legal entity.

Which of the following best expresses the intent of forecasting? A. To give managers accurate data projecting material requirements B. To give shop floor workers ranges and variations within which production must take place C. To give production supervisors direct input into the distribution requirements system D. To give managers information on which to base decisions

D. To give managers information on which to base decisions Forecasting gives managers information they can use to base their decisions on when lead times and other production complexities require production to precede actual orders. Giving managers accurate data projecting material requirements is incorrect because forecasts are seen as an estimate or approximation rather than as accurate. Giving shop floor workers ranges and variations is incorrect because forecasts generally are not for the direct use of shop floor workers and do not dictate production demands. Giving production supervisors direct input is incorrect because production supervisors have no involvement with the distribution system.

Which of the following is a reason an organization may purchase hedge inventory? A. To claim extended supplier warranties B. To capitalize on quantity discounts C. To protect against surge demand D. To lock in low market prices.

D. To lock in low market prices Hedge inventory planning involves speculation related to an event that may or may not happen, such as a price increase, labor strike, etc. Companies will watch for commodities traded in open markets to drop in price. Once prices fall, the company will lock in low market prices and buy enough inventory to satisfy their target customer service level.

Material is staged for which of the following reasons? A. To offset poor storeroom response B. To use warehouse space efficiently C. To balance the workload in the storeroom D. To minimize the impact of inventory errors

D. To minimize the impact of inventory errors Staging inventory before put-away, use, or shipment enables inventory control to validate balance records.

What is the objective of sales and operations planning? A. To hold sales accountable for the forecast month to month B. To provide a means for the master scheduler to validate the schedule C. To integrate the master schedule with the business plan D. To provide an integrated plan for sales and manufacturing

D. To provide an integrated plan for sales and manufacturing Even though S&OP may accomplish some of the other areas indirectly, its primary objective is to tie the sales, inventory, and production plans into one plan.

Newspaper and fresh food industries generally follow which type of capacity management strategy A. Lead B. Lag C. Fixed D. Tracking

D. Tracking

Which of the following is a valuable forecast evaluation activity? A. Using standard hours to track variation B. Involvement of users in the process of developing forecast tools C. Balancing bias in a forecast with the opposite bias D. Tracking actual demand against projected demand

D. Tracking actual demand against projected demand Tracking actual demand against projected demand is the basic process of evaluating forecast performance. Involvement of users might ensure that they can effectively use the data from a forecasting system, but it is not an evaluation activity.

Which is the most practical way to reduce the bullwhip effect? A. Improve forecasting. B. Apply disintermediation. C. Use forward integration. D. Use point-of-sale information.

D. Use point-of-sale information. Improving the forecast is not as effective as having real-time information. Forward integration and disintermediation will provide better visibility to downstream demand but are not everyday solutions to the bullwhip effect.

Which of the following conditions is typically necessary for a successful pull production system implementation? A. There are only assembly operations. B. Products are made to inventory. C. Specialized machinery and skilled operators are used. D. Variation in demand is low.

D. Variation in demand is low. In a pull system, items are produced only as demanded for use or to replace those taken for use, so pull systems are reactive and do not "look ahead." Therefore, the pull system works best when products are stable and predictable.

What form of transportation is most useful for moving low-value, bulky cargo over long distances? A. Pipelines B. Truck C. Air D. Water

D. Water The main advantage of water transport is cost. It is most useful for moving low-value bulky cargo over relatively long distances.

What is vital to periodically evaluate regarding a breakthrough strategy designed to significantly increase inventory turnover? A. Whether specific goals should be set if progress on the strategy is starting to slow B. Whether inventory turnover is becoming too high and needs to be lengthened C. Whether enough pressure is being placed on functional areas that could further increase inventory turnover D. Whether the change has introduced unintended consequences such as to quality

D. Whether the change has introduced unintended consequences such as to quality Strategies and tactics need to be monitored to ensure that unexpected negative results have not been introduced. Increasing inventory turnover is a worthy goal, but it could promote taking shortcuts that harm quality and result in customer dissatisfaction.

Which factor has the least impact on the choice of process technology? A. Scale and scalability B. Level of automation required C. Volume and variety of products D. Worker skills

D. Worker skills Worker skills might have some effect on the choice but are not as important as the other factors. Of the choices offered, volume and variety are perhaps the most important factors. For example, very high volumes usually require higher levels of automation, and decisions about scale reflect performance objectives choices with respect to flexibility and cost—as in whether to have large-scale centralized operations or small-scale decentralized operations.

Which is an example of design for sustainability? A. Developing a subcomponent that can be attached using the same standard nuts and bolts used in the rest of the product B. Developing the next new solar panel so it can be released as the current model is starting to slow in sales. C. Deconstructing a competitor's new LED lighting fixture to determine how to build one just like it as a "me too" product D. Working with supply chain members to ensure that agricultural practices eliminate toxic chemicals

D. Working with supply chain members to ensure that agricultural practices eliminate toxic chemicals Nike is working to eliminate toxic chemicals from its supply chain, and this is an example of design for sustainability. While the other answers may have something to do with sustainability, designing for standard nuts and bolts would be better described as design for manufacturability. Deconstructing an LED lighting fixture is an example of reverse engineering. Developing a follow-on product for a product that is in decline is an example of product life cycle planning.

Early customer involvement in the design process can result in: A. lower training costs. B. improved manufacturability. C. key performance indicators. D. a longer product life cycle.

D. a longer product life cycle. Ensuring that products are aligned with customers' requirements can lengthen the life cycle of the product.

If an annual contract is in place, the supplier is notified of the delivery amount required by means of: A. a blanket order. B. an advance shipment notification. C. a purchase order. D. a release.

D. a release. Monthly, weekly, or daily quantities needed are communicated via releases, which may be in the form of a kanban.

Expediting can be a positive response to business growth and: A. a function that manufacturing companies should make permanent. B. a good way to augment ever-changing schedules that the enterprise resources planning system may have difficulty managing. C. a solid replacement for a push shop floor control system. D. a source of operational risk when operations is constantly stressed to meet ever-growing demand.

D. a source of operational risk when operations is constantly stressed to meet ever-growing demand. Business growth, although seemingly positive, becomes a risk when operations has to stretch or be reconfigured to deal with larger volumes, often leading to a loss of focus.

Current trends are essentially forcing companies that use outsourcing to ensure that all suppliers conform to: A. USMCA regulations. B. EDI (electronic data interchange) protocols. C. Electronic Product Code (EPC) standards. D. appropriate corporate social responsibility practices.

D. appropriate corporate social responsibility practices. When a company chooses to outsource any part of its operations, it must consider quality, speed, dependability, flexibility, and cost and must ensure that suppliers conform to appropriate corporate social responsibility (CSR) practices.

Customer relationship management supports total quality management because: A. each philosophy focuses on the strategic supply/demand relationship. B. between the two, all external and internal customers are included. C. they are both part of the manufacturing/customer supply chain. D. both philosophies are focused on customer satisfaction.

D. both philosophies are focused on customer satisfaction. Both customer relationship management and total quality management are customer-satisfaction-oriented.

A work cell has six operations. The information required to determine the capacity of the cell includes: A. setup. B. number of operators. C. capacity of the fastest operation. D. capacity of the slowest operation.

D. capacity of the slowest operation. The slowest operation in the work cell would be the constraint.

Allowances for scrap/yield estimates in the manufacture of a component require overplanning of: A. parent planned releases. B. parent safety stock. C. component planned receipts. D. component planned releases.

D. component planned releases. Since the scrap/yield occurs on the component level, bill-of-material issues will have to take this factor into account and over-issue component quantities.

The cost associated with providing defective or substandard products or services is known as the A. rework cost. B. cost of complaints. C. scrap rate. D. cost of poor quality.

D. cost of poor quality. The cost of poor quality is the cost associated with providing poor-quality products or services.

Utilization of assets in distribution can be measured by the ratio of: A. floor space used to floor space available. B. rack space used to rack space available. C. vehicle space used to vehicle space available. D. cubic volume used to cubic volume available.

D. cubic volume used to cubic volume available. The utilization of assets in distribution can be measured by the ratio of space used to space available.

Distribution requirements planning (DRP) provides transportation planners with: A. locations for scheduling deliveries. B. backhauling information. C. load optimization information. D. current and future shipping requirements.

D. current and future shipping requirements. DRP can convert the schedule of planned orders into transportation data elements such as weight, volume, and number of pallets.

A work center that is designated to produce a single item or a limited number of similar items is said to have: A. a functional layout. B. horizontal integration. C. group technology. D. dedicated capacity.

D. dedicated capacity. A work center that has dedicated capacity is designated to produce a single item or a limited number of similar items.

A company has both functional/low variety products and innovative/high variety products. The distribution deployment should include: A. shipping products to customers in the same manner as the competition. B. shipping all products consistently. C. shipping products from regionally positioned distribution warehouses. D. different strategies for the two different types of products.

D. different strategies for the two different types of products. When deciding how to distribute product to customers, operations should deploy different strategies for functional/low variety products and innovative/high variety products.

The practice of reducing the forecast by actual customer orders is known as: A. order integration. B. demand commitment. C. available-to-promise. D. forecast consumption.

D. forecast consumption. Forecast consumption is the practice of reducing the forecast by actual customer orders.

The time when resources are not producing product is known as: A. slack time. B. queue time. C. wait time. D. idle time.

D. idle time. Idle time is the time when operators or resources are not producing product because of setup, maintenance, or lack of material, tooling, or scheduling.

Records for a part dimension over time show that it has a single mean and that values tend to cluster around the mean. This type of distribution is likely to be referred to as: A. z-bar. B. binomial. C. Pareto. D. normal.

D. normal. The APICS Dictionary describes a normal distribution as a "statistical distribution where most of the observations fall fairly close to one mean." In addition, the "deviation from the mean is as likely to be plus as it is to be minus. When graphed, the normal distribution takes the form of a bell-shaped curve."

In capacity requirements planning, scheduled receipts include: A. firm planned orders. B. purchase orders. C. planned orders. D. open production orders.

D. open production orders. Open orders appear as scheduled receipts, coming from material requirements planning.

Pulling together a cross-functional team to drive new product design is an example of A. project management. B. backward integration. C. good manufacturing practices (GMP). D. participative design/engineering.

D. participative design/engineering. Participative design/engineering is the simultaneous participation of all functional areas in the product design activity.

A company is aware that its processes are suboptimal. The company cannot initiate improvement until: A. a crisis of grand proportions reveals the true need for improvement. B. employee financial incentives are introduced. C. those employees who do not agree with the concept are fired. D. processes are documented and value streams are identified and shared with representatives from all departments.

D. processes are documented and value streams are identified and shared with representatives from all departments. When value streams are defined (presumably using value stream mapping) and a sharing of knowledge occurs simultaneously, with all groups together discussing the issues, the company will be able to identify the specific functional processes that deliver value to customers. Once these are identified and shared, the company will be able to improve these processes.

A production leveling strategy refers to: A. producing a minimum level and matching demand through subcontracting. B. matching demand somewhat and using inventory to meet demand. C. matching demand at any given time. D. producing to average levels.

D. producing to average levels. A level production method maintains a stable production rate while varying inventory levels to meet demand.

The use of U-lines promotes all of the following outcomes except: A. more effective utilization of labor. B. reduction of inventory between operations. C. visibility of problems related to quality. D. production in a batch at each machine.

D. production in a batch at each machine. Because it is in the shape of a U, a U-line allows workers to easily perform several nonsequential tasks without much walk time. This means that inventory is reduced because there are no queues before operations. Since workers are placed within a cell, production problems become very visible to operators, and labor is more efficiently utilized. A U-line will reduce queues and lead times because products can be produced in quantities as small as one unit rather than in a batch.

A manufacturing cell is characterized by: A. a process layout. B. specialization of labor. C. large production runs. D. production of similar items.

D. production of similar items. A manufacturing cell is defined as a manufacturing process that produces families of parts within a single line or cell of machines controlled by operators who work only within the line or cell.

The role of master scheduling is to create a statement of planned output from production and to: A. determine the feasibility of the operations plans. B. drive the distribution planning process. C. synchronize the plans with trading partners. D. provide information for coordinating production and sales.

D. provide information for coordinating production and sales. Master scheduling provides information on when products will be available in the future, enabling sales to promise delivery to customers.

In master scheduling, hedging refers to a practice that A. provides safety capacity to protect against work center overload only B. provides safety lead time, and provides safety capacity to protect against work center overload only C. provides safety inventory in case option mixes are different from those forecast, and provides safety inventory in case volume is greater than forecast only D. provides safety lead time, provides safety inventory in case option mixes are different from those forecast, and provides safety inventory in case volume is greater than forecast only

D. provides safety lead time, provides safety inventory in case option mixes are different from those forecast, and provides safety inventory in case volume is greater than forecast only Hedging is a quantity of stock to protect against uncertainty of demand; it has the dimensions of timing and amount. The hedge may be either a mix hedge or a volume hedge. The other answers are incorrect because hedging is not related to safety capacity; hedging does use safety lead times to protect against late deliveries but does not use safety capacity; and hedging does provide safety inventory in case volume or option mixes are greater than forecast, but it also provides safety lead times to protect against late deliveries.

A typical supplier performance evaluation would rate suppliers on their ability to meet delivery dates and: A. hidden renewal requirements. B. transportation needs. C. quote promises. D. quality specifications.

D. quality specifications. The supplier must be capable of producing items that meet quality specifications. Suppliers should be aware of the metrics that will be used to measure their performance.

Manufacturing lead times can be reduced by: A. ensuring that there is a backlog of work so that no machines are idle. B. increasing the number of operators at the work center. C. reducing input at bottleneck work centers. D. reducing planned queue times at work centers.

D. reducing planned queue times at work centers. Queue time makes up most of the lead time, so reducing what is planned will reduce the amount of time the product is in process.

Using a planning horizon shorter than the longest cumulative lead time may result in: A. increased throughput. B. a reduction of work in process. C. a decrease in inventory turns. D. replenishment orders released with short lead times.

D. replenishment orders released with short lead times. If the planning horizon does not extend far enough out for items with long lead times, the planned order release will fall in the current period, with a message that the release is past due.

A critical role that a shop floor supervisor can play in health, safety, and environment (HSE) compliance is ensuring ease of access to A. GRI sustainability reports. B. senior management for complaints. C. regulatory requirements. D. safety data sheets.

D. safety data sheets. Managing safe working conditions and practices is a primary HSE concern, and one of the most important responsibilities is to ensure ease of access to safety data sheets (SDS).

A repetitive pattern of demand from year to year with some periods considerably higher than others is known as: A. a trend. B. exponential smoothing. C. a qualitative forecast D. seasonality.

D. seasonality.

Changing the plant layout to a manufacturing cell arrangement to attain faster plant throughput requires: A. a pull system to be in place. B. extra capacity to be available. C. supplier delivery direct to the work center. D. sufficient demand for the product.

D. sufficient demand for the product. There must be sufficient production volume for the product family to justify pulling equipment together.

On-time supplier deliveries can be impacted most by: A. long lead times. B. purchase order quantities. C. dedicated transportation carriers. D. supplier capacity.

D. supplier capacity. Supplier capacity that is adequate for meeting the dates has the most impact on on-time deliveries.

The most common sequence for processing products in a supply chain is: A. retailer, supplier, manufacturer. B. manufacturer, customer, supplier. C. distributor, retailer, supplier. D. supplier, manufacturer, customer.

D. supplier, manufacturer, customer. Goods in a supply chain originate with the supplier, who provides the raw materials and components to the manufacturer. In turn, the manufacturer produces the end product, which is then sold to the customer.

A key design factor for today's manufacturers might include taking product back at the end of its life cycle to dispose of properly. This would be an example of: A. global warming. B. energy efficiency. C. anti-corruption. D. sustainability.

D. sustainability. Sustainability includes activities that provide present benefit without compromising the needs of future generations.

The strategic risk plan must have go/no-go guidelines for: A. customer contracts. B. make-or-buy decisions. C. the legal community. D. switching from problem mitigation to recovery.

D. switching from problem mitigation to recovery. The strategic risk plan asks, "At what point do we reach the limit of avoidance and mitigation strategies before we start to rely on recovery strategies?"

The final assembly schedule (FAS) takes place when: A. there are few options. B. the component level is fixed. C. the forecast is fixed. D. the customer's order is received.

D. the customer's order is received. The FAS is a schedule of end items to finish the product for specific customers' orders in a make- or assemble-to-order environment.

Strategic mid-level and front-line goals cannot be identified without first understanding: A. the needs of current and future employees. B. the targeted earnings per share. C. the overall marketing plan. D. the major components of the corporate/business strategy.

D. the major components of the corporate/business strategy. Mid-level and front-line managers cannot craft unified strategic moves without first understanding the company's long-term direction and the major components of the corporate/business strategy.

The primary objective of lean production is to reduce: A. labor costs. B. inventories. C. lead times. D. waste.

D. waste. Lean production aims to eliminate all non-value-added activities (waste) from product design and production and management of the supply chain and customers. Although the reduction of inventories, costs, and lead times may be goals within a lean production program, none of these are, by themselves, the primary objective of lean production.

Material requirements planning (MRP) may recalculate planned orders as a direct result of changes in: A. capacity. B. customer order dates. C. the planning horizon. D. work order receipt dates.

D. work order receipt dates. A change in a scheduled receipt may cause the replanning of a planned order.

What is the formula for forecast deviation. ​

Demand-Forecast

In the rivalry between competitive sellers, rivalry is stronger when demand is increasing- True or False

False

True or False- EOQ is a good way to determine order quantities, it balances ordering and carrying costs against current period demand

False

True or False- If RCCP determines the plan is not workable, the entire plan is sent back to the S & OP stage for refinement.

False

True or False- Safety stock and safety lead time are essentially the same and can be used interchangeably.

False

True or False- Safety stock should be carried in whatever level, needed to ensure 100% customer satisfaction and never lose a sale

False

True or False- Standard Hours includes operation run time but not machine/operation setup time

False

True or False- Strategic Forward and Backward Integration refers to new products that will be compatible with previous and future models

False

True or False- The planning horizon for S&OP should be about the same as the customer lead time

False

True or False- Using the FIFO method will ensure that the physically oldest inventory will be consumed first

False

True or False- When optimizing planning, a key point is to minimize either the ordering or carrying cost, whichever. is greater.

False

True or false, A manufacturing environment with assembly lines running 24/7/365 should use infinite loading for scheduling

False

True or false- Ideally, forecast deviations will be small, but will always be on the same side of the mean value

False

Which is a network based organization that developed the worlds most widely used sustainability reporting framework

GRI

True or False- Production Activity Control (PAC): input is MRP planned production orders; output is completed production orders

True

True or False- SCOR is a tool to help organizations compare there performance metrics against internal, industry, and best in class.

True

Continous Improvement should ( Select the proper option from each row pair) SCOPE - Concentrate on major initiatives SCOPE - Focus on small steps TIMING - Be underway all the time TIMING - Carefully schedule when people are idle FOCUS - Limit scope to profitability FOCUS - Target effectiveness, efficiency, & quality

SCOPE - Focus on small steps TIMING - Be underway all the time FOCUS - Target effectiveness, efficiency, & quality

What are the primary competitive priorities that drive the design of manufacturing and service processes, (select multiple) Speed Dependability Flexibility Market share Quality Cost

Speed Dependability Flexibility Quality Cost

What is the formula for Economic Order Quantity and when do you apply it

Square Root Of: √2 x Annual Demand x Order Cost Item Cost x Carrying Cost Application- Lot Sizing

What is the formula for Takt Time and what is the application

Standard Hours (or Minutes, or Seconds) Available Average Daily Demand in Units Application- Line Balancing; Capacity Planning

Which is not one of the 5 forces framework? Competitive rivalry Suppliers Buyers Technology Substitutes New entrants

Technology

The two Methods of qualitative forecasting are

The Delphi Method and Pyramid Forecasting

True or False- The TBL can be restated with P words Planet, Profit, people while maintaining its orginal scope and meaning

True

True or False- order winners and qualifiers and the location of the push pull frontier are two of the strongest manufacturing success factors

True

True or false Value chain analysis seeks to identify wastes/costs that can put an organization at a competitive disadvantage

True

Analyzing errors and correcting failures requires a commitment to continuous improvement and training personnel- True or False

True

In a periodic review system the timing is fixed and the quantity may vary- True or False

True

There's a difference between product grade and product quality. A low-grade product can have high quality and vice versa- True or False

True

True or False- Careless planning of inventory levels can have a negative impact on customer service and on production efficiency.

True

True or False- Customer Segmentation is an important factor for determining what we are going to sell and to whom?

True

True or False- Days of Supply= how long current inventory will last, at the current daily usage, if no aunts are made or received

True

True or False- For MTO, production scheduling is driven by an MPS that has to be updated as each customer order arrives

True

True or False- In DRP, the warehouse Planned Order Releases are added to become the Gross Requirements for central supply

True

A beer company deciding to manufacture its own bottles and cans is an example of Vertical Integration or Horizontal integration

Vertical integration

What is a hierarchical description of a project in which each lower level is more detailed

Work Breakdown Structure