Exam 2

In the area of inventory management, the purchasing professional should make explicit decisions regarding which of the following?

All of the above

______ is the direct computer transmission of orders and other transaction information.

EDI

In situations where order quantity discounts are available, the price per unit is constant regardless of the number of units ordered.

False

__________ inventory systems are distribution stocking points, such as warehouses or distributors.

Pure

In order to manage the various types of inventory, attributes of the items first must be analyzed in terms of all the following with one exception. Which one is the exception?

Quality

Safety stock is extra inventory held to protect against _______________ in demand or lead time.

Randomness

Buying firm managers should focus their _____ implementation efforts on suppliers that exhibit commitment to the buying firm. Although the buying firm's perceptions of the supplier's commitment are inherently biased, it represents the best proxy for the supplier's commitment.

SDP

One of the most crucial elements of the ____________ system is small lot sizes.

just in time

Toyota's manufacturing system used ________ to control their production system?

kanban cards

There are many benefits to using EDI. What is(are) the main benefit(s) for smaller companies?

keep a valued trading partner or customer

Which of the following practices are not considered essential for a comprehensive JIT implementation: Uniform production (also known as heijunka), Quick set times, Large lot sizes, Short lead times

large lot sizes

The __________ method is probably the most commonly used evaluation method.

linear averaging

Very often, resistance is encountered because the employees are required to change their _____________, or because they interpret the new system as being _____________ jobs

long standing work habits, a threat to their

For _______ to work it initially requires a strong commitment from _____ party/parties. Although these relationships can bear significant benefits for the customer and service provider, the road will not always be a smooth one.

long term relationships, both

According to Figure 6.4 on Pg. 127, the JIT and Traditional approach focuses on which of the following:

manufacturing lead time, transportation lead time

The purchasing manager must have a clear understanding of the role of inventory in the ________ management system.

materials

One problem with indirect purchasing is the tendency for employees to intermittently buy indirect items off contract. This practice is referred to as ________________.

maverick purchasing

In order to effectively cultivate the outsourcing relationship, the buying organization should be active in _______________ performance and ____________________.

monitoring and evaluating, solving problems

Supplier performance can be measured _______ accurately under the JIT purchasing approach compared to the traditional one.

more

Top management support has long been recognized as one of the _______ important ingredients necessary for the ___________ of any organizational change, and the same holds true for the ____________ of an EDI system.

most, introduction, introduction

The main arguments for __________ sourcing are competition and assured supply.

multiple

Much debate has taken place concerning the number of suppliers a firm should use. One side of the debate is the _____________ side. This involves the use of two or more suppliers. The other side of the debate is the ____________ policy, in which only one supplier is used to supply a particular part.

multiple-sources, single source

Unlike the barcode-based tracking system, a radio frequency identification system offers a __________________________________ .

no-contract, no-line-of-sight reading and tracking system

Buyers should be experts ___________ and in specific _____________.

on the industry, raw materials or component parts

Collaboration or collaborative relationships, usually found with the buying firm s strategic/tier-______ suppliers, include the ___________ component that is missing in a cooperative relationship.

one , team

____________ (statistical inventory control) techniques are based on the assumption of uniform requirements per unit time. If this assumption of the demands is unrealistic, these techniques can lead to inappropriate inventory decisions.

order point

The objective of an inventory system is the minimization of total operating costs. The unavoidable costs of operating pure inventory systems are ___________.

ordering cost, stockout cost, and holding cost

The ____________ establish (es) the performance measures, deliverables, due dates, and the expected supplier requirements. Performance measurement is the cornerstone of the buyer supplier relationship. Without measurement there is no control. Without control there can be no relationship to manage.

original contract

Failing to appreciate the employee concerns and proactively managing them will have an adverse impact on the ________ engagement.

outsourcing

While a contract is required to legally protect one's interests, an extensive strategic assessment and a true commitment to a cooperative relationship with the service provider are both necessary to realize expected outsourcing benefits. These insights offer valuable guidance to __________________ in terms of where and how ______________ should be applied.

outsourcing practitioners, sourcing resources

A complete transfer means that the ______________________________ and other assets are no longer maintained internally once the business process is outsourced.

people, facilities, equipment, technology

___________ suppliers are those that are important to the buying firm, but alternative suppliers could be found with some effort.

preferred

The major arguments in favor of _________ sourcing are that with the certainty of large volumes that the supplier can enjoy lower costs per unit and increased cooperation.

single

The purchasing function in an organization must assume the responsibility of calling on top management regularly for leadership and support.

true

Two disadvantages of RFID are: cost and companies needing to purchase thousands of readers to cover all over their facilities, warehouses, and stores.

true

__________ is needed to cover the demand during the replenishment lead time in case actual demand is greater than expected demand.

Safety stock

If suppliers fail to provide materials of _____________ on a regular basis, production slow-downs and stoppages will occur regularly.

adequate quality

According to Table 6.2 on pg 130, the expectations of JIT include some of the following

all of the above

Advantages of RFID include:

all of the above

Before implementing on RFID system, companies must ask themselves questions such as:

all of the above

The buying firm must be highly skilled at ____________________________.

all of the above

What are some risks associated when implementing and developing EDI?

all of the above

Outsourcing is also sometimes thought to be similar to subcontracting, joint venturing, and contract manufacturing. Contracting is the purchasing of goods or services to facilitate a business process owned by the buyer. The outsourcing point of departure from these concepts is the ________________ of all associated internal business process activities.

complete transfer

A ______________ relationship is almost required with transactional/tier-three suppliers and assumes that the buying firm can _____ prices to help keep its competitive edge in the market.

competitive, lower

Outsourcing can be defined as the ___________ transfer of a business process that has been traditionally ________________ internally to an independently owned external service provider.

complete, operated and managed

It has long been recognized in both the strategy and operations literature that the most effective _________ sourcing relationships involve considerable management time and coordination

external

The crafting of the business case is followed by implementing the ____________________ and, ultimately, managing the relationship with the provider.

external sourcing model

Anything that will immediately impact profits or bottleneck your operations is a good place to experiment with a new electronic procurement system.

false

Potential outsourcing suppliers must be qualified and available.

false

Presumably, sourcing externally induces higher levels of many overhead administrative functions such as payroll, benefits management, utility expenses, IT expenses, and so forth.

false

Single sourcing advocates may want to address the following issues regarding long-term impacts of single sourcing. In the long-run, if everyone reduces their supplier base, there will be fewer suppliers to deal with and overall competition will decrease as there are fewer suppliers. A supplier consolidation will give suppliers less power in the long run.

false

The certification criteria cannot be changed and updated as recertification may be required. Thus, the hurdle can be lowered until there are a few suppliers left.

false

The classical EOQ model assumes that the per-unit material price is variable.

false

As EDI really takes hold and international EDI becomes more commonplace a major stumbling block will be overcoming the language barriers that now exist. The most widespread EDI language in the United States is _________________

ANSI X12 standard

The counterproductive relationship is desirable because: 1) it promotes a positive rapport between buying and supplying firms involved and 2) both organizations achieve their goals.

false

The two main categories of supplier evaluations are procedure-based evaluations and quality-based evaluations.

false

The _____ step in the make-or-buy decision is to understand the strategic importance (value) of the activity or system.

first

A ________ method can easily be used for determining the minimum cost order quantity.

five step

a 2005 study reported that, based on the experience of the global consulting firm Booz Allen Hamilton, they would estimate that approximately one in three outsourcing efforts fails to achieve outsourcing expectations. These anecdotal findings suggest that there is a troubling gap between expectations and reality; however, outsourcing is ____________.

here to stay

According to a recent Deloitte Consulting study, 64 percent of respondents indicated that they had brought outsourced services back in-house. Fifty percent of respondents identified ______________ as the primary problem encountered with outsourcing, while 44 percent _________ realize cost savings.

hidden costs, did not

Traditionally, long and infrequent production runs have in the past been considered beneficial for the overall productivity of a manufacturing organization. However, long production runs usually lead to ____________ of raw-material and finished-goods inventories.

high levels

It is not a good idea to implement e-procurement on systems that have a ___________ and ___________, especially if there are a very limited number of suppliers to choose from.

high supply risk, low profile impact

The second group of methods used to reduce the number of suppliers a firm uses is what the textbook refers to as the _________ methods.

hurdle

A ________ approach can be used that is known as ____________. With this method, the supplier base is expanded without increasing the actual number of suppliers.

hybrid, cross-sourcing

The advantages associated with implementing the categorical evaluation program are that it can be implemented almost ________ and is the least expensive of the three evaluation systems discussed in the textbook.

immediately

The classical EOQ model is based, in part, on four of the following assumptions. One of the following in not one of the assumptions. Which one?

intermittent demand

While internal coordination costs are unique to external sourcing alternatives, they must be contrasted against the _______________ and ____________ associated with internally sourcing a product or service.

internal coordination, overhead costs

In general, one can think of __________ coordination costs as those overhead expenses incurred solely due to the decision to _________ source a product or service.

internal, internally

Dunn and Bradstreet found that 20 to 25 percent of all outsourcing relationships fail within __________ and nearly half fail within ____ years. This implies that the likelihood of incurring these expenses again, or experiencing costs associated with re-internalizing an outsourced activity, is ___________. Another critical financial consideration with outsourcing is the impact on the ___________.

two years, five, relatively high, internal workforce

Outsourcing risks include breaches in intellectual property, provider shirking, and opportunistic renegotiation. The combination of contractual incompleteness, asset specificity, and uncertainty gives rise to these risks when firms pursue external sourcing. Outsourcing organizations must have a clear _____________________.

understanding of true supplier intentions

The function of purchasing is to provide and ensure a firm with all EXCEPT:

unreasonable prices

Another critical issue for JIT manufacturers is the _____ in product demand

variability

Walmart pioneered the concept of _________ through the use of Point of Sale (POS) information system

vendor managed inventory (VMI)

_____________ gives a firm more control over the part in question. However, the greater the percentage of internal parts an assembly firm produces, the greater their need to have ___________ in each of the areas involved.

vertical integration, competence

The relationship between higher levels of vertical integration and an increase in bureaucratic costs has been noted in the extant academic literature. Some firms have cast the decision to _____________ versus the decision to externally source as a comparison between the costs of bureaucracy and the cost of _____________.

vertically integrate, external coordination

From time to time, buying firms receive discounted price schedules from their suppliers. This usually means that the price per unit is lower if larger orders are purchased. It _____________ to the buyer's advantage to accept the quantity discount.

May or may not be

______ purchasing is a term used for purchasing office equipment, furniture, office supplies, forms, computers, travel services, maintenance services, light bulbs, janitorial supplies, and many other relatively low-cost items.

ORM

Another study reported similar findings from a Bain survey of large and medium-sized firms. They found that only ____ percent of the firms were highly satisfied with the costs they were saving, and nearly _____ percent failed to achieve cost savings expectations

10/50

Businesses that use reverse auctions, or e-auctions, have given testimonials of savings of more than ____ percent.

50

Global business process outsourcing alone has surpassed the US$________ mark. A recent Booz Allen report posits the expectation that U.S. business process outsourcing will continue to grow at about _____ percent per year in the near term.

6 trillion, 10

If you analyze what sells the most and what costs the most, a predictable pattern will emerge with most distribution inventories. As a result of this general pattern, a small percentage of the total item usage accounts for a large proportion of total usage value. It is hypothesized that ____ percent of the total inventory cost is vested in approximately ____ percent of the items.

80/20

One model that explains supply chain relationship management includes which of the following behavioral dimensions?

A and C only

________________ relationships are those in which each organization (buying and supplying) is so focused on getting what is best for it that each puts the other at a disadvantage.

Counterproductive

There are five primary functions of inventories. One of the following is incorrect. Which one?

Coupling

In addition, large buying organizations increasingly are demanding that their suppliers become certified through third-party organizations, such as ____________ certification or _______________ National Quality Awards.

ISO 9001, Malcolm baldrige

The inventory items that are the most ___________ for a specific industry or firm should be items that account for the greatest dollar value.

Important

The cost reduction must be significantly lower than the current direct operating costs in order for an outsourcing proposal to be attractive. The generic strategic benefits of outsourcing are listed below with one exception. Which one is not one of the strategic benefits?

Improvement in the organization s core competencies by increasing productivity, reducing indirect operating expenses, lowering overhead, and expanding services.

The type of business a firm is in will usually determine how much of the firm's assets are invested in ___________.

Inventories

__________ is the life blood of most businesses. Most firms store thousands of different items.

Inventory

The transition to ______ has not necessarily been a smooth one for many companies in the United States. But this does not imply that switching from a pure ____ system to a __________ system was a mistake for most companies.

JIT, MRP, JIT or hybrid

________ systems utilize substantially better information on future requirements than is possible by the traditional non-time-phased order-point system.

MRP

The ______ concept provides the basis for projecting future inventories in a ____________ operation.

MRP, manufacturing

_______ can help improve the traditional non-time-phased order-point system because it allows the _____________ to plan requirements (raw material, component parts) to meet the final assembly schedule.

MRP, operating manager

In the case of a manufacturing firm, you must consider whether the ____________ process is make to order, make to stock, or some hybrid of the two.

Production

The advantages of multiple sourcing can be viewed as the disadvantages of _____ sourcing and vice versa.

Single

Dependent demand is related to the demand for other items.

True

EDI software technology enables the orders to be converted into a standard format and translated either directly to the supplier's system or to an electronic mailbox on a third-party value-added network (VAN) accessed by the partners.

True

It is well documented that JIT reduces physical inventory level. Reductions in physical inventory will also have a favorable impact on: Reduced insurance premiums associated with the storage of inventory, Reduced inventory holding costs, Reduced labor cost in store rooms and material handing costs, Reduced clerical and administrative costs, Reduced waste from the manufacturing process, Reduced obsolescence costs, Reduced deprecation of handling and storage equipment, Each of the cost savings will result in a leaner more profitable operation.

True

Management of inventories is a major interest of purchasing managers. In many industries, the investment in inventories comprises a substantial share of the firm's assets. If the productivity of the inventory asset can be enhanced, the improvement will go directly to the bottom line.

True

The benefits of implementing a JIT system impact all entities involved in supply chain management.

True

The following are key mistakes in the make-versus-buy decision: 1) In most cases, businesses are not proficient at identifying their core capabilities. Buyers usually rationalize in-house decisions based on capacity capabilities. 2) Buying organizations wait too late to assess the value of consultants or strategic partners. 3)Buyers do not recognize that the product or service is approaching maturity. 4) There are always new competitors with new technology attacking the market.

True

The purchasing function is taking on increasing importance in today's industrial economy.

True

The seven (7) steps to effectively implement e-procurement are: 1. Start with non-critical items. 2. Bring all internal stakeholders on board with your new procurement process to establish internal customer behavior. 3. Streamline, map, test, troubleshoot, and improve the process before expanding it to external suppliers. Work with a favored supplier to test the system. 4. Leverage your system once it s running. Exploit your full purchasing power by using reverse auctions. 5. Aggregate buyers within your organization to increase your purchasing power and gain better pricing. 6. Use an incremental approach to expand your system. 7. Once the bumps have been ironed out of the system, move on to the manufacturing operations.

True

All marketing strategies are compatible with the JIT system.

True or false?

The use of outsourcing has quickly become _____________ for an increasing number of businesses.

a competitive weapon

According to the Lewin-Schein theory of change the change process consists of the following three steps EXCEPT:

analyzing

In a recent study, executives categorized their outsourcing activities. Table 9.1 in the textbook illustrates the diverse set of outsourced activities that were reported on. Not surprisingly, information technology outsourcing (ITO) represented the largest number of responses at 25.8 percent. Approximately 35 percent of the responses represented the outsourcing of some type of manufacturing activity, with the remainder being _________________.

business process outsourcing (BPO)

Relationships with strategic suppliers need to be closely managed. One way to keep up on supplier relationships is for a __________ organization is to compile ___________ for each strategic __________.

buying, supplier profiles, supplier

Kanban is the Japanese word for _____________.

card

The ____________ method s major disadvantage is its dependence on the judgment of its users. The system is largely dependent on the memories of personnel to explain what unsatisfactory or good means. With this method, there is no concrete supporting data.

categorical

The three general types of supplier evaluation systems in use today are the _________________________.

categorical method, the cost-ratio method, and the linear averaging method

Supplier ______________ are very useful tools to evaluate the quality capabilities of a supplier.

certification programs

It appears clear that effective buyer supplier relationships should include a formalized procedure for ______________ the buyer's expectations and _____________ the supplier's performance.

communicating, evaluating

Firms are increasingly considering more strategic capabilities for outsourcing, making the strategic evaluation much more complex. Firms are discouraged from making outsourcing decisions piecemeal, but rather encourage organizations to make them as part of a __________________.

comprehensive sourcing strategy

____________ relationships recognize the potential value of both organizations getting what they want and maximize the potential of having a long-term relationship.

cooperative

Which of the following is one of the most influential factors in vertical integration decisions?

coordination requirements

The organization must have a set of ______________ that ensure survival in a competitive marketplace.

core capabilities

The concept of _______________ along with the resource-based view of the organization provides the basis for the assertion that in considering outsourcing, the decision making team must have a thorough understanding of _______________ capabilities and how they relate to an organization s competitive advantage.

core competencies, core and non-core

The __________________ is especially concerned with how to coordinate diverse production skills and integrate multiple streams of technology.

core competency concept

Only organizations that are diligent about understanding and avoiding the pitfalls of _______________ outsourcing and that apply total business-outcome-focused outsourcing will be successful.

cost focused

_______________ and ______________ are necessary in order to keep costs down and create trust with strategic suppliers.

cost reduction, continuous process improvement

The ___________ method evaluates supplier performance by using standard cost analysis.

cost-ratio

Outsourcing initiatives must ___________. The type of management and relationship skills and capabilities must be developed through training and/or recruitment within the outsourcing organizations.

create value

Maintenance, Repair, and Operations (MRO) purchasing is concerned with what parts?

critical maintenance and replacement

A crucial issue to be considered is the relevance of _________ in the successful implementation of the just-in-time system in a country.

culture

If sourcing internally, firms must estimate the costs of ________ prevention, the costs of _____________, the cost of ___________, and the cost of ____________.

defect, quality appraisal, internal failure, external failure

According to Figure 7.4 on pg 150, the first step to implementing the reverse auction process is:

define market specifications

MRP systems are helpful for companies with assembled products that have component requirements __________ on the final product.

dependent

It is virtually impossible to generalize why organizations outsource various business processes. The final outsourcing decision depends on whether the CEO, CFO, or CIO initiates the outsourcing proposal. Whichever executive initiates the outsourcing proposal, a reduction in __________________ is usually the primary driver.

direct operating costs

In a reverse auction the competition between the sellers drives the price _______, instead of _______, so the buyer pays _________ at the expense of the seller.

down, up, less

In general, the guiding factors in determining which system is best are ____________ and _______________ of the system.

ease of implementation, overall reliability

The acronym EOQ is defined as _______________.

economic order quantity

A commonly cited source of financial benefit from outsourcing is the vendor's better ______________.

economies of scale

It is crucial to treat _____________ both survivors of and those directly impacted by outsourcing with respect and dignity during the decision-making and implementation process.

employees

Equitable distribution of pain and gain will ultimately lead to __________ partnership performance. Along with having a contract that defines performance incentives by means of penalty and reward structures, the relationship also must be able to work through unforeseen conditions in a productive manner.

enhanced

The _________ evaluation is an assessment of the supplier s production or service process. ______________ evaluations are based on objective measures of performance.

process based, performance based

Outsourcing can be conceptualized as a _________ rather than simply an event. This __________ begins with the development of a strategic and financial business case for outsourcing.

process, process

There are two main types of kanban: __________ signals the need to produce more parts. Each kanban is physically attached to a container. __________ signals the need to withdraw parts from one work center and deliver them to the next work center.

production kanban, withdrawal kanban

To extend the commitment to increasing productivity in all departments within a given facility, many companies have adopted the concept of __________.

profit centers

A kanban system is referred to as a __________ because the kanban is used to ______ parts to the next production stage only when they are needed.

pull system, pull

In a ____________, removing an end item (or a fixed lot of end items) triggers the order release, by which the flow of materials or components is initiated. In contrast, ____________ allow for the production or material flow in anticipation of future demand.

pull system, push system

Since materials constitute the largest single percentage of their purchasing dollars, profit-oriented firms have turned to professionally operated _________ departments to make sure they are getting full value for their outlays on materials.

purchasing

__________ professionals are primarily charged with the responsibility for controlling the total cost of ownership (TCO).

purchasing

Reductions in physical inventory also will have a favorable impact on all EXCEPT:

quality

The buying firm will need to ensure that proper mechanisms are in place to make sure that they are capable of detecting _____________ by an external source.

quality failures

Grade methods are those that are based on a score or grade given to the supplier by the buyer for some attribute. The most common attributes are _____________________.

quality, price, and delivery

Systems contracting is a purchasing management technique that seeks overall _______ in the cost of an item from the time a need is recognized to the time that need is fulfilled.

reduction

The buying and selling organizations must follow the specific roles outlined in the contract. The buying organization also must appoint a __________ manager. The __________ manager and the suppliers must merge their independent plans into one consensus plan.

relationship, relationship

Consequently, ______ of supply is a critical consideration in the selection of JIT suppliers

reliability

Some of the often hidden costs of outsourcing include training internal employees to become relationship managers rather than technical managers. The hidden costs also include ______________________________________ required to thwart labor disputes.

retention bonuses, severance packages, employee turnover, and management time

A more devastating downside of ______________ is the buyer/seller relationship damage that may result from this method of buying. The buyer runs the risk of alienating both current and potential sources for the goods/services.

reverse auctions

_____________ involves a detailed analysis of what can be done to reduce or eliminate the probability and severity of adverse events while also considering the trade-offs involved.

risk mitigation

______________ involves continuously evaluating supply chain conditions so that potential issues may be avoided or at least lessened by being more proactive.

risk monitoring

Lower levels of __________ contribute significantly to reduced working capital requirements for the firm.

safety stocks

In addition to the supplier profiles, the buying organization should clearly establish expectations for the potential suppliers and discuss the __________ and the _________________ for the outsourcing activity.

scope of work, appropriate pricing

Because of ____________ and frequent delivery schedules, suppliers are in a position to receive quick feedback regarding any potential manufacturing or design problems. Also, manufacturing is in a position to implement engineering changes quicker because of the _________ inventory levels.

smaller lot sizes, reduced

____________ is the sum of the actual and potential resources embedded within, available through, and derived from the network of relationships possessed by an individual or social unit.

social capital

The three e-procurement categories are: Indirect, Direct, and ______

sourcing

It is important to make sure that all ______________ feel as though their interests were represented and considered in making the decision.

stakeholders

Initially, outsourcing decisions predominantly involved ___________, _______________, and activities of ____________ strategic value.

standardized processes, commoditized products, extremely low

A _______ committee guiding various project teams is recommended in order to orchestrate the various aspects of the implementation process.

steering

Once the system is developed, it then forces the various functions in the buying firm to evaluate which suppliers truly add value. The rankings are aggregated to enable a ranking of all suppliers. The company will then categorize the suppliers into one of three categories:

strategic, preferred, or transactional

Traditional purchasing professionals who act as little more than order placers are giving way to __________ involved ___________ managers who control vital inputs to the production process.

strategically, analytical

In collaboration, the two organizations truly realize the benefits of working together to optimize outcomes for both organizations. The two firms work together to develop a ___________ to deliver a high-quality product or service on time and under budget.

strategy

___________________, one type of supplier development program (SDP), are an attempt to meet current and future business needs by improving supplier performance and capabilities.

supplier evaluations

In addition to the strategic _________ profiles, the buying firm should clearly establish expectations for the strategic _________ and discuss future product and _______ development plans; this is typically done with an annual review period.

supplier, suppliers, supplier

Buying firms select _____________ based on their capabilities, and not purely on the competitive process.

suppliers

The _________ see little incentive in adopting the JIT approach when the primary benefits of the program go to the buyer.

suppliers

The _____________________ process is based on the idea of efficient resource coordination and teamwork.

supply chain management

Recognizing that purchase price is but one element of the total cost picture, the scope of ____________ goes far beyond the purchase price for any given item.

systems contracting

Although it is a strong relationship, a cooperative alliance lacks the ___________ that is needed between the various buying and supplying firms in order to optimize the benefits for all of the members of the supply chain.

teamwork

The performance evaluation is a final key element of an effective buyer supplier relationship.

true

_____ percent of the firms surveyed using JIT practices in the United States indicted that they had serious problems regarding lack of support from engineering.

thirty nine

Many firms report lack of support from __________ as being one of the major problems encountered in the implementation of JIT (Lean) purchasing.

top management

___________ suppliers are those that can be easily replaced in a short time.

transactional

Among the better-known lot-sizing methods for the single item, non-discount, time-phased, certain-demand models are: (1) lot for lot, (2) economic order quantity, (3) periodic order quantity, (4) least unit cost, (5) McLaren s order moment, (6) Silver-Meal, and (7) the Wagner-Whitin dynamic programming algorithm.

true

During the transition period, firms incur costs related to internal staff providing additional support and duplicate resources. There is usually lower efficiency and effectiveness at the beginning of the contract.

true

JIT is also referred to as a lean production.

true

RFID tags can be read through snow, fog, ice, paint, and crusted grime, unlike the barcode system. The tag also can be programmed to hold information such as the item s serial number, color, size, manufacture date, and current price, as well as a list of all distribution points the item reaches as it moves before arriving at a store.

true

Radio frequency identification, or RFID, is a universal term given to any technology that uses radio waves to identify and track items.

true

Rule One (1) of the dual card kanban is: No parts are made unless there is a production kanban to authorize production. If no production kanban are in the in box at a work center, the process remains idle, and workers perform other assigned activities. This rule enforces the pull nature of the process control.

true

Some of the specific benefits of outsourcing are to reduce and control operating costs. Improve quality. Change company focus. Acquire external capabilities. Refocus scarce resources for alternative uses. Reduce cycle time. Obtain cash infusion. Reduce risks. Gain flexibility. Turn fixed costs into variable costs.

true

Strategic suppliers are those that are most important to the buying firm. They supply the buying firm with essential materials and capabilities that are not easily replaced.

true

The categorical method involves categorizing each supplier s performance in specific areas defined by a list of relevant performance variables.

true

The general lot-sizing problem is to batch requirements to minimize the sum of ordering and carrying cost each time an order is to be placed.

true

The level of employee and supplier commitment to the JIT concept is not as uniform and high as it is in Japan

true