Exam 2- Mind tap

Complete the following MRP record and provide the planned order releases for Week 1. Lead time is 2 weeks. Safety stock is 3. Use LFL lot sizes. Part XWeek1234Gross Requirements32163440Scheduled Receipts10Projected On-Hand inventory46Planned Order Releases a. 14 b. 34 c. 26 d. 29

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The __________ specifies which end product is to be made, how many are required, and when they need to be completed. a. Aggregate production plan b. Super bill of materials c. Master production schedule d. Bill of material

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If at the end of the year, the cost of revenue = $2,500, total revenue = $12,000 and inventory value = $2,000, the inventory turnover ratio would be: a. 1.250 b. 0.208 c. 0.800 d. 2.667 e. 0.375

a. 1.250

When demand and delivery lead time are known and constant, daily demand = 8, purchase lead time = 5 days, and the purchase price = $20/unit, then the reorder point is: a. 40. b. 56. c. 2. d. 32. e. 13.

a. 40.

Based on the information in the data set below, what is the mean squared error (accurate to 1 decimal)?MonthActualForecast1121121310310 8411 65 9 8 a. 8.0 b. 0.8 c. 10.0 d. 1.00

a. 8.0

Calculate the final discrete available-to-promise quantity for Week 1 using the following table. Weeks1234MPSBI = 3010101510Committed Customer Orders2052515ATP:D a. ATP1 = 10 b. ATP1 = 15 c. ATP1 = 0 d. ATP1 = 20

a. ATP1 = 10

Which of the following would be considered a dependent demand item? a. Bicycle tires used to assemble a bicycle b. Retail customers c. Televisions d. Furniture

a. Bicycle tires used to assemble a bicycle

Which of the following basic production strategies works best with make-to-order manufacturing firms? a. Chase Production Strategy b. Level Production Strategy c. Mixed production Strategy d. Capacity Production Strategy

a. Chase Production Strategy

Not all ERP software is designed to provide the exact same tools, nonetheless, some of the common modules usually included in ERP software packages include: a. Customer relationship management and Human resource management b. Operating systems and Internet browsing c. Computer assisted drawing and Photo enhancing d. All of these choices are correct.

a. Customer relationship management and Human resource management

The real value of Collaborative Planning, Forecasting and Replenishment (CPFR) comes from: a. Exchange of forecasting information b. Sophisticated forecasting algorithms c. Both "Sophisticated forecasting algorithms" and "Exchange of forecasting information" d. None of these choices are correct.

a. Exchange of forecasting information

Inaccurate forecasts can result in negative outcomes like: a. Imbalances in supply and demand b. Low inventory costs and stockouts c. Material shortages and decreased costs of obsolescence d. High inventory costs and increased profits

a. Imbalances in supply and demand

According to the textbook, which of the following is considered a reason that ERP implementations fail? a. Lack of communication within an organization b. Organizations tend to spend too much time and money training their employees on the new system c. Top management becomes overcommitted to the point where they constantly encourage the employees during implementation d. All of these choices are correct.

a. Lack of communication within an organization

Cyclical variations are longer than a year and can be influenced by: a. Political factors b. Population growth c. Imbalances in supply and demand d. Events such as natural disasters

a. Political factors

When there is not a lot of currently relevant data available it is generally best to use: a. Qualitative forecasting b. Simple moving average forecasting c. Naive forecasting d. Time series forecasting

a. Qualitative forecasting

The ___________ solution picks all the desired applications from a single vendor for the ERP system. a. Single integrator b. Best-of-breed c. Premier application

a. Single integrator

According to the textbook, the top three challenges for CPFR implementation include all of the following EXCEPT: a. Supplier lead times b. Cost c. Making organizational and procedural changes d. Trust between supply chain partners

a. Supplier lead times

Which one of the following is NOT a reason for firms to carry inventory? a. To increase production change/setup costs b. To take advantage of quantity discounts c. To maintain independence of operations d. To meet variations in product demand e. To allow for production scheduling flexibility

a. To increase production change/setup costs

A positive error implies that a forecast was? a. Too low b. Too high c. Neither too high or too low d. The sign of an error gives no information as to the direction of the error.

a. Too low

The inventory turnover ratio shows how efficiently a firm is using its inventory to generate revenue. a. True b. False

a. True

Which of the following is true under the Periodic Review System? a. a higher level of safety stock is needed to buffer against uncertainty in demand over a longer planning horizon, compared to the EOQ system b. there are no discrepancies between physical inventory and the stock record c. the only uncertainty is the magnitude of demand during the delivery lead time d. a lower level of safety stock is needed to buffer against uncertainty in demand over a longer planning horizon, compared to the EOQ system e. it is more expensive to administer compared to the Continuous Review System

a. a higher level of safety stock is needed to buffer against uncertainty in demand over a longer planning horizon, compared to the EOQ system

If an item is ordered using its economic order quantity, the annual carrying cost should be: a. equal to the annual ordering cost. b. twice the annual purchase price. c. the square root of the annual ordering cost. d. slightly less than the annual ordering cost. e. None of these choices are correct.

a. equal to the annual ordering cost.

Using the data set below, what would be the forecast for period 4 using a three period moving average: (Choose the closest answer.)PeriodActual Demand110,000212,400313,250415,750520,500618,500 a. 11,500 b. 11,883 c. 12,244 d. 14,008

b. 11,883

Using the data set below, what would be the forecast for period 5 using a four period weighted moving average? The weights for each period are 0.05, 0.15, 0.30, and 0.50 from the oldest period to the most recent period, respectively. (Choose the closest answer.)PeriodActual Demand110,000212,400313,250414,750515,220618,500 a. 12,820 b. 13,710 c. 14,610 d. 13,105

b. 13,710

A forecasting method has produced the following data over the past 5 months shown in the data set. What is the mean absolute deviation (accurate to 1 decimals)?MonthActualForecast1121121310310 8411 65 9 8 a. -1.2 b. 2.4 c. 10.0 d. 2.0

b. 2.4

Which of the following would refer to the 80/20 rule when applied to the ABC inventory control system? a. 80 percent of the items account for 20 percent of the groups. b. 80 percent of the total annual $ usage is accounted for, by 20 percent of the items. c. 20 percent of the items account for 80 percent of the tasks. d. 80 percent of the unit cost accounts for 20 percent of the items. e. None of these choices are correct.

b. 80 percent of the total annual $ usage is accounted for, by 20 percent of the items.

Why are firms migrating to ERP systems? a. ERP systems are inexpensive to implement b. ERP systems tie together a variety of specialized systems c. ERP systems are easy to implement, particularly in large organizations d. ERP systems are successful with two-dimensional processes

b. ERP systems tie together a variety of specialized systems

Use the information below to calculate the number of orders per year when using the EOQ: Annual demand for an item is 43,000 unitsThe cost to place an order is $200The per unit cost of the item is $50.00The annual holding rate is 35%Choose the closest answer. a. 202 b. 123 c. 49 d. 81

c. 49

Which of the following is considered an advantage/benefit of utilizing an ERP system? a. Flexible enough that it allows different companies with different business models to mold the new ERP system to fit the company's business model b. Enables the company to utilize a single centralized database system, thus eliminating duplicate data entries c. Fairly inexpensive to purchase and implement d. All of these choices are correct.

b. Enables the company to utilize a single centralized database system, thus eliminating duplicate data entries

The ABC inventory control prioritizes dependent demand inventory items into three groups, A, B, and C. A items receive the smallest amount of safety stock, while C items typically have the most safety stock. a. True b. False

b. False

The four categories of inventory are raw materials, intermediate assemblies, work-in-progress and finished goods. a. True b. False

b. False

Which one of the following is NOT a type of qualitative forecasting? a. Consumer survey b. Simple moving average c. Sales force composite d. Jury of executive opinion

b. Simple moving average

Which of the following is TRUE regarding the EOQ figure below? a. A lot size of G has an annual total cost of about C. b. The EOQ is at lot size G, and curve K is the annual holding cost curve. c. Curve J represents the annual ordering cost, and curve L represents the annual holding cost. d. At lot size H both holding costs and ordering costs exceed the annual total cost.

b. The EOQ is at lot size G, and curve K is the annual holding cost curve.

When linear trend forecasts are developed, demand would typically be: a. The lead variable b. The dependent variable c. The independent variable d. The passive variable

b. The dependent variable

While ERP is a relatively new technology, it has grown rapidly since the early 1990s. Which of the following is the reason that has contributed to its rapid growth? a. The trend for companies to eliminate their supply chain partners b. The year 2000 millennium bug c. The increased use of email during the 1990's d. All of these choices are correct.

b. The year 2000 millennium bug

Your company is conducting forecasting that revolves around population growth in large cities. This type of forecasting can be referred to as what component of a time series? a. Cyclical Variations b. Trend Variations c. Seasonal Variations d. Random Variations

b. Trend Variations

Using the data set below, what would be the forecast for period 5 using the exponential smoothing method? Assume the forecast for period 4 is 14000. Use a smoothing constant of α = 0.4 (Choose the closest answer.)PeriodActual Demand110,000212,400313,250414,750515,220618,500 a. 12,660 b. 13,190 c. 14,030 d. 15,220

c. 14,030

If your company had an annual purchase cost of items equal to $2,000,000, an annual holding cost of $150,000 and an annual ordering cost of $50,000 this scenario would reveal that: a. Your order lot size was equal to the EOQ b. Your order lot size was higher than the EOQ c. Your order size was lower than the EOQ d. Nothing because there is insufficient information to discern where the EOQ would be.

b. Your order lot size was higher than the EOQ

Classify the following inventory items as either A, B, or C items using the ABC inventory control system: Item #Annual SalesUnit Cost1130 units$ 4.002400 units15.30325 units17.0041,320 units1.25590 units2.10 a. item 1 (B), item 2 (A), item 3 (A), item 4 (C), item 5 (C) b. item 1 (C), item 2 (A), item 3 (C), item 4 (B), item 5 (C) c. item 1 (B), item 2 (C), item 3 (B), item 4 (C), item 5 (A) d. item 1 (C), item 2 (B), item 3 (C), item 4 (A), item 5 (C) e. item 1 (A), item 2 (B), item 3 (C), item 4 (A), item 5 (B)

b. item 1 (C), item 2 (A), item 3 (C), item 4 (B), item 5 (C)

Using the ________________ multiple software infrastructures and databases may have to be used to link the multiple applications obtained from different vendors. a. Elite integrator solution b. Premier application solution c. Best-of-breed solution d. Multi-modular solution

c. Best-of-breed solution

An advantage/benefit of utilizing an ERP system includes which of the following? a. ERP systems are designed to take advantage of Internet technology b. ERP systems enable the firm to automate some of the steps of a manufacturing process c. Both "ERP systems are designed to take advantage of Internet technology" & "ERP systems enable the firm to automate some of the steps of a manufacturing process" d. None of these choices are correct.

c. Both "ERP systems are designed to take advantage of Internet technology" & "ERP systems enable the firm to automate some of the steps of a manufacturing process"

All of the following may influence demand and should be considered when developing a forecast EXCEPT a. Emerging markets b. Supplier quality c. Ergonomic conditions d. New competition

c. Ergonomic conditions

Quantitative forecasts use mathematical techniques that are based on: a. Surveys b. Sales force knowledge of the market c. Historical data d. Expert opinions

c. Historical data

Which of the following is NOT a common module of ERP systems? a. Human Resources Management b. Supply Chain Management c. Marketing Resources Management d. Customer Relationship Management

c. Marketing Resources Management

Which strategy uses overtime and subcontracting to cope with the high demand periods? a. The Level Production Strategy b. The Aggregate Production Strategy c. Mixed Production Strategy d. The Chase Production Strategy

c. Mixed Production Strategy

If an available-to-promise (ATP) for any period is negative, the deficit must be subtracted from the: a. Beginning inventory b. Bill of materials c. Most recent positive ATP d. Master Production Schedule

c. Most recent positive ATP

Random variations in a Time Series component are due to: a. Population growth b. Using a large value for the exponential smoothing constant c. Unpredictable events d. Inaccurate responses of the expert participants

c. Unpredictable events

The College Bookstore sells a unique calculator to college students. The demand for this calculator has a normal distribution with an average daily demand of 20 units and a standard deviation of 4 units per day. The lead time for this calculator is 9 days. Compute the statistical reorder point that results in a 95 percent in-stock probability. Choose the closest answer. a. 80 units b. 420 units c. 180 units d. 200 units e. 20 units

d. 200 units

The cost of a product is $5, and the carrying cost rate is 20%; the cost of processing an order is $45 and the annual demand is 1000. What is the economic order quantity (EOQ)? a. 5 b. 200 c. 25 d. 300 e. 20

d. 300

Legacy MRP systems had which of the following limitations? a. The systems needed continuous modifications b. The systems were designed to perform a very specific operational function c. The systems were not user-friendly d. All of these choices are correct.

d. All of these choices are correct.

Which of the following is a benefit of CPFR? a. Provides an analysis of key performance metrics b. Uses joint planning and promotions management c. Integrates planning, forecasting and logistics activities d. All of these choices are correct.

d. All of these choices are correct.

The impact of poor communication and inaccurate forecasts resonates along the supply chain and results in the: a. Delphi method b. CPFR effect c. Mean deviation d. Bullwhip effect

d. Bullwhip effect

The ___________ planning horizon is shorter than the aggregate production plan's, but must be longer than a firm's production lead time to ensure the end item can be completed within the planning horizon? a. Material requirements plan b. Capacity Requirements Plan c. Demand time fence d. Master production schedule

d. Master production schedule

Which of the following seeks to develop short range plans seeking to effectively and efficiently manage components and/or subassemblies over time period of few days to a few weeks? a. Resource requirements plan b. Master production schedule c. Rough-cut capacity plan d. Material requirements plan

d. Material requirements plan

In 2016, Spin Master, did not properly forecast demand for their new product, Hatchimals, causing ___________ for their distributors. a. Excess stock b. Price reductions c. The bullwhip effect d. Stockouts

d. Stockouts

Which strategy allows finished goods inventories to accrue and relies on backlogs to handle the demand? a. Mixed Production Strategy b. The Chase Production Strategy c. The Aggregate Production Strategy d. The Level Production Strategy

d. The Level Production Strategy

Legacy MRP systems typically utilized multiple software packages and databases which caused: a. Data integrity b. Planned order releases c. The system to crash often d. The same information to be stored in multiple locations

d. The same information to be stored in multiple locations

Which of the following is a disadvantage of carrying too much inventory? a. it leads to higher annual inventory ordering costs. b. it leads to lower average finished goods inventories. c. it reduces the need to conduct cycle counts. d. it creates an unnecessary waste of scarce resources. e. it increases the need to purchase items.

d. it creates an unnecessary waste of scarce resources.

The College Bookstore sells a unique calculator to college students. The demand for this calculator is constant at 20 units per day. The lead time for this calculator is variable at an average of 9 days with a standard deviation of 2 days. Compute the statistical reorder point that results in a 95 percent in-stock probability. Choose the closest answer. a. 46 units b. 182 units c. 226 units d. 26 units e. 246 units

e. 246 units

The primary purpose of the basic economic order quantity (EOQ) model is to: a. Calculate the optimum safety stock level b. Minimize the sum of purchase cost and holding cost c. Calculate the reorder point, so that replenishments take place at the proper time d. Maximize the customer service level e. None of these choices are correct.

e. None of these choices are correct.

Which of the following is NOT an assumption of the economic order quantity (EOQ) model? a. The only variable costs are setup cost and holding cost. b. Lead time is known and constant. c. Demand is known, constant, and independent. d. Quantity discounts are not possible. e. Production and use occur simultaneously.

e. Production and use occur simultaneously.