ISDS 3115 Final
ABC analysis is based upon the principle that: A. there are usually a few critical items, and many items that are less critical. B. an item is critical if its usage is high. C. all items in inventory must be monitored very closely. D. as with grade distributions in many MBA courses, there should be more medium-level "B" items than either "A" or "C" items. E. more time should be spent on class "C" items because there are many more of them.
a
An aggregate plan satisfies forecast demand by potentially adjusting all EXCEPT which of the following? A. facility capacity B. overtime work C. labor levels D. inventory levels E. production rates
a
Dependence on an external source of supply is found in which of the following aggregate planning strategies? A. subcontracting B. hiring and laying off C. varying production rates through overtime or idle time D. back ordering during high demand periods E. using part-time workers
a
Disaggregation: A. breaks the aggregate plan into greater detail. B. is an assumption required for the use of the transportation model in aggregate planning. C. transforms the master production schedule into an aggregate plan. D. calculates the optimal price points for yield management. E. converts product schedules and labor assignments to a facility-wide plan.
a
Vertical integration appears particularly advantageous when the organization has: A. a large market share. B. little experience operating an acquired vendor. C. a very common, undifferentiated product. D. a very specialized product. E. purchases that are a relatively small percent of sales.
a
What directly results from disaggregation of an aggregate plan? A. a master production schedule B. a capacity-demand matrix C. a transportation matrix D. detailed work schedules E. priority scheduling
a
Which of the following is NOT one of the benefits in MRP? A. increased inventory levels B. better response to customer orders as a result of improved adherence to schedules C. improved utilization of facilities and labor D. faster response to market changes
a
Which of the following is an advantage of the postponement technique? A. reduction in inventory investment B. reduction in automation C. early customization of the product D. reduction in training costs E. better quality of the product
a
Which of the following should be higher in P systems than Q systems? A. safety stock B. order size C. demand D. lead time E. order spacing
a
Which of the following statements about ABC analysis is FALSE? A.ABC analysis is based on the presumption that all items must be tightly controlled to produce important cost savings. B.ABC analysis is based on the presumption that controlling the few most important items produces the vast majority of inventory savings. C.In ABC analysis, "A" items should have tighter physical inventory control than "B" or "C" items have. D.Criteria other than annual dollar volume, such as high holding cost or delivery problems, can determine item classification in ABC analysis. E.In ABC analysis, forecasting methods for "C" items may be less sophisticated than for "A" items.
a
Which of the following statements is TRUE about the MRP plan when using lot-for-lot ordering? A. The quantity of gross requirements for a child item is equal to the quantity of planned order release(s) multiplied by the number of child items used in the parent assembly. B. The quantity of gross requirements for a child item is always equal to the quantity of gross requirements for its parent. C. The quantity of gross requirements for a child item is always equal to the quantity of planned order releases for its parent. D. The quantity and gross requirements for a child item is always equal to the quantity of net requirements for its parent. E. All of the above are true.
a
Which of the following statements regarding a pull system is TRUE? A. problems become more obvious B. manufacturing cycle time is increased C. work is pulled to the downstream stations before it is actually needed D. large lots are pulled from upstream stations E. none of the above is true of a pull system
a
Which of the following statements regarding the production order quantity model is TRUE? A. It relaxes the assumption that all the order quantity is received at one time. B. It applies only to items produced in the firm's own production departments. C. It relaxes the assumption that the demand rate is constant. D. It minimizes inventory. E. It minimizes the total production costs.
a
Which of these is among the demand options of aggregate planning? A. back-ordering during high-demand periods B. varying production rates through overtime or idle time C. subcontracting D. changing inventory levels E. varying workforce size
a
Which one of the following is a characteristic of a JIT partnership? A. removal of incoming inspection B. frequent deliveries in large lot quantities C. third-party logistics never used D. active pursuit of vertical integration E. maximal product specifications imposed on supplier
a
Which one of the following is not a benefit of JIT implementation? A. variability increase B. quality improvement C. rapid throughput D. rework reduction E. cost reduction
a
Aggregate planning would entail which of the following production aspects at BMW for a 12-month period? A. number of green cars to produce B. total number of cars to produce C. number of cars with a hi-fi stereo system to produce D. number of two-door vs. four-door cars to produce E. B, C, and D
b
Characteristics of just-in-time partnerships do NOT include: A. focus on core competencies B. large lot sizes to save on setup costs and to gain quantity discounts C. produce with zero defects D. long-term contracts E. removal of in-transit inventory
b
Enterprise resource planning (ERP): A. does not integrate well with functional areas other than operations. B. automates and integrates the majority of business processes. C. seldom requires software upgrade or enhancement. D. is inexpensive to implement. E. all of the above
b
If a factory wants to cut its current lot size in half, by what proportion must setup cost change? A. Setup cost must double from its current value. B. Setup cost must be cut to one fourth its current value. C. Setup cost must also be cut in half from its current value. D. Cannot be determined. E. Setup cost must quadruple from its current value.
b
The objective of aggregate planning is to meet forecast demand while ________ over the planning period. A. minimizing stock out B. minimizing cost C. minimizing fixed cost D. maximizing service level E. all of the above
b
The purpose of safety stock is to: A. eliminate the likelihood of a stockout due to erroneous inventory tally. B. control the likelihood of a stockout due to variable demand and/or lead time. C. eliminate the possibility of a stockout. D. protect the firm from a sudden decrease in demand. E. replace failed units with good ones.
b
Which choice below best describes the counterseasonal demand option? a. producing such products as lawnmowers and sunglasses during the winter b. developing a mix of products that smoothes out their demands c. lowering prices when demand is slack d. using subcontractors only when demand is excessive e. the breaking of the aggregate plan into finer levels of detail
b
Which of the following actions is consistent with the use of level scheduling? A. vary production levels to meet demand requirements B. use inventory to meet demand requirements C. use overtime to meet higher-than-average demand requirements D. vary work force to meet demand requirements E. none of the above
b
Which of the following aggregate planning strategies is a capacity option? A. influencing demand by back ordering B. changing inventory levels C. influencing demand by extending lead times D. counterseasonal product mixing E. influencing demand by changing price
b
Which of the following is NOT one of the Seven Wastes? A. transportation B. assignment C. motion D. overproduction E. defective product
b
Which of the following is NOT one of the successful techniques for controlling the cost of labor in services? A. an on-call labor resource that can be added or deleted to meet unexpected demand B. little flexibility in worker hours to decrease the burden on management C. flexibility in rate of output or hours of work to meet changing demand D. flexibility of individual worker skills that permits reallocation of available labor E. accurate scheduling of labor-hours to assure quick response to customer demand
b
Which of the following is generally found in most Lean environments? A. a push system for high margin items and a pull system for low margin items B. pull systems C. a push system for purchased parts and a pull system for manufactured parts D. push systems E. a push or pull system, depending upon the rate of demand
b
Which of the following is specifically characterized by the elimination of waste through a focus on exactly what the customer wants? A. Material requirements planning (MRP) B. Lean operations C. kanban D. Just-in-time (JIT) E. Toyota Production System (TPS)
b
Which of the following statements is NOT true about MRP? A. MRP has evolved as the basis for Enterprise Resource Planning B. MRP is an independent demand technique used in a production environment C. MRP provides a clean structure for dependent demand. D. MRP uses a bill-of-material, inventory, expected receipts, and a master production schedule to determine material requirements
b
Which of the following statements is true regarding the leverage of supply chain savings? A. Supply chain leverage depends only upon the percent of sales spent in the supply chain. B. Supply chain savings exert more leverage as the firm's net profit margin decreases. C. Supply chain savings exert more leverage as the firm's purchases are a smaller percent of sales. D. Supply chain leverage is about the same for all industries. E. None of the above is true.
b
Which of these aggregate planning strategies is a capacity option? A. changing price B. using part-time workers C. back ordering D. promotion E. counterseasonal product mixing
b
A disadvantage of the "few suppliers" sourcing strategy is: A. possible violations of the Sherman Antitrust Act B. the lack of cost savings for customers and suppliers C. the high cost of changing partners D. the suppliers are less likely to understand the broad objectives of the procuring firm and the end customer E. the risk of not being ready for technological change
c
A firm uses the chase strategy of aggregate planning. It produced 1000 units in the last period. Demand in the next period is estimated at 800, and demand over the next six periods (its aggregate planning horizon) is estimated to average 900 units. Which of the following tactics would be most representative of following a chase strategy? A. add 200 units to inventory in the next period B. implement a lower price point to increase demand C. lay off workers to match the 200-unit difference D. hire workers to match the 100-unit difference E. add 100 units to inventory in the next period
c
A fried chicken fast-food chain that acquired feed mills and poultry farms has performed which of the following? A.horizontal integration B.current transformation C.backward integration D.forward integration E.job expansion
c
A rice mill in south Louisiana purchases the trucking firm that transports packaged rice to distributors. This is an example of which of the following? A. horizontal integration B. keiretsu C. forward integration D. current transformation E. backward integration
c
ABC analysis divides on-hand inventory into three classes, generally based upon which of the following? A. item quality B. unit price C. annual dollar volume D. the number of units on hand E. annual demand
c
Aggregate planning would entail which of the following production aspects at BMW for a 12-month period? A. number of two-door vs. four-door cars to produce B. number of green cars to produce C. total number of cars to produce D. number of cars with a hi-fi stereo system to produce E. B, C, and D
c
In the service sector, which of the following aggregate planning strategies might direct your client to a competitor? A. varying work force size by hiring or layoffs B. changing inventory level C. subcontracting D. using part-time workers E. varying production rates through overtime or idle time
c
JIT makes quality cheaper because: A. JIT adds more buffers to the system. B. the cost of low quality can be hidden in inventory. C. JIT prevents long runs of defects. D. B and C E. A, B and C
c
Low level coding means that a. a final item has only a few levels in the BOM structure b. it is the code for the lowest level in the BOM structure c. a component item is coded at the lowest level at which it appears in the BOM structure d. the top level of the BOM is below level zero and that BOMs are not organized around the finished product e. none of the above
c
Manufacturing cycle time is best defined as the: A. time between the start of one unit and the start of the next unit. B. time it takes a unit to move from one workstation to the next. C. time from raw materials receipt to finished product exit. D. sum of all the task times to make one unit of a product. E. length of the work shift, expressed in minutes per day.
c
The assumptions of the production order quantity model are met in a situation where annual demand is 3650 units, setup cost is $50, holding cost is $12 per unit per year, the daily demand rate is 10 and the daily production rate is 100. What is the production order quantity for this problem? A. 365 B. 139 C. 184 D. 174 E. 548
c
The proper quantity of safety stock is typically determined by: A. multiplying the EOQ by the desired service level. B. carrying sufficient safety stock so as to eliminate all stockouts. C. setting the level of safety stock so that a given stockout risk is not exceeded. D. using a single-period model. E. minimizing total costs.
c
Which of the following is FALSE concerning enterprise resource planning (ERP)? A. it attempts to automate and integrate the majority of business processes. B. it provides and accesses info in a real-time environment C. it is inexpensive to implement D. it shares common data and practices across the enterprise E. ERP software promises reduced transaction costs.
c
Which of the following is not associated with manipulation of product or service demand? a. price cuts or discounts b. promotion c. subcontracting d. counterseasonal products or services e. advertising
c
Which of the following statements about aggregate planning is TRUE? A. An advantage of the counterseasonal product and service mixing option is that it matches seasonal fluctuations without hiring/training costs. B. A disadvantage of subcontracting is that it may require skills or equipment outside the firm's areas of expertise. C. A pure chase strategy allows lower inventories when compared to a pure level scheduling. D. The option of varying workforce size by hiring or layoffs is used where the size of the labor pool is small. E. In aggregate planning, back orders are a means of manipulating supply while part-time workers are a way of manipulating product or service demand.
c
Which of the following statements regarding aggregate planning is TRUE? A. Because service firms have no inventory, the chase strategy does not apply. B. In a pure level strategy, production rates or work force levels are adjusted to match demand requirements over the planning horizon. C. Mixed strategies in aggregate planning may utilize inventory, work force, and production rate changes over the planning horizon. D. A pure level strategy allows lower inventories when compared to pure chase and hybrid strategies. E. A disadvantage of the option of changing inventory levels is that it forces abrupt production changes.
c
Which of these is among the demand options of aggregate planning? A. changing inventory levels B. varying workforce size C. back-ordering during high-demand periods D. varying production rates through overtime or idle time E. subcontracting
c
in MRP, the number of units projected to be available at the beginning of each time period refers to: A. planned order releases B. scheduled receipts C. projected on hand D. net requirements E. the amount necessary to cover a shortage.
c
A grocery store is attempting to implement a kanban system. Which of the following would not be an application of kanbans? A. A red light on top of the cashier's lane signals that the cashier needs additional change replenished. B. A line of 5 people in the Chinese department signaling the department to heat 5 Crab Rangoon. C. An empty doughnut tray signaling the bakery to produce 2 dozen glazed doughnuts. D. The meat department stocking up on turkeys before Thanksgiving. E. All of the above are kanban applications.
d
Concerning relationships with suppliers, which of the following combinations is critical to the success of JIT? A. distant relationships with skepticism B. distant relationships with trust C. close relationships with skepticism D. close relationships with trust E. none of the above
d
How can a reduction of in-transit inventory be encouraged? A. use of trains, not trucks B. low carrying costs C. high setup costs D. supplier location near plants E. low-cost, global suppliers
d
In level scheduling, what is kept uniform from month to month? A. product mix B. inventory levels C. sub-contracting levels D. production/workforce levels E. demand levels
d
In level scheduling, what is kept uniform from month to month? A. sub-contracting levels B. product mix C. demand levels D. production/ workforce levels E. inventory levels
d
In the basic EOQ model, if the cost of placing an order doubles, and all other values remain constant, the EOQ will: A. increase by 200% B. increase by 100% C. either increase or decrease D. increase by about 41% E. increase, but more data is needed to say by how much.
d
In the service sector, which of the following aggregate planning strategies might direct your client to a competitor? A. varying work force size by hiring or layoffs B. changing inventory level C. varying production rates through overtime or idle time D. subcontracting E. using part-time workers
d
Kanban is associated with all of the following except A. small lot sizes B. signals, such as cards, lights, or flags C. moving inventory only as needed D. increased material handling E. reductions in inventory
d
The two most basic inventory questions answered by the typical inventory model are: A. ordering and carrying cost B. timing of orders and cost of orders C. order quantity and service level D. timing of orders and order quantity E. order quantity and cost of orders
d
What is one of the tools that is particularly useful in reducing system nervousness in an MRP system? A. lot sizing B. modular bills C. closed loop system D. time fences E. time phasing
d
What is the primary purpose of the basic economic order quantity model shown below? Q* = (Sqrt 2DS/H) A.to minimize the sum of carrying cost and holding cost B.to calculate the reorder point, so that replenishments take place at the proper time C.to calculate the optimum safety stock D.to minimize the sum of setup cost and holding cost E.to maximize the customer service level
d
Which choice best describes level scheduling? A. Overtime is used to handle seasonal demand fluctuations. B. Daily production is variable from period to period. C. Subcontracting, hiring, and layoffs manipulate supply. D. Inventory goes up or down to buffer the difference between demand and production. E. Price points are calculated to match demand to capacity.
d
Which of the following aggregate planning options attempts to manipulate product or service demand? A. subcontracting B. inventories C. overtime/idle time D. price cuts E. part-time workers
d
Which of the following is FALSE regarding the links between JIT and quality? A. JIT reduces the number of potential sources of error by shrinking queues and lead times. B. If consistent quality exists, JIT allows firms to reduce all costs associated with inventory. C. As quality improves, fewer inventory buffers are needed; in turn, JIT performs better. D. JIT increases the cost of obtaining good quality. E. Inventory hides bad quality; JIT immediately exposes it.
d
Which of the following is specifically characterized by a focus on continuous improvement, respect for people, and standard work practices? A. Lean operations B. Just-in-time (JIT) C. kanban D. Toyota Production System (TPS) E. Material requirements planning (MRP)
d
Which of the following is specifically characterized by continuous and forced problem solving via a focus on throughput and reduced inventory? A. Toyota Production System (TPS) B. Lean operations C. kanban D. Just-in-time (JIT) E. Material requirements planning (MRP)
d
Which of the following statements about quantity discounts is FALSE? A. if carrying costs are expressed as a percentage of value, EOQ is larger at each lower price in the discount schedule. B. the cost-minimizing solution may or may not be where annual holding costs equal annual ordering costs. C. The smaller the ordering cost, the less attractive a discount schedule will be. D. The larger the annual demand, the less attractive a discount schedule will be. E. in inventory management, item cost becomes relevant to order quantity decisions when a quantity discount is available.
d
Which one is NOT an application of lean principle in services? A. inventory sharing among members of the pharmaceutical network B. JIT in food supply management C. improving kitchen layout at McDonald's to drive seconds out of the production process D. securing more inventory to prepare for disruption in production E. scheduling personnel availability at 15 minute increments to meet demand fluctuations
d
Which one of the following statements is TRUE about the kanban system? A. It is associated with a push system. B. The quantities in the containers are usually large to reduce setup costs. C. The supplier workstation signals the customer workstation as soon as a batch is completed. D. The customer workstation signals to the supplier workstation when production is needed. E. It is useful to smooth operations when numerous quality problems occur.
d
A specific product has demand during lead time of 100 units, with a standard deviation during lead time of 25 units. What safety stock (approximately) provides a 95% service level? A. 55 B. 165 C. 140 D. 133 E. 41
e
Aggregate planning for service firms that provide intangible output deals mainly with: A. centralized purchasing B. smoothing the production rate and finding the optimal size of the workforce C. capital investment decisions D. centralized production E. planning for human resources requirements and managing demand
e
An advantage of the fixed-period inventory system is that: A. the average inventory level is reduced. B. no inventory records are required. C. safety stock will be lower than it would be under a fixed-quantity inventory system. D. orders usually are for smaller order quantities. E. there is no physical count of inventory items when an item is withdrawn.
e
By convention, what is the top level in a product structure? A. level 10 B. level 1 C. level T D. level 100 E. level 0
e
Excess bags of basic commodities such as flour and sugar that are stored in a restaurant's kitchen represent which of the following wastes? A. overproduction B. defective product C. transportation D. queues E. inventory
e
Hewlett-Packward delays customization of its laser printers as long as possible. This is an example of which of the following? A. backward integration B. standardization C. vendor-managed inventory D. timely customization E. postponement
e
In the basic EOQ model, if D = 6000 per year, S = $100, and holding cost = $5 per unit per month, what is the economic order quantity? A.100 B.141 C.24 D.600 E.490
e
Lean operations are known for their: A. supplier education B. challenging jobs C. employee development D. supplier partnerships E. all of the above are attributes of lean operations.
e
Outsourcing: a. transfers traditional internal activities to outside vendors b. utilizes the efficiency which comes with specialization c. lets the outsourcing firm focus on its critical success factors d. None of the above are true or outsourcing. e. All of the above are true of outsourcing.
e
Revenue management is MOST likely to be used in which one of the following situations? A. a firm with a good counterseasonal product mix B. a fast food restaurant with wide demand fluctuations during the day C. a shipping company that can change its fleet size easily D. a dental clinic that wants to fill its appointment book E. an airline attempting to fill "perishable" seats at maximum revenue
e
The main trait of a single-period model is that: A. the cost of a shortage cannot be determined accurately B. the order quantity should usually equal the expected value of demand C. supply is limited D. it has the largest EOQ sizes E. inventory has limited value after a certain period of time
e
The minimum record accuracy required for successful MRP is approximately which of the following? A. 97% B. lower than 90% C. 90% D. 95% E. 99%
e
What is the practice of keeping a product generic as long as possible before customizing? A.forward integration B.keiretsu C.vendor-managed inventory D.backward integration E.postponement
e
What term is used to describe the outsourcing of logistics? A.shipper-managed inventory (SMI) B.e-logistics C.hollow logistics D.sub-logistics E.third-party logistics (3PL)
e
When quantity discounts are allowed, the cost-minimizing order quantity: A. is always an EOQ quantity. B. minimizes the sum of holding and ordering costs. C. minimizes the unit purchase price. D. may be a quantity below that at which one qualifies for that price. E. minimizes the sum of holding, ordering, and product costs.
e
Which of the following is NOT a goal of JIT partnerships? A. removal of in-transit inventory B. removal of unnecessary activities C. obtain improved quality and reliability D. removal of in-plant inventory E. All of the above are goals of JIT partnerships.
e
Which of the following is an element of inventory holding costs? A. investment costs B. housing costs C. pilferage, scrap, and obsolescence D. material handling costs E. All of the above are elements of inventory holding costs.
e
Which of the following is characteristic of lean operations? A. inventory buffers between each workstation to minimize system downtime B. specialty workers with no cross-training C. no supplier partnerships D. easy, mindless jobs E. low space requirements
e
Which of the following is consistent with a pure chase strategy? a. vary production levels to meet demand requirements b. vary work force to meet demand requirements c. vary production levels and work force to meet demand requirements d. little or no use of inventory to meet demand requirements e. All of the above are consistent with a pure chase strategy.
e
Which of the following is true regarding the steps to reducing setup times? a. The first step involves performing as much setup preparation as possible while the process/machine is operating. b. The cycle of steps is repeated until setup time is reduced to under a minute. c. Standardize tooling and standardize training are included in the same step. d. Improved material handling and move material closer are done before operator training. e. All of the above are true.
e
Which of the following statements about the basic EOQ model is TRUE? A. If annual demand were to double, the EOQ would increase. B. If annual demand were to double, the number of orders per year would increase. C. If the ordering cost were to double, the EOQ would rise. D. If the carrying cost were to increase, the EOQ would fall. E. All of the above statements are true.
e
Which of the following lot-sizing techniques results in the lowest holding costs? A. the quantity discount model B. EOQ C. POQ D. Wagner-Whitin algorithm E. lot-for-lot
e
Which one of the following statements is TRUE regarding JIT inventory? A. It is minimized with large lot production. B. It hides variability. C. It increases if setup costs decrease. D. It exists just in case something goes wrong. E. It is the minimum inventory necessary to keep a perfect system running.
e
Because most services cannot be inventoried, there is little place for JIT to help service organizations achieve competitive advantage.
f
MRP can be effective only if very accurate lot sizes are calculated in advance.
f
The supply chain management opportunity called postponement involves delaying deliveries to avoid accumulation of inventory at the customer's site.
f
Outsourcing is a form of specialization that allows the outsourcing firm to focus on its key success factors.
t
Outsourcing refers to transferring a firm's activities that have traditionally been internal to external suppliers.
t
Savings in the supply chain exert more leverage as the firm's net profit margin decreases.
t
The bullwhip effect refers to the increasing fluctuations in orders that often occur as orders move through the supply chain.
t
The supply-chain systems that result from using ERP in the grocery industry are called efficient consumer response (ECR) systems.
t
