ISDS Final Concept Questions
Revenue management is MOST likely to be used in which one of the following situations? A. an airline attempting to fill "perishable" seats at maximum revenue 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 firm with a good counterseasonal product mix E. a dental clinic that wants to fill its appointment book
A
What is one of the tools that is particularly useful in reducing system nervousness in an MRP system? A. time fences B. closed loop system C. lot sizing D. time phasing E. modular bills
A
Which of the following is specifically characterized by the elimination of waste through a focus on exactly what the customer wants? A. Lean operations B. Just-in-time (JIT) C. Material requirements planning (MRP) D. kanban E. Toyota Production System (TPS)
A
Which of the following statements about aggregate planning is TRUE? A. A pure chase strategy allows lower inventories when compared to a pure level scheduling. B. An advantage of the counterseasonal product and service mixing option is that it matches seasonal fluctuations without hiring/training costs. C. The option of varying workforce size by hiring or layoffs is used where the size of the labor pool is small. D. In aggregate planning, back orders are a means of manipulating supply while part-time workers are a way of manipulating product or service demand. E. A disadvantage of subcontracting is that it may require skills or equipment outside the firm's areas of expertise.
A
Which one of the following statements is TRUE about the kanban system? A. The customer workstation signals to the supplier workstation when production is needed. B. The quantities in the containers are usually large to reduce setup costs. C. It is useful to smooth operations when numerous quality problems occur. D. The supplier workstation signals the customer workstation as soon as a batch is completed. E. It is associated with a push system
A
What term is used to describe the outsourcing of logistics? A.third-party logistics (3PL) B.e-logistics C.sub-logistics D.shipper-managed inventory (SMI) E.hollow logistics
A. third-party logistics
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.41 B.133 C.140 D.165 E.55
A.41
In level scheduling, what is kept uniform from month to month? A. inventory levels B. production/workforce levels C. sub-contracting levels D. demand levels E. product mix
B
Which of the following aggregate planning options is NOT associated with manipulation of product or service demand? A. counterseasonal products or services B. subcontracting .C. price cuts or discounts D. advertising E. promotion
B
Which of the following aggregate planning strategies is a capacity option? A. counterseasonal product mixing B. changing inventory levels C. influencing demand by extending lead times D. influencing demand by back ordering E. influencing demand by changing price
B
All EXCEPT which of the following statements about ABC analysis are true? A.ABC analysis suggests that there are the critical few and the trivial many inventory items. B.ABC analysis suggests that all items require the same high degree of control. C.ABC analysis categorizes on-hand inventory into three groups based on annual dollar volume. D.ABC analysis is an application of the Pareto principle. E.In ABC analysis, inventory may be categorized by measures other than dollar volume.
B.
In the basic EOQ model, if the cost of placing an order doubles, and all other values remain constant, the EOQ will: A. increase, but more data is needed to say by how much. B. increase by about 41%. C. either increase or decrease. D. increase by 100%. E. increase by 200%.
B. increase by about 41%
The main trait of a single-period model is that: A. it has the largest EOQ sizes. B. the order quantity should usually equal the expected value of demand. C. inventory has limited value after a certain period of time. D. supply is limited. E. the cost of a shortage cannot be determined accurately.
C
Top executives tend to focus their attention on which type of forecasts? A. the forecast for the next day's absentee levels B. short-range C. long-range D. weather E. intermediate-range
C
Which choice best describes level scheduling? A. Overtime is used to handle seasonal demand fluctuations. B. Subcontracting, hiring, and layoffs manipulate supply. C. Inventory goes up or down to buffer the difference between demand and production. D. Daily production is variable from period to period. E. Price points are calculated to match demand to capacity.
C
Which of the following statements regarding a pull system is TRUE? A. Large lots are pulled from upstream stations. B. Manufacturing cycle time is increased. C. Problems become more obvious. .D. Work is pulled to the downstream stations before it is actually needed. E. None of the above is true of a pull system.
C
Which of the following lot-sizing techniques results in the lowest holding costs? A. EOQ B. the quantity discount model C. lot-for-lot D. POQ E. Wagner-Whitin algorithm
C
Which of the following statements regarding the production order quantity model is TRUE? A. It minimizes the total production costs. B. It relaxes the assumption that the demand rate is constant. C. It relaxes the assumption that all the order quantity is received at one time. D. It minimizes inventory. E. It applies only to items produced in the firm's own production departments.
C. it relaxes the assumption that all the order quantity is received at one time
A grill assembly takes 20 washers. Instead of listing these washers separately, they are grouped into a single kit for production. How is the bill of material for the washers classified? A. low-level bill B. component bill C. phantom bill D. planning bill E. modular bil
D
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 cars with a hi-fi stereo system to produce C. number of green cars to produce D. total number of cars to produce E. B, C, and D
D
Concerning relationships with suppliers, which of the following combinations is critical to the success of JIT? A. close relationships with skepticism B. distant relationships with skepticism C. distant relationships with trust D. close relationships with trust E. none of the above
D
Dependence on an external source of supply is found in which of the following aggregate planning strategies? A. varying production rates through overtime or idle time B. hiring and laying off C. using part-time workers D. subcontracting .E. back ordering during high demand periods
D
What is the practice of keeping a product generic as long as possible before customizing? A.keiretsu B.backward integration C.forward integration D.postponement E.vendor-managed inventory
D. postponement
Which of the following is specifically characterized by a focus on continuous improvement, respect for people, and standard work practices? A. kanban B. Just-in-time (JIT) C. Lean operations D. Material requirements planning (MRP) E. Toyota Production System (TPS)
E
Which one of the following is a characteristic of a JIT partnership? A. frequent deliveries in large lot quantities B. maximal product specifications imposed on supplier C. third-party logistics never used D. active pursuit of vertical integration E. removal of incoming inspection
E
ABC analysis divides on-hand inventory into three classes, generally based upon which of the following? A.the number of units on hand B.item quality C.annual demand D.unit price E.annual dollar volume
E. annual dollar volume
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.keiretsu B.backward integration C.horizontal integration D.current transformation E.forward integration
E. forward integration
A restaurant runs a special promotion on lobster and plans to sell twice as many lobsters as usual. When this large order is sent to the distributor, the distributor assumes the large size is a trend, not a one-time event. The distributor therefore places an even larger order with the lobsterman. This behavior is the result of which of the following? A.CPFR B.double marginalization C.postponement D.vendor-managed inventory E.the bullwhip effect
E. the bullwhip effect
Because most services cannot be inventoried, there is little place for JIT to help service organizations achieve competitive advantage. True or False
False
The supply chain management opportunity called postponement involves delaying deliveries to avoid accumulation of inventory at the customer's site. True or False
False
Savings in the supply chain exert more leverage as the firm's net profit margin decreases. True or False
True
