OMGT Test 3 T/F

Accuracy is a key performance dimension for strategic decision-making information flows.

False

The roof of the house of quality displays conflicts between the voice of the customer and product characteristics and permits designers to rapidly identify trade-offs.

False

Value may be increased by simultaneously increasing cost and decreasing functionality.

False

A company that orders at their economic order quantity has an annual ordering cost that is half of their total cost.

True

Just-in-time production is the same thing as Lean production.

True

The greater the demand, the more kanbans are needed.

True

Target costing is the act of designing a process to meet a specific cost objective.

False

The BEST use of a Gantt chart is to show precedence requirements for a project's constituent activities.

False

The concept development phase addresses the feasibility of a product or service.

False

The development funnel demonstrates that while initial conceptual development takes a long time, product design can progress quickly through the final phases of development.

False

The earliest finish time is calculated by adding the activity's duration to the predecessor's earliest finish time.

False

The earliest finish time of an activity is always later than its latest start time.

False

The ease with which parts can be replaced, checked or evaluated is testability.

False

The excess cost of an item is the profit you would have made on it.

False

The flexibility of inventory increases as materials move down the supply chain.

False

The forecast for next month is 200 units so the manufacturer gathers materials for this anticipated level of production activity. This is an example of pull production.

False

The just-in-time philosophy applies only to the production floor of a manufacturing company.

False

The oil could be changed at the push of a button without dirtying your hands or peering underneath the new Chrysler Crepitus, an important achievement in their Design for Six Sigma program.

False

The reorder point increases as the service level falls.

False

The value of goods on a "per unit" basis far upstream in a supply chain is greater than the value of those same goods far downstream in a supply chain.

False

Throughout every MRP record, ending inventory is equal to the ending inventory from the previous period, plus the master production schedule quantity, minus the orders booked for that period.

False

Warehouse and transportation planning systems support strategic planning efforts by allocating fixed logistics capacity in the best possible way, given business requirements.

False

Your authors argue that the increasing numbers of middle management are attributable to their ability to manage projects.

False

One recent development in Lean thinking is the combination of Lean and Six Sigma into Lean Six Sigma, which combines the rigor of statistical analysis and DMAIC approach with Lean's focus on waste reduction.

True

Performance or time targets for each major group of activities in a project are set during the planning phase of a project.

True

Pre sourcing is the process of preapproving suppliers for specific commodities or parts.

True

Component J is ordered on February 1, is received, and is ready to use on February 8. Its planning lead time is seven days.

True

Customer relationship management refers to planning and control activities and information systems that link a firm with its downstream customers.

True

Cycle stock can occur at more than one point in a supply chain.

True

Decreases in the standard deviation of demand reduce the amount of safety stock that should be held.

True

Distribution requirements planning is identical to material requirements planning except instead of gross requirements, a DRP record shows forecasted demand.

True

ERP's traditional strengths lie in routine decision making and in execution and transaction processing.

True

Enterprise resource planning applications span the supplier, customer, and

True

For a kanban system to work properly, demand rates must be relatively stable, and interruptions must be minimized.

True

Gross requirements in an MRP record can be met by inventory from previous weeks, scheduled receipts, or planned receipts.

True

In order for the economic order quantity model to work, demand must be known and constant.

True

In order to find the lowest cost ordering policy in a quantity discount model, you must compare the holding cost, ordering cost, and the cost of goods for various order quantities.

True

In the launch phase of product development it is typically the marketing department's responsibility to fill the downstream supply chain.

True

In the planning phase, the operations and supply chain function develops initial cost estimates and identifies key supply chain partners.

True

In the project definition phase, project planners identify, among other tasks, how to accomplish the work and how to organize for the project.

True

Lean thinking has received considerable attention in the last decade, but tools such as kanbans cannot be used in all production environments.

True

MRP nervousness refers to the notion that a small change at the top of a bill of material can have drastic effects on items farther down the bill of material.

True

MRP uses backward scheduling.

True

Material requirements planning is performed over a shorter time frame and greater level of detail than master scheduling.

True

Most project management software represents a project in AON format.

True

One ERP vendor is known simply as SAP.

True

One characteristic of cloud computing is that the provider's computing resources may serve multiple consumers with the resources dynamically allocated according to customer demand.

True

One of the primary characteristics of projects as a form of work is the movement of personnel from project to project.

True

Product design refers to the development of physical products and intangible services.

True

Products developed using a concurrent engineering process can be developed more quickly than those using a sequential development process.

True

Program evaluation and review technique, PERT, is a network-based technique in which there are multiple time estimates for each activity.

True

Quality function deployment can be used to show linkages between customer requirements and product characteristics.

True

RFID tags can be used instead of a bar code system to trace the movement and location of materials.

True

Robust design is the design of products to be less sensitive to manufacturing variation and misuse.

True

The order quantity in a periodic review system rises as the on-hand inventory falls.

True

The output from the first QFD matrix that feeds into the second QFD matrix is the product characteristics information.

True

The purpose of the execution and transaction processing supply chain activities is to record and retrieve data and execute and control physical and monetary flows.

True

There are more resources required during the performance phase of a project than the project definition phase.

True

Transportation is waste according to the Lean philosophy.

True

Crashing a project refers to the technique that minimizes completion cost of the project.

False

Dependent demand inventory never needs hedge inventory.

False

Design collaboration is a typical customer relationship management application.

False

Distribution requirements planning is used to synchronize supply chain partners at the production activity control level.

False

From a revenue standpoint, a producer would rather have higher forecasted demand than booked orders.

False

If a company is capable of delivering the service time and again at a consistent level of quality it is said to have a high level of scalability.

False

If a job has a negative critical ratio then it must be early.

False

In a bill of material, a parent may have many children but a child may have only one parent.

False

In the kanban formula, the letter T represents the time it takes to empty a box of parts through building product.

False

Internal supply chain management is used to link higher level planning and location decision making with lower level activities within the same supply chain.

False

Key points in a project, such as when a major activity or phase is completed, are referred to as lodestones.

False

Material requirements planning is used to manage independent demand inventory.

False

Order quantity decisions are typically made in isolation from considerations of transportation, packaging, and material handling.

False

Since a JIT manufacturer has very little inventory, it is vital that all incoming parts receive a thorough inspection.

False

Since the booked orders figure represents actual customer demand in a master schedule, that value is always less than or equal to forecasted demand.

False

Some companies have found it beneficial to combine the planning capabilities of kanban with the control capabilities of MRP.

False

Companies employing the Lean philosophy use only kanban as a production control method.

False

Company B has no inventory at any level. They will need 145 Es to make 12 units of end item X.

False

A two-card kanban system is a planning tool that links production and movement of units at two work centers.

False

Activities on the critical path may have positive or negative slack as long as the overall slack time of the critical path is zero.

False

All information systems are computer-based.

False

All product development efforts directly benefit the consumer.

False

An example of black box design would be a producer of automotive brakes working at the design table with an automobile manufacturer through all phases of product development.

False

As the average demand rises, the standard deviation of demand falls.

False

Available to promise inventory is always zero for the first week in the master schedule record.

False

Business process modeling tools differ from business process management systems (BPMS) in that business process modeling tools are aimed at business process analysis and design and BPMS are used only to manage processes.

False

Buying advance tickets for the Giraffe Massacre concert on New Year's Eve saves the buyer one-tenth of one percent on the face value of the tickets. It would be wise to buy tickets well in advance of the concert date.

False

Companies can reduce the time and cost of developing new products and reduce the cost of final products by using parts standardization.

True

Companies do not plan to use safety stock.

True

The longer the production and supplier lead times, the longer the MRP record's planning horizon needs to be.

True

CAD systems allow engineers to develop, modify, share, and test designs in a virtual world.

True

A critical path is composed entirely of critical activities.

True

A forward pass through a network is used to determine the earliest start and finish times for each project activity.

True

A project is a one-time undertaking designed to achieve a particular organization goal.

True

A pull system is a production system in which actual downstream demand sets off a chain of events that pull material through various steps in the production process.

True

A reduction in inventory levels forces a company to improve manufacturing practices.

True

A target service level is the point where the expected cost of a shortage equals the expected cost of having excess units.

True

A unit that is not been sold or otherwise committed to any other customer should be considered available to promise.

True

An airline specifies a wider monitor for installation on their overseas flights. The airframe manufacturer will accommodate this order by issuing an engineering change.

True

An increase in the safety factor results in an increase in the amount of inventory in a kanban system.

True

The Guide to the Project Management Body of Knowledge (PMBOK®) is divided into two main parts, the various business processes that organizations follow in carrying out projects and the nine knowledge areas applicable to nearly all projects.

True

The bullwhip effect says that a small change in demand downstream in the supply chain causes a large change in demand upstream.

True

The cards employed in a two-card kanban system are the production card and the move card.

True

The earliest start time of an activity is dependent on the earliest finish time of its immediate predecessors.

True